Financial Results Briefing for Q3 FY2020
Business attributes to assist in sustaining high growth even in times of crises

August 13, 2020

The 62nd IR Meeting

GMO Payment Gateway, Inc.
(3769; Tokyo Stock Exchange First Section)

https://www.gmo-pg.com/en/corp/

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

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 August 13, 2020.
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.

2

Agenda1. Summary of Financial Results for Q3 FY2020
2. Key Attributes of Our Business and Growth Strategy
3. Financial Highlights

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

3

1.

Summary of Financial Results for Q3 FY2020

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

4

1.1

Financial Results Summary （IFRS）

Results outperforming company plans; MK reclassified as
discontinued operation from Q3（Million yen）

Revenue

Q3 FY2019
ActualQ3 FY2020
Actual20,10824,118% YoY% achievement
vs. Full year
guidance

FY2020 Q3
standalone

76.7%

8,623

＋19.9％（＋29.5％）

Operating
Profit

6,932

Pre-tax
Profit

6,749

8,413

＋24.7％

85.3％

ProfitAttributable to
Owners of Parent

4,252

5,750

＋35.2％

94.1%

EBITDA ※1

7,578

8,844

＋16.7％-KPI※2（% YoY)

7,778＋12.2％

75.0%

3,090
（＋20.3％）3,165（＋25.9％）2,342（＋39.9％）3,445（＋23.2％）

Operating Stores(end-Q3) ※3

TRX Volume(Q3 standalone)

TRX Value(Q3 standalone)

129,404

Approx. 670 mil.

Approx. ¥1.3 tr.

（＋22.2%）（＋53.1％）（＋24.9％）※1 EBITDA＝Operating Profit + Depreciation.
※2 Figures in parentheses are % YoY changes. Excludes offline transactions; if offline transactions are included the TRX volume is approx. 680 mil. (up 53.6％ YoY) and TRX value isapprox. ¥1.4 tr. (up 27.6％ YoY).
※3 Figures exclude the recent increase in operating stores from a specific merchant. If included, the number of operating stores is 305,004 stores (up 65.3% YoY) for the same period.

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

5

1.2.1Main points on earnings ①

Initial plan was to return to revenue growth of 25%, andmaintain OP growth 25%■Return to revenue growth of 25%
Focusing on multiple large development projects to recoup the impact thatlarge merchants had from Q2 of the previous term. Revenues from theseprojects likely to concentrate in the latter part of this year.
Revenue growth guidance of 14%. Intend to return to 25% growth trajectoryin one year’s time.
Q3 progress to date: Growth rates improving every quarter, making progress innearing to the 25% growth trajectory■Maintain 25% OP growth
Could not foresee MK’s divestiture and COVID-19 when we compiled theguidance back in September 2019. Hence, OP guidance of ¥10.3bn was
based on the estimated FY19 OP of ¥8.3bn.
Q3 progress to date: Achievement ratio of 75% of full year guidance;
continuing to strive for full achievement.
Currently budgeting to maintain 25% growth next fiscal year and beyond

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

6

1.2.2Main points on earnings ②※

Underlying growth excluding MK’s reclassification to
discontinued operation and PS’ allowance for doubtful accounts【Consol. 3Q】 Adjusting for previous term’s OP uplift from PS’
allowance for doubtful accounts
Revenue +19.9％
OP+12.2％ Excl. above factors: ＋20.4％【Consol. Q3 standalone】Adjusting for previous term’s OP uplift fromPS’ allowance for doubtful accounts
Revenue +29.5％
OP+20.3％ Excl. above factors: +29.8％【Full Year Earnings】Previous term’s OP includes MK’s impairment loss
and its earnings. Reclassifying MK as discontinued operations causes:
Previous term’s OP from continuing operation to be uplifted to¥9,562 mil. versus the reported figure of ¥8,301 mil.
OP guidance: （pre-revision)＋25.0％ （after revision) ＋8.5％※Underling growth is defined as the actual growth rate for revenue and operating profit after removing the impact from reclassifying MK
as discontinued operation and PS’ allowance for doubtful accounts for both FY2020 and FY2019.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

7

1.3

Drilldown of recent revenue growth rates

Progress on track; business attributes worked to offset thenegatives with the positives
Sectors/services showing
accelerating growth■ Image of near-term growth

Digital content, apparel, home delivery etc.

Sectors/services
Trajectory forshowing accelerating mid/long term growth Payment terminals sales for offline payment
growthPayment After Delivery, Remittance, etc.
Merchant acquisitions accelerates at GMO
Epsilon (for small-scale online shops)
Etc.

Sectors and project delays due to
COVID-19
Travel/ticket sales etc.

Sectors and project
delays due to COVID-19

2Q

3Q

4Q

stera (online): next generation payment
platform with SMCC and Visa
DX platform
Financial institutions, utilities, telecomand distributor/retailer
B2B factoring

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

Etc.

