Gmo Financial Gate, Inc. · TSE:4051
Gmo Financial Gate — Q2 2024 Earnings Presentation
92 slides from Gmo Financial Gate's earnings presentation, May 10, 2024
Slide 1: Financial Results Briefing for 2Q FY2024
Financial Results Briefing for 2Q FY2024 Revenue and profits increased steadily in the 1H, while investing for future growth May 10, 2024 16th IR Presentation GMO Financial Gate, Inc. (Ticker: 4051, TSE-Growth) https://gmo-fg.com/ Copyright 2024 GMO Financial Gate, Inc.
Slide 2: Cautionary Note Regarding Presentation Materials
Cautionary Note Regarding Presentation Materials The content of these presentation materials is based on generally recognized economic and social conditions, as well as assumptions judged to reasonable by GMO Financial Gate as of May 10, 2024 Note that presentation material content is subject to cha
Slide 3: Meeting Agenda
Meeting Main Agenda Agenda 1. Summary of Financial Results for 2Q FY2024 2. KPI 3. Business Highlights 4. Growth Strategy and Progress Supplemental Agenda 5. Financial Information, Investment and Shareholder Return Policies 6. ESG Initiatives (Details) 7. Appendix Copyright 2024 GMO Financial Gate,
Slide 4: Summary of Financial Results for 2Q FY2024
Summary of Financial Results for 2Q FY2024 1 Copyright 2024 GMO Financial Gate, Inc.
Slide 5: 2Q FY2024 Summary
1.1 2Q FY2024 Summary Progress on track for the 1st half for revenue and operating profit. Active investment for future growth led to recurring revenue, profit growth 1H FY2024 P7 ‐ Revenue : ¥ 9.24bn(YoY+27.2%) Progress towards 1H forecast 100.4%、 Progress towards full-year forecast 48.1% ‐ Operati
Slide 6: Operating Profit Forecast for FY2024
1.2 Operating Profit Forecast for FY2024 OP progress as of 1H is c.65%. Forecast for full-year remains unchanged as on schedule progress is expected for 2H FY2024 Forecast vs. Result 1H 2H (mn yen) (百万円) Full-year 予算 Forecast 740 670 forecast 1,410 +182 2H Planned Budget Unpassed 実績 Result 922 Will
Slide 7: Summary of Financial Results
1.3 Summary of Financial Results Solid progress in both revenue and profit. KPI numbers continued to grow as expected Forecast Progress towards （mn yen） 1H FY2023 1H FY2024 YoY 1H FY2024 forecast 1H FY2024 （Full-year） （Full-year） 9,208 100.4% Revenue 7,264 9,244 ＋27.2% (19,200) （48.1%) 2,421 111.6%
Slide 8: Breakdown of Financial Results
1.4 Breakdown of Financial Results Steady growth in both initial and recurring revenue. Improvement in margin of initial terminals and growth in recurring revenue led to increase in operating profit ◼ Revenue (mn yen) (＋) Initial: Large and mid to small deals led to revenue growth Revenue (＋) Recurr
Slide 9: Revenue by Business Model (YoY)
1.5 Revenue by Business Model (YoY) Each revenue with steady increase. Composition of reccuring revenue rose from 29.4% to 34.5% (mn yen) 1H FY2023 1H FY2024 YoY (Composition %) (Composition %) 5,125 6,059 Initial +18.2％ (70.6%) (65.5%) 2,139 3,185 Recurring-Model +48.9％ (29.4%) (34.5%) 543 818 Stoc
Slide 10: Revenue by Business Model (Quarterly)
1.6 Revenue by Business Model (Quarterly) Initial: Steady QoQ growth due to mid-size deals Recurring: Growth in number of active terminals led to QoQ growth despite seasonality impact Initial Revenue Recurring Revenue （mn yen） （mn yen） 4,000 2,000 Avg QoQ for each FY 3,461 1,800 3,500 Stock Fee Spre
Slide 11: KPI
KPI 2 Copyright 2024 GMO Financial Gate, Inc.
