Financial Results Briefing for Q1 FY2023
Deploying the strategy that incorporates medium-to-long termchanges in business environment

February 14, 2023
72 th Investor Meeting

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

Agenda1. Summary of Financial Results for Q1 FY2023
2. Growth Strategy and Initiatives in Focus Areas
3. Sustainability
4. Financial Highlights and Reference Materials
Following abbreviations are used in this material.
GMO-PG: GMO Payment Gateway; GMO-EP: GMO Epsilon; GMO-MR: GMO Medical Reservation Technology; GMO-PS: GMO Payment Service;
GMO-FG: GMO Financial Gate; GMO-CAS: GMO Card System
Merchandise EC: apparel, food & beverage, cosmetics & health foods, home delivery & newspaper, household goods, office supplies, C2C, etc.
Non-merchandise EC: digital content & telecommunication, utility, travel & ticket, insurance, membership fees and services, etc.
PF: Platform

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

2

Safe Harbor Statement

The contents of this document are based on generally
recognized economic and social conditions, as well asassumptions judged to be reasonable by GMO Payment
Gateway as of February 14, 2023.
Please note that the contents are subject to change
without prior notice in the event of changes in thebusiness environment or other unforeseen occurrences.

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

3

1.

Summary of Financial Results for Q1 FY2023

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

4

1.1

Earnings Summary (Consolidated)

Revenue grew 24.9%, achieving 52.0% of 1H guidance,
but we maintain a cautious guidance
IFRS（¥ Mil）

Q1 FY2022

Q1 FY2023% YoY

FY2023 1H
Guidance

Achievement %of 1H Guidance

Revenue

11,857

14,813＋24.9％

28,491

52.0%

Gross Profit

8,173

9,791

＋19.8％－－

Operating
Profit

4,116

5,090

＋23.7％

10,33049.3％

Pre-tax Profit

4,299

4,687

＋9.0％

9,648

48.6％

2,517

2,447

－2.8％

5,952

41.1％

4,612

5,657

＋22.7％－－

ProfitAttributable to Ownersof Parent

EBITDA

Operating Stores(end-Q1 FY2023)
KPI (% YoY)

147,204（＋12.6％）

Consol. TRX Volume(Q1 FY2023 standalone)

Consol. TRX Value(Q1 FY2023 standalone)

Approx. 1.46 bn (+29.8％) Approx. ¥3.6 trn (＋34.2％)
o.w., online approx. 1.33 bn (＋27.1％)

o.w., online approx. ¥2.6 trn (+23.2％)※ EBITDA=Operating Profit + Depreciation.
※ Operating stores figure is for GMO-PG and GMO-EP. Consolidated TRX volume and value figures are the sum totals for GMO-PG, GMO-EP, GMO-PS and GMO-FG.
The online payment figures are the sum totals for GMO-PG, GMO-EP and GMO-PS.
※ The standards for calculation the number of operating stores has been revised from Q1 FY2023.
Figure exclude an operating stores of a specific merchant and stores using fincode byGMO. If included, operating stores would be 502,160 (up 37.6% YoY).

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

5

1.2

OP and Pre-tax Profit Waterfall Chart

OP grew 23.7% from increased revenue, forex losses
recorded but risk to full year guidance removed
OP YoY: waterfall chart（+23.7% YoY）（¥ Mil）

SGA
GP
increase
Other
Other
increase＋1,617 －634 revenue expense
increase increase
5,090
＋5
－14

Pre-tax profit YoY: waterfall chart（+9.0% YoY）

Financial Financial
EquityOP income expense
methodincrease increase increase
profit
＋973
＋17
－558
decrease－44 4,687

4,299

4,116

・Interest income increase ＋184
・Gains on inv. partnerships
recorded in previous term －152

・ Increase in prov. for
doubtful accounts －128

・FX loss・CoS ratio increase －415
・Revenue increase ＋2,033

Q1 FY2022
OP（¥ Mil）－457※ Risk of forex loss to fullyear guidance has
already been removed.

Q1 FY2023
OP

Q1 FY2022
Pre-tax Profit

Q1 FY2023
Pre-tax Profit※ The “+” and “-” sign denote the direction of the impact to operating profit and pretax profit.

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

6

1.3

Market Stats and GMO-PG’s TRX Value

Despite tough market conditions, above-market growthachieved from the increase in offline and large EC merchants※1

Offline TRX Value (GMO-FG Consol.)※2

Non-merchandise EC (GMO-PG)

Company ＋76.0%
Market +15.2%

Company +34.3%
Market +14.1%

Company’s GMV
Market Stats

Company’s GMV
Market Stats

140%

60%

120%

50%

100%
80%
60%

Merchandise EC (GMO-PG/PS/EP）

Company
Market

100%

80%

40%

+8.9%
－2.4%

GMO-PG/PS
Market Stats

GMO-EP
Impactfrom large
merchants

60%

30%
20%

40%

10%
40%

20%

0%
20%
0%

-10%

0%

-20%

-20%

-30%

-20%

・Sales capability of payment
terminal sales from collaboration
with SMCC

・Entering new market domains, suchas large enterprises and utilities
・Rollout of industry specific PFs andintra-industry deployment

・Strategy that responds tomarket trends
・Acquisition of large/growing
merchants※1 Offline market: “METI’s Survey of Selected Service Industries.” The figures for December 2022 for offline market has not been announced as of this writing; the above figures present
the YoY growth rate for Oct.～Nov. period. EC Market: Based on data from Ministry of Internal Affairs and Communication’s “Family Income and Expenditure,” data has been classified intomerchandise and non-merchandise based on the total internet expenditures per household.
※2 GMO-PG figures excludes offline payment (GMO Cashless Platform)

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

7

1.4

Waterfall Chart of Consol. Revenue

Growth of 24.9% from expanding offline domains, growth of nonmerchandise and recovery of large merchandise merchant andConsol.
BNPLConsol. GMO-FG＋52.7％（％ YoY)（¥ bn）

GMO-PG＋22.1％

GMO-PS＋22.3％

GMO-EP＋1.2％

SME
domain15

Consolidated＋24.9％

Other ¥14.8bn

BNPL
Rate revision, large
merchant acquisition, etc.

