Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q3 FY2019 Earnings Presentation

28 slides from Gmo Payment Gateway's earnings presentation, Aug 7, 2019

  1. Slide 1: Financial results briefing for the Q3 of FY2019

    Financial results briefing for the Q3 of FY2019 Return to high growth despite macro headwinds, steady progress in securing post-FY2020 growth August 7 th, 2019 The 58 th IR Meeting GMO Payment Gateway, Inc. (Code: 3769; TSE-1st section) 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 August 7, 2019. However, please note that they are subject to change withou

  3. Slide 3: Agenda

    Agenda 1. Summary of financial results for Q3 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 Q3 of FY2019

    1. Summary of financial results for Q3 of FY2019 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Financial Results Summary

    1.1 Financial Results Summary Revenues up 25.3% YoY, OP up 30.2% YoY, brisk progress towards achieving full year guidance FY2019 Q3 FY2019 Q3 FY2019 % Progress （mil. JPY） % YoY Full Yr. Actual Actual vs. guidance guidance Revenue 19,122 23,961 ＋25.3％ 31,850 75.2% Operating Profit 5,190 6,760 ＋30.2％

  6. Slide 6: Sequential revenue growth from Q2 to Q3

    1.2 Sequential revenue growth from Q2 to Q3 Q3-only revenue excl. MACROKIOSK is up 23.8%, a return to high revenue growth trajectory ■YoY comps of Q3-only and Q2-only ■ Factors for Q3-only revenue growth Q2-only YoY Q3-only YoY 【1】Broader EC growth offsets Consol. ＋20.3％ Consol. ＋21.0％ merchandise E

  7. Slide 7: Revenue breakdown by business model

    1.3 Revenue breakdown by business model Revenue grew 25.3%, with particularly strong growth of core online payment (spread model) Spread +25.3％ YoY Mil. JPY ₊ Strong online payment (+32.2%) ₊ Growth of GMO Payment after Delivery 20,000 ₊ Expansion of global lending 10,225 Fee +20.5％ YoY 8,159 15,000

  8. Slide 8: Cumulative Q3 Segment Revenue and OP

    1.4 Cumulative Q3 Segment Revenue and OP Strength of the Payment Processing & MSB segments offset the strategic upfront investments in the Payment Enhancement Business ■Segment Revenue ■ Segment OP before adjustments & eliminations Mil. JPY Mil. JPY Revenue: +25.3％ Consoli. OP +30.2％ YoY （）: % YoY 2

  9. Slide 9: 2. Future Initiatives and Growth Strategy

    2. Future Initiatives and Growth Strategy Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 9

  10. Slide 10: Merchant evolution and growth strategy towards 2025

    2.1. Merchant evolution and growth strategy towards 2025 Deploying initiatives to achieve OP ¥25.0bn, expanding scope and size of merchants 2000 2005 2010 2015 2020 2025 2030 Listed on TSE Mothers Establishment TSE First Section Capital alliance with SMFG ※1 Strategy to achieve OP ¥25bn by 2025 1. S

  11. Slide 11: The Broader EC: creating new markets ①

    2.2.1. The Broader EC: creating new markets ① Non-merchandise EC areas to lead growth ■ Distribution of merchants by sector Based on GMO-PG parent data; covering merchants with over ¥30 mil. C2C monthly revenue and annual growth rate of over 20% Growth of a 【2 years ago】 【Current】 Major merchant Fin

  12. Slide 12: The Broader EC: creating new markets ②

    2.2.2 Broader EC: creating new markets ② Focus on defensive new markets, and blue ocean areas ■ Distribution of merchants by sector Based on GMO-PG parent data, covering merchants with over-¥30 mil. monthly revenue and annual growth rate of over-20% 【3 Years from now】 【Current】 Utility bills Revenue

  13. Slide 13: FinTech: Assets and profit growth

    2.3.1 FinTech: Assets and profit growth *1 Rapid growth of global lending and margin improvement of GMO PaD ％ indicates YoY change ■MSB-related assets ■ Segment Revenue ■Segment OP （mil. JPY) 1,477 －43.5％ －20.5％ +27.3％ YoY +24.4％ YoY Impact from ＋69.0％ YoY change in +32.1％ Provisions for doubtful ac

  14. Slide 14: FinTech: Raising capital efficiency

    2.3.2 FinTech: Raising capital efficiency Raising capital efficiency of MSB business from roll-out and expansion of high-ROIC services ■Receivables purchased and ■ MSB related asset and ROIC factoring revenue trend Overall MSB ROIC 0.9％ ⇒ 2.6％ ROIC Four-fold 250 00 Low increase 500 ,0 00 200 00 400

