Financial Results Briefing for Q2 FY2023
Stock-model revenue expanded as economic activity resumed. Initial revenue also grew due to contributions from large-lot project～ Entering the phase of achieving "necessary future investment" and "high profit growth” simultaneously ～12th IR Presentation

May 12, 2023
GMO Financial Gate, Inc.
(Ticker:4051, TSE-Growth)

https://gmo-fg.com/

Copyright 2023 GMO Financial Gate, Inc.

Cautionary Note Regarding Presentation Materials

The content of these presentation materials is based on generally
recognized economic and social conditions, as well as assumptions
judged to reasonable by GMO Financial Gate as of May 12, 2023
Note that presentation material content is subject to change without priornotice in response to changes in the business environment or other
unforeseen circumstances

Copyright 2023 GMO Financial Gate, Inc.

2

Meeting
agendaMain Agenda
1. Summary of financial Results for Q2 FY2023
2. Business Highlights
3. Revision of FY2023 Forecast
4. Growth Strategy and Progress
Supplemental Agenda
5. Financial Information, Investment and Shareholder Return Policies
6. ESG Initiatives (Details)
7. Appendix

Copyright 2023 GMO Financial Gate, Inc.

Summary of financial Results for Q2 FY2023

1
Copyright 2023 GMO Financial Gate, Inc.

1.1 Q2 FY2023 Summary
Achieved 1H plan due to steady revenue/profit progress. Upwardly revised full-year revenue/profit
forecast taking into account the balance between current business trends and future investment needs

quantitative information●Q2 FY2023 Cumulative
P6- Revenue：¥7.26billion (+62.6% YoY) Progress towards 1H forecast 118.8%, Progress towards full-year forecast 58.3%- Operating Profit：¥0.64billion (+71.4% YoY) Progress towards 1H forecast 140.3%, Progress towards full-year forecast 68.3%● Revenue categories
P8- Initial revenue：¥5.13billion (+65.4% YoY) , Stock-Model revenue：¥2.14billion (+56.1% YoY)
● KPIs

P12、P13- Number of active terminals：223K(+66 YoY, +42.7% YoY)
- Transaction Volume (Number of transaction)：0.11billion(+71.7% YoY) ,GMV：¥0.94trillion (+83.3% YoY)
P21
● Upward Revision of FY2023 Forecast- Revenue：¥12.47billion⇒¥13.62billion (+9.2%)、 Operating profit：¥0.93billion⇒¥1.02billion (+9.7%)

Qualitative
information

Business
TopicsOrganization
Topics• Expanding cases of cashless introduction at stadiums and surrounding commercial facilities P26• Large-lot project in the public service industry, which we have been working on since the Q1, was also installedin the Q2 and started operation in April(Our Q3) P27
P25• Conducted third-party architecture assessment to upgrade internal back-office related
operations
P●• Obtained certification from an external certification organization regarding GHG emissions for ESG-related
P29
information. Scheduled to obtain certification every fiscal year going forward

Copyright 2023 GMO Financial Gate, Inc.

5

1.2 Summary of Financial Results
Steady progress in both revenue and profit towards 1H plan. Q2 KPI steadily expanded from Q1 despite
the seasonality, which is usually weak during Q2（Millions of yen）

Q1 FY2022

Q1 FY2023

Forecast
FY2023 1st half
（Full-year）

YoY

Progress towards
forecast FY2023 1st half
（Full-year）

Revenue

4,468

7,264

＋62.6%

6,115（12,470)

118.8%（58.3%)

Gross profit

1,210

1,746

＋44.3%

1,492(3,136)117.0%（55.7%)

Operating profit

370

635

＋71.4%

453(930)

140.3%（68.3%)

Profit attributable to ownersof parent

234

394

＋68.5%

283(580)

139.2%（68.0%)

KPIs
（YoY）

Number of active terminal

Transaction Volume

Transaction Value (GMV)（End of Q2 FY2023）（Q2 FY2023 Only）（Q2 FY2023 Only）

223,041

Approx. 108.0 million

Approx. ¥946 billion（+42.7%）（+71.7%）

Copyright 2023 GMO Financial Gate, Inc.