MSB ＋24.8％
BaaS Support +38.1%
Merchandise EC ＋13.3％

13Strong growth at large merchant and food &beverage, etc.

¥11.8 bn

Non-merchandise EC ＋24.8％
Growth of GMP, utilities, travel/ticket, etc.

Stock-type ＋53.6％
Operating terminals and pickupof offline consumption

Initial ＋52.6％

100Strong payment terminal sales incl. tolarge customers
22/1Q

23/1Q

※ MSB stands for Money Service Business.

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

8

1.5

GMO-PG Non-consolidated Performance

Online payment up 20.1% from continued non-merchandise EC
and recovery of merchandise EC% YoY ※2

GMO-PG Non-consolidated Revenue and OP ※1（¥ Mil）
Revenue at certain merchant (left axis)
Merchandise EC revenue (left axis)
7,000

5,000

4,500

Non-merchandise revenue (left axis)
Operating profit (right axis)

4,000

6,000
3,500
5,000

4,000

3,000

3,000

2,500

2,000

0

＋16.5％＋22.1％＋13.6％＋20.1％－1.6％＋13.3％

ApparelFood & Beverage
Cosmetics, Health food－44.9％＋35.8％＋12.4%＋7.1％＋21.8％＋5.1%

Non-merchandise EC＋27.2％＋24.8％＋23.7％＋41.4％＋30.5%＋15.9％＋19.2％＋44.1%

Online payment
Merchandise EC

Digital content・Telecom
Utility
Travel & Ticket

1,500

BaaS Support＋26.7％＋38.1％

1,000

Money Service Business ＋10.1％＋24.8％

2,000

1,000

23/1Q

Revenue

百万

百万

8,000

22/1Q

500

0

Remittance service＋5.1％＋20.9％

Early Payment＋58.4％＋23.5％

Overseas lending ※3＋100.4％＋26.2％

21/1Q 21/2Q 21/3Q 21/4Q 22/1Q 22/2Q 22/3Q 22/4Q 23/1Q※1 Figures includes BaaS support and MSB revenues. ※2 Figures are before elimination and adjustments. Online payment revenue is after eliminations and adjustments. The
figures for BaaS Support is the sum total for Ginko Pay and processing platform. ※3 Figure for overseas lending is on a consolidated basis. Figures are after adjusting for the onetime revenue recognized in Q4 FY2021 and Q1 FY2022. Figures for PG non-consolidated would be Q1 FY2022 ＋46.2％, Q1 FY2023 +0.5％ YoY.

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

9

1.6

Performance of GMO-EP, GMO-PS and GMO-FG※1

GMO-FG trending strongly; GMO-PS impacted by rate revision;
GMO-EP strengthening new initiatives
Consol. GMO-EP

GMO-PS

Consol. GMO-FG

Revenue (% YoY) ＋1.2％

Revenue (% YoY) ＋22.3％

Revenue (% YoY) ＋52.7％

Revenue (left axis)※2（¥ Mil）

Operating stores (right axis)（trx.）

1,500

60,00050,0001,000（¥ Mil）

Revenue (left axis)

Revenue (left axis)

New merchants (right axis)（trx.） （¥ Mil）

Operating terminals (right axis)（units）

2,500

200

3,000

200,000

2,500

2,000

150

150,000

2,000

40,0001,500
100

30,0001,500

100,000

1,000
1,000

20,000New initiatives facing challenges
Strengthened management
structure from Q2

Revenue increased from rate revisions
Progress in acquiring large merchants

23/1Q

22/4Q

22/3Q

22/2Q

22/1Q

21/4Q

21/3Q

0

21/2Q

0

21/1Q

23/1Q

22/4Q

22/3Q

22/2Q

22/1Q

0

21/4Q

0

21/3Q

23/1Q

22/4Q

22/3Q

22/2Q

22/1Q

21/4Q

21/3Q

21/2Q

0

21/1Q

0

50,000500

21/2Q

10,000

50

500

21/1Q

500

Strong terminal sales contributing
to payment TRX growth※3
Stock-type revenue up 53.6％※1 The figures for all the companies stated above are amounts before eliminations and consolidated adjustments. GMO-EP Consol. includes GMO-EP and GMO-MR.
GMO-FG Consol. includes GMO-FG and GMO CAS.
※2 Figures present the number of B2C EC merchants. ※3 Stock-type revenue (sum total of stock, fee and spread) is after consolidated eliminations.

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

10

1.7

Revenue by Business Model

Fee revenue up 35.2% from increased transactions andacquisition of large merchant% YoY（¥ Mil）
16,000Spread14,813
11,857

＋

5,371
4,257

8,000

6,000

3,149

4,000

2,237

1,851

2,000

2,260

1,484

0
22/1Q

Initial＋11.7％＋12.8％＋23.1％＋35.2％

6,057

Fee
10,00023/1Q＋ Online payment (PG)
－ Online payment (EP)－ GMO Payment After Delivery

14,00012,00022/1Q

Fee※Special factor:
rate revision of GMO Payment After Delivery

Stock
＋
＋
＋
－

Spread

＋＋21.6％＋20.9％＋69.4％＋52.2％

Processing Platform
Offline payment
Development of online payment
Online advertising service

Initial

23/1Q

Stock

Offline payment (FG)

Terminal sales expanded from large projects※ The “+” signs indicate services with growth rates that are higher than 25% or if the growthrate is higher than that of the business model; the “-” indicates growth rates that are lower.

