Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q1 FY2019 Earnings Presentation

29 slides from Gmo Payment Gateway's earnings presentation, Feb 14, 2019

  1. Slide 1: Financial results briefing for the Q1 of FY2019

    Financial results briefing for the Q1 of FY2019 Strong Q1 results raises visibility to achieve full year guidance; OP up over 30% YoY February 14, 2019 The 56 th IR Meeting GMO Payment Gateway, Inc. (3769: Tokyo Stock Exchange Section-1) https://corp.gmo-pg.com/en/

  2. Slide 2: A cautionary note about the contents of the document

    A cautionary note about the contents of the document The contents of this document are based on generally recognized economic and social conditions, as well as assumptions judged to be reasonable by GMO Payment Gateway as of February 14, 2019. However, please note that they are subject to change wit

  3. Slide 3: Agenda

    Agenda 1. Summary of financial results for Q1 FY2019 2. Future initiatives and growth strategy 3. Financial highlights 4. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3

  4. Slide 4: 1. Summary of financial results for Q1 of FY2019

    1. Summary of financial results for Q1 of FY2019 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Financial Results Summary

    1.1 Financial Results Summary OP up 30.2％ YoY, Q1 TRX value also up 31.4% to exceed JPY 1 trillion Q1 FY18 Q1 FY19 FY19 Full Yr % Progress vs （mil. JPY） % YoY Actual Actual Guidance FY19 Guidance （H1 Guidance） （vs H1 Guidance） Revenue 6,098 8,246 ＋35.2％ 31,850 25.9% （15,202） （54.2％） Operating Profit

  6. Slide 6: Factors affecting earnings

    1.2.1 Factors affecting earnings Adj. OP increased 37.3% YoY +35.2％ Revenue （mil. JPY） （＋）Continued strong growth of online payment 8,000 （＋）Expansion of Ginko Pay and other services to financial institutions （＋）Increased GMO Payment after delivery (PaD) transactions （＋）Growth of card-present paymen

  7. Slide 7: Factors behind 37.7% adj. OP growth

    1.2.2 Factors behind to 37.7% adj. OP growth Growth driven by strong online payment and lending service ■OP image by segment (1Q standalone) ■Overseas & Domestic Lending service Breakdown by Service line Japan Overseas (% YoY) ＋30.2％ PaD ≒ up 35％ Insurance income MSB Lending booked in the previous t

  8. Slide 8: What we said back in Nov. 2012…

    1.2.3 What we said back in Nov. 2012… Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 8

  9. Slide 9: Segment Revenue and OP

    1.3 Segment Revenue and OP Payment Processing & MSB grew strongly; strategic losses at Payment Enhancement from upfront investments ■Segment Revenue ■ Segment OP before adjustments & eliminations （mil. JPY） （mil. JPY） Consoli. OP +30.2％ YoY 8,000 Adj. Revenue: +35.2％ OP before adj./elimi. +41.8％ YoY

  10. Slide 10: Revenue breakdown by business model

    1.4.1 Revenue breakdown by business model Over-25% YoY growth across all business models FY2018 Full Yr. （mil. % YoY JPY） 8,000 Spread +33.6％ YoY （＋19.8％） ・Strong online payment 7,000 ・Launch of global lending 3,595 ・Increased GMO PaD transactions 6,000 Fee +30.2％ YoY （＋37.7％） 5,000 2,691 ・Favorable

  11. Slide 11: Revenue breakdown by business model: quarterly trend

    1.4.2 Revenue breakdown by business model Quarterly Revenue trend by business model （mil. JPY） J-GAAP IFRS* 3,595 3,500 3,072 2,946 3,000 2,861 2,773 2,691 2,801 2,705 2,653 2,666 2,471 2,500 2,436 2,360 2,101 2,004 2,000 1,895 1,809 1,527 1,500 1,441 1,383 1,227 1,259 1,184 959 1,026 1,000 931 794

  12. Slide 12: Spread business model

    1.4.3 Spread business model Growth acceleration from expanding online payment and lending service Spread revenue trend ■MSB（Lending)：+242.3％ QoQ；+1,088.8％ YoY Japan: contribution from B2B-type MSB (Receivables guarantee, factoring, etc) Overseas: contribution of lending service ■MSB（Payment after De

  13. Slide 13: 2. Future Initiatives and Growth Strategy

    2. Future Initiatives and Growth Strategy Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 13

  14. Slide 14: Focused product portfolio to drive growth

    2.1 Focused product portfolio to drive growth Pursue growth in the 5 focus areas to achieve FY2025 OP ¥25bn Breakdown of 25% CAGR growth by theme: ・Expanded functionality of 2.5 online payment center ■Overlap of the 5 focus areas IoT ・Cultivate the unattended market Figures in bracket show 2025 OP i

  15. Slide 15: EC: Initiatives to expand footprint

    2.2.1 EC: Initiatives to expand footprint New wins thanks to Installment Sales Act amendment and accelerated growth of TRX value from capturing non-merchandise EC market 1Q TRX value ■Quarterly trend of TRX value （％ YoY) ¥1.03trillion Growth factors (＋31.4％) Acquired large-scale merchant on back （mi