8

1.4

Analysis of major KPIs (Q3 standalone)

DX acceleration at customers and services: resulting insurging TRX volume and increasing TRX value
Operating stores＋22.2％※2＋16.0%
Prev. Q3
（stores）
140,000

TRX Volume ＋53.1％
Prev. Q3 ＋26.1％※2※1（Mil. trx.)＋22.2％

120,000（Bil Yen）

700
650

1,400

＋53.1％

1,300

600

100,000＋24.9％＋24.0％ ※2

決済処理金額TRX Value
旅行・チケット除く決済処理金額
Excl. Travel/Ticket＋24.9％

1,200

550

80,000TRX Value
Prev. Q3

※1

1,100

500
60,000

450

1,000

400

900

350

800

40,00020,000300

0End-June 2019

End-June 2020

・Excl. increase in deliveryrelated stores:＋17.1％
・Excl. increases in telecomrelated stores:＋20.6％＋35.0％

700
18/6 18/9 18/12 19/3 19/6 19/9 19/12 20/3 20/6

18/9 18/12 19/3

19/6

19/9 19/12 20/3

20/6

・Surge in TRX volume for・Decline in high per-transaction
sectors shown below: ※3value travel/ticket sectors:※3
Utility＋188.2％ Excl. travel/ticket ＋35.0％
Delivery/Newspaper＋185.1％
Digital content＋131.8％ ・Accelerating growth ofmerchandise EC
Apparel＋112.0％※1 Excludes offline. If offline is included, Q3 (April to June 2020) TRX volume growth is 53.6％（prev. Q3 is up 26.4％), TRX value is up 27.6％ (prev. Q3 is up 23.5％).
※2 YoY figures for Q3 FY2019 (April to June 2019); operating stores are as of end-June.
※3 YoY figures show TRX value for each sector in Q3 (April to June 2020) for PG Multi-Payment Service. Apparel sector excludes a large merchant.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

9

1.5 Revenue by business model (Q3 standalone, continuing operations)Q3 standalone (Apr. to Jun.) fee and spread grew over 30%(See page 3.5.1 for
Up 30.4％ YoY
Cumulative Q3)
Prev. Q3 up 29.9%（+）Strong online payment（+）Growth of GMO Payment After Delivery（+）Growth of overseas lending(Mil. Yen)

Spread

8,623

9,000

8,000

6,661

7,000

4,290
6,000

3,289

5,000

2,382
4,000

Up 31.4％ YoY
Prev. Q3 up 9.1%（＋）Strong online payment excl. one-offs（＋）Strong offline payment（＋）Increase in remittance service from refunds
Fee

1,812

3,000

Stock Up 18.2％ YoY
Prev. Q3 up 39.0%

1,460（－）Delays in financial institution business due
to COVID-19

1,236

2,000

1,000

489

323
0

FY20192019年9月期
Q3 standalone
単3Q

InitialStock

FY20202020年9月期
Q3 standalone
単3Q

Fee

Up 51.5% YoY
Prev. Q3 up 9.0%（+）Strong trend in payment terminal sales forthe offline market
InitialSpread※ Prev Q3: shows the YoY growth for Q3 FY2019 (April to June 2019).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

10

1.6 Segment revenue and OP YoY (Q3 standalone, continuing
operations)

All segments outperformed company plans■ Segment revenue■ Segment operating profit

8,000(Unit: Mil. Yen)
Consol. OP: Up 20.3% YoY
4,000 (Excl. one-offs in pevious term): Up 29.8%
41 Down 10.36% YoY
Prev. Q3
3,500

(Mil. Yen)

(Mil. Yen)

9,000

Cumulative comparison on page 3.6

Consol. Revenue: Up 29.5％ YoY
171 Up 9.5% YoY
Prev. Q3
2,503 Up 31.0% YoY
Prev. Q3 up 29.6%

7,000

156

＋ Growth of GMO
Payment After Delivery＋ Strong Remittance, Early
Payment, Lending (Japanand overseas)

6,000

1,911

5,000

4,594

4,000

5,950 Up 29.5% YoY
Prev. Q3 up 23.9%

3,000＋ Growth of online payment＋ Strong trend of offline
payment＋ Expansion of Ginko Pay

2,000

Of which, offline and like-forlike non-consolidated online
payment: +35.0% YoY

1,000

Prev. Q3 up 26.2%

0FY2019 Q3

FY2020 Q3

Payment Processing

Money Service

46

3,000

2,568
2,500

489
2,000

1,500

2,627
1,000

3,090

507

Up 3.6% YoY
Prev. Q3 Up 68.4%＋ Growth trend of GMO Payment
After Delivery+ Strong trend of Remittance,
Early Payment, Lending (Japanand overseas)－ Impact from change inprovision rate

3,267 Up 24.4% YoY
Prev. Q3 Up 19.4%＋ Growth of online payment＋ Strong trend of offline payment＋ Expansion of Ginko Pay500

0

FY2019 Q3

Payment Enhancement

FY2020 Q3

Operating Profit(after consol. Eliminations/adjustments)※ Previous Q3: Shows the YoY change for Q3 FY2019 (April to June 2019). Continuing operations in the Payment Enhancement Business before FY ending September 2018 cannot be computed.
※ Like-for-like online payment excludes:① Contract expiration of a large merchant in the previous Q2, ② contract termination of a certain merchant in the previous Q2, ③ change in contract terms to certain merchants in the current term’s Q1.

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

11

1.7

Group earnings: Actual, Forecast and Mix

Strong Q3 earnings at each company; progressing towards
achieving full-year guidance (revised)
1Q

2Q

3Q
Forecast% of
Revenue% of OP

Consolidated

100%

100%

ー

PG parent

60%

73%

ー

EP

12%

20%

PS

18%

4%

FG

10%

3%

3Q
Actual（As of Q2）※2

Revenue up over 16.7%

Increase of up to
16.7％ YoYYoY decline※1 PG parent: Non-consolidated GMO Payment Gateway; EP: GMO Epsilon; PS: GMO Payment Service; FG: GMO Financial Gate
※2 Up 16.7％: This fiscal year’s revenue growth rate (revised forecast)
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

12

2.