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

11

1.8

Segment Results

All segments post revenue increased but MSB segment profits
decline from higher credit costs, etc.
Segment Revenue

Consol. ＋24.9％ YoY（¥ Mil）（¥ Mil）
16,00014,81314,00012,000

Segment Profit ＋23.7％ YoY（after consol. adjustments)

11,857

246

225

3,356

% YoY

6,000

41

＋9.1％

＋ GMO-MR－ Online advertising down 25.7％

2,772

10,000

% YoY

51

5,000

－ Online advertising revenue
decline

5,090＋21.0％+ Growth in remittance+ Expansion of GMO Payment
After Delivery

8,000

4,000

4,116

11,215

8,866＋ Expansion of offline payment＋ Growth of non-merchandise EC＋ Recovery of merchandise EC

4,000

4,260

＋26.5％
2,000

5,282

0
22/1Q

23/1Q

Payment Processing Business－2.5％＋24.0％＋ Expansion of offline payment＋ Growth of non-merchandise EC＋ Recovery of merchandise EC

1,000

2,000

615

+ Profitability improvement inremittance service－ GMO Payment After Delivery
Higher credit costs and enhanced
sales organization－ Cycling through of one-off upliftin overseas lending

630

3,000

6,000

－19.7%

0
22/1Q

Money Servivce Business (MSB)

23/1Q

Payment Enhancement Business

Operating Profit(after eliminations)

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

12

1.9

Current Market Conditions

Q1 in-line with expectations thanks to initiatives, but businessenvironment remains uncertain
EC Market and GMO-PG’s Revenue Growth (Quarterly Trend)

35%

Consol. Revenue
GMO-PG+GMO-EP revenue
EC Market

30%

24.9% Inflation

25%

18.2%

20%

15%

Reversal of monetary
policyVolatility in interest
rates and FX
Chip shortage, etc.

10%

Sluggish EC consumption

5%

3.5%
0%
21/1Q

21/2Q

21/3Q

21/4Q

22/1Q

22/2Q

22/3Q

22/4Q

23/1Q

23/2QE

23/3QE

23/4QE※ EC Market: Based on data from Ministry of Internal Affairs and Communication’s “Family Income and Expenditure,” data has been classified into merchandise and non-merchandise
based on the total internet expenditures per household.

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

13

2.

Growth Strategy and Initiatives in Focus Areas

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

142.1 Business Opportunity and Medium-to-Long term
Changes in Business Environment
Turning society’s needs into business opportunities throughthe payment-related businesses
Social Challenges

ClimatechangeDiminishing
resources

Poverty,economicslump

Obsoletevalues andpractices

Automation
AI and Data
driven society

Business Opportunity for GMO-PG

Regional
revitalization
Workstylereforms
Borderless,inbound tourism

Decarbonization

Sharing
Cyber security
Banking
consolidation

Financialinclusion

DX

Telemedicine
Pandemic,
healthcare

Digital/RealfusionPayment related businesses

Aging populationand low birth rate,rural depopulation

Social Trends

Biometric
authentication

CRM

Data
utilization

Self-checkout

Salaryprepayment

C2C payment

Digital salaryPaperlessSecurityenhancement

IoT payment

BNPL

Road pricing

Micro-finance

Embedded
Finance

D2C

API

OMO

Online medical
consultation

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

15

2.2

Management Targets

Current OP growth and growth strategy to 2025 in the five
focus areas
OP and OP Target in Five Focus Areas※1,2
Target（¥ Mil）
300

Broader EC

25% growth curve

BaaS

250～

Offline Payment
250

Growth investment and strengthening
management for post-2025 growth

FinTechGrowth rates(current)

Global203

200

GlobalFinTechInvest/Lend in growth regions,＋15～20％ BNPL, salary prepayment

162
OfflinePayment

150

Targetannounced inFeb. 2018
100

BaaS

65

Growth strategy＋25～30％

Drive stera
Expand cashless domains
Online/Offline fusion＋30～40％ Advance and expand
Processing Platform

50

Broader EC

Large projects（High Value）＋20～25％ Efficient sales (High Volume）

0
18/9

19/9

20/9

21/9

22/9

※1 Figures for global include FinTech up to FY2021.
underlying profit.

23/9
25/9
列1
TargetPlan※2 The Fintech OP for FY2019 exclude a one-time impact from changing the provisioning rate, and present figures for the

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

16

2.3 Trend and Target for Revenue Mix by Merchant Size
Making progress towards 40% revenue share of large
merchants from merchant acquisitions and growth

GMO-PG: Revenue Mix by Merchant SizeAnnual sales at merchants■ Large

Over ¥100.1 bn■ Middle

From ¥1.0～¥100.0 bn

Targetrevenue mix

Under ¥1.0 bn■ Long-tail40%

Targetannounced inFeb. 2022

32％
30％

40%
44％

43％
19％
54％
27％
10/9

列2

15/9

16/9

17/9

18/9

19/9

20/9

21/9

20%

24％

27％
22/9

23/9E

24/9E

25/9E

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

17

2.4.1

Broader EC:

Revenue Growth Driven by Growth of Large Merchants

Broader EC
2025 OP Target¥18.0～¥22.0 bn

Growth driven by top merchants with a 50% revenue share※1

Revenue of merchandise/nonmerchandise EC (quarterly trend)（¥ Mil）
百万

6,000

5,000

■ Merchandise EC■ Non-merchandise EC% YoY

Q1 Revenue growth rate of top merchants

Online payment
Merchandise Total＋20.1％
EC
Top 100
Merchandise
EC＋13.3％
4,000

Nonmerchandise
EC

Total
Top 50＋13.3％＋16.2％ （Share※2 52.5％）＋24.8％＋32.3％ （Share※2 52.4％）

Non-merchandise EC growth strategy(Platform use case)※3

Expansion of TRX volume in utility sector
3,000

2,000

1,000

0

Non-merchandise
EC＋24.8％

23/1Q
22/1Q
Cross sell to Co. B
Expandand Co. C
wallet shareat Co. A
Expand within