（+83.3%）6

1.3 Major Topics Regarding Financial Results
Steady growth in revenue due to the contribution from large-lot project and inbound-related merchants.
Operating profit grew greater than revenue despite significant future investment（Unit：Millions of yen）

8,000

Revenue（+62.6％ YoY）

◼ Revenue(＋)Large-lot project contributed to increased sales of payment terminals(＋) Steady growth in stock-model revenue backed by an increase of active terminal(＋) Recovery of inbound demand also contributed to the expansion of stock-model revenue

7,000◼ Gross Profit(＋)Revenue growth(＋)Steady expansion of high-margin stock-model revenue(－) Revenue composition of low gross margin terminal "stera" increased

6,000

5,000

7,264

4,000

3,000

4,468

Gross Profit（+44.3％ YoY）

2,000

1,000

1,746

◼ Operating Profit(＋)Steady growth in revenue and gross profit(－) Continue to invest for future earnings withoverachievement of original OP plan
Operating Profit（+71.4％ YoY）

1,210
370

0
Q2 FY2022 売上高Q2 FY2023
Cumulative
Cumulative

Q2 FY2022
Q2 FY2023
売上総利益
Cumulative
Cumulative

Copyright 2023 GMO Financial Gate, Inc.

635

Q2 FY2022
Q2 FY2023
営業利益
Cumulative
Cumulative7

1.4 Revenue by Business Model (YoY)
Although the proportion of stock-model revenue declined due to the spike of initial revenue in Q2, Feerevenue shifted strongly. Spread revenue which had been struggling since the beginning of the period,is recovering(Unit：Millions of Yen)

Q2 FY2022
Cumulative

Q2 FY2023
Cumulative(Proportion %)(Proportion %)YoY

Initial

3,098(69.3%)

5,125(70.6%)+65.4％

Stock-Model

1,370(30.7%)

2,139(29.4%)+56.1％

Stock

392(8.8%)

543(7.5%)+38.5％

Fee

520(11.7%)

1,059(14.6%)+103.4％

Spread456(10.2%)

536(7.3%)+17.3％

Total Revenue

4,468

7,264

+62.6％

Copyright 2023 GMO Financial Gate, Inc.

8

1.5 Initiatives for accelerating Spread Revenue
Various measures has led to a recovery of Spread revenue to +17% YoY at Q2 cumulative basis (+12% YoY
at Q1). Aiming to return to the level of +20-25% growth by accumulating new projects in Q3 and beyond
Initiatives

Category

Business in Manned terminals

Progress
Progress Topics

FY2022 Spread revenue●ARPU-Up
Existing

ｰ Additional payment methods and credit brands
ｰ Support BtoB cashless payment utilizing
merchant-base we havemerchants

FY2023 Spread revenue
Initiatives• Strengthening proposals for expansionof payment methods to merchants

High probability revenue
forecast～¥1.1 billion• Implemented system investment tolaunch BtoB payment service

Business in Unmanned/IoT terminals●Expansion into hotel/travel and leisure-relatedindustries
ｰ Collaborate with profitable acquirer• Will start in Q4. Full-scale
introduction will be next fiscal year

¥0.95
billion¥1.05 billion

Business in Unmanned/IoT terminals

New●Penetrate in SME long-tail development inspecific areas
ｰ Improvement of web traffic to increase inflow
ｰ Reduction of lead time to improvedisengagement of prospective merchants• Steady increase in the number ofmerchants due to steady progress in
SME long-tail business through webbased applications～¥100 million－¥60
millionmerchants
Business in Unmanned/IoT terminals●Strengthen alliances with vending machine/selfcheckout manufacturers• Expansion of agent contract withsuch as airport facilities andstadium parking lots～¥50 million－

ｰ Acquire new agent contracts for e-money, QR
code payments, etc.

¥0.95 billion
Copyright 2023 GMO Financial Gate, Inc.

¥30
millionHigh probability revenue¥1.14 billion
91.6 Revenue by business model (Quarterly)
Initial : Significant growth in Q2 comes from large-lot project that have been contributing from Q1
Stock-Model : Despite weak seasonality, Q2 recorded higher revenue than Q1 which has strong seasonality
Initial Revenue
Pre COVID

Stock-Model Revenue

Under COVID

Pre COVID（Unit: Millions of yen）

Under COVID（Unit: Millions of yen）

3,500

YoY+56.1%

1,200
2,905

3,000

1,048

Stock

1,000

Fee

Spread

921

2,500
2,220

2,137
1,928

2,000
1,682
1,525
1,500

800

496

1,000

855
627

500

400

693
451

466

391

430

427

363

368

178

180

124

70

80

80

101

99

118

129

132

136

146

200
75
111

0

687

683

239

218

251

570

600

1,103

268

242

1,643
1,455

268

841

1,091

204

193

182

149
161

539

435
361

186

333
179

520

184

182

262

259

186

206

229

244

260

283

0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022 FY2022 FY2023 FY2023

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022 FY2022 FY2023 FY2023

Copyright 2023 GMO Financial Gate, Inc.

