Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q3 FY2017 Earnings Presentation

32 slides from Gmo Payment Gateway's earnings presentation, Aug 1, 2017

  1. Slide 1: Financial results briefing for the 3Q of FY2017

    Financial results briefing for the 3Q of FY2017 Maintaining high growth despite the incident impact August 1, 2017 The 50 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 August 1, 2017. However, please note that they are subject to change withou

  3. Slide 3: Agenda

    Agenda 1. Summary 2. Summary of financial results for 3Q FY2017 3. Future actions to realize growth strategies 4. Financial highlights 5. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3

  4. Slide 4: 1. Summary

    1. Summary Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Industry topics

    1.1 Industry topics Our position regarding recent issues ■A compilation of measures is being taken, to develop a world-level payment environment; for implementation of the revised Installment Sales Act in May 2018 ・The revised Act requires mandatory security measures, merchant inspections, and envir

  6. Slide 6: Business performance

    1.2 Business performance OP +33％ (cumulative), +30.4% (3Q alone) 3Q (cumulative) 3Q (Apr-Jun) （Million yen） FY2016 FY2017 FY2016 Actual Change Full-year Progress Actual Change Actual Actual (%) forecast (%) (%) Revenue 15,708 8,820 78.1 20,370 77.1 5,716 3,089 85.0 Gross profit 10,961 6,822 60.7 - -

  7. Slide 7: Factors that affected the cumulative results

    1.3 Factors that affected the cumulative results Revenue +78.1% (YoY), net profit -16.3% with income tax impact Revenue 16,000 Million yen +78.1％ ・Expansion of app business for banks ・Acquisition of large merchants by GMO-PS ・Consolidation of FG and MACROKIOSK 14,000 ・Delays in some projects due to

  8. Slide 8: 2. Summary of financial results for 3Q FY2017

    2. Summary of financial results for 3Q FY2017 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 8

  9. Slide 9: Quarterly results

    2.1 Quarterly results Maintaining strong growth: Revenue +85% (YOY), OP +30% (YOY) ％: YoY change ■ FY2017 Quarterly results（consolidated) +85.0％ (Million yen) +30.4％ Revenue 1,400 Operating profit (Million yen) 5,000 1,200 1,000 4,000 800 3,000 600 2,000 400 *Temporary revenue boosters of the 17/2Q

  10. Slide 10: Revenue/OP by segment (Cumulative)

    2.2 Revenue/OP by segment (Cumulative) Significant growth in revenue across all segments; OP of the payment processing business up 32% *（%）：YoY ■Revenue by segment ■ OP by segment (before consolidation adjustments) (Million yen) 16,000 (Million yen) 444 （+258.0％） 4,900 2,805 14,000 （+210.1％） 124 12,

  11. Slide 11: Payment processing business

    2.3 Payment processing business Revenue +34% (YoY): 20% growth from online payments net of FG （Million yen） Revenue FG revenue OP（ before consolidation adjustments ） 3,000 Revenue of large system development YoY ■Business environment +34.1％ * (+20.0％ Online 2,500 Expansion of the Ecommerce market ex

  12. Slide 12: MSB

    2.4 MSB Returned to operating profitability in 3Q; measures in place to keep the same for the full year (Million yen) Revenue OP （ before consolidation adjustments ） 1,400 ■Business environment 1,200 YoY Needs for new services (remittance, early payment, and deferred payment) +161.8％ Expansion of se

  13. Slide 13: Payment enhancement business

    2.5 Payment enhancement business Started PL consolidation of MACROKIOSK from the 2Q (Million yen) Revenue MK revenue OP（ before consolidation adjustments ） 1,200 * ■Business environment Global market： YoY Asian consumption and EC market in the 1,000 expansion stage +291.0％ Online advertising： Expans

  14. Slide 14: Revenue breakdown by business model (cumulative)

    2.6 Revenue breakdown by business model （cumulative） More than 25% revenue growth in all business models （Million yen） 16,000 Spread: YoY+76.9％ ・Expansion of MSB（GMO payment after delivery)* 14,000 ・Increase in the transaction value 7,226 12,000 Fee: YoY+120.9％ 10,000 ・Consolidation of MK ・Expansion

  15. Slide 15: Full-year forecast

    2.7 Full-year forecast Keeping our full-year forecast revised in 2Q ■ FY2017 （Million yen, ％ YoY） Operating Ordinary Revenue Net profit EBITDA profit profit Full year 20,370(68.2％) 5,013 (31.2％) 4,673 (23.6％) 2,762 (-5.1％) 5,811 （38.7％） Dividends 37 yen (+10 yen) forecast ■ Points * EBITDA＝OP + Depr

  16. Slide 16: 3. Future actions to realize growth strategies

    3. Future actions to realize growth strategies Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 16

  17. Slide 17: Mid-term goals

    3.1 Mid-term goals OP goal for 2020 can be achieved by growth of our existing services and products OP target ASEAN EC market（¥T） ¥10bil for 2020 Global 2.4 → 4.0 *Total forecast for countries Business of our operations Online advertising market(¥T) Online 1 → 1.5 Advertising Payment enhancement bus