Slide 12: Initial Revenue and Number of Active Terminals
2.1 Initial Revenue and Number of Active Terminals Steady initial revenue, number of active terminals even with seasonality effects Seasonality +18.4 ( ) : Excluding, for Japan Post +27.2 344.5 +25.5 (+20.2) 326.0 Initial revenue（mn yen） +39.3 Number of active terminals （thousands） (+20.0) 298.8 Sea
Slide 13: Consolidated KPI (Number of active terminals)
2.2 Consolidated KPI（Number of active terminals） Continued steady progress. The number of IoT terminals is increasing due to implementation in large lot customers 2Q FY2024 YoY＋110.5 K、YoY+47.3% （Thousand） 450 Manned terminal Unmanned terminal Sold by others YoY 400 QoQ ＋18.4 K Sold by others 2Q FY2
Slide 14: Consolidated KPI (Quarterly Transaction volume / GMV)
2.3 Consolidated KPI (Quarterly Transaction volume / GMV) Transaction volume and value increased by more than 50% YoY Transaction Volume Transaction Value (GMV) （100 mn yen） （mn） 180 16,000 YoY +57.9% YoY +58.8% 14,000 150 12,000 120 10,000 90 8,000 6,000 60 4,000 30 2,000 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4
Slide 15: Business Highlights
Business Highlights 3 Copyright 2024 GMO Financial Gate, Inc.
Slide 16: Trends by Merchant Industry
3.1 Trends by Merchant Industry Installation of self-checkout, mobile terminals at 100-yen shops, supermarkets, and taxis are increasing High inbound Store scale：Large One-stop service proposals tourism demand Drug store with alliance partners Neutral Expansion Post office Expansion (medicine/ 100-y
Slide 17: Transaction Trends by Industry (2Q)
3.2 Transaction Trends by Industry (2Q) ： High inbound tourism demand Restaurant, hotel/travel industries increased by capturing seasonal demand. Supermarket and drugstores continued on a steady trend Merchant C Merchant Ａ Transaction Volume Transaction Volume Banquet Transaction Value (GMV) needs T
Slide 18: Top Merchants (GMV basis)
3.3 Top 30 Merchants (GMV basis) Men’s clothing merchant increased due to seasonality Large merchants increased due to vertical expansion – five large lot merchants increased YoY 2Q FY2023 2Q FY2024 Gentlemen's Clothing Store A Gentlemen's Clothing Store A Super Market A Hotel/Travel A Sporting Good
Slide 19: Comparison to Market Growth (February YoY)
0 2 4 6 8 10 (tn yen) 19/10 19/11 19/12 20/01 20/02 20/03 20/04 20/05 20/06 20/07 20/08 小売（左軸） 全体（左軸） All (left axis) 20/09 飲食店（右軸） 20/10 20/11 20/12 Retailers (left axis) Hotel/inn (left axis) 21/01 旅館・ホテル（右軸） 21/02 Restaurants (left axis) 21/03 21/04 21/05 21/06 21/07 21/08 21/09 21/10 21/11 21/12
Slide 20: Settlement Platform which Grows with its Merchants
3.5 Settlement Platform which Grows with its Merchants GMO-FG GMV grew at +58.8% YoY for 2Q, +25.5%YoY for existing merchants Merchants grew with GMO-FG’s settlement platform GMV Growth Rate （100 mn yen） Newly acquired Growth of merchants GMV overall Overall +55.64 bn 15,023 Existing Growth of GMV f
Slide 21: Growth Strategy and Progress
Growth Strategy and Progress 4 Copyright 2024 GMO Financial Gate, Inc.