  16. Slide 16: EC: Next Gen Payment Platform

    2.2.2 EC： Next Gen Payment Platform Basic agreement with SMCC, Visa’s participation will jointly leverage our collective strengths Negotiations start 8 th May 2018 Development & rollout of Establish cashless payment One Stop Payment service environment with world- Basic Agreement class safety and se

  17. Slide 17: FinTech: Assets and profit growth

    2.3 FinTech: Assets and profit growth Margin improvement of GMO PaD; rapid growth of global lending Growth ① GMO PaD ② Margin Improvement ③ Expand service line-up strategy - Expand merchant - Accumulate and Analyze payment data - B2B type MSB services, etc footprint and TRX value - Deploy AI ■MSB-re

  18. Slide 18: Cashless: Growth of stock business model

    2.4 Cashless: Growth of stock business model Ginko Pay adopted by 11 Banks; Expand revenue source through linkups with existing services Growth ① Expand Bank adoption ② Create feedback loop to payment Strategy - Build Fee model by linking with existing merchants ■Banks adopting Ginko Pay (includes p

  19. Slide 19: IoT/Card Present Payment: Growth acceleration

    2.5 IoT/Card Present Payment: Growth acceleration Expand Center functionality for Stock/Fee/Initial revenue capture Growth Strategy * ①Expand Settlement Processing Center ■GMO-FG: Revenue breakdown by business model functionality to enable large merchant 1Q F19 % YoY acquisitions Initial ＋291.4％ - T

  20. Slide 20: Global: 1Q performance and growth strategy

    2.6 Global: 1Q performance and growth strategy Further diversify overseas portfolio; establish foothold for payment business ■Global Business quarterly revenue by business line 1Q Topics （unit: ‘000 JPY) （unit: ‘000 JPY) 1,200,000 Bank/LargeCorp business(SMS） US: Lending turned a profit LHS 100,000

  21. Slide 21: 3. Financial Highlights

    3. Financial Highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 21

  22. Slide 22: Balance Sheet changes

    3.1 Balance Sheet changes Increase in deposits received and MSB-related assets; capital raised through Euro-Yen CB Issue （unit: mil. JPY) Current assets Fixed assets Liability Net Asset Deposits Investments （under Representative Merchant Service) *1 Other MSB-related Other MSB-related Capital Other

  23. Slide 23: Major Quarterly KPIs

    3.2 Major Quarterly KPIs Group-wide annual TRX value reaches ¥3.8 trillion Operating merchants: 112,341, TRX volume approx. 400 mil., TRX value approx. 1 trillion. （¥100 mil.) 10,000 （Reference）Cumulative 12-mnth TRX Value approx. ¥3.63 trillion （10,000 TRX) ～ Including GMO FG, the TRX value reaches

  24. Slide 24: 4. Reference materials

    4. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 24

  25. Slide 25: Revenue trend by business model

    4.1 Revenue trend by business model Pursue balanced growth of each business model （mil. JPY） 32,000 J-GAAP IFRS 30,000 28,000 26,000 SPREAD 24,000 22,000 20,000 18,000 16,000 14,000 12,000 FEE 10,000 8,000 6,000 4,000 STOCK 2,000 INITIAL 0 2004/9 2005/9 2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012

  26. Slide 26: Quarterly trend of CoS and SGA ratio

    4.2.1 Quarterly trend of CoS and SGA ratio CoS ratio fluctuates with changes in sales mix *Figures with asterisk exclude outsourcing expense related to MSB. These outsourcing expenses are not booked in SG&A from Q1 FY2018 due to IFRS adoption. （mil. JPY） J-GAAP IFRS 8,246 *50.2％ *44.5％ *47.2％ 52.7%

  27. Slide 27: Quarterly trend of PG and EP's CoS and SGA ratio

    4.2.2 Quarterly trend of PG and EP’s CoS and SGA ratio CoS ratio fluctuates with changes in sales mix *Figures with asterisk exclude outsourcing expense related to MSB. These outsourcing expenses are not booked in SG&A from Q1 F2017 due to IFRS adoption. （mil. JPY） *50.2％ *47.2％ 50.9% 8,000 51.8% *4

  28. Slide 28: Consolidated CF Statement

    4.3 Consolidated CF Statement Positive Free Cashflow from earnings and deposit growth J-GAAP ■Changes in Q1 FY19 (mil. JPY) 20,000 IFRS 18,000 OCF： ＋¥9,997 16,000 Pretax profit +¥1,934 Chgs in receivables －¥56 14,000 Advances paid －¥2,009 12,000 Accrued revenue －¥6,847 10,000 Chgs in payables ＋¥524

  29. Slide 29: Thank You Very Much

    T h a n k Yo u Ve r y M u c h GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange section-1) URL： https://corp.gmo-pg.com /en /ir/ For inquiries please contact our IR team at the telephone number below: Corporate Value Creation Strategy Division (IR Department) TEL: +81-3-3464-0182

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