Future initiatives and growth strategy

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

13

2.1 Business Attributes: Resilient business andrevenue structure in times of crisis
Achieved OP growth of over 20% even during past crises (Great Financial Crisis)■ Business characteristics

Market Factors

Growth markets: EC, DX, Cashless,FintechBusiness Model

Cross industry

Large market size
High entry barrier

Feedback loop of stock &transaction (flow)※2

Past crises and OP trend (prev. standard) 2020

COVID-19+25.0％

2019

CrisesEnlarges corporate Consumption
tax 8→10％
disparity+25.0％

Growth secured by supporting
digital transformation (DX) toachieve sustained growth after
overcoming the crisis

Expanding business scope:credit card→multi-payment→Offline→FinTech→Profit structure

Client industry-linked revenue
Low cost of sales ratio
Online payment business: approx. 15％
Churn rate 1.3％

2014
Consumption
tax 5→8％
2011+31.3％
2008
Great East Japan
Lehman Earthquake
Shock+20.8％+21.7％※1

Scale merit※1 Churn Rate: the proportion of merchant contract termination (from July 2019 to June 2020) to total operating stores (as of end of June 2020) for non-consolidated GMO-PG.
※2 Previous standard: OP before the deconsolidation of MACROKIOSK (i.e. including both continuing and discontinued operation)

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

14

2.2.1

Cross-industry ①

Sustain a high and stable growth by acquiring growthcompanies across diverse sectors and within sectors■Services provided to (including to-be provided) representative merchants in the Nikkei industry
classification and growth expectation trend
Nikkeiindustryclassification

Foods

Pharmaceutical

Electric
MachineryRealEstateElectric
Power

Gas

Merchant

Major fooddelivery

Foreignowned
pharmaMajor
appliancemaker

Major realestate

Major
EPCO
group

Major Gas
utility

Financials
Foreign-owned
insurance
Major regional
bank・Payment for・Payment for ・Payment on ・Payment for ・Payment for ・Payment for ・Insurance
regular deliethical drugs, official EC
rental, share electricity and gas bill
premium
GMO-PG very of foodsupplements, website
officegas bills
・Payment for payment
service packs
cosmetics EC ・Payment for(medical/auto)
・Payment for EC website
・Payment for website
employeesupportfor kitchen
・Ginko Pay
organic vegeservices
services
appliances
etc.
etc.
table delivery
etc. ・Acquiring
etc.
etc.
TRX Value
growth（Q3 standalone YoY）＋80％

＋55％

＋15％

＋30％

＋940％

＋40％

※3

＋60％

※1 Excerpt of Nikkei industry classification with which we have commercial relation with.
※2 Shows approximate YoY figures of TRX value of a representative merchant in each of the industry classification that use PG Multi-Payment service during Q3 FY2020 (April toJune 2020).
※3 The figure shows the growth rate of TRX value of the service we provide to the foreign-owned insurance company

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

15

2.2.2

Cross-industry ②

Sustain a high and stable growth by acquiring growthcompanies across diverse sectors and within sectors■Services provided to (including to-be provided) representative merchant in the Nikkei industry
classification and growth expectation trend

RetailNikkeiindustry
Apparelclassification
Merchant

Major
domestic
brand

Services

Department
store/GMS

Cosmetic

Hobby/
SportsMermbership/Service

Major
department
store

Major
Major travel Global video Major
cosmetic
streaming sportwear
agent
maker
maker

Sharing
EconomyTravelDigitalContent

・Payment for ・Payment for
package tour EC
multiplebrand’s EC web website
・Payment forsite
・Large・Remittancesubscription
・Payment forcustomer POS ・Payment for service
shared economy payment（cancellation
useful hints
refunds）
・Payment
service website
・Acquiring
etc.
After Delivery
etc.
etc.

・Payment for ・Payment for
multiple brand’s online EC
website
GMO-PG EC website

・Payment for
sports goods EC
websiteservice・Payment formember-ship
websiteTRX Value
growth・Payment for
fashion subscription

etc.

etc.

（Q3 standalone YoY）＋45％

＋110％

＋65％

－95％

＋110％

＋30％

＋35％

※1 Excerpt of Nikkei industry classification with which we have commercial relation with.
※2 Shows approximate YoY figures of TRX value of a representative merchant in each of the industry classification that use PG Multi-Payment service during Q3 FY2020 (April to June 2020).

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

16

2.3

2025 Management Target

Promote commercialization of large projects to achieve OP of¥25.0bn by 2025（）OP potential amount（Unit: ¥ billion)■ OP target by focus areas

FY2015¥2.9bnFY2020¥10.3bn

FY2025¥25.0bn
Global business（¥5bn～） 2.8

Broader EC¥20.0bn～¥16.0bn＋20％
CAGR¥8.0bn¥2.9bnEC5％penetration
EC Market ¥15tr.
GMV

¥2tr

＋15％
CAGR

（¥18.0bn～）
2.5.1

7％

14％～

¥20tr.

¥40tr.～¥5tr.

¥12tr.～

FinTech（¥3bn～） 2.7
Offlinepayment/IoT（¥2bn～）

2.6

Financial Institution
2.5.2（¥1bn～）※ References：METI’s “FY2019 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”.
Figures in 2025 are forecasts, and figures are approximations.