10

1.7 Initial Revenue and No. of Active Terminals (Quarterly)
Initial revenue increased sharply due to the contribution of large-lot project following Q1.Terminals soldthrough this large-lot project are scheduled to go into activation from Q3 and are not reflected in thenumber of active terminals yet

Q2 has weak seasonality in terms of transaction, and there is a temporary deactivation of terminals that were in operation in
Q1. The increase in the number of terminals tends to slow down usually from Q1 to Q2. For this fiscal year, terminals forlarge-lot project are scheduled to go into activation in Q3 and beyond, which will have a significant impact

Initial revenue（Unit: Millions of yen）
Number of active terminals （Unit: Thousand）

3,500

+15.3
+18.2

3,000

223.0

+15.3
+17.9

189.5

+13.1

2,500

174.2

+18.3

156.3
143.2

+17.7

2,000

+14.1
1,500

107.2

+5.4

47.1

80.7

72.7

67.3

1,000

2,137

57.6

1,525

500

627

693

Q1
FY2020Q2
FY2020

2,906

93.1

+9.7

+10.5

124.9

+12.4

+8.0

207.7

855

451

466

Q3
FY2020Q4
FY2020

1,682

1,455

2,220
1,928

1,643

1,103

0
Q1
FY2021Q2
FY2021Q3
FY2021Q4
FY2021Q1
FY2022

Copyright 2023 GMO Financial Gate, Inc.

Q2
FY2022Q3
FY2022Q4FY2022Q1
FY2023Q2
FY202311

1.8

Consolidated KPIs（Number of active terminals）

The increase in manned terminals, centered on stera, continues to drive the overall increase.
Unattended terminals also continue to expand steadily
Active terminals overall ： YoY＋66.7K YoY 、YoY+42.7% YoY（Unit: Thousand）

YoY
250

Manned terminal

Unmanned terminal

Sold by others

QoQ ＋15.3

207.7
189.5

200

174.2
156.3
143.2

150

124.9
107.2
93.1

100

57.6
50

47.1

67.3
13.6

72.7

80.7

14.4

9.6
28.0.0

24.4

26.5

27.7

30.3

36.7

Q1
FY2020Q2
FY2020Q3
FY2020Q4
FY2020Q1
FY202149.0
47.0

Unmanned terminal (IoT)＋5.8K (＋13.4%)

45.6

39.8
33.6

45.4

(+5.7%)

44.6

142.2

30.9

21.5

26.1

+1.0K

42.3

111.6

29.1

8.5
14.1

18.7

43.2

16.4

16.7

16.7

14.9

Sold by others

18.5

17.9

18.0

17.7

17.9

223.0

56.8

68.6

83.0

155.4

Manned terminal＋60.0K

126.0(＋62.8%)

95.4

0
Q2
FY2021Q3
FY2021Q4
FY2021Q1
FY2022Q2
FY2022

Copyright 2023 GMO Financial Gate, Inc.

Q3
FY2022Q4FY2022Q1
FY2023Q2
FY202312

1.9

Consolidated KPIs (Quarterly Transaction volume / GMV)

Both the number of transaction volume and GMV exceeded our target of +50% YoY. Also, QoQ basis,
both grew steadily with the increase in the number of active terminals, despite Q2 has weak seasonality
Number of transaction volume

Transaction value (GMV)（Unit：100 million yen）

（Unit：million）+83% YoY

10,000120+72% YoY

9,000

110
100

8,000

90

7,000

80
6,000

70

5,000

60
50

Quasi of SOE＋
Seasonality

4,000

Quasi of SOE＋
Seasonality

40

30

3,000
2,000

20

1,000

10

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022 FY2022 FY2023 FY2023

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022 FY2022 FY2023 FY2023

Transaction volume(10 K)
Transaction value(GMV)（¥100 M）

Q1
FY2020Q2
FY2020Q3
FY2020Q4
FY2020Q1
FY2021Q2
FY2021Q3
FY2021Q4
FY2021Q1
FY2022Q2
FY2022Q3
FY2022Q4FY2022Q1
FY2023

FY2023

1,383

1,494

1,809

2,231

2,683

2,774

3,848

4,914

6,497

6,293

8,237

9,224

10,553

10,804

1,442

1,534

1,307

1,833

2,329

2,361

3,141

3,810

5,251

5,162

6,658

7,530

9,242

9,460

Copyright 2023 GMO Financial Gate, Inc.

Q2

13

Business Highlights

2
Copyright 2023 GMO Financial Gate, Inc.

2.1 Merchant Industry
Preparation for after COVID is successfully working. In Q2, terminals were installed and activated at SCs
and SME type restaurants, etc., which had been an industry affected by COVID-19
Expanded
Expanded

Public service
institutions(Deliverance/
Transportation sector)※Operation is scheduled tostart in 3Q or later.

