Financial results briefing for the 1Q of FY2016（October 1, 2015-December 31, 2015）
Themes：Achieve 25% profit growth in the payment business field
via expansion of Money Service BusinessFebruary 5, 2016

The 44 th IR Meeting

GMO Payment Gateway, Inc.
(3769: Tokyo Stock Exchange section-1)

h t t p : / / c o r p . g m o - p g . c o m /A Cautionary Note About
the Contents of this Document

The contents of this document are based on generally
recognized economic and social conditions, as well as
premises judged to be reasonable by GMO Payment
Gateway as of February 5, 2016.
However, please note that they 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.

2

Agenda1. Summary of Financial Results for 1Q FY2016
2. Progress of the growth strategy
3. Financial highlights

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

3

1. Summary of Financial Results for 1Q FY2016

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

4

1.1

Summary

Good performance of payment processing service and MSB（Million yen）

1Q of FY2016

1Q of FY2015

Progress

Results

GrowthGrowth rate

1H

Full Year

Sales

2,732

1,958

774

39.5％

52.4%

23.9%

Gross income

2,117

1,576

541

34.3％

52.4％

23.9％

Operating income

870

725

145

20.0％

49.3％

23.3％

Ordinary income

924

758

166

22.0％

52.3％

24.7％

Net income

596

476

120

25.4％

54.6％

25.6％

Number of operating stores

Amount of processed
payments

Number of processed
payments

65,652450 Billion Yen

208 Million

KPI■ Key points

1. Accelerated profit growth, 1Q results rose steadily
Payment Processing Business： Merchant acquiring service revenue increased
Money Service Business：

MSB continued to grow steadily

2. The actions for the future steadily implemented such as strategic investments and overseas
businesses
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

5

1.2

Sales/Gross income

Sales up 39.5％, gross income (adjusted basis) up 29.1％■Sales(1,000 yen）
3,000,000■Gross income

YoY(1,000 yen）

+39.5％• YoY of Gross income (adjusted
basis : excluding outsourcing
expenses of SG&A）

YoY+34.3％+29.1％

2,732,786
2,000,000
2,603,210

2,500,000
2,204,334

2,000,000

2,264,704

1,958,642
1,842,793

1,825,574• Sales increase due tothe special factors
About ¥149 million

1,892,030

1,645,144
1,500,000

1,420,034

1,469,820

1,563,063

1,311,166

1,000,000

1,000,000

500,000

0

1Q

2Q

FY2013

FY20143Q

4Q

FY2015FY201601Q
FY20132Q

3Q

4Q

FY2014FY2015FY2016

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

6

1.3

Gross income (adjusted basis)

Income growth rate increased from 20% to about 30%
Special factor■Gross income (adjusted basis)(1,000 yen）
2,000,000

30.0%

Front-loaded increasein demand prior to theconsumption tax hike

About 10%
Increased

1,500,000

20.0%

1,000,000

10.0%

500,0000

0.0%
2013/1Q 2013/2Q 2013/3Q 2013/4Q 2014/1Q 2014/2Q 2014/3Q 2014/4Q 2015/1Q 2015/2Q 2015/3Q 2015/4Q 2016/1Q

Gross income

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

7

1.4

Operating income/Ordinary income

Operating income up 20.0％, Ordinary income up 22.0％■Operating income(1,000yen)
YoY +20.0％
900,000■ Ordinary income(1,000yen)
YoY +22.0％
1,000,000

870,919924,496812,277
800,000

900,000

762,315
725,596
675,999

700,000

600,000

661,953

677,081800,000

758,080

772,486

684,886

700,000
577,208536,273

561,408

682,507

641,092

561,247

600,113

601,701
600,000

500,000 479,031

787,380

540,382

472,151

560,812500,000 480,414

465,943

400,000
400,000
300,000
300,000
200,000

200,000

100,000

100,000

00

1Q
FY20132Q
FY20143Q

4Q

FY2015FY2016

1Q

2Q

FY2013

FY20143Q

4Q

FY2015FY2016

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

8

1.5

Revenue breakdown

Up over 25% in all revenue model(1,000yen)