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

17

2.4

Progress of Priority Initiatives

Delays occurred in certain projects; impact to earnings estimated to be minimal
2020

Already commenced
To be commenced

2021

2H

Financial
Institutions

1H

September launch, fully
scale start in 1H 2021

Telecom

Launch in March
Launch this FY, full scale
start in 2022

In line with plans
Slowdown of next project
discussions
Demand increase forunmanned terminals
Caught up with the app
development delays

stera（offline）

B2B factoring (Invoice Early Payment, B2B Early
Payment), Expansion of B2B AR Guarantee
Decline in inflows

FinTechNEW

Global BusinessNEW

Expanding into Unattended Market

Offline Payment(IoT)

B2B Payment
Business

Slowdown of next project
discussions
Delay in some functions
Pushouts of full-scalelaunch9-month delay

stera (online)

Real Estate
Distributor/Retailer

Global Major
Players(not limited to COVID-19 impact)

2H

Ginko Pay・Issuing/Acquiring

UtilityDX Platform

Update/Progress

New scheme for Remittance service
Acquired. Starting first rollout inAugustMultiple projects
underway

Increase in additional needs
In line with plans

Preparing for
new service launch

Demand increase
Faster take—up likely

Strengthen MSB to support investees (Fintech
companies) through payment and lending

Competition easing
Opportunity to expand lending※Orange text: delayed projects
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

18

2.5.1DX Platform: The Broader EC

Growth acceleration of merchandise EC from progress in DX;
also aiming at new business opportunities■ OP Potential of broader EC 2025
2020

（Est.）¥8.0bn※■ Quarterly trend of merchandise
and nonmerchandise GMV value¥16.0bn～¥20.0bn

非物販EC（決済処理金額）
Non-merchandise EC (TRX value)■Growth strategy and progress

Non-merchandise EC
Up 29.6％ YoYCreating industry specific DX platforms
Acquire large and high-growth merchants (enterprise)
NEW Omni-channel enabled for offline sectors

Impact from travel/ticket

物販EC（決済処理金額）
Merchandise EC (TRX value)

Growth acceleration ofmerchandise EC

NEW Global major players

Strengthening measures at GMO Epsilon(SME domain)＜Delayed projects＞
stera（Online): Delay in certain functions
Utility: September launch, full scale startin 1H 2021
Telecom: 9-mnth delay

Merchandise EC
Up 51.4％ YoY※ TRX value of Multi-Payment Service provided by GMO Payment Gateway.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

19

2.5.2DX Platform: Financial Institution

Expand stock revenue by expanding the number of services provided
per financial institution■Quarterly trend of stock revenue forfinancial institution businesses■ OP potential from financial
2025
institution platform

The Hokuriku Bank2020

¥1.0bn～The Hiroshima Bank

The Bank of Fukuoka■Growth strategy and progress

The Kumamoto Bank

Expand Platform for financial institution
Ginko Pay
Issuing/Acquiring
Recovery signs in GCP demand led by
NEW My Number point program, etc.

The Shinwa Bank

The Hokkaido Bank
Sumitomo Mitsui
Banking Corporation

Japan Post Bank

Total:Up 39.5％ YoY
Ginko Pay:
Up 48.5％ YoYBank of Yokohama

Bank of Okinawa

Issuing/
AcquiringUp 38.6％ YoY＜Project delays＞
Issuing/Acquiring:
Slowdown in future project discussions at some clients
Revenue decline at offline stores,
Slowdown in discussions on next project※GCP：GMO Cashless Platform
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

20

2.5.3

Initiative in the SME domain and progress

TRX value surging, focusing on new merchant acquisitions toreturn to 25% growth trajectory■Growth strategy and progress■GMO-EP: TRX value and new merchantacquisitions（Mil. Yen）
60,00055,000

TRX value(LHS)（Stores）

Up 91.1％ YoY

New merchant acquisitions (RHS)

3,000

Target new merchant acquisitions (RHS)

50,000Acceleration of new merchant acquisition measures andcreation of new businesses
Strengthen business to financial institution throughcollaboration with partners
NEW Financial Institution service, new measures such as busines
cards etc.
Rollout of “Cycle by GMO” in early Fall of 2020
NEW Expand merchant acquisition by strengthening inter-partner measures
45,000

7/9 Service launch of online sales support portal

40,000＜TRX value growth of top-ranking sectors＞
March
Apr-JunAlcohol＋115% ＋250%

2,000
35,00030,00025,00020,00015,0001,000

Bags, trinkets, brand goods ＋70%

＋105%

Beaty, cosmetic, perfume

＋60%

＋105%

Men’s: fashion, shoes

＋55%

＋100%

Food, sweets

+50%

+175%

Books, Magazine, Comics

+40%

+115%

Flower, Gardening, DIY

+35%

+80%

※ Approximations. Average of the monthly figures for April to June.

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

21

2.6

Offline payment and IoT

Accelerate cashless by promoting omni-channel adoption andunmanned payment technology■Offline Payment/IoT OP potential■IPO of GMO-FG to TSE Mothers market;
core company in the IoT domain2025¥10.0bn

OP growth of 25%; Procured necessary
funds of ¥732 mil. to promote businesswith the aim of expanding TRX value（graph: OP target for GMO-FG)¥2.0bn～

2020

～2035

※ Includes GMO-FG and others■Growth strategy and progress

IPO after 10 years from becoming an equitymethod affiliate

Expand GMO-FG’s TRX value

BV of equity stake2020 ¥0.5tr. → 2025 ¥5tr.