One dollar shop
Chain restaurant
Publictransportation(Train/bus etc.)

New

Drug store(medicine/cosmetics)

Stadiums/Sports
spectator facilities

IoT

Administrative
institutions

Vending/
checkout machine(City office /Police station/
Drivers’ license agency)

Low unit
pricestera pack
(For SMEs)

Educational
institutions(Stores/Cafeterias in
University/High
School)clothing/
Sporting
goodsSupermarket

•
•

•
•

Introduction of selfcheckout registersA
IoT POS / Center
linkage

Solutions for the mass
marketProvision of DX services
to business partners

Hotel/Travel： High inbound tourism demand
COVID-19 headwind
COVID-19 tailwind
NeutralExpanded

Retailers/Shopping Centerof Railway company

Action Plan

Parking lot

IoT Mobility

Store scale：Large••

POS point linkage
Provision of DX services
to business partners•

Sales strategies byindustry/ individualcompany
Proposals in collaboration
with business partners•

ExpandedElectronics
chain-retailers

High-end retail/
Department
store

One-stop service proposals withalliance partners
High unit
price
GMO Card System(consolidated
subsidiary)
Small restaurant(Incl: fine dining)

Medical / Clinic

Small restaurant/
Small retailService/
LeisureStore scale : Small
Copyright 2023 GMO Financial Gate, Inc.

High ASP*
retailer(goods/apparel)

15

2.2 Transaction Trends by Industry (Q2)
Re-opening & recovery of inbound demand has led to a recovery in merchants that were negatively
impacted by COVID-19
COVID-19 tailwind
Transaction Volume
Transaction Value (GMV)

23/3

23/2

23/1

22/12

22/11

22/10

22/9

22/8

22/7

22/6

22/5

22/4

22/3

22/2

22/1

21/12

21/11

Shifted steadily

21/10

21/9

21/8

21/7

23/3

23/2

22/12

23/1

Supermarket

22/11

22/10

22/9

22/6

22/5

22/4

22/3

22/2

22/1

21/12

21/11

Seasonality&
Quasi of SOE

21/10

21/9

21/8

21/7

(Izakaya)

22/8

Transaction Value (GMV)

22/7

Transaction Volume

Chainrestaurant

Merchant C

Jul - Sep：Decreased
due toRe-expansion of
COVID+
Bad weather

COVID-19 headwind

Merchant Ａ

Merchant D
COVID19 Headwinds/Inbound-related industries

Merchant B

Significant YoY growth due to rapid recovery
COVID-19 headwind

Hotel/Travel

October 11th,
Eased the restriction for theimmigration from theoutside of Japan

Transaction Volume
Transaction Value (GMV)

500,000

COVID-19 tailwind

450,000Drug store

Transaction Volume

400,000 Pharmacy

Transaction Value (GMV)

350,000

COVID19 Headwinds/Inbound-related industries

Steady and steady YoY growth
Shifted steadily(Medicine/
Cosmetics)

300,000
250,000

Seasonality&
Quasi of SOE

200,000
150,000
100,000
50,000

Copyright 2023 GMO Financial Gate, Inc.

： High inbound tourism demand

23/3

23/2

23/1

22/12

22/11

22/10

22/9

22/8

22/7

22/6

22/5

22/4

22/3

22/2

22/1

21/12

21/11

21/10

21/9

21/8

21/7

23/3

23/2

23/1

22/12

22/11

22/10

22/9

22/8

22/7

22/6

22/5

22/4

22/3

22/2

22/1

21/12

21/11

21/10

21/9

21/8

21/7

0

16

2.3 Top 30 ranked merchants (GMV basis)
Vertical expansion of our payment platform has been successful, and we are steadily acquiring new
merchants. Existing merchants also grow steadily so our payment platform is expanding nicely
Q2 standalone FY2022
Retailer A
Drug Store A
Retailer B
Low ASP Retailer A
Apparel A
Drug Store B
High ASP Retailer A
Retailer C
Medical/Clinic A
Retailer D
High ASP Retailer B
Chain restaurant A
Service A
Hotel/Travel A
Drug Store C
Retailer E
Retailer F
High ASP Retailer C
High ASP Retailer D
Retailer G
High ASP Retailer E
High ASP Retailer F
Retailer H
Apparel B
High ASP Retailer G
Hotel/Travel B
High ASP Retailer H
Hotel/Travel C
Service Ｂ
Retailer I

Q2 standalone FY2023

Subtotal of top 30 GMV¥111.4 billion（Unit: ¥100 million）

0

50

100

150

200

250

Apparel C
Retailer A
Retailer J
Hotel/Travel D
Drug Store A
Low ASP Retailer A
Hotel/Travel A
Retailer B
Chain restaurant A
Apparel A
Drug Store B
Retailer C
High ASP Retailer I
High ASP Retailer A
High ASP Retailer B
Retailer K
Retailer D
Medical/Clinic A
Apparel D
Retailer E
Hotel/Travel E
Drug Store C
Apparel E
High ASP Retailer C
Hotel/Travel FHigh ASP Retailer G
High ASP Retailer J
Retailer F
High ASP Retailer D
Apparel B

300

Copyright 2023 GMO Financial Gate, Inc.