Spread2,500,000+53.6％

・Sales of our merchants increased・MSB continued to grow steadily
1,155,545

2,000,000

Fee
1,500,000+32.0％

・Expansion of “Payment after delivery”
and Remittance Service

752,202771,471

1,000,000

Stock

584,529500,000
516,330
0

105,579

14/12 (1Q)
InitialStock+28.5％

・Cultivating large-scale merchants
・Expansion of “Online Advertising Service“
663,581

Initial・Cultivating growing merchants
・System development revenue

142,188

15/12 (1Q)Fee

+34.7％

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

9

1.6

Sales/Operating income by Segment

Sales/operating income exceeded the forecast(1Q)■Sales■ Operating income

3,000,000 （1,000yen）

1,300,000（1,000yen）

283,190※ ％YoY(vs. Forecast)

27,589+55.3％（+43.6％）+59.5％（+30.2％） 1,100,000

2,500,000

17,766

428,5882,000,000

177,596+275.5%900,000

42,024
Turned into
gains（+34.6％）（+17.4％）

114,148700,000

1,500,000

1,167,028
1,000,000
1,667,245

2,021,235+21.2％（+4.8％）

500,000+21.6％

959,905（+5.6％）

300,000

500,000
100,0000
2015/1Q
Payment processing business

Forecast 2016/1Q
Money service business-4,0692015/1Q

Forecast 2016/1Q

Payment processing business

Money service business-100,000
OthersCopyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

Others10Reference:

Segment/Revenue model/Service

３ Segments and ４ Revenue models
３ Segments
Payment processing
business

4 Revenue models

Payment processing

Initial

SSL

Payment processing
System development(Initial revenue)
etc

System development

Stock

Payment after delivery(Monthly revenue)

Payment processing
Online Ad Service

etc

Remittance Service

Money service
business

Payment processing

Transaction lending

MSB
Fee

Early payment

Finance Lease(Transaction
processing revenue)

Remittance Service
etc

Payment processing

SSL
Delivery service

Payment after delivery

Delivery service

etc

Online Ad Service

Othersetc

etc

SpreadTransaction lending(Merchant acquiring
service revenue )Early payment
Finance Lease

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

etc

11

2. Progress of the growth strategy

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

12

2.1

Three growth strategies

Strategies progressed to achieve more than 25% profit growth
3, Long-Term “Business area strategy”

Now

・Global business・Strategic investments

2, Mid-Term ”Product strategy”

5％ ・Expansion of Money Service Business

・BtoB
・GMO Pallet（Regional revitalization related）

1, Short-Term “Market targeting strategy”
・Broad definition EC market（BtoC, BtoB, CtoC）
・Expand market share（Cultivate/win back large merchants）
・System development Services for large-sized enterprises（increase our Stock and Spread revenue）
・Face-to face market（GMO-FG, GMO Pallet）

20％
25％ growth line
20％ growth line

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

13

2.2.1Market targeting strategy: BtoB

Promoting the use of credit cards for BtoB transactions
Introducing case studies

Trends of BtoB ratio（%）
Amount of processed payments
1.4%

Number of operating storesCompany A : Wholesale
WWW hosting service
Monthly amount: ¥15M

1.2%

1.0%

0.8%

Company B : Retail
Daily necessities sales site operator
Monthly amount: ¥80M

0.6%

0.4%

Company C : Wholesale
Industrial tools sales site operator
Monthly amount: ¥45M

0.2%

0.0%

2014/4“Visa Business Pay”
2014/9“EC-CUBE B2B”

(The number of operating stores is calculated at the end of the quarter,
the amount of processed payments are the results for each quarter)

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

14

2.2.2Market targeting strategy:
Business and capital partnership

Joint Venture Company started business■Establishment

November 2015

■Capital stock

312 million yen

Dogenzaka

SMBC Shibuya branch■Representative

Masamitsu Ikezawa (CEO)Tomoyuki Murakami (COO)■Business

Online payment processing service

GMO Payment Gateway

GMO Internet Group■Shareholders■HP

SMBC（80%）
GMO-PG（20%）
https://www.smbc-gp.co.jp/

SMBC GMOPAYMENT

Shibuyastation28-3 Maruyamacho, Shibuya-ku, Tokyo, Japan・Business started in February 2, 2016
・GMO-PG will increase the share to 49% after November, 2016
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