21/1Q
Industry
specific PF
19/4Q
to Co. A
Service start toCo. B

industry
SMS Choice ofPayment,
Credit card payment,
Applications,multiple service
offerings

19/1Q 19/3Q 20/1Q 20/3Q 21/1Q 21/3Q 22/1Q 22/3Q 23/1Q
21/1Q 21/2Q 21/3Q 21/4Q 22/1Q 22/2Q 22/3Q 22/4Q 23/1Q※1 Figures are merchandise EC and non-merchandise EC revenues for online payment at non-consolidated GMO-PG. ※2 Proportion of GMO-PG’s merchandise EC and non-merchandise
EC revenues. ※3 Transaction volume at electric power and gas companies.

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

18

2.4.2

Broader EC: GMO-EP’s Current Condition

Continue to tackle issues despite above-market GMV growth
GMV Index ※1
110

Operating stores and GMV per store ※2% YoY

GMO-EP＋9.0%

Marketstats (merchandise)
市場統計（物販）

100

140 ,0 00% YoY

稼動店舗数（左軸）
Operatingstores

700 ,0 00＋6.5%

1加盟店当たりGMV（右軸）
GMV
per stores

120 ,0 00

600 ,0 00

100 ,0 00

500 ,0 00

－2.4%

90

80

80,00 0

22/1Q

22/2Q

22/3Q

22/4Q

23/1Q

Above-market GMV growth despite toughmarket conditions

400 ,0 00

22/1Q

22/2Q

22/3Q

22/4Q

23/1Q

Improving GMV per store

Challenge

Sluggish revenue from rate changes given intense competition

Response

New merchant acquisitions improving by entering new market domains with
fincode byGMO and collaborating with industry-specific partners※1 GMV refers to transaction value.

※2 Operating stores excludes stores using fincode byGMO. GMV per store exludes the stores using fincode byGMO and their GMV.

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

19

2.5

BaaS: Current and Progress of Initiatives（Embedded Finance）

BaaS
2025 OP Target¥1.0 bn～

Progress on large project to accelerate growth from next FY※

Ginko Pay & Processing PF Revenue(Quarterly Trend)■ Ginko Pay■ Issuing (Processing PF)■ Acquiring (Processing PF)

Service start toCo. Y and Co. Z

Q1 YoY

Total＋38.1％

Ginko Pay ＋2.1％
Change in monthly
contract revenue fromcontract renewal of large
customer (total
contractual amountunchanged)

Processing PF＋61.9％Key Initiatives and Progress
Processing Platform
Preparation towards large-scale credit card
issuing project
Co. X: rollout

23/1Q

Co. Y: preparing for rollout 24/1Q
Co. Z: preparing to rollout
24/2Q

Ginko Pay
Contract revision
Sales of security products
Direction of business domain expansion

Business operators
Credit card companies
Enhancing credit card
City banks
issuing leading tolarger clients andRegional
large revenue
banks
potential
Increased functionalities※ Includes revenue from business operators other than financial institutions for Ginko Pay and Processing Platform.

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

20

2.6 Offline payment:
GMO-FG’s Current Condition

Offline2025 OP Target¥2.0 bn～ ※1

Expanding growth opportunities from addressing large customers andrecover of offline events and inbound tourists
GMO-FG/CAS Revenue by Business Model※2(Quarterly Trend)（¥ Mil）

Recovery of Inbound Consumption（10,000 persons）
Inbound foreign
350
tourists ※3
300

% YoY

■ Initial (right axis) ＋52.6％
1,200■ Stock (left axis)＋42.8%■ Fee (left axis)＋99.2％

2,500

250
200
150
100
50

2,000

0

19/1
19/3
19/5
19/7
19/9
19/11
20/1
20/3
20/5
20/7
20/9
20/11
21/1
21/3
21/5
21/7
21/9
21/11
22/1
22/3
22/5
22/7
22/9
22/11

22/12

1,000 ■ Spread (left axis) ＋12.1％

Stock-typerevenue＋53.6％

Significant room for
Govt. target:
recovery as inbound60 mil. annually
tourists are only half the
pre-COVID level＋
Greater purchasing powerfrom savings and weak yen

800
1,500
600
1,000
400

200

0

500

0

Penetrate customers by responding to industryspecific system development needs
Public service (transportation) with nationwide services
Track record of acquiring large merchants intransport/travel sector contributing to customer leads
C→REX：
Stera terminal chosen for card payment service at JTBoperated accommodation and tourist facilities (fromSummer 2023)
Offline events (sports stadiums, etc.):
Cashless adoption at shops and food vendors※1 The operating profit target for 2025 includes companies other than GMO-FG and GMO-CAS. ※2 Revenue figures are after consolidated eliminations.
Stock-type revenue is the sum total of stock, fee and spread revenues. ※3 Japan National Tourism Organization

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

21

2.7

FinTech2025 OP Target¥3.0 bn～

FinTech:Reasons for Revenue Increase and Profit Decline and Response Measures

Revenue increase of 21% but profit decline due to higher
GMO Payment After Delivery
credit costs, etc.
Revenue Growth Rate

FinTech Revenue and Profit/Loss（¥ Mil）
百万

3,500

Reasons for revenue increase
and profit decline and response
measures% YoY＋21.0%

3,000

15%

Increase in credit cost

10%

→ Credit control given
macro trends

2,000Strengthen sales structure→ Progress on
penetrating large
customers

1,500

Hard comps due to sharp
one-off revenue increase
last fiscal year

－2.5%
500

→ Accelerate stable growth% YoY＋22.0％

20%

GMO Payment After Delivery

2,500

1,000

25%

Rate
revision
impact

5%
0%
22/1Q

23/1Q

GMO-PG Remittance service
5

VolumeGP margin

50%

% YoY

4

Volume3

GP margin Up2over-2% pts.