Slide 22: Image of rise in Revenue & Operating Profit
4.1 Image of rise in Revenue & Operating Profit Market share expansion phase: sales/activation of payment terminals will lead to fluctuation in revenue Profit margin expansion phase: recurring model revenue will increase due to increase in active terminals which will contribute to operating profit g
Slide 23: Mid-term Financial Plan
4.2 Mid-term Financial Plan OP of 1.5bn yen will be achieved this year ahead of schedule – a new five-year plan has been created to promote operating profit of 5bn yen in 2030 Operating Profit Growth Curve Action Plans Mid to long term strategy (operating profit: bn yen) Acquire multi-industry/high-
Slide 24: Vertical Expansion Action plans
4.3 Vertical Expansion Action plans 1 2 3 4 Accelerate business expansion with large corporate groups by providing a variety of tailor-made services - expanding profit opportunities by applying this to other large corporate groups Expansion into other industries New Example of solution Company D ass
Slide 25: Expanding Pipelines utilizing our Solution Assets
4.4 Expanding Pipelines utilizing our Solution Assets Action plans 1 2 3 4 Steadily building new pipelines by utilizing solution assets cultivated through vertical expansion Large commercial facility chain D Large commercial facility chain C Difficulty Large commercial High Size of bubble: Contribut
Slide 26: Progress in Expanding Market Share
4.5 Progress in Expanding Market Share Action plans 1 2 3 4 Recurring sales steadily increased as we increase market share – will continue to aim for well-balanced growth in both initial and recurring model by expanding our service lineup Growth Cycle Investment In Soft Space Fund FY2025~ raising Co
Slide 27: Expansion of Payment Platforms - Mobility Domain
4.6 Expansion of Payment Platforms - Mobility Domain Action plans 1 2 3 4 With the recent increase in the number of foreign visitors to Japan, mobility payments in urban areas are on the rise – provided services to 100 enterprises as of Mar. 2024. Experimental implementation is scheduled to start wi
Slide 28: Expanding use of contactless NFC payment
4.7 Expanding use of contactless NFC payment Action plans 1 2 3 4 The percentage of credit touch payments at our processing center is on an upward trend. Growing awareness of the convenience of NFC is driving the future spread of credit touch in the mobility field Credit and debit payments at our ce
Slide 29: Progress in IoT/Unattended Payment
4.8 Progress in IoT/Unattended Payment Action plans 1 2 3 4 Supporting the transition from traditional to unmanned terminal (IoT) payments Expanding business pipelines based on track record with major merchants IoT terminal incorporation into the market Track record and business pipelines IoT/unatte
Slide 30: Expanding ESG Initiatives
4.9 Expanding ESG Initiatives Continuous promotion of ESG initiatives to improve corporate value and will continue to improve as a payment infrastructure corporation – have completed scope 1 and 2 carbon neutral ESG Initiative Roadmap To Do’s Corporate value Promote MSCI score acquisition/improvemen
Slide 31: ESG / External Certification
4.10 ESG / External Certification Obtained a Scope 1~3 guarantee for GHG (greenhouse gas) emissions in September 2023. Achieved carbon neutral for Scope1 and 2. Will continue dialogue with partner companies to reduce Scope 3 External Certification (FY2023) GHG (greenhouse gas/Scope 1~3) emissions ca
Slide 32: Financials, Investment / Shareholder Returns
Supplemental Information Financials, Investment / Shareholder Returns 5 Copyright 2024 GMO Financial Gate, Inc.
Slide 33: Profit & Loss
5.1 Profit & Loss (thousands of yen) 1H FY2023 1H FY2024 YoY Revenue 7,264,812 9,244,148 +27.2% Cost of goods sold 5,518,271 6,543,482 +18.6% Gross profit 1,746,541 2,700,665 +54.6% SG&A 1,110,898 1,777,934 +60.0% Operating profit 635,642 922,731 +45.2% Ordinary profit 633,973 916,784 +44.6% Profit
Slide 34: Revenue by business model (Quarterly)
5.2 Revenue by business model (Quarterly) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q （mn yen） FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 Initial 855 1,103 1,525 1,682 1,454 1,643 2,136 1,927 2,220 2,905 3,461 2,529 2,915 3,143 Recurring-Model 430 427 495 569 686 683 841 921
Slide 35: Changes in Revenue Composition and Gross Profit Margin
5.3 Changes in Revenue Composition and Changes in Gross Profit Margin Gross profit margin remained in line with sales composition, around the 30% range, rising for four consecutive quarters Although the recurring ratio has declined due to QoQ, initial gross profit margin has improved due to increase
Slide 36: SG&A and Profit Trends (half-year transition)
5.4 SG&A and Profit Trends (half-year transition) While actively implementing growth investments that are variable cost elements (1) performance-based compensation, (2) other SG&A, the ability to generate profits has been improved through operating leverage*. Growth investment will be continued in t
Slide 37: Balance sheet