15

2.3.1

Product strategy: Money Service Business

MSB-related asset and amount of processed payment
MSB-related sales
About ¥1,700 million
MSB-related sales
About ¥400 million/1Q

MSB-related asset
About ¥9,000 million
MSB-related asset
About ¥6,200 million

1Q-endbalanceYear-endbalanceAmount of processed
payment (Dec)（Payment after delivery）

Sep 2016

Dec 2015
Transaction lending

Amount of processed
payment (Sept)（Payment after delivery）

Early payment

Finance Lease

Payment after delivery

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

16

2.3.2

Product strategy:
GMO Payment after delivery

Expanding ”Purchase Finance”■Most noteworthy payment service
・Competing firms growing in Europe and the US
・Payment method other than credit card
・Unique knowhow to avoid the risks arising bad
debts■Expanding revenue by creating synergistic effects
with GMO-PG

50

Number/Amount of processed
payments (Index)

40

30

20

10

■GMO Payment Service, Inc.
■Establishment
January 23, 2013
■Capital stock
100 million yen■Representative
Katsunari Mukai（CEO）

0

NumberAmount※Index: 2014/1Q=1

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

172.3.3

Product strategy:
Online Advertising Service

Unique value-adding service only GMO-PG can produce
Sales Performance
Our ad service user’s average：+143.5％■Online advertising service based upon transaction data
■Contribute to boost sales of our merchants

Average：+126.1％

December 1, 2016, Full-fledged
deployments for “Twitter Ads”

Average

AverageOur AD(2014)(2015)

service user

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

18

2.3.4

Product strategy: GMO Pallet

Infrastructure of cashless payment, new services in relation
to the Regional revitalization
February 5, 2016
As part of its FinTech (combined financeand IT) services, GMO-PG will startoffering OEM(*1) services for GMO
Pallet, its smart phone payment service
for Hokkoku Bank, Ltd. “Hokkoku
Osaifu-Appli“ a smart phone application
aimed at strengthening the relationshipbetween local stores and the residentsof the community.

Account balance
User IMG

Balance ofthe points

CouponImportant notices

Stamp card

※GMO Pallet：
The new type of smart phone payment service which provides
speedy payment without a wallet.
Useful FinTech service.

Shop search

GMO-PG will continue to expand its provisionof OEM services for GMO Pallet to financial
institutions, the real estate sector, insurance,and other industries.
Image
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

192.4.1Business area strategy: Global business

Steady progress in oversea business■Measures：・Support our merchants to enter the Taiwanese market
・Cultivate large merchants
・Priority products
Apparel (clothing)/Accessory/Cosmetics/
Health foods

Amount ofprocessed payment
YoY
4.0 times

Number ofmerchants
YoY
4.6 times

Japan

TaiwanThailandHong Kong

Malaysia

Singapore※From June 2014
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

20

2.4.2Business area strategy: Global business

Investment strategy and portfolios (region/service)

US etc（Growth + R&D）
10M US$（5.3M US$）

5M US$（2M US$）JAPAN

Lending/
Remittance

Payment

Numberof thecompany

6

ASIA（Growth）

12M US$（1M US$）9

2015/1Q 2016/1Q

1M US$（1M US$）1

３※

2015/1Q 2016/1Q

RegionService※（）Numbers in parentheses is invested amount from “GMO Global Payment Fund”
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

21

3. Financial highlights

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

22

3.1

Summary of the consolidated results

Sales and income exceed the forecast
1Q of FY2016(Million yen)

1Q of FY2015

Results

Sales
composition

GrowthGrowth rate

Results

Sales
composition

Sales

2,732

100.0

774

39.5％

1,958

100.0

Cost of sales

615

22.5

233

61.0%

382

19.5

Gross income

2,117

77.5

541

34.3％

1,576

80.5

SG&A

1,246

45.6

395

46.5%

851

43.5

Operating income

870

31.9

145

20.0％

725

37.0

Ordinary income

924

33.8

166

22.0％

758

38.7

Net income

596

21.8

120

25.4％

476

24.3

-

-

-

Net income
per share(Yen)

16.07

13.78

-

※Our company issued 2,587,300 shares of common stock through a third-party allotment with a payment date of June 25, 2015