022/1Q
□ Rate revision impact ※1■ GMO Payment After Delivery■ Other※2

23/1Q■ Remittance■ Early Payment■ Domestic lending

Up 13.9%

1
0

40%
22/1Q

23/1Q

Segment profit/loss※1 Rate revision due to the price increase of CVS payment cost.

※2 Other refers to B2B factoring, finance lease, B2B AR Guarantee, Condo Pay and Instant Salary byGMO.

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

22

2.8.1

Global Investment Strategy

Global2025 OP Target¥3.0 bn～

Improve agility of investment strategy given changes inmacro environment

Global macro changes: slowing inflation (tapering of US monetary tightening),
resumption of economic activity in China and elsewhere

Easing of recessionary concerns; Stock prices bottoming from
EM-driven growthinterest rate declines

22 23 24India

22 23 24
ASEAN

120

3.3

110

3.0

100

2.7

90

2.4

80
22/8

22/9 22/10 22/11 22/12 23/1

23/2

20

800

10

400

0

0

22/4Q

22 23 24
USA

3.6

1,200

22/3Q

22 23 24
Global

1,600

30

22/2Q

0%

130

22/1Q

2%

3.9

21/4Q

4%

（volume）

140

21/3Q

6%

Global FinTech Deals (right axis)※3

40

21/2Q

4.2

150

21/1Q

MSCI Emerging Market Index (right axis)

Global FinTech Funding (left axis)※3

20/4Q

4.5

（＄B）

US 10-yr T-bond (left axis)※2
NASDAQ (right axis) ※2

20/3Q

（%）

GDP forecast/IMF ※1

20/2Q

8%

20/1Q

（%）

Start-up funding continues
to decline

Improve agility to ensure the investment opportunities are captured
Investment funds secured for now (Singapore company holds funds from 2C2P share sale), equity
increased by US$30 mil at US company)
Increasing personnel at local entities (local recruits, expats)
Invest in Indian VC (reinvested the S’pore’s funds mentioned above) and strengthening self-funding
Speeding up decision-making※1 Based on revised outlook from IMF’s World Economic Outlook, January 2023.

※2 Indexed to September 1, 2022. ※3 CB Insights’ “State of Fintech Global 2022.”

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

23

2.8.2 Area Strategy of Global Investment/Lending
Approach cutting edge FinTech regions by leveraging
expertise while exercising regional diversification
Focus on India withsound FinTech industry
expansion
UPI usage※1,2
2020

2022

Internet users※3
2021 (act.)

2030（est.)¥54 trn →¥200 trn 0.85bn → 1.34 bn
¥35

¥30

Loan Book (India)
2-yr CAGR

¥25

¥20

（2020～2022）+208%
End-Dec 2022

Approx.
¥10.0 bn

¥15

¥10

¥5

¥0

20/9

21/9

22/9

23/9E

※1 UPI stands for United Payments Interface and is the largest digital payment method led by the Indian Government, where payments between individuals are free of charges withinstant debit and remittance from bank accounts. Open to any user with a bank account and smartphone.
※2 National Payments Corporation of India. ※3 Inc42, Statista, NPCI, Bain & Company, App Annie.

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

24

2.8.3Global: Earnings Summary

Pipeline expanding, continue to diversify country and sector risk
Revenue & Operating Profit ※（¥ Mil）
300

Loan Balance (end-Dec)

New loans（¥ Mil）
10,000% YoY＋24.4%US MSB+2.9%

250＋23.2%

US

Loan executed to education sector
FinTech (Jan. 2023)

8,000

＋4.3%

•
•

6,000

Singapore+345.1%

•

200

150

OP
＋23.5%

100

Asia MSB＋39.7%

India+191.6%

4,000

Current pipeline
Indonesia
+2.7%

2,000
50

Asia Payment
－3.9%

0
22/1Q

23/1Q

•

FinTech education loan to individuals
Loans provided to over 70K people;
collaborates with over 600 schools
Credit after assessing both student andeducation institution
Contributes to expand access to
education in India

0
End Q1 2022

End Q1 2023

FinTech providing instant loan
for individuals
RBF (Revenue Based Funding)for digital content sector※ Figures exclude a one-time revenue and operating profit recorded in Q1 FY2022.

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

25

3.

Sustainability

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

26

3.1 Integrated Report: Enhancing Disclosure of Nonfinancial Information
Expanding non-financial information which is the foundation ofvalue creation as we advance sustainability management
29 th Integrated Report
URL：https://www.gmo-pg.com/en/corp/newsroom/pdf/20221219_gmo_pg_ir_integrated_report_en.pdf

New contents•••

Roundtable meeting of External
Directors- Governance perspective- Company strength and challenges
Response to climate change（information disclosure alignedwith TCFD recommendation)- GHG emissions (Scope 1+2)
- 84% reduction (YoY)
Human resource strategy- People determine the company- Partner’s voices

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

27

3.2

Initiatives to Reduce GHG Emissions

Reduced GHG emissions by 80% by implementing what is
effectively renewableenergy in FY2022※

GHG Emissions (Scope 1+2)

Third Party Certification

Scope2（Scope 1 is zero emissions)•

Acquired third party certification fromSOCOTEC Certification Japan to secure
reliability of GHG emissions (Scope1+2) reporting in FY2022•

Currently verifying Scope 3 emissions（t-CO2）
2,000

1,883
1,736

1,600

1,559

GHG Emissions (Scope 3)
•

1,200

Main source of GHG emission fromprocurement of payment terminals foroffline payment and use of terminal
5,493

15,178800

Category 1 (purchased

FY2021308

24,015(t-CO2)

400

3,344

products/services)
Category 11 (use of
products sold)
Other

0
19/9

20/9

21/9

22/9

23/9E

※ Compiled from electricity consumption at the major companies’ data centers and offices. Scope 1 are direct greenhouse gas emissions from sources that are directly controlled orowned by an organization. Scope 2 are indirect emissions associated with the purchase of electricity, steam, heat or cooling.