5.5 Balance sheet Small increase in cash & cash equivalent, merchandise End of 2Q FY2024（thousands of yen） ◼ Note Cash and cash equivalents Current liabilities Merchandise ： ¥ 3.34 bn (38.3%) 3,619,735 4,216,506 Increased by 260mn yen from end of 1Q Current liabilities ： ¥ 3.61 bn Non-current liabil
Slide 38: Balance sheet (Quarterly)
5.6 Balance sheet (Quarterly) 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q （mn yen） FY21 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 QoQ YoY Cash and cash 3,434 1,425 1,618 2,231 2,519 1,720 2,190 2,779 4,015 3,897 4,216 +319 +2,026 equivalents Current Merchandise 1,615 2,177 2,523 1,545 1,507 2,511 3,131
Slide 39: Consolidated KPIs (Number of Active Terminal)
5.7 Consolidated KPIs（Number of Active Terminal） The number of operating terminals is steadily increasing, driven by manned terminals, while number of unmanned terminals continues to increase due to the trend of self-service and labor saving 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 4Q 1Q 2Q QoQ YoY （thousan
Slide 40: Capital Allocation Policy
5.8 Capital Allocation Policy Aim to achieve continuous business growth in accordance with the investment funding policy and capital allocation policy Investment Source Funding Policy Capital Allocation Policy ⚫ Priority will be given to business investment and growth ⚫ Priority of investment resour
Slide 41: Investment Policy
5.9 Investment Policy Proactive business investment to execute "market share expansion strategy" necessary for medium to long-term operating profit growth of +25% YoY Business investment Growth investment ・Investments in data centers, terminal development, and internal ・Support for cashless transact
Slide 42: Shareholder Return Policy
5.10 Shareholder Return Policy Aiming to increase corporate value through business growth while providing stable and continuous dividends simultaneously Basic Policy on Shareholder Returns Increase in corporate value Stable and continuous dividends ・Aim to increase market capitalization over the med
Slide 43: ESG Initiatives (Details)
Supplemental Information ESG Initiatives (Details) 6 Copyright 2024 GMO Financial Gate, Inc.
Slide 44: (Reposted) Expanding ESG Initiatives
6.1 (Reposted) Expanding ESG Initiatives Continuous promotion of ESG initiatives to improve corporate value – will continue to improve as a infrastructure corporation – has completed scope 1, 2 carbon neutral ESG Initiative Roadmap To Do’s Corporate value Promote MSCI score acquisition/improvement p
Slide 45: (Reposted) ESG / External Certification
6.2 (Reposted) ESG / External Certification Obtained a Scope 1~3 guarantee for GHG (greenhouse gas) emissions in September 2023. Achieved carbon neutral for Scope1, 2. Will continue dialogue with partner companies to reduce Scope 3 External Certification (FY2023) GHG (greenhouse gas/Scope 1~3) emiss
Slide 46: ESG-related topics (Materiality, CDP Score B)
6.3 ESG-related topics (Materiality Identification/CDP Score B earned) (1) Identified materiality. (2) Received a "B" in CDP, focusing on prime companies, exceeding the industry average, the Asian average, and the global average. Aiming for "A" in the future, and aiming to improve the score of low e
Slide 47: ESG Initiatives / Environment
6.4 ESG Initiatives / Environment In the provision of our payment platform, we promote business operations that consider environmental impact．Working to reduce CO₂ emissions related to our business Specific Efforts Environment Related Data Our Supply Chain GMO-FG downstream ⚫ Recycled paper is used
Slide 48: ESG Initiatives / Social
6.5 ESG Initiatives / Social Aiming for sustainable growth by hiring excellent human resources and enhancing various systems that contribute to improving the capabilities of all partners* in order to create corporate value and solve social issues *Employees are referred to as partners Initiatives So
Slide 49: ESG Initiatives / Governance
6.6 ESG Initiatives / Governance Focus on enhancing corporate governance by establishing a decision-making structure that responds quickly and appropriately to changes in the business environment, a fair, transparent, and efficient business execution structure Specific Efforts Governance Related Dat
Slide 50: ESG Initiatives / Board of Directors
6.7 ESG Initiatives / Board of Directors Governance structure built around technology and financial background Internal Director (Managing Director) Independent External Director Kentaro Sugiyama ／ Nao Shimamura ／ President and Representative Director External Director (Audit and Supervisory Committ
Slide 51: ESG Initiatives / Executive Skills Matrix
6.8 ESG Initiatives / Executive Skills Matrix Appointment of human resources that contribute to the enhancement of corporate value as directors, with a view to building a system that enables the Board of Directors to function effectively. * GMO-ism is the collective name for the company motto and co
Slide 52: Appendix
Supplemental Agenda Appendix 7 Copyright 2024 GMO Financial Gate, Inc.