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

23

3.2

Summary of the consolidated balance sheets

MSB linked to current assets
Change（Million yen）

Results for
1Q, FY2016

Results for 1Q,
FY2015

Change27,092

17,714Current liabilities

33,764

22,775

10,98933,772

23,8499,923

29,27820,8228,455

Lease receivables

3,440

0

3,440

Related to Finance Lease

Deposits by merchants through representative
merchant service

Advance payments

2,373

969

1,404

Increase of Early Payment Service*Discrepancy occurs with the pace of merchants’ sales
growth due to change in merchants’ cutoff date andpayment cycle

Accounts receivable

1,590

982

607

Allowance for
doubtful accounts

△223

△86

△136

Other current assets

3,855

1,378

3,097

5,306

2,662

2,643

214

215

△1

（Million yen）

Results for
1Q, FY2016

Current assets

44,807

Cash and deposits

Fixed assets
Tangible fixed assets
Intangible fixed assets
SoftwareInvestments andother assets
Total assets

Results for 1Q,
FY2015

Deposits

Accounts payable

2,671

1,189

1,482

1,815

764

1,051

Increase of Payment after delivery

Other current
liabilities

Short-term loan receivables (=TL-related asset) is included in “Other current assets”

Non-current liabilities

211

167

43

Shareholders’ equity

15,995

6,684

9,311

Capital stock

4,712

708

4,004

Third-party allotment

1,009

785

223

Total Accumulated
other comprehensive
income

737

669

67

4,082

1,660

2,421

50,11329,754

20,358 Increase in investment securities and investments in other securities of subsidiaries and affiliates

140

120

19

Total net assets

16,137

6,811

9,325

Total of liabilities andnet assets

50,11329,754

20,358

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

24

3.3

Revenue Breakdown

Spread revenue up 53.6％(1,000yen)
1,200,000

1,000,000

YoY

1,155,545

Initial+34.7％

Stock＋28.5％

Fee＋32.0％

Spread＋53.6%

1,148,987※Specialfactor873,483

800,000

889,917
771,471752,202670,573
568,811600,000

526,214390,290
400,000

431,131401,280
374,667

396,019505,369
470,792
464,560

441,038

705,327
659,842582,291

529,688464,540689,264

483,241

526,041
501,688

540,507
499,083

584,529
516,330

681,844565,664

708,637
663,581594,679

528,120425,963363,264
183,609200,000
93,072

117,872

112,981

147,110

127,499

127,249

108,580

142,887
105,579

127,279

150,905

142,1880
12/12 (1Q)

13/3 (2Q)

13/6 (3Q)

13/9 (4Q)

13/12 (1Q)

Initial14/3 (2Q)Stock

14/6 (3Q)

14/9 (4Q)Fee

14/12 (1Q)

15/3 (2Q)

15/6 (3Q)

15/9 (4Q)

15/12 (1Q)

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

25

3.4

Cost of sales ratio/SG&A ratio

The sales-cost ratio increased due to the sales mix(1,000yen)※Excluding MSB-related outsourcing
expenses ※50.2％

3,000,000

52.7%

51.6%
45.8%

44.4%

44.0%

50.9%

2,732,786※41.5％

45.6%

43.2%

2,500,000

43.5%

43.8%

42.9%

50.0%

※42.6％

2,603,210

45.6%

41.7%
40.0%

2,204,334 2,264,704

2,000,000

1,842,793
1,563,063

1,500,000

1,825,574

1,892,030

1,958,642

1,645,144

30.0%

1,469,820

1,420,034
1,311,166

17.7%

17.8%

19.3%

18.2%

17.8%

20.9%

20.0%

19.5%

19.5%

1,000,000
806,331
600,491

630,40721.5%

851,039750,260

796,546

783,601

966,01322.4%

944,400

21.3%
22.5%
20.0%

1,372,331

1,246,788

962,443

647,175
10.0%

500,000

231,643

253,353

261,235

284,580

384,293

317,675

365,973368,339

382,006

476,005

508,027

553,797

615,0780

0.0%
12/12 (1Q)

13/3 (2Q)

13/6 (3Q)Sales

13/9 (4Q)

Sales-cost

13/12 (1Q)

14/3 (2Q)

SG&A

14/6 (3Q)

14/9 (4Q)

Sales-cost ratio

14/12 (1Q)

15/3(2Q)