Approx. ¥1.8bn

Unattended Market (UM）Market size of 4.5 mil. units compared to
payment terminals of 4 mil. units
stera（offline）

PV of equity stake

Approx.10x

Approx. ¥18.9bn

※

2024

Expanding next generation multi payment terminal
Target 300K terminal sales in 5 years¥1.0bn～2035
20242020 2021 2022 2023
20242025
2025 2026 2027 2031 2032 2033
2034
2020

O2O, omni-channel strategy (group synergy)¥450mil.

¥1.5bn¥10.0bn

TRX value ¥0.5 tr.

¥5 tr.

¥30 tr.

Completed catch up for delayed projects

OP※ Converted using the closing price of August 7, 2020 and our equity stake of 60.8%.

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

22

2.7

FinTechImprove capital efficiency and expand earnings through high-margin services andPayment After Delivery■OP potential of FinTech
2025

2020

■Segment revenues and OP (Q3 standalone)Up 31.0％ YoY※2
New service¥3.0bn～Finance Lease

507 ＋52.3％

B2B Factoring

＋3.6％
489

■Growth strategy and progress
Remittance Service

Asset shift into high margin services※1
Expanding Payment After Delivery due to
growing merchandise EC market

GMO Payment After
Delivery

Expanding overseas lending

Early Payment

Increase in credit risk
Tightening credit screening to reflect change
in risk profile
NEW New scheme in remittance service
Increased usage for cancellation refunds (Q2/Q3)＜Project delays＞
B2B factoring: decrease in inflows

Lending (global)－52.7％＋158.7％+68.0％
302 Impact of+23.5％

change inprovisioning
rate of sometransactions

Segment OP＋27.9％+84.8％Q3 FY2019

Q3 FY2020※1 Services where ROIC > WACC: Payment After Delivery, Overseas Lending, B2B Factoring (Invoice Early Payment, B2B Early Payment), B2B AR Guarantee.
（ ROIC = Est annual NOPAT ÷ Monthly avg. BS balance ）※2 B2B AR Guarantee (launched May 2018), “Kondo Barai” (launched June 2020). YoY figures are not displayed.

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

23

2.8.1

Global: The 5 payment domains

Create Payment

FinTech feedback loop in the mid/long term

■Q3 FY2020 progress
Payment processing revenue(Twn only)■Growth potential of Global
Equity-method affiliate
Inv. income from 2C2P

2025
¥5.0bn～＜Reference＞

Positive Profit※1
Full Yr Revenue
up 63.6% YoY

Up 35.0％
YoY

FinTech（¥3～¥4bn）

2020
FinTech2019/3Q

2020/3Q

2019/3Q

IncomePayment

Japan※Investment/Lending
initiatives

No. 1 in AI Early Salary service

Point ofsale
Co. A
AI Payment
After Delivery,No. 1 in Credit
Service

５Payment
domains

Bill
Payment※2■Growth strategy to 2025

➢Method: Own business, investment, lending and
M&A

Co. B

Overseas

IoT

2020/3Q■5 focus areas in overseas market
Domains of involvement

IoT

B2B
Payment
Co. C
Invoice finance

P2P
Payment※1 Shows the YoY change in 2C2P’s annual revenue from July 2019 to June 2020.

➢└Flexible combination depending on macro conditions and timing➢Own business: Z.com Payment└Focus on Taiwan, expand to local and Japanese companies➢Partner with top VC/Financial institutions inIndonesia and USA└Approx. target list of 100 companies including minority investments※2 Source: CB INSIGHTS “Payments Trends to Watch in 2019”

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

24

2.8.2Global: Fintech supporting MSB services (Lending)

Strategy unchanged; Seeking new potential investee/borrower
while monitoring overall conditions■Growth strategy
Strengthening Fintech support
Phase 1: Prudently ① monitor existing borrowers, and② seek new potential borrowers
Phase２：Proactive conversion※■ Phases and US/Asia GDP growth
Down
trend

With Corona（％）
８

New clients

Lending revenue

４

2019/3Q 2020/3Q

Phase2Phase1

Corporate

Bullish Forecast
Bearish Forecast

-４

2020
2021
HERE

Individual

Phase3

Up 66.7％ YoY

Mid/small banks/nonbanks
Shrink from Ⓐ→Ⓑ
Mid/small bank/nonbank
Increase in bad loan
Large banksⒶ reserves, weakening
due to monetary0Ⓑ
policyFinTech companies
New clients
Expand from Ⓧ→ⓎShrinking presence oflarge/mid/small banks
FinTechOpportunity to expandⓍ Ⓨ to “fill the void”

After Corona（% YoY）

Phase３：Proactive expansion
High growth achievable from building up
pipeline during COVID-19 times
Expanding domain of Fintech
companies during Phase 1 in thecredit score pyramid

Recovery

2022

2023

2024

2025

※GDP growth rate of Asian countries excluding Japan, Korea, Taiwan, Hong
Kong and Singapore.
Referenced IMF’s ”World Economic Outlook, June 2020: The Great Lockdown;”
Figures for 2022 and onwards are our forecasts

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

25

3.