*Apparel C grew due to the seasonality (Jan-Mar) in addition
to the Re-Opening effect.

New

New

Increase from Q2 FY2022
Decrease from Q2 FY2022

Subtotal of top 30 GMV¥177.5 billion

New(+¥66.1billion YoY, +58.4% YoY)
New
New

New

New contract:7※ Merchants with no transaction in
the same period of the previous year

New
New

（Unit: ¥100 million）

0

100

200

300

17

2.4

Comparison with Market Growth (February single month comparison)

While the overall market is currently growing +21%, our GMV is growing +92%. Growth ofexisting merchants and acquisition of new merchants is driving our growthMarket GMV (Transaction value of credit card payment)(trillion yen)

Restaurants
飲食店(右軸)(Rightaxis)

Retailers
小売(左軸)(left axis)

All
全体(左軸)(left axis)

9

Hotels/Inn
旅館・ホテル(右軸)(Right axis)

February
2022

+21%
YoY

8

GMO-FG GMV(100 million yen)

4,000

February 2,500
2023

3,500

2,000

3,000

7
6

February2023

February2022(100 million yen)

+92%
YoY

2,500

+63%
YoY

1,500
5

2,000
+31%
YoY

4

1,000

1,500

3
1,000
2

500

23/03

23/02

23/01

22/12

22/11

22/10

22/09

22/08

22/07

22/06

22/05

22/04

22/03

22/02

22/01

21/12

21/11

21/10

21/09

21/08

21/07

21/06

21/05

21/04

21/03

21/02

21/01

20/12

20/11

20/10

20/09

20/08

20/07

20/06

20/05

20/04

20/03

20/02

20/01

19/12

0

19/11

0

19/10

23/03

23/02

23/01

22/12

22/11

22/10

22/09

22/08

22/07

22/06

22/05

22/04

22/03

22/02

22/01

21/12

21/11

21/10

21/09

21/08

21/07

21/06

21/05

21/04

21/03

21/02

21/01

20/12

20/11

20/10

20/09

20/08

20/07

20/06

20/05

20/04

20/03

20/02

20/01

19/12

19/11

19/10

0

500

+17%
YoY

1

*Source: "Current Survey of Selected Service Industries" by the Ministry of Economy, Trade and Industry.

Copyright 2023 GMO Financial Gate, Inc.

18

2.5

Payment platform grows together with merchants

In the Q2 alone, our GMV growth rate was +83% overall and +45% for existing merchants. Existing
merchants exceeded the current (February) market growth rate of +21%, with merchants growing
together with our payment platform
GMO-FG GMV growth rate(¥100 million)
10,000

Newly acquired merchants

Growth of GMV overall

Existing merchants

Growth of GMV from existing merchants

9,000
8,000

9,459

Overall +¥429.8billion(+83.3% YoY)

1,997

Existing +¥230.1billion（+44.6％ YoY）

7,462

7,000

6,000
5,000
4,000
3,000
2,000

5,161

1,000
0

2022/9期
単2Q実績
Q2 FY2022

2023/9期
単2Q実績
Q2 FY2023*Existing merchants are calculated as the number of merchants in the same period of the previous year. Existing merchants increase in “the number ofpayment terminals” and “new store openings” are also considered as existing growth.
*The above figures are considering churn of merchants.

Copyright 2023 GMO Financial Gate, Inc.

19

Revision of FY2023 Forecast

3
Copyright 2023 GMO Financial Gate, Inc.

3.1 Upward Revision of FY2023 Forecast
Upward revision of both revenue / profit based on current progress, while continuing to invest adequate
amount of SG&A for future growth（Unit : millions of yen）

FY2022
Full year actual

FY2023

FY2023Full year forecast

Full year forecast（Original）（Revision）% change

YoY（to original forecast）

Revenue

10,295

12,47013,620+32.3%+9.2%

Gross profit

2,768

3,136

3,274

+18.3%+4.4%

Operating profit

740

930

1,020

+37.7%+9.7%

Profit attributable toowners of parent

472

580

631

+33.5%+8.9%

Earnings per share¥57.32*¥70.39¥76.29+33.1%

+8.4%

¥36

¥39

+¥10

－

*Reflected 1:2 stock split

Dividend per share¥29**Reflected 1:2 stock split

Copyright 2023 GMO Financial Gate, Inc.