  15. Slide 15: Cashless: Expansion of Stock Revenue

    2.4 Cashless: Expansion of Stock Revenue Making multifaceted inroads into the cashless market by strengthening offline/online synergies ■Quarterly Stock revenue from ■ GMO-PG Group’s strategy to the cashless services to FIs payment market (offline and online) Overall Purpose: Payment support to meet

  16. Slide 16: IoT: Unattended Markets

    2.5 IoT：Unattended Markets Reinforce sales in this high-growth market; aim to expand services to major merchants ■Unattended Markets revenue: ■ Focus Areas Plan and Actual Vending Machine Up 33％ YoY ・Several large merchants to go live next FY Fare Adjustment/ Up 170％ YoY Achieved 2 years ahead of pl

  17. Slide 17: Global: The five new payment areas

    2.6.1 Global: The five new payment areas Making steady inroads in the “AI x New Payment” domain ■ Our presence in the 5 new payment domains (Overseas & Japan) GMO-PG’s domain Overseas  Investment into top-rated Fintech/Payment corporates  Loans (structured finance) that are to revenue-creating, kn

  18. Slide 18: Global: Revenue trend by business line

    2.6.2 Global: Revenue trend by business line MK: Lending grows, focusing on neighboring new markets despite headwinds ■Quarterly revenue trend of MacroKiosk MacroKiosk’s Revenue and Lending Q3-only: Up 8.2% YoY （Mil. JPY） ・Deceleration of Malaysian business offset by 1,200 expansion into neighboring

  19. Slide 19: 3. Financial Highlights

    3. Financial Highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 19

  20. Slide 20: Revenue by business model

    3.1 Revenue by business model Quarterly trend of revenue by business model ※ （mil. JPY） J-GAAP IFRS 3,500 3,595 3,379 3,250 3,072 2,997 2,861 2,971 3,000 2,946 2,773 2,666 2,801 2,653 2,691 2,705 2,471 2,436 2,500 2,360 2,101 2,004 2,000 1,895 1,809 1,527 1,500 1,383 1,441 1,240 1,227 1,259 1,184 1,

  21. Slide 21: Balance Sheet Changes

    3.2 Balance Sheet Changes Increase in deposits received and MSB-related assets Assets Liabilities and Equity Mil. JPY 126,948 Mil. JPY 126,948 （百万円） （百万円） 120,000 116,858 120,000 116,858 39,403 43,394 100,000 100,000 42,033 38,800 84,338 84,338 80,000 80,000 24,943 15,608 27,533 14,549 36,497 60,000

  22. Slide 22: Major Quarterly KPIs

    3.3 Major Quarterly KPIs Group-wide annual TRX value reaches ¥4.3 trillion ※1 Operating stores: 105,891 stores, TRX volume approx. 430 mil., TRX value approx. ¥1.09 trillion. （¥100 mil.) （Reference）Cumulative trailing 12-mnth TRX Value approx. ¥4.05 trillion 11,000 （stores) TRX value reaches ¥4.33 t

  23. Slide 23: 4. Reference materials

    4. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 23

  24. Slide 24: Revenue trend by business model (annual)

    4.1 Revenue trend by business model (annual) 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 20

  25. Slide 25: 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 December 2017 (Q1) due to IFRS adoption. J-GAAP IFRS （mil. JPY） ※50.2％ ※44.5％ ※47.2％ 8,2

  26. Slide 26: 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 *All figures are based on J-GAAP PG: GMO-PG, EP: GMO Epsilon （mil. JPY） 8,000 51.8% 50.9% 50.0% 48.8% 47.4% 44.8% 7,000 41.3% 44.8% 44.9% 45.3% 42.5% 40.0% 6,000 36.7% 36.8% 34.0% 36.7% 5,032 4,840

  27. Slide 27: Consolidated CF Statement

    4.3 Consolidated CF Statement ■Cumulative Q3 FY19 changes （mil. JPY） J-GAAP IFRS (mil. JPY) 20,000 Operating CF: －¥1,886 18,000 Pretax profit +¥6,582 16,000 Chgs. in rcvbles +¥1,046 14,000 Advances paid －¥6,549 12,000 Accrued Income －¥4,845 Chgs. in payables ＋¥48 10,000 Accrued expenses +¥528 8,000

  28. Slide 28: 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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