Slide 53: GMO-FG Business Domain
GMO-FG Business Domain Business Model GMO-FG is focusing on offline payment （リアル店舗決済 ＋ IoT決済） Company name Business GMO Financial Gate GMO Payment Gateway Domain (Payment at Brick & Mortar + IoT) (EC) Payment by passing card/QR code Payment by entering credit card over the reader information in PC /
Slide 54: Gross profit composition ratio
Gross profit composition ratio Business Model Growth in recurring revenue leads to steady profitability base Composition by Product Category (Revenue and Gross Profit) （mn yen） 18,000 イニシャル Initial リカーリング型 Recurring 15,909 16,000 14,000 4,792 Recurring 30% 12,000 10,295 10,000 3,132 Recurring 30% 8,
Slide 55: Revenue Models: Financial Gate vs. Payment Gateway
Revenue Models: Financial Gate vs. Payment Gateway Business Model Initial revenue in offline payment is tend to be fluctuate because of its seasonality of terminal delivery Revenue Revenue Time Time １Q ２Q ３Q ４Q １Q １Q ２Q ３Q ４Q １Q Initial Revenue（Terminal Sales・Software Development） Initial Revenue（In
Slide 56: Three Biz Models Over a Single, One-Stop Platform
Three Biz Models Over a Single, One-Stop Platform Business Model One-stop platform covering all settlement processes between merchants and acquirers Consumer Merchants FG Acquirers Various Payment Terminals 1 Methods Payment Various Payment Terminal Sales Terminal Methods Business Credit Card Issuer
Slide 57: Recurring-Model Revenue Expansion Originating From Terminal Sales
Recurring-Model Revenue Expansion Originating From Terminal Sales Business Model Recurring-model revenue grows with flow model revenue which is mainly coming form the sales of payment terminals % Revenue Model 3 Business 4 Types of Revenue (2Q FY2024) Flow Model ① Terminal Sales Initial 65.5％ Revenu
Slide 58: Players in offline cashless payment setting
Players in offline cashless payment setting Business Model Sales activity to merchants/Clearing of merchant transaction offline Payment Processing Payment Financial Merchants Center Network Institutions Offline market Domestic network Acquirer Terminal manufacturer POS vendor Processing center (CCT)
Slide 59: CCT (Credit Center Terminal)
CCT (Credit Center Terminal, ⇒Card company-owned terminal) Business Model CCT(Credit Center Terminal) It is a terminal name authorized by the information processing center (CCT Center) designated by the Japan Credit Card Association (JCCA) and operated in accordance with the guidelines, etc., establ
Slide 60: Merchant POS (Merchant-owned terminals)
Merchant POS (Merchant-owned terminals) Business Model Merchant POS In general, POS (Point of Sales) is a generic term for a service that provides information on sales performance trends such as the date, time, quantity, and price of products sold, but in the credit industry, the term merchant POS i
Slide 61: Increase in stera lineup
Increase in stera lineup Business Model stera unit, mobile has been released in addition to stera terminal Usage expected to increase in different scenes New New Usage Scenes Increase in Increase in Usage Scenes Usage Scenes Self Checkout KIOSK Counter Checkout Cart POS Table Check Copyright 2024 GM
Slide 62: Leveraged Growth Model
Leveraged Growth Model Business Model Fee and spread revenue are expanding with the market /growth in membership merchants Leveraged Growth N＋1 Recurring revenue N Recurring revenue Recurring-Model Revenue Spread Linking with the growth of TAM / membership merchants Fee Recurring-Model Revenue befor
Slide 63: Difference between terminals sold and active terminals
Difference between the number of terminals sold and the number of active terminals Business Model Initial revenue = Number of terminals sold × Average selling price per terminal + Accessory sales + Development sales Number of active terminals = Number of terminals that have processed payment at leas
Slide 64: Details on each revenue ①
Details on each revenue ① Business Model Initial Content Revenue Model Payment terminal Revenue from Payment terminals purchased from terminal manufacturers, and then confirm • Terminal Selling Price × Units Sold ✓ More than 10 types of terminals sales certain measures of payment methods that each m
Slide 65: Details on each revenue ②
Details on each revenue ② Business Model Fee Content Revenue Model • TRX Volume× Processing Fee Processing It is a fee we charge toward monthly transaction volume based on the rate per transaction ✓ Processing fee is about ¥2 to ¥3 per transaction • Number of Order × Price of Roll Paper Roll paper T
Slide 66: Fee ARPU
Fee ARPU (Fee revenue divided by Transaction volume) Business Model Fee revenue fell in 2Q due to fluctuations in roll paper cost. ◼ Fee ARPU（Fee revenue divided by Transaction volume） 6.00 Image of linkage ratio to the number of Low transaction volume High 5.50 5.19 4.92 5.00 4.94 4.94 5.00 4.81 4.