21

3.2 Approach to Revised Plan
Background of the Balance between 1st half and 2nd half :Revenue : Demand for large-lot project was concentrated in the first half of the year and will reach cruising speed in the second half
OP : Additional investment in SG&A expenses is planned for growth in the next fiscal year and beyond
FY2023
1H (Actual) vs 2H (Forecast)

FY2023 Full Year Plan
（Millions of yen）

FY2022(A)16,000

FY2023 original（Millions of yen）

13,620 Revenue

14,00012,470

Revenue
Full year 13,620

FY2023 Revised

vs FY2022 ：+32.3%
vs FY2023 original：+9.2%

8,000【1H】 Large-lot project contributed significantly

7,264

12,0007,000【2H】 Initial revenue will return to the cruising speed level even though theterminal from large-lot project will be delivered in Q3 and partially in Q4 as well

6,355

10,2956,000

10,000Gross profit
vs FY2022 ：+18.3%
vs FY2023 original ：+4.4%

8,000

5,000

Gross profit
Full year 3,274

4,000
6,000

【1H&2H】 Align with revenue

3,000

3,274

4,000

3,136
2,768

Operating Profit
vs FY2022 ：+37.7%
vs FY2023 original ：+9.7%

2,000
740

930

1,020

1,746

2,000

1,527

1,000

OP
Full year 1,020【2H】 Additional investment
planned for future growth, buthigh growth secured on a fullyear basis

635

385

0

0

Revenue

Gross profit

Operating profit
Copyright 2023 GMO Financial Gate, Inc.

1H
2H
(Actual) (Forecast)

1H
2H(Actual) (Forecast)

1H
2H(Actual) (Forecast)22

3.3 SG&A and Profit Trends (half-year transition)
While aggressively investing in (1) business performance-linked compensation, and (2) other SG&A
expenses, which are variable costs, operating leverage has improved the power to generate profits.
Investment for growth will continue in 2H as well2,000（Millions of yen）
1,800

present【2H】Additional investment is planned for the
future,Despite plans for additional investmentin the future, high growth is secured on a fullyear basis.

Gross profit

HR cost (fixed cost)

1,600

Other SG&A expenses (fixed + variable cost)

1,400

Total SG&A
expenses
1,188

Performance-linked compensation (variable cost)
Total variable cost

1,200

Operating profit

1,000

Total SG&A
expenses
661

800

980
400
200

1,041

237

359

1,210

273

453

319

224

192

1,747

89

45

65

600

Total SG&A
expenses839

Total SG&A
expenses771

Total SG&A
expenses
1,143

Total SG&A
expenses
1,111

1,558

412

1,527

422

311

552

439

370

270

370

497

635
385

0

FY20211H(actual)

Number of Employees (End of
fiscal year, consolidated basis)
Operating Profit(Fiscal year, consolidated)

Operating Profit per capita*(fiscal year, consolidated)

FY20212H(actual)

FY2022
1H(actual)

FY20222H(actual)

FY20231H(actual)

FY20232H(Forecast)

FY2021

FY2022

FY2023

81

96

Approx. 115¥589 Million¥740 Million

1,020 Million¥7.27 million¥7.71 million¥8.87 million*Monitoring operating profit per employee, and pursuing business operations with a

Copyright 2023 GMO Financial Gate, Inc. small number of high-skilled employees due to an emphasis on productivity andefficiency

23

Growth Strategy and Progress

4
Copyright 2023 GMO Financial Gate, Inc.

4.1 Growth strategy on mid-term target
Progress in developing large-lot project with next-generation multi-payment terminal. Steady progress in market
share expansion strategy. Upward revision of profit forecast increases the probability of achieving the profit target of¥1.5 billion for FY2025
2022 *actual
Consolidate OP

TargetGMV

revised2024

2023 *Forecast¥740 million¥1,020 million¥2.5 trillion¥3.7trillion

1. Acquire multi-industry/high-growth enterprises by launching next-generation multipayment terminals
Initial, Stock, Fee , Spread⚫ Large-lot introduction to public service organizations continued in Q2. Contributed to expansion of initial revenue⚫ Transactions at inbound-related merchants grew in response to the resumption of economic activity (travel/hotels,
electronics/appliances retailers, apparel, restaurants, etc.).