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

28

4.

Financial Highlights and Reference Materials

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

29

4.1.1

Consolidated Balance Sheet Changes

Increase in deposits received and MSB related assets
Assets（¥ Mil）（¥ Mil）

297,562

300,000

Liabilities/Equity
297,562

300,000

273,407273,407250,000

250,000

215,455

130,191

113,967

104,523-

50,000078,25135,252

32,684

19,678

19,69925,741

23,00027,95019,59315,15818,89020,653150,000

52,62259,603100,000

85,562200,000

200,000

150,000

111,366

215,455

100,000

30,599Prov. For
Prov. For101,736Prov. For
doubtful 86,965 doubtful
doubtful
70,479 accounts
accounts
accounts－2,722－3,339－3,66313,012

9,852

12,870End Q4 FY2021

End Q4 FY2022※1

End Q1 FY2023

50,00089,260 Equity

57,820 Equity0

Investment related

MSB related ※2

EquityOther

Cash & Equivalents

Bonds

ratio
31.9%

ratio
25.9%

End Q4 FY2021

28,025End Q4 FY2022

77,836 Equity

ratio※425.4%

End Q1 FY2023

MSB relaetd※2

Borrowings

Other

Merchant deposits※3※1 Securities classified under investment securities and investment accounted for under the equity method.
※2 MSB Related Asset = Lease assets, Short term loans, Advances paid, Accrued revenue (net of provision for doubtful accounts). MSB Related Liabilities = Accrued expenses※3 Deposits received from merchants under the Representative Contract.. ※4 Equity ratio is total equity attributable to owners of parent divided by total assets.
※5 Some figures are shown in net amounts of financial assets and liabilities.

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

30

4.1.2Major Consolidated Financial Indicators(Annual trend)

Strengthened equity base with the expansion of MSB
J-GAAP（¥ bn）IFRS

300

Third party allotment
Raised ¥8.0bn

40%Euro Yen CB Due2026
Raised ¥21.1 bn
250Euro Yen CB Due 2023 33.8%
Fully converted

35%

Issued Euro Yen
CB Due 2023
Raised ¥17.5 bn

30%

千ドル

45%

32.3%
200

31.9%

25%

ROE Baseline

150

20%

15%

100

10%

14.2%

50

5%

0%

0
End Q4End Q4End Q4End Q4End Q4End Q4End Q4End Q4End Q4End Q4End Q4End Q4FY2011FY2012FY2013
FY2014FY2015
Total assets
Return on equity using profit attributable to owners of parent (ROE)
OP margin

FY2016FY2017FY2018FY2019FY2020
FY2021
FY2022Return on total assets using pretax profit (ROA)
Total equity attributable to owners of parent to tota assets (equity ratio)※ Figures from FY2018 are based on IFRS standards. For figures before FY ending September 2017 are based on J-GAAP standards. As such, total assets refers to assets, equity refers to
net assets and total equity attributable to owners of parent to total assets refers to equity ratio, return on total assets using profit attributable to owners of parent refers to ordinary profit
to assets ratio, and return on equity using profit attributable to owners of parent (ROE) refers to net profit to equity ratio.

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

31

4.2

Consolidated Revenue by Business Model(Quarterly Trend)（¥ Mil）
6,057

6,000
5,371 5,296

5,500
5,000

4,808
4,414

4,500

3,646
3,450

3,500

3,135
3,000

2,671

2,500
2,000

4,731

1,520

386

3,840

3,672

3,364

2,532

1,661

1,767

889

1,846

1,825

1,812

1,236

1,261

1,937

1,359

296

659
389

3,395

316

323

362

19/2Q

19/3Q

19/4Q

2,713

2,559

2,083

1,411

2,669

2,037
1,851

1,717

1,460

1,478

1,610

1,522

1,723
1,484
1,754
1,552

1,947 2,166
1,678

2,237
2,080

2,260

2,005

1,131

919
561

2,527

2,382
1,906

3,278

3,149
2,922

1,179 1,221

828

3,289

4,257

2,815

1,500

500

4,707

5,415

4,290

4,000

1,000

4,665

5,297

876

725
489

506

20/3Q

20/4Q

0
18/2Q

18/3Q

18/4Q

19/1Q

Initial

20/1Q

20/2Q
Stock

Fee

21/1Q

21/2Q

21/3Q

21/4Q

22/1Q

22/2Q

22/3Q

22/4Q

23/1Q

Spread※ Online advertising service (stock) and finance lease (spread) revenues are recognized as a net amount with the IFRS adoption rather than the gross method from FY Ending September 2018
The figures for revenues by business model present the continuing operations only and exclude MACROKIOSK, due to its deconsolidation in May 2020.

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

32

4.3

FinTech: Assets & Profit GrowthProfit decline from higher credit cost and change in sales mix
Segment revenue

MSB related assets (end-Dec)（¥ Mil）+22.2％

100,000（¥ Mil）＋20.1％＋21.0％

3,000

80,000＋17.9％ 2,500

60,0002,000（% YoY)600+20.7％

400+22.3%

1,500

40,000+18.2％

Segment profit（¥ Mil）−2.5％＋23.7％
200

1,000
20,000500＋23.2％+18.6%

0
End Q1 FY2022

End Q1 FY2023＋9.2％＋2.8％ ※3
＋14.7％0
Q1 FY2022

Q1 FY2023

0Q1 FY2022

Q1 FY2023

Lending (Japan)

Lending (overseas)

Early Payment service

GMO Payment After Delivery

Remittance service

B2B Factoring

Finance Lease ※2

B2B AR Guarantee ※2Condo Pay※2

Instant Salary byGMO ※2※1 Figures for GMO Payment After Delivery related assets (accrued revenues) is net of allowance for doubtful accounts.
※2 The % YoY figures for finance lease, B2B AR Guarantee, Condo Pay and Instant Salary byGMO are not displayed.
※3 Includes a one-time revenue recorded only in Q1 FY2022. If excluded the revenue growth rate would be +26.1% YoY.

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

33

4.4.1

Consolidated CoS and SG&A Ratio(Quarterly Trend)

CoS ratio fluctuates with changes in revenue mix※(¥ Mil)14,81314,00013,341

50.0%

12,897
12,000

42.7%

41.2%

11,85739.6%

10,000

35.5%

36.1%
35.9%

8,000 7,769

36.6%

36.7%

35.2%
9,030

9,356
35.2%

33.3% 8,160
7,945
32.7%

36.8%

10,121
9,767

8,623

27.9%
3,813

2,791

2,818
2,646

2,986

3,720

3,433

3,181

3,292

2,664

3,174

2,488

40.0%

37.5%
34.6%

33.8%

33.4%

34.7%

33.6%

33.9%

35.8%
31.3%

6,000

2,807

34.8%

40.9%

11,132

8,927

26.7%

4,000

10,646

12,201

33.0%

32.6%

31.1%

32.0% 30.0%

30.7%

28.8%
5,460
4,169
3,872
2,817

3,522

3,599

3,169

3,466

3,982

4,108
3,684

4,075
4,021

4,469

4,487

3,959

4,743
5,022

20.0%

2,302
10.0%

2,000

0

0.0%
19/2Q

19/3Q

19/4Q

20/1Q

20/2Q

Revenue

20/3Q

20/4Q

Cost of Sales

21/1Q

21/2Q

SG&A

21/3Q

21/4Q

22/1Q

CoS ratio

22/2Q

22/3Q

22/4Q

23/1Q

SGA ratio※ Figures only present the continuing operation from Q3 FY2020 and onwards and exclude MACROKIOSK (reclassified as discontinued operation) due to its deconsolidation in May 2020.

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

34

4.4.2

CoS/SGA Ratio of GMO-PG & GMO-EP(Quarterly Trend)

Cost of sales ratio for online payment business trending stably(¥ Mil)

9,083

9,000

8,498
45.2%

7,906

8,000

7,682
41.6%
36.5%

36.8%

6,110

33.1%

6,000

5,000 4,840

4,000

21.0%

20.9%

1,000

1,016

20.9%

1,874

40.0%

41.2%

32.5%

21.2%

20.2%

1,069

21.0%

20.5%

22.1%

2,665

1,117

1,373

30.3%

22.6%

20.1%
20.5%

19.5%

3,462

2,932
2,286

1,339

21.5%

30.0%

32.9%
29.4%

19.3%

1,984
1,235

32.5%

31.6%

2,649
1,800

1,065

1,005

40.7%

5,271
5,126

20.7%

1,592

7,122

33.3%

2,319
1,783

6,878

39.7%

34.2%
5,142

4,816

6,370

3,000

2,000

6,858

6,709

7,000

50.0%

7,977

1,517

2,495

2,603

1,609

1,483

1,616

20.0%
2,755

2,345

2,177
1,478

18.7%

1,553

1,711

1,696

0

10.0%

0.0%
19/2Q

19/3Q

19/4Q

Revenue

20/1Q

20/2Q

Cost of Sales

20/3Q

20/4Q

SG&A

21/1Q

21/2Q

CoS ratio

21/3Q

21/4Q

SGA ratio

22/1Q

22/2Q

22/3Q

22/4Q

23/1Q

SGA ratio (1-yr trailing average)※ Figures are before consolidated eliminations.

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

35

4.5.1

Operating Stores, TRX Volume and Value(Quarterly Trend)Group-wide annual TRX value reaches approx. ¥12.2 trillion※1

Operating stores 147,204 stores, consol. TRX volume approx. 1.46 bn, consol. TRX value approx. ¥3.6 trn ※2（Stores）（¥ trn）
160,000
2.6
2.4
2.2
140,000 2.0
1.8
1.6
120,000 1.4
1.2
1.0
0.8
100,000
0.6
0.4
0.2
80,000（100 miltransactions）
14(Reference 1) Online payment TRX volume approx. 1.33 bn, TRX value approx. ¥2.6 trn(Reference 2) Annual consol. TRX value approx. ¥12.2 trn
Excluding GMO-FG
approx. ¥9.2 trn

12

10

8

6

60,000

Proportion of spread revenue ≒45%
※Annual average basis(revised in 5% increments)

40,000

4

2

20,0000

0

Recurring billing TRX volume

Pay-as-you-go TRX volume

Operating stores

TRX Value※1 The standards for calculation the number of operating stores has been revised from Q1 FY2023. Figure exclude an operating stores of a specific merchant and stores using fincode
byGMO. If included, operating stores would be 502,160 (up 37.6% YoY). ※2 Operating stores are measured on an end-of-quarter basis. Figures for GMV value and volume are the total
for the respective quarter. ※3 The graph is based using only online payment figures.