Financial Highlights

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

26

3.1

Balance Sheet Changes

Increase in deposits received and MSB-related assets(Mil. Yen)

(Mil. Yen)

Asset
192,661

200,000

180,000

160,000

160,000

140,000
120,000
100,000

116,858

100,000

42,03329,33340,00020,000027,171
23,185
Prov. for53,530 doubtful

62,050Prov. for

doubtfulaccounts－2,728accounts－
1,968

7,965

7,275

9,238

End-Sep 2018

End-Sep 2019

End-Jun 2020

※1

Inv. Related※2

MSB Related

Other

Cash & Equivalents

116,858

40,00020,00077,48546,752
26,37138,800
16,63080,00060,000

Prov. fordoubtful
43,674accounts－2,003

139,990140,000
120,000

52,01380,00060,00092,039

192,661

200,000

180,000

139,990

Liability/Equity

14,327

16,745

16,6766,300
14,732

17,19926,02027,53915,123

16,797
20,131
20,922
30,9520
End-Sep 2018

EquityCorporate Bonds

End-Sep 2019

MSB Related※2
Other

End-Jun 2020

Borrowings
Merchant Deposits※3※1 Securities classified under Investment Securities and Equity-Method Affiliates※2 MSB Related Asset = Lease assets, Short term loans, Advance payment, Accrued revenue (net of provision for doubtful accounts)
MSB Related Liabilities = Accrued expenses※3 Deposits received from merchants under the Representative Contract. ※4 Some figures are shown in net amounts of financial assets and liabilities.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

27

3.2

Revision to Full Year Guidance

Reclassified MS as discontinued operations as per IFRS
standards; OP guidance unchanged（％: % YoY）

■FY2020 Full Year Guidance Revision (Mil. Yen)
RevenueOP+25.0%＋8.5％＋16.7％
32,121MK Impact－5,199 26,922

Pre-revision
2019年９月期
FY2019
実績（旧）10,376

31,418MK Impact

8,301 +1,261

2019年９月期

2020年９月期
FY2020

実績（新）Guidance予想

FY20199,562

2019年９月期
Pre-revision
FY2019実績（旧）2019年９月期

FY20202020年９月期

実績（新）Guidance予想（新）FY2019MACROKIOSK’s earnings is presented as profit/loss from discontinued operation andexcluded from continuing operations, due to its deconsolidation on May 2020 as per IFRS
accounting standards. As a result, earnings guidance for FY2020 and the revenue,
operating profit and profit before income taxes in the previous term have been restated topresent continuing operations only and exclude the discontinued operation.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

28

3.3 Factors affecting OP & Pretax Profit (Cumulative Q3 basis)
SG&A increase due to higher provisions; Pre-tax profit upliftedfrom increase in equity method income■OP waterfall chart (+12.2% YoY)
SGA
GP
increase increase＋2,984 ＋2,094(Mil. Yen)

Other
Other
revenue expenses＋57 7,778
＋13

6,932
・Increase in provision for
doubtful accounts at PS＋749 mil.
・Higher rent and otherexpense from officerelocation＋226 mil.
・Higher provision for oneoff factors
Current term ＋246 mil.
Prev. term
－356 mil.

■Pre-tax profit waterfall chart(+24.7% YoY)
Equity(Mil. Yen)

incomeFinancial Financial ＋538
8,413
income expense
OP increase ＋256
－ 23
＋846

6,749

・Increase in gains frominv. partnerships ＋261 mil.
・Decline in interest &dividends received －5mil.
・Increase in equity method
income (2C2P turns a profit)＋102 mil.
・Gain on change in equity to
2C2P＋435 mil.

・Of which, revenue increase＋2,870 mil.
FY2019 3Q累計
営業利益

粗利（増減）Q3 FY2019OP

販管費（増減）その他の収益（増減）その他の費用（増減）FY2020 3Q累計
営業利益

Q3 FY2020
OP

Q3 FY2019
PBT

Q3 FY2020
PBT

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

29

3.4.1

Quarterly trend of CoS and SGA ratio

CoS ratio fluctuates with changes in revenue mix(Mil. Yen)
※44.5％
50.3%
9,000

8,623
8,246

※39.9％
43.6%※40.3％
44.2%

8,000

7,000
6,086
5,645

7,295

32.1%

5,000

6,098
33.4%

5,716
31.9%

50.0%

8,160

41.2%

40.2%
6,459

6,000

7,945

7,769
40.9%

6,563
36.3%

41.1%

35.9%
35.5%

33.2%
35.3%

37.6%

35.4%

36.4%
36.1%

31.9%

36.7%

36.6%
35.2%

33.3%

40.0%
36.8%

35.2%

32.7%

30.0%
26.7%

23.4%

4,347
25.5%

4,000

3,720

3,294
2,497

2,491

1,813

1,823

2,036
1,655

772

2,997

3,067

3,000

1,000

9,356
9,030

※47.2％
50.4%※41.7％
46.8%

2,000

※

IFRS
IFRS

J-GAAP

1,940

2,494

2,595

2,035

2,143

2,382

2,581

3,098
3,004

2,807
2,791

2,818

2,986

2,646

2,664

3,181

3,433
3,174 20.0%

3,292

2,320

2,302
10.0%

1,109

0

0.0%
16/9(4Q) 16/12(1Q) 17/3(2Q) 17/6(3Q) 17/9(4Q) 17/12(1Q) 18/3(2Q) 18/6(3Q) 18/9(4Q) 18/12(1Q) 19/3(2Q) 19/6(3Q) 19/9(4Q) 19/12(1Q) 20/3(2Q) 20/6(3Q)

Revenue

Cost of SalesSGA

CoS ratio

SGA ratio※Figures with asterisk exclude outsourcing expense related to MSB. These outsourcing expenses are not recorded in SG&A from December 2017 (Q1) due to IFRS adoption.
※ Figures only present the continuing operation from Q3 FY2020 and onwards and exclude MACROKIOSK (reclassified as discontinued operation) due to its deconsolidation on May 2020.