15/6(3Q)

15/9(4Q)

15/12(1Q)

Sales-SG&A ratio

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

26

3.5

Transition of the major factors

Amount of processed payment will exceed ¥2 trillion
Number of operating stores 65,652 / Amount of processed payments ¥450 billion / Number of processed payments 280 million
Amount ofprocessed payments（100 million yen）

（Reference） Amount of processed payments (12 months)

Number of
4,000
operatingstoresInclude GMO FG’s amount of processed payments

Number of processed
payments (10,000 trx)

1.70 trillion yen
1.87 trillion yen

20,00060,0003,000

50,0002,000

40,00015,000Share of themerchant acquiring
service revenue
in the settlement
amount: 35%

1,000

30,00010,00020,0005,000
10,000

0

0
10/3

10/6

10/9 10/12 11/3

Recurring payment

11/6

11/9 11/12 12/3

Online Payment

12/6

12/9 12/12 13/3

13/6

Number of operating stores

13/9 13/12 14/3

14/6

14/9 14/12 15/3

15/6

15/9 15/12

Amount of processed payments(The number of operating stores is calculated at the end of the quarter, the amount/number of processed payments are the results for each quarter)

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

27

3.6

Summary of the consolidated results

Forecast 25％ for income growth, Planning ¥22.0 for dividend(1,000yen)¥22.0011,413,000¥18.0010,000,000¥15.00※％ yoy¥12.259,030,892

8,000,000¥9.75
7,205,542¥7.75

6,000,000

¥5.88

¥5.25

¥4.38

5,764,085

Sales:+26.4％

Operating income:+25.7％

Ordinary income:+25.0％Net income:+26.0％

4,708,097
3,866,316

4,000,000
2,207,071

2,546,550

2,048,865

3,145,901

1,753,759

776,2532,527,793

756,506
440,080

1,764,325

926,288

1,147,552

1,431,391

927,535
524,259

763,774

585,206

2,977,2703,741,000
3,750,000
3,000,455

1,441,214
1,169,694

2,000,000

2,476,408

960,761

2,047,552
1,217,025

2,335,000
1,855,037

1,853,449

0
2008/92009/9Sales

2010/92011/9Operating income

2012/9Ordinary income

2013/9Net income

2014/92015/92016/9E

Dividend

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

28

3.7

Revenue Breakdown

Action plans to realize the growth(1,000yen)

10,000,000+ 34.2％8,000,000+ 38.4％+ 26.7％6,000,000+ 27.6％+ 28.4％4,000,000+ 36.4％+46.9％

+9.9％

+4.1％

0

+1.9％
+24.6％+ 16.6％+ 24.6％+15.6％+ 19.4％+ 21.8％+10.6％+ 11.5％+ 7.1％

2008/92009/9Spread529,138Fee

816,868

Stock
Initial+ 14.8％+ 24.9％+ 13.2％+14.0％+ 22.4％+ 20.0％+ 12.6％+ 25.6％・Cultivating large-scale
merchants
・GMO payment later”
expansion・”Remittance service”
expansion
・Cultivating large-scale
merchants
・ “Online AdvertisingService“ expansion+ 17.3％+25.9％+ 18.1％+23.9％+ 22.8％+ 40.3％2,000,000+ 29.0％・Cultivate growing
merchants
・Service to increase
the merchants’ sales
・Expansion of MSB
such as Transaction
lending, Early
payment+36.0％－7.1％

2010/92011/92012/92013/92014/92015/92016/9E

666,209934,441

1,274,419

1,636,774

2,089,254

2,647,458

3,664,591

4,918,924

897,658

1,060,123

1,235,737

1,418,822

1,663,741

2,042,710

2,634,854

3,265,310

608,236

702,946

839,522

1,022,263

1,251,675

1,559,914

1,948,574

2,204,794

2,513,386

252,828

279,735

311,813333,895

400,823

451,175

566,799

526,652

716,252

・System development
and Services for largesized enterprises
・Cultivating large-scale
merchants※％ yoyCopyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

29

Thank you very much!

GMO Payment Gateway Inc.
(TSE:3769)
URL http://corp.gmo-pg.com/

For more information, please contact the Corporate Value Creation Strategy Division
Investor relations office

TEL:+81-3-3464-0182