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

36

4.5.2

Waterfall Chart for Consol. TRX Value

Achieved above-market growth rate from increase in offline
and non-merchandise EC
Online payment Company ＋23.2%
Consol.＋34.2%※1

Offlinepayment（% YoY）（¥100 Mil）

Company

MarketMarketNon-merchandise EC+34.3%＋20.2+14.1%＋76.0%+15.2%＋3.5%
Merchandise EC
+8.9%
－2.4%

GMO-PS
Merchandise

3.5¥3.6 trn

GMO-EP

Other non-merchandise※3

Travel & Ticket
Increased outings and travel

Utility

Expansion of service
to major EPCOs

3.0

Digital content & Telecom※4※4Major telcos, growth of GMP, etc.

¥2.7 trn

GMO-PG
GMO-FG ※2
Increase in TRX

2.5
0

22/1Q

23/1Q

※1 Offline market: METI’s “Survey of Selected Service Industries”. The offline market figures show the YoY change for October to November as the December figure is undisclosed as ofthis writing. EC Market: Based on Ministry of Internal Affairs and Communication’s “Family Income and Expenditure Survey,” figures are categorized into merchandise and nonmerchandise according to the Company’s standards using the Internet expenditure amount per household. ※2 Excludes GMO-PG’s offline payment (GMO Cashless Platform)※3 Financial institution-linked utility ※4 GMP stands for Global Major Players ※4 Rounded off to nearest trillion of yen.

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

37

4.5.3Distribution of major sectors

Balance both stability and growth through sector diversification
Revenue share by industry (vertical axis)/ Revenue growth rate (horizontal axis)
30%（Actual data for Q1 FY2023)
25%

Revenue proportion

The size of the circle
represents the TRX value
Digital content/
telecom

20%

15%

10%

Cosmetic/
health food5%

ApparelUtility

C2C
0%
0%

10%

Travel/ticketFood &
beverage

Insurance
Daily
Home
goods/
delivery/
officesupplies newspaper
20%

30%

40%

50%

Revenue growth (% YoY)
※ Composed from TRX value by sector for the PG Multi-payment service. Apparel excludes a certain merchant.

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

38

4.6.1

Consolidated Cashflow Statement
Q1 FY2023 changes by item (¥ Mil)（¥ Mil）

J-GAAP

55,000IFRS

Operating CF：＋16,173

30,000Pretax profit
Trade receivables
And other receivables
Advances paid
Accrued revenues
Accrued expenses
Deposits received
Income taxes−1,656−7,484－7,854＋6,919＋26,930－5,20925,000Investing CF：+8,28850,00045,00040,00035,000+4,687

Deposits into
restricted accounts−1,161
Deposits to subsidiaries
and affiliates−5,300Withdrawals of deposits to
subsidiaries and affiliates ＋16,500

20,00015,00010,0005,000
0Financing CF：－7,378

FCF＋24,461

Net ST borrowings
Dividends paid

-5,000-10,000-15,000
14/9

15/9

16/9

Operating CF

17/9

18/9

Investing CF

19/9

20/9
Financing CF

21/9

22/9

22/12

：

＋3,000－12,083

Cash & Equivalents: 130,191

FCF

Mainly Money
Service Business※ FCF is calculated as the sum-total of Operating CF and Investing CF. Only major items of the cash flow statement are shown on this page.

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

39

4.6.2

Changes in the Consolidated CF Statement

Following factors affect operating CF other than the pretax
profitRelated Liabilities & Assets
Impact from business expansion
Payment Processing Business
Sales proceeds frommerchants under
Representative Contract

Deposits received(liability)

Liability

Operating CF

Yearly fluctuations can be large as annual TRX value oftrillions of yen can be carried over to following year

Money Service Business
Early Payment service

Advances paid
(asset)Asset

Operating CF

BNPL service

Accrued revenue(asset)Accrued expense(liabilities)

Asset

Operating CF

Liabilities

Operating CF

Asset

Investing CF

Others

Deposits to subsidiaries
and affiliates (asset)

Funds that are temporarily deposited into the CMS of
GMO Internet Group, which can be withdrawn at any
time depending on cash requirements.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

40

4.7 Value Proposition to Support Customer’s Growth
Support growth of our customer’s facing irreversible changes
by implementing digital payments
Irreversible Changes andAdvances

Progress indecarbonization

Use Cases

Major electric powercompany

Our Value Proposition

Digital payment＋α
Paperless migration

OMO/Mobile ordersystemMajor restaurant chain

EC penetration/
Subscription of daily
goods

Major food subscription

Changing values andconsumption behavior;
Promotion of D2C

Foreign-capital electric
appliance manufacturer

Community
revitalization/
Premium coupon

Major travel agent

Improve business
operations surrounding
payment
Over 30 payment methods
Strengthen security

Stable system operations
Group-wide products
Comprehensive capability
Payment know-how/
Proposal based sales backed
by customer knowledge

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

41

あThank
り が とYou
う ごVery
ざ い Muchました

GMOペイメントゲートウェイ株式会社
GMO Payment Gateway, Inc.
(3769;
Stock
Exchange
Prime)( 東 証Tokyo
プラ
イム
376
9)
IRサイトURL
https://www.gmo-pg.com/corp/
URL： https://www.gmo-pg.com/en/corp/
お問合せ・個別取材のお申込みは、企業価値創造戦略
統括本部
For inquiries, please contact our IR team at the
telephoneIR部までご連絡ください。
number below:
Corporate Value Creation
Strategy Division (IR Department)
TEL：03-3464-0182
TEL: +81-3-3464-0182
E-mail：ir-contact@gmo-pg.com
E-mail：ir-contact@gmo-pg.com

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