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

30

3.4.2 Quarterly trend of PG and EP’s CoS and SGA ratio
CoS ratio fluctuates with changes in revenue mix(Mil. Yen)
50.9%
6,000

6,110

48.8%

50.0%

47.4%
45.3%

44.9%

44.8%
5,032

5,000

4,663
34.0%

33.5%
4,000
3,653
3,397

4,297
3,937

21.9%

22.6%
21.3%

36.7%

36.8%

36.7%

767

36.5%

32.5%
34.2%

22.2%

22.1%

23.6%

24.2%

24.3%

23.0%
20.7%

1,785
1,577

1,525
1,225

677

33.1%

30.0%

1,890

778

40.0%

3,469

2,000

1,000

4,816

4,384

2,212

1,509

4,840

3,712

3,092
3,000

45.2%
5,271
5,126

5,142

21.0%

20.9%

1,783

1,874

770

822

928

1,067

1,071

1,043

21.2%

1,016

1,005

1,065

20.2%
1,984

20.0%

1,800

1,592

1,180
1,039

20.9%
2,319

2,253

1,611

20.7%

1,069

1,117

1,235

0

10.0%

0.0%
16/9(4Q) 16/12(1Q) 17/3(2Q) 17/6(3Q) 17/9(4Q) 17/12(1Q) 18/3(2Q) 18/6(3Q) 18/9(4Q) 18/12(1Q) 19/3(2Q) 19/6(3Q) 19/9(4Q) 19/12(1Q) 20/3(2Q) 20/6(3Q)

Revenue

Cost of SalesSGA

CoS ratio

SGA ratio※ Based on J-GAAP

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

31

3.5.1 Revenue by business model (cumulative Q3,
continuing operations)(Mil. Yen)

24,11825,00020,00020,108
11,609Spread Up 17.6% YOY
Prev. Q3 up 27.2%（+） Strong online payment excl. one-off
impact from certain customers（+） Growth of GMO Payment After Delivery（+） Growth of overseas lending
Up 15.0% YOY
Prev. Q3 up 21.3%（＋） Strong online payment excl. one-offs（＋） Strong offline payment（＋） Increase in remittance service fromrefunds (Q2 and Q3)
Fee

9,874

15,000

6,403
5,566
10,000

4,231
3,637
5,000

1,874

1,029
0
Q3 FY2019

InitialStock

Q3 FY2020

Fee

Stock Up 16.3% YOY
Prev. Q3 up 45.0%（－）Delays in financial institution businessdue to COVID-19
Initial Up 82.0% YOY
Prev. Q3 up 10.7%（+） Strong trend in payment terminal
sales for the offline market

Spread※ Previous Q3: Shows the YoY change for Q3 FY2019 (October 2019 to June 2019).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

32

3.5.2 Quarterly trend of revenue by business modelIFRS

J-GAAP

4,290(Mil. Yen)

4,000
3,647 3,672

3,500

3,450

3,289

3,365

3,136

3,000

2,816

2,558 2,671

2,500

2,532

2,433
2,291

2,383

2,057

2,000

1,907

1,876
1,662 1,767

1,500
1,227 1,259
959
931
804 601
612

1,000
500

733
532
512
528
516
499

594

663

1,527

105

142

127

150

1,192

1,026

749
724
748
728

687

713

723

791

142

161

151

828

889

920
659

725

562

451
185

1,359 1,411 1,461

1,266

749

2,083

1,222 1,236 1,261
1,180

794
786

1,825

1,520
1,406

1,120

344
147

0

565

630

667

1,383

1,441

1,847 1,813

1,938

236

324

386
248

297

490
390

316

323

362

14/4Q 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q 17/2Q 17/3Q 17/4Q 18/1Q 18/2Q 18/3Q 18/4Q 19/1Q 19/2Q 19/3Q 19/4Q 20/1Q 20/2Q 20/3Q

Initial

Stock

Fee

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 on May 2020.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

33

3.5.3

Revenue trend by business model (annual)(Mil. Yen)J-GAAP

34,000IFRS

32,00030,00028,00026,00024,000Spread22,00020,00018,00016,00014,00012,000Fee

10,000
8,000
6,000
4,000

Stock

2,000

Initial0

2004/9 2005/9 2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9 2013/9 2014/9 2015/9 2016/9 2017/9 2018/9 2019/9 2020/9E
TSE
Listing※ 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 on May 2020.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

34

3.6

Segment revenue and OP YoY(cumulative Q3, continuing operations)(Mil. Yen)

25,000Up 19.9％ YoY
448 Down 9.8% YOY
Prev. Q3 ー
6,868 Up 19.6% YOY
Prev. Q3

up 25.4%＋ Growth of GMO
Payment After Delivery＋ Strong Early Payment,
Lending (global)

5,744

15,000Up 12.2% YoY
10,00013,866

Prev. Q3

8,000

6,932

Down 33.4% YOY
Prev. Q3 ー

1,337

Down 9.5% YOY
Prev. Q3 up 69.0%＋ Growth GMO Payment
After Delivery＋ Strong Remittance, Early
Payment, Lending (global)－ Impact from change inprovisions

1,477
6,000

up 30.0%

8,647 Up 17.6% YOY
4,000＋ Growth of online payment＋ Strong trend of offline payment＋ Expansion of Ginko Pay
5,000

Of which, offline and likefor-like online payment:
Up 32.5% YoY

Prev. Q3Q3 FY2019

7,778

16,809 Up 21.2% YOY

10,000

0

79
120

497

20,000（Unit: Mil. Yen)

■ Segment operating profit■ Segment revenue＋ Growth of online payment＋ Strong trend of offline payment＋ Expansion of Ginko Pay

2,000

－
0

Q3 FY2020

Payment Processing BusinessPrev. Q3 up 21.4%

7,352

Money Service Business

Q3 FY2019

Q3 FY2020

Payment Enhancement Business

Total※ Previous Q3: Shows the YoY change for Q3 FY2019 (October 2018 to June 2019). Continuing operations in the Payment Enhancement Business before FY ending September 2018 cannot be computed.
Like-for-like online payment excludes:① Contract expiration of a large merchant in the previous Q2, ② contract termination of a certain merchant in the previous Q2, ③ change in contract terms to certain merchants in the current term’s Q1.
Cumulative figures before FY ending September 2018 cannot be computed.

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

35

3.7.1 FinTech: Assets & profit growth (cumulative basis)
Expansion of high-margin services; YoY decline from reversals
of provisions booked in the previous year
■ MSB related assets(end-June)
Up 15.9％■ Segment revenue (Q3）
－58.9％＋82.4％Up 19.6％■ Segment profit
Down 9.5％ (%: % YoY)

－44.9％＋306.7％

Impact fromchange inprovision rate
for doubtful
accounts＋13.2％+19.4％Up 33.5％+18.0％＋5.0％＋14.7％+58.6％+58.3％End-June 2019
End-June 20202019年9月期第3四半期末
2020年9月期第3四半期末
Lending (global)

Early Payment

Q3 FY2019

Q3 FY2020※1

GMO Payment After Delivery

Remittance

Q3 FY2019
B2B Factoring

Finance Lease

Q3 FY2020※2

New service※1 Figures for GMO Payment After Delivery assets (accrued revenue) are net of provision for doubtful accounts.
※2 B2B AR Guarantee (launched May 2018), “Kondo Barai” (launched June 2020). YoY figures are not displayed.

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

36

3.7.2

FinTech: Assets & profit growth (Q3 standalone)

Steady growth of high-margin services leading to higher
revenues and profits ■ Segment revenue (Q3■ MSB related assets(end-June)+15.9％■ Segment profit

standalone）－58.9％＋82.4％+31.0％(%: % YoY)

－52.7％＋158.7％＋3.6％＋52.3％+68.0％+19.4％

Impact fromchange inprovision rate
for doubtful
accounts+23.5％＋5.0％＋27.9％+84.8％+58.3％End-June 2019
End-June 20202019年9月期第3四半期末
2020年9月期第3四半期末
Lending (global)

Early Payment

Q3 FY2019
standalone

Q3 FY2020
standalone※1

GMO Payment After Delivery

Remittance

Q3 FY2019
standalone
B2B Factoring

Finance Lease

Q3 FY2020
standalone※2

New service※1 Figures for GMO Payment After Delivery assets (accrued revenue) are net of provision for doubtful accounts.
※2 B2B AR Guarantee (launched May 2018), “Kondo Barai” (launched June 2020). YoY figures are not displayed.

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

37

3.8

Consolidated Cashflow Statement■ FY2020 Q3 changes (Mil. Yen)

(Mil. Yen)J-GAAP

50,000IFRS

Operating CF:＋43,889
Pretax profit+8,413
Depr. & Amort.
＋1,117
Advances paid
－3,121
Accrued income－3,619Chgs in payables＋1,463
Accrued expenses＋5,789Deposits received＋38,035
Income tax & refunds－3,01845,00040,00035,00030,00025,00020,00015,00010,0005,000
0-5,000-10,000

Investing CF:
Acq. of intangibles－3,827－1,176

Financing CF:
ST borrowings
LT borrowings
Dividend payout＋28＋4,000－1,067－2,647-15,000

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Operting CF

Investing CF

Financing CF

3Q
FY2020

FCF:

FCF

Cash &
Equivalent※＋40,062

92,039※ FCF is calculated as the sum total of Operating CF and Investing CF. Only major items (above ¥1 bn change) of the cash flow statement are shown on this page.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

38

3.9

Major Quarterly KPIs

Group-wide annual GMV value reaches ¥5.5 trillion※1※2

Operating stores: 129,404 stores, GMV volume 670 mil., GMV value approx. ¥1.3 trillion.
(Stores) (¥100 Mil.)
140,000 14,000
13,00012,000120,000

11,000(10K cases)
70,000（Reference）Consolidated GMV value: Approx. ¥5.5 trillion
GMV value excl. GMO-FG: Approx. ¥5.0 trillion

60,00010,0009,000
8,000

100,000

7,000

50,0006,000
5,000
80,0004,000

40,000

Proportion of spread revenue≒50%※Annual average basis(revised in 5% increments)

60,00030,00040,00020,00020,00010,0000

0

Recurring billing TRX volume

Pay-as-you-go billing TRX volume

Operating stores

TRX value※1 Figure excludes a significant increase in operating stores from a specific merchant. If included, operating stores would be 305,004 outlets as of end-June 2020 (up 65.3% YoY).
※2 Operating stores are measured on an end-of-quarter basis. GMV value and volume are the total for the respective quarter.

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

39

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.com

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