  18. Slide 18: FY2017 results and future actions

    3.2 FY2017 results and future actions Gaining results through strategic investments; Action plan for 2020 Results and tasks Action plan for 2020 High Lights ・Expansion of app business for banks ・Expansion of app solutions and partner banks ・Rapid expansion of “GMO payment after delivery” ・Establishi

  19. Slide 19: Payment processing business: business for banks

    3.3.1 Payment processing business：business for banks Expanding mobile payment services among regional financial institutions Focusing on “mobile banking” to expand FinTech services Expansion of app solutions Increase of partner banks and multi-bank payments From April 2016 OEM expansion of our Expec

  20. Slide 20: Payment processing business: B2B

    3.3.2 Payment processing business ：B2B Towards becoming an industry-standard B2B payment platform B2B ratio in payments processed by GMO-PG (non-consolidated) Transaction value Operating stores 4.0% Result: B2B payments have steadily increased in the past three years 3.0% Task: Ratio of B2B stores>R

  21. Slide 21: MSB: assets and segments performance

    3.4.1 MSB：assets and segments performance Revenue up by 2.7 times in line with increase in MSB assets MSB-related assets（BS) MSB-related revenue・OP（PL) (Million yen) 30,000 Revenue related to MSB assets increased 25,000 by 3.0 times 2.3 2.7 20,000 times times 15,000 10,000 5,000 2016/6(cumulative 3Q

  22. Slide 22: MSB: GMO payment after delivery

    3.4.2 MSB：GMO payment after delivery New service significantly increased payments; Original service also showed solid growth Transaction value Transaction volume In the process of adjusting the credit check process Payment volume Payment value Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights

  23. Slide 23: Business in Asia

    3.5.1 Business in Asia Steady growth of group companies, partners and portfolios 0.5 ■Global business: 兆 progress and results 円 The first FinTech investment fund in Japan dedicated to payment ventures in Asia ・Progress in acquiring major （¥2 billion） merchants and banks across GDP Philippines and In

  24. Slide 24: Global investment strategies

    3.5.2 Global investment strategies Global synergy：Connecting investments in growing SEA and North America PG-Japan PG-Singapore North America Innovation • Purpose：increase profit on the main center battlefield Japan • Source of investments： direct investments（PG, EP, FG） Profit Center • Purpose：acqu

  25. Slide 25: 4. Financial highlights

    4. Financial highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 25

  26. Slide 26: Consolidated Balance Sheet

    4.1 Consolidated Balance Sheet Increase in assets followed by MSB and expansions (Million yen) End of 3Q’17 End of 3Q’16 Change (Million yen) End of 3Q’17 End of 3Q’16 Change Current assets 65,731 47,680 18,050 Current liabilities 52,202 35,459 16,742 Short-term borrowings 28 0 28 Cash and deposits

  27. Slide 27: Major KPIs (Quarterly change)

    4.2 Major KPIs (Quarterly change) Annual transaction value amounted to 2.4 trillion yen Number of operating stores: 88,425/Transaction value: ¥690 billion/Transaction volume: 281 million Transaction value (number （billion yen） of stores) 6,500 （Reference） Transaction value(12 months cumulative) 2.39

  28. Slide 28: 5. Reference materials

    5. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 28

  29. Slide 29: Cost of revenue ratio/SG&A ratio (Quarterly change)

    5.2 Cost of revenue ratio/SG&A ratio （Quarterly change） The cost of revenue ratio changed due to the sales composition *Excluding MSB-related outsourcing expenses (Million yen) 5,716 5,645 *50.2％ 52.7% *44.5％ 50.9% 50.3% 50.0% 5,000 *42.6％ *41.7％ 45.6% 46.8% 43.5% 43.8% 43.6% 44.2% *39.9％ 4,347 43.6

  30. Slide 30: Revenue breakdown (Quarterly)

    5.3 Revenue breakdown（Quarterly） Significant revenue increase in all business models 2653 (Million yean) 2,471 2,500 Year-over-year Initial +57.0% 2,101 Stock +24.3% 2,000 1895 Fee +152.9% 1,808 Spread +84.2% 1,527 1,441 1,500 1,383 1,227 1,259 1,026 931 959 749 794 1,000 724 904 929 874 804 748 733

  31. Slide 31: Changes in segments and Revenue models

    5.4 Changes in segments and Revenue models “GMO payment after delivery” is divided into fee and spread, consolidation of MK Red：Changes from 2Q 4 business models Payment processing（MK） ３ Segments Payment processing Payment processing Initial SSL business System development （Initial revenue） System d

  32. Slide 32: Thank you very much!

    Thank you very much! GMO Payment Gateway Inc. (TSE:3769) URL https://corp.gmo-pg.com/en For more information, please contact the Corporate Value Creation Strategy Division Investor relations office TEL:+81-3-3464-0182

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