Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q1 FY2022 Earnings Presentation

44 slides from Gmo Payment Gateway's earnings presentation, Feb 10, 2022

  1. Slide 1: Financial Results Briefing for Q1 FY2022

    Financial Results Briefing for Q1 FY2022 Business expansion accelerates from customized strategy by customer segment February 10, 2022 68 th Investor Meeting Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

  2. Slide 2: Agenda

    Agenda 1. Summary of Financial Results for Q1 FY2022 2. Growth Strategy 3. Initiatives on Focus Areas 4. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 2

  3. Slide 3: Safe Harbor Statement

    Safe Harbor Statement 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 10, 2022. Please note that the contents are subject to change without prior notice in the event o

  4. Slide 4: 1. Summary of Financial Results for Q1 FY2022

    1. Summary of Financial Results for Q1 FY2022 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Earnings Summary

    1.1.1 Earnings Summary Revenue and OP off to a strong start towards full year guidance Achievement vs. IFRS 1H FY2022 Q1 FY2021 Q1 FY2022 % YoY 1H Guidance (¥ Mil) Guidance (%) Revenue 9,767 11,857 +21.4% 23,438 +50.6％ Operating Profit 3,122 4,116 +31.8% 8,117 +50.7％ *See 4.2 Pre-tax Profit 3,038 4,

  6. Slide 6: Growth Trend of Revenue and OP

    1.1.2 Growth Trend of Revenue and OP Revenue grew 21%, OP grew 31% during the ‘With-Corona’ phase Revenue Operating Profit (¥ Mil) (¥ Mil) 12,000 With vs With With vs With ＋21.4％ 4,000 ＋31.8％ 10,000 Pre vs With 3,500 ＋28.5％ Pre vs With 3,000 ＋48.3％ 8,000 2,500 6,000 2,000 1,500 4,000 1,000 2,000 500

  7. Slide 7: Revenue by Business Model (Q1)

    1.2 Revenue by Business Model (Q1) Revenue grown on a recovery trend from contribution of various priority initiatives Initial Stock Fee Spread 5,371 4,808 3,646 3,450 3,149 2,559 1,851 1,906 1,937 1,484 1,359 1,522 1,179 876 659 （¥ Mil） 389 19/1Q 20/1Q イニシャル21/1Q 22/1Q 19/1Q 20/1Q ストック21/1Q 22/1Q 1

  8. Slide 8: Segment Results

    1.3 Segment Results Steady progress in all segments despite the uplift from COVID-19 related demand last term Segment Revenue Consol. ＋21.4％ YoY Segment Profit Consol. ＋31.8％ YoY (¥ Mil) (¥ Mil) 12,000 225 ＋37.8％ YoY 5,000 51 ＋156.3％ YoY ＋ Strong GMO-MR ＋ Strong GMO-MR ＋ Growth of online advertising

  9. Slide 9: GMO-PG Non-consolidated performance (Quarterly Trend)

    1.4.1 GMO-PG Non-consolidated performance (Quarterly Trend) Non-merchandise returns to 25% growth trajectory; Overall performance outperformed plans GMO-PG Non-Consolidated Revenue and OP % YoY （¥ Mil） Revenue ＋16.5％ 7,000 3,500 Revenue from a certain merchant (Left axis) 百万 百万 Merchandise revenue e

  10. Slide 10: Performance of GMO-EP, GMO-PS and GMO-FG (Quarterly Trend)

    1.4.2 Performance of GMO-EP, GMO-PS and GMO-FG ※1 (Quarterly Trend) EP/PS on a recovery trend despite high COVID-19 related demand last term, GMO-FG continues strong performance Revenue (Right axis) KPI (Left axis) GMO-EP Consol. GMO-PS GMO-FG Consol. Revenue ＋ 7.9％ YoY Revenue ＋ 5.6％ YoY Revenue ＋6

  11. Slide 11: 2. Growth Strategy

    2. Growth Strategy Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 11

  12. Slide 12: Growth Acceleration

    2.1 Growth Acceleration Supporting core businesses of large clients leading to growth rates exceeding forecasts at FY2015 Consol. TRX value Energy sector DX and (¥ trillion) decarbonization 8 Offline payment (GMO-FG consol.) support Other online payment (GMO-EP, GMO-PS, etc.) Actual GMO-FG 7 Online

  13. Slide 13: Expanding Support of Core Businesses

    2.2 Expanding Support of Core Businesses Business scale is enlarging yearly from providing digitalization support of core businesses Digitalization support for core businesses ※1 GMO-PG non-consol. revenue by year of contract (FY) (excerpt) ※3 clients※2 Mega 5 (¥ bn) Non- Tax payment (consumption ta

  14. Slide 14: Revenue Expansion Strategy by Customer Segment

    2.3 Revenue Expansion Strategy by Customer Segment Raise sales productivity through customized strategy by customers scale and speed up acquisitions Customer Revenue Growth factors, Customer strategy and Application scale Potential revenue model approach Digitalization of core business Acquire new l

  15. Slide 15: OP Breakdown by Customer Segment

    2.4 OP Breakdown by Customer Segment Growth accelerates from core business support and acquisitions of large clients OP target and breakdown by customer segment ※ (¥ Mil) ¥25.0 bn 25,000 Ann. revenue size of client ■ Large Over ¥100.1 bn ■ Medium From ¥1.0～¥100.0 bn 20,000 ■ Small Under ¥1.0 bn 15,0

  16. Slide 16: 3. Initiatives in Focus Areas

    3. Initiatives in Focus Areas Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 16

  17. Slide 17: Initiatives to Achieve 2025 OP Target

    3.1 Initiatives to Achieve 2025 OP Target Implement product strategy coupled with initiatives customized to each customer segment Large Medium Small Reference page S L G※ (¥100 mil) P L G※ 250 GMO-EP SMEs 3.2 200 GMO-FG Offline payment/IoT 3.4 GMO-PS BNPL 3.5 150 FinTech 250～ Global 3.6 BaaS 3.3 （Em

  18. Slide 18: Broadly Defined EC

    3.2 Broadly Defined EC Focus on DX promotion to acquire large clients, penetrate into SME segment 2021 2025 GMO-PG non-consolidated B2C EC transaction value (Act.) (Target as of 2021) (merchandise, 1,800 non-merchandise; Quarterly trend)※2 十億 OP (¥ bn) 9.5 18.0～22.0 (¥ bn) 1,600 Merchandise EC Growt

  19. Slide 19: BaaS and Cashless (Embedded Finance)

    3.3 BaaS and Cashless （Embedded Finance) Provide proprietary financial function to capture structural changes in financial services 2021 2025 Q1 stock revenue from services to FIs※ (Act.) (Target as of 2021) ■ Ginko Pay OP (¥ bn) 0.6 1.0～ ■ Issuing/Acquiring ■ Others ＋17.7％ YoY Growth Scenario 1）Bui

  20. Slide 20: Offline/IoT

    3.4 Offline/IoT Increase in transactions from the recovery in offline consumption contributing to overall performance 2021 2025 Revenue by business model for GMO-FG and (Act.) (Target as of 2021) GMO-CAS (quarterly trend) ※3 0.58 2.0～ ※1 20/1Q 21/1Q 22/1Q OP (¥bn) % YoY ■ Initial (Right) ＋78.4％ ＋36.

  21. Slide 21: FinTech

    3.5 FinTech Revenue only grew 11.7％ but profit grew 28.9% from growth of high-margin products 2021 2025 Q1 FinTech Service performance (Act.) (Target as of 2021) OP (¥bn) 2.0 3.0～ (% YoY) Revenue Growth Scenario ＋11.7％ ■B2B Factoring －48.5％ 1) Asset shift to high margin services ※ ■Remittance servic

  22. Slide 22: Global

    3.6 Global Entered expansionary phase from COVID-19 reopening ahead of Japan ■ Market environment and business policy ・Overseas is transitioning to post-COVID phase. Asia in aggressive expansion phase, US assessing competitive environment to turn aggressive ・Tailwind for financial business and margi

  23. Slide 23: 4. Financial Highlights and Reference Materials

    4. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 23

  24. Slide 24: Balance Sheet Changes

    4.1.1 Balance Sheet Changes Increase in MSB related asset and deposits received Asset Liabilities/Equity (¥ Mil) (¥ Mil) 243,997 243,997 215,455 215,455 200,000 192,022 200,000 192,022 99,040 102,459 78,251 104,253 150,000 150,000 86,751 95,830 24,833 25,741 48,197 19,614 100,000 100,000 18,021 19,5

  25. Slide 25: Major Financial Indicators

    4.1.2 Major Financial Indicators Strengthened equity base in order to expands MSB segment J-GAAP IFRS (¥ Mil) 45% 300,000 Third party allotment Euro Yen CB Due2026 40% Raised ¥8.0 bn Raised ¥21.1 bn 250,000 35% Euro Yen CB Due 2023 Fully converted 30% 200,000 Issued Euro Yen CB Due 2023 25.9% 25% Ra

  26. Slide 26: OP and Pre-tax Profit Waterfall Chart

    4.2 OP and Pre-tax Profit Waterfall Chart Pre-tax profit grew 41.5% from profit contribution from overseas FinTech investment and lending activities OP YoY: waterfall chart (¥ Mil) Pre-tax profit YoY: waterfall chart (¥ Mil) （+31.8% YoY） （+41.5% YoY） Equity GP SGA Other Other Financial Financial met

  27. Slide 27: Revenue by Business Model (Q1 FY2022)

    4.3.1 Revenue by Business Model (Q1 FY2022) Steady progress of online payments and strong offline terminal sales (¥ Mil) 11,857 Spread ＋11.7％ YoY 12,000 ＋ Early Payment Service ＋ Overseas lending 10,000 9,767 － GMO Payment After Delivery 5,371 － Impact from a merchant on online payment 8,000 Fee ＋23

  28. Slide 28: Quarterly Trend of Revenue by Business Model

    4.3.2 Quarterly Trend of Revenue by Business Model (¥ Mil) J-GAAP IFRS 5,500 5,371 5,000 4,808 4,731 4,707 4,665 4,500 4,290 4,414 4,000 3,646 3,672 3,450 3,500 3,289 3,364 3,149 3,135 3,000 2,922 2,815 2,671 2,713 2,669 2,557 2,532 2,527 2,432 2,559 2,500 2,291 2,382 2,056 1,767 1,906 1,846 2,083 1

  29. Slide 29: Revenue Trend by Business Model (Annual)

    4.3.3 Revenue Trend by Business Model (Annual) (¥ Mil) 55,000 J-GAAP IFRS 50,000 45,000 40,000 Spread 35,000 30,000 25,000 20,000 Fee 15,000 10,000 Stock 5,000 Initial 0 04/9 05/9 06/9 07/9 08/9 09/9 10/9 11/9 12/9 13/9 14/9 15/9 16/9 17/9 18/9 19/9 20/9 21/9 22/9E TSE Listing ※ Online advertising s

  30. Slide 30: FinTech: Assets & Profit Growth (Q1 FY2022)

    4.4 FinTech: Assets & Profit Growth (Q1 FY2022) Steady profit trend from expansion of high margin services MSB related assets Segment revenue Segment profit （% YoY) (end-Dec.) ＋11.7％ +18.4％ －11.8％ －48.5％ +28.9％ +5.0％ ＋12.1％ +5.6% ＋16.1％ ＋47.4％ ＋113.0％ +146.0％ －31.9％ ＋18.1％ Q1 FY2021 Q1 FY2022 Q1 FY2

  31. Slide 31: Quarterly Trend of CoS and SGA Ratio

    4.5.1 Quarterly Trend of CoS and SGA Ratio CoS ratio fluctuates with changes in revenue mix; decline from Q3 FY2020 is due to deconsolidation of※ MK IFRS (¥ Mil) 11,857 12,000 11,132 50.0% 10,646 42.7% 10,121 41.1% 9,767 10,000 37.6% 41.2% 8,927 40.2% 9,030 9,356 7,769 7,945 8,623 39.6% 36.3% 8,160

  32. Slide 32: CoS and SGA ratio of GMO-PG and GMO-EP (Quarterly Trend)

    4.5.2 CoS and SGA ratio of GMO-PG and GMO-EP (Quarterly Trend) Cost of sales ratio for online payment business trending stably (¥ Mil) 8,000 47.4% 7,682 45.2% 50.0% 44.8% 7,122 7,000 6,370 6,709 6,858 6,878 41.6% 39.7% 41.2% 36.8% 36.5% 6,110 6,000 36.7% 33.1% 40.0% 36.7% 34.2% 5,142 5,271 33.3% 5,1

  33. Slide 33: Operating Stores, TRX Volume and Value (Quarterly Trend)

    4.6.1 Operating Stores, TRX Volume and Value (Quarterly Trend) Group-wide annual TRX value reaches ¥8.7 trillion ※1 ※2 Operating stores 129,659 stores, consol. TRX volume approx. 1.12 bn, consol. TRX value approx. ¥2.6 trillion (Stores) (¥100 Mil) (10,000 22,000 (Reference) online payment TRX volume

  34. Slide 34: TRX volume and value (Quarterly Trend)

    4.6.2 TRX volume and value (Quarterly Trend) TRX volume growth accelerating from increase in micropayments Quarterly trend of online payment TRX volume Quarterly trend of online TRX value ＋28.1% YoY TRX volume ＋20.3% YoY TRX value (Million) A certain merchant (¥ Billion) A certain merchant 1,000 900

  35. Slide 35: Data Book

    4.6.3 Data Book Starting this quarter, a data book containing major financial indicators, KPIs will be made available on the website Data Book Q1 FY2022 URL：https://www.gmo-pg.com/en/corp/newsroom/pdf/211220_gmo_pg_ir_integrated_report_en.pdf Figures included in the data book: イメージ ・Revenue by busin

  36. Slide 36: Consolidated Cashflow Statement

    4.7.1 Consolidated Cashflow Statement (¥ Mil) J-GAAP IFRS Q1 FY2022 changes by item (¥ Mil) 55,000 Operating CF： ＋15,996 50,000 Pretax profit +4,299 45,000 Advances paid －5,305 40,000 Accrued revenue －7,848 35,000 Accrued expense ＋7,050 30,000 Deposits received ＋21,713 25,000 Chg. in other liabiliti

  37. Slide 37: Changes in the Consolidated CF Statement

    4.7.2 Changes in the Consolidated CF Statement Following factors affect operating CF other than the pretax profit Related Liabilities & Assets Impact from business expansion Payment Processing Business Sales proceeds from Deposits received Liability Operating CF merchants under (liability) Yearly fl

  38. Slide 38: Expand line-up and expand revenue per customer

    4.8 Expand line-up and expand revenue per customer Diverse value proposition to existing customers Promote up-sell through resolving customers’ issues Our Strengths/Value Proposition Highly scalable payment platform Expand Product Early Payment • GMO-PG Remittance • Incorporates various payment meth

  39. Slide 39: BaaS and Cashless (Embedded Finance)

    4.9 BaaS and Cashless （Embedded Finance） Deploy BaaS business by leveraging our strengths Market • Growing cashless and DX demand Environment • Provide financial service embedded into main service of business operators Strengths • One-stop offering of payment know-how, money flow management, develop

  40. Slide 40: Offline Payment and IoT: Initiatives to terminal-free payment

    4.10 Offline Payment and IoT: Initiatives to terminal-free payment Implementing initiatives for the future without payment terminals. Strengthen initiatives in mobility and beverage vending machine sectors Tap to Phone NFC Tag Tap-ad-Pay Payment 2021/12～ New Likely during FY2022 New Started JCB tap-

  41. Slide 41: Global

    4.11 Global Leverage synergy with NAm investments; focus on growth in SE Asia and India markets Payment ■Global business footprint Processing Business North America Japan Money Service Innovation Business Profit center center SE Asia & India Growth center ■Global MSB investment and loan portfolio ■H

  42. Slide 42: Sustainability

    4.12 Sustainability Integrated Report outlines the various initiatives to realize sustainability 28 th Integrated Report URL：https://www.gmo-pg.com/en/corp/newsroom/pdf/211220_gmo_pg_ir_integrated_report_en.pdf Specific initiatives (excerpt) Realize convenient and comfortable society by promoting EC

  43. Slide 43: Strengthening governance

    4.13 Strengthening governance Realize medium to long term corporate value enhancement from strengthening supervisory function of Board of Directors Corporate Governance Organizational Structure ① Transition to company with Audit and Supervisory Committee ② Proportion of External Director rises to a

  44. Slide 44: Thank You Very Much

    Thank You Very Much GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange, Section 1) URL： https://www.gmo-pg.com/en/corp/ For inquiries, please contact our IR team at the telephone number below: Corporate Value Creation Strategy Division (IR Department) TEL: +81-3-3464-0182 E-mail：ir-contact@gmo-pg

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