Slide 67: Number of Employees (Consolidated basis)
Number of Employees(Consolidated basis) Business Model Plans a net increase of 15 to 20 employees per fiscal year to achieve the management benchmarks. Assumed composition of work force is approximately 40% sales, 40% systems, and 20% administration Plan to hire 15-20 people (consolidated basis) eac
Slide 68: Concept of Spread revenue ratio to GMV
Concept of Spread revenue ratio to GMV Business Model Our total GMV is the sum of ①and ②below. Spread revenue is generated only in the case of ②Agent contract. Since ① also contributes significantly to GMV, the linkage between total GMV and Spread revenue tends to decline Enjoyable revenue ①Direct c
Slide 69: Relationship between active terminals & stock revenue
Relationship between number of active terminals & stock revenue Business Model In addition to the increase in the number of active terminals, revenue opportunities for Stock revenue will increase, but the status of subscriptions to paid services will differ depending on the needs/demand of merchants
Slide 70: Monetization by Payment Method
Monetization by Payment Method Business Model We operate different business models according to payment method as a cashless platformer. Growth in each payment method contributes to our growth as well Flow model revenue Recurring model revenue ① Initial ➁ Stock ③ Fee ④ Spread Credit・China Union Pay・
Slide 71: Revenue Model by Merchant Size
Revenue Model by Merchant Size Business Model We mainly acquire medium- to large-sized merchants through alliances with major financial institutions. We mainly acquire small merchants (=long tail segment) through our subsidiaries ◼ Four types of revenue model ◼ Revenue model related to the size of m
Slide 72: Medium-Term Strategy: Acquiring major merchants through alliances
Medium-Term Strategy Acquiring major merchants by focusing on alliances Business Model Meeting customer needs through enhanced credit payment functions and alliances with QR / points vendors Credit E-money QR code J-debit House points Common Points Duty exemption Terminals we offer Floor-Standing Mo
Slide 73: TRX-increase through cashless penetration
TRX-increase through cashless penetration Business Model TRX volume & value tend to go up in a few months to six months after the merchants introduced cashless payment for the first time ◼ Merchant A（Tokyo） Monthly TRX trend TRX Volume TRX Value Merchant Cash only ⇒ Introduce cashless payments N月 N
Slide 74: TAM (Total Addressable Market)
TAM(Total Addressable Market) Market Environment Transaction Value of cashless (face-to-face) payment is expanding rapidly, as the value of IoT / Unattended ◼ Offline Transaction value in Japan ◼ Potential market value of IoT/Unattended Private sector final consumption expenditure in Potential marke
Slide 75: Growth trend of domestic offline cashless market
Growth trend of domestic offline cashless market Market Environment The market for offline cashless payments is currently ¥98 tn, four times larger than the online market. Cashless penetration is expected to rise driven by government-led cashless policies (tn yen) 200 100% Offline cashless market si
Slide 76: Composition Ratio of Domestic Cashless Payment Methods
Composition Ratio of Domestic Cashless Payment Methods Market Environment Even in an environment of significant growth in the proportion of QR codes, transaction value and volume of credit continue to grow Transaction Value Transaction Volume Composition 2019 2020 2021 2022 2023 Composition 2019 202
Slide 77: IoT/Unattended Market Growth
IoT/Unattended Market Growth Market Environment The number of terminals is expected to be equal to or greater than the market for payment terminals in real stores. Unattended market (= general term for vending/service machine market) is expected to expand further due to changes in the external envir
Slide 78: Trends in the number of foreign visitors to Japan
Trends in the number of foreign visitors to Japan Market Environment After a rapid recovery from the post covid, number of visitors has gradually stabilized Number of visiting foreigners (annually) Our inbound-related industry merchants （10K） 6,000 6,000 Government’s target Aggressively cultivate me
Slide 79: Our philosophy on growth strategies