2025+25% growth YoY¥1,500 million¥5 trillion
FY2020 Rev. level

CAGR25%1

1¥8.0-8.3
billion¥18～20billionVertical2. Expand IoT payments by supporting contactless (tap) and unattended payments
Initial, Stock, Fee⚫ With the increasing recognition of contactless payment (NFC), we will strengthen the payment solutions focusedon convenience. Plans to introduce NFC for table checking, mobile payment, and payment at SME typemerchants.
⚫ Increasingly introduced to mobility (buses, trains) and parking lots near stadiums and other leisure facilities.
⚫ Continued strong demand for self-cash registers at 100-yen discount stores, with steady expansion in thenumber of units installed.

Horizontal

2¥2.5～3billionVertical

3¥0.5～1billion⚫ Began work on a new proprietary point development project for two railroad operators in the Kansai region.
⚫ Leveraging solution assets cultivated through past point development projects, strengthened Vertical development

4. Increase added value by strengthening processing center functions

4

Stock, Fee⚫ Development of payment platform for JTB (C→REX terminals) is in progress for release this summer⚫ An external organization conducted an architecture evaluation of our internal back-office operations, centered on
the billing settlement system (investment for future scale)

Labor force saving
support through self-chekout register etc(Vertical expansion)

Horizontal¥0.1-0.2
billion

Stock, Spread

Horizontal
expansion2¥1.0-1.3
billion3

3. Acquire large accounts through expansion of alliances with QR, points, etc.

FY2026 Rev. level (assumption)

4¥0.2-0.3
billionVertical

Copyright 2023 GMO Financial Gate, Inc.

Horizontal¥0.5～1billionVertical
expansion
Strengthen
・Fintech services
・Money services
・Data businessat appropriate timing25

4.2 Expansion of GMO-FG cashless platform

Expansion of services byindustry

By horizontally deploying the solution assets cultivated through the Vertical expansion, the company isacquiring large scale merchants in the same industry. Viral expansion of the merchant base andestablishment of a solid payment platform
1
2
VerticalBus & Railway/Real Estate Industry Solution Asset Applications
Stadium Facilities cases of Solution Asset Applications
Expansion• Our settlement and communication know-how, which can operate stably even
Bus/Railway • Allows merchants to settle payments/grant points using points issued by the
Stadium
Facilities

merchant's own company
Real Estate

during events with tens of thousands of people, will contribute to securing thenext project.

• Installation of terminals in related commercial facilities/shopping centers

Stadium B

Railroad Company C

Railroad Company A

Stadium A(Kansai region,
from Q4 FY2023)(Kanto region, May 2022)(Kansai area, from Mar 2023)(Metropolitan area, Mar 2022)

Deal Track Records
lead us to next deals

Deal Track Records
lead us to next deals

Railroad Company B

Railroad Company D(Western Japan area,from Dec 2022)(Kansai region,
from Q4 FY2023)

Stadium C(Hokkaido area, Mar 2023)

Saitama Super Arena(GMO SONIC, Jan 2023)

Stadium D(Metropolitan area, scheduled forQ3 FY2023)

1

1

New

2
Stadium Facilities

Public Service
Institution

Vending machine

Parking lot
EV meterLaundry

Amusement

TravelWholesale

Real Estate

Office/School

Medical/Welfare

Hotel/Inn

Bus/Railway

Restaurant

Retailer

Expansion in customer industry

Horizontal Expansion①Payment terminal, ②Processing center, ③PSP service

Approach to large accounts in each industry

Copyright 2023 GMO Financial Gate, Inc.

• Acquirer• Clearing machine
manufacturer• POS operators26

4.3 Manned Terminal Topics

Action plans 1

2

3

4

Installation of terminals for large-lot project (public service organization in the deliverance / transportation sector)
was concentrated in the 1st half. Terminals installed for large-lot project will be activated from April (3Q) and are
expected to contribute to KPIs expansion
Number of manned terminal（Unit :FY2020
FY2021（単位：千台）FY2021

FY2021

FY2021

FY2022

FY2022

FY2022

FY2022

FY2023

FY2023

QoQ

YoY

thousand）

End Q4End Q1End Q2End Q3End Q4End Q1End Q2End Q3End Q4End Q1End Q2MannedLaunched stera

(%)
+13.2

36.7

45.4

56.8

68.6

83.0

95.4

111.6

126.0

142.2

155.4

(%)
+60.0

(+9.3％)(+62.8%)terminal

30.3

+6.4

+8.7

+11.4

+11.8

+14.4

+12.4

+16.2

+14.4

+16.2

+13.2

Specific Public and Transportation Sector Large Volume
Projects / Terminal Availability

Terminal sales* (FY2023)*Total terminal sales including manned terminal and unattended terminal (IoT)

16,000100,000,000

14,000Transaction volume and GMV will be
expected to be maximized toward June

80,000,000

60,000,000

40,000,000

12,00010,000Transaction volume
決済件数

8,000

GMV
決済金額

6,000

April : Terminals parcially began to operate

4,000

20,000,000
2,000

Q1(Actual)

Q2(Actual)

Q3(Forecast)

Q4(Forecast)

02023/04

Copyright 2023 GMO Financial Gate, Inc.