Our philosophy on growth strategies Growth Strategy Our growth strategy is based on the perspective of "a payment platform that provides value to society as an infrastructure company supporting a cashless society”. We develop growth strategies focusing on “value creation” growth strategy ⚫ Market Sh
Slide 80: Strategy to Maximize Transaction Value
Strategy to Maximize Transaction Value Growth Strategy We created a new payment processing route with alliance partners. This route increases GMV, as the route reduces costs to participating merchants and acquirers Merchants Acquirers Competitor/Peer Terminals Conventional Retail Route Processing Pa
Slide 81: Strategy to Maximize Transaction Value
Strategy to Maximize Transaction Value Growth Strategy Due to cashless settlement penetration, TAM of our service scope has continuously expanded – New process network alliance partner will contribute to GMV increase Offline Cashless (face-to-face) Market (2025E) GMV：¥138 tn/year Expansion Continuou
Slide 82: Improvements in Unmanned Terminals (IoT)
Improvements in Unmanned Terminals (IoT) Growth Strategy Unmanned Terminals (IoT) has strengthened alliance initiatives in multiple areas Initiatives to monetize data is planned to materialize in the near future 2023 2024 Progress Launched To be released June Sep Dec Jan Mar June Sep • Orders for su
Slide 83: Data Services in the IoT Domain
Data Services in the IoT Domain Growth Strategy Started providing payment data service for merchandise vending machines, contributing to recurring- model revenue. Supporting merchants' operational efficiency improvement and sophistication (DX) using data IoT Appropriate stock replenishment and cash
Slide 84: Unique Positioning
Unique Positioning Competitive Advantage End-to-end solutions via one-stop platform allows us to create alliances with many players in the market ◼ Solutions in Offline Payment Market Customization Adaptation of Terminal Payment Clearing/ Maintenance/ (Customize Payment Top-End POS Methods) Settleme
Slide 85: Barriers to Entry (Regulations to be Followed)
Barriers to Entry （Regulations to be Followed） Competitive Advantage Many kinds of regulations exist in the face-to-face payment market depending on the payment method, and the number of regulations are increasing. As payment methods become more diversified, the barriers to entry become more challen
Slide 86: Government Promotion of Cashless Payments
Government Promotion of Cashless Payments Industry Topic METI announced its Cashless Vision policy in 2018, Japanese cashless market will expand in response Present Impact on Business Increasing demand for cashless terminals as merchants are obligated to use credit card IC Expanding demand for Imple
Slide 87: New topic of credit card industry
New topic of credit card industry Industry Topic In response to a request from the Japan Fair Trade Commission, Visa, Mastercard, and UnionPay announced their intention to disclose their interchange fee rates by the end of November Breakdown of MDR METI requires fee among credit card companies （mode
Slide 88: Shareholder Structure
Shareholder Structure Company Profile Actively engaged in IR activities for domestic and foreign institutional investors through 1-on-1 meetings and conference appearances, maintaining the ratio of foreign institutional investors at over 20%. GMO-PG Japanese Other enterprises Foreign Individuals ins
Slide 89: Affiliated Companies
Affiliated Companies Company Profile GMO-FG serves in offline face to face payment market as a consolidated subsidiary of GMO-PG GMO INTERNET GROUP （Internet infrastructure business） GMO PAYMENT GATEWAY （Online payment/Payment section of GMO internet group） Consolidated 100% GMO EPSILON （Online paym
Slide 90: Company Profile
Company Profile Company Profile ■Company GMO Financial Gate, Inc.（TSE Growth Ticker:4051） ■Foundation September 1999 ■Address Humax Shibuya Building 7F, Shibuya Dogenzaka 1-14-6, Tokyo ■Stock Capital ¥1,638 mn(end of March 2023) ■Major Shareholder GMO Payment Gateway, Inc. ■Board Member Representati
Slide 91: Reference
Reference Site name URL GMO Financial Gate https://gmo-fg.com/ IR https://gmo-fg.com/ir/ Sustainability https://gmo-fg.com/sustainability/ Recruitment information https://gmo-fg.com/recruit/ GMO Financial Gate (English) https://gmo-fg.com/en/ GMO Payment Gateway https://www.gmo-pg.com/ Cashless Road
Slide 92: Thank you
Thank you GMO Financial Gate, Inc. (TSE Growth 4051) IR web site URL https://www.gmo-fg.com/ir/ Copyright 2024 GMO Financial Gate, Inc.