02023/05

2023/0627

4.4 Expansion of Payment Platforms - Mobility

Action plans 1

2

3

4

Mobility payments in urban areas are on the rise due to the recent increase in the number of foreign
visitors to Japan. Successfully capturing the recovery of inbound demand after COVID era, and morerailroads and buses are scheduled to be introduced going forward
Introduction snapshot in domestic public transportation (Visa Publication)

Trends in the number of foreign visitors to Japan &mobility payment trends(ten thousand)200

Number of foreign visitors to Japan

150
100

50
22/11

22/12

23/1

23/2

23/3

22/12

23/1

23/2

23/3

22/10

22/11

22/9

22/8

22/7

22/6

22/5

22/4

22/3

22/2

22/1

21/12

21/11

21/10

21/9

21/8

21/7

21/6

21/5

21/4

21/3

0

Source: Japan National Tourism Organization (JNTO)

Mobility Settlement Trends (Number of cases)

Kansai Transportation Company A
Kyushu Transportation Company B

OthersCopyright 2023 GMO Financial Gate, Inc.

22/10

22/9

22/8

22/7

22/6

22/5

22/4

22/3

22/2

22/1

21/12

21/11

21/10

21/9

21/8

21/7

21/6

21/5

21/4

21/3

Source: Visa (excerpted from the December 19, 2022 media briefing handout)

28

4.5 ESG / Obtained a Certificate of Assurance of GHG
Obtained a certificate of assurance from an external certification instituion (Socotec, Inc.) regarding
GHG emissions in FY2022. We plan to receive external certification every fiscal year and continue toassess the environmental affect coming from our business
Certificate of Assurance by External Certification Institution (FY2022)

ESG related plan

2022
Oct

Nov

2023
Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Supply chain CO2 emissions (SCOPE 1-3)
May 12 : Disclosure of "Third
Party Assurance Report"
Grasping based on our own
standards

External Certification

Dec 9 : Announcement of ESG
initiatives on website

Next action
Acquisition of Certificate
regarding renewable energy⇒ Aim for zero CO₂ emissions in
FY2023*.

*Considering acquisition of non-fossil certificates to offset power consumption atbusiness locations in FY9/2023.

Plans to continue disclosing the acquisition of a guarantee andimplementing the PDCA cycle to reduce emissions in the next fiscal
year and beyond
Copyright 2023 GMO Financial Gate, Inc.

29

Supplemental Agenda
Financial Information, Investment and Shareholder Return Policies

5
Copyright 2023 GMO Financial Gate, Inc.

5.1 Profit & Loss
Gross profit margin increased despite lower gross profit margin due mainly to higher proportion of
initial revenue. Operating profit margin improved, handling the increase in SG&A expenses(Unit：Thousands)

Q2 FY2022
Cumulative（actual）

Q2 FY2023
Cumulative（actual）

YoY

Revenue

4,468,335

7,264,813+62.6%

COGS

3,258,241

5,518,272+69.4%

Gross profit

1,210,093

1,746,541+44.3%

SG&A

839,141

1,110,898+32.4%

Operating profit

370,952

635,643+71.4%

Ordinary profit

370,591

633,973+71.1%

Profit attributable to ownersof parent

234,115394,368+68.5%

Copyright 2023 GMO Financial Gate, Inc.

31

5.2 Revenue by business model（YoY)
Initial revenue proportion increased more than expected due to rapid terminal sales growth in Q2
OP margin improved, handling the SG&A expenses of the stock-model businessInitial

Stock

Fee

Spread

536
1,060
543

457
521
392
375
201
282

5,126
3,098

1,959

FY2021 2Q

FY2022 2Q

Copyright 2023 GMO Financial Gate, Inc.

FY2023 2Q

32

5.3 Revenue by business model (Quarterly)
Initial revenue reached a new record quarterly high thanks to the acquisition of a large merchant. Feeand Stock continued to increase despite the weak season, and Spread was maintained at the same level
as during the strong season (Q1)
Preventing the
spread of disease
Priority measures（Unit :
millions of yen）

Q1
FY2021Q2
FY2021Q3
FY2021Q4
FY2021Q1
FY2022Q2
FY2022Q3
FY2022Q4FY2022Q1
FY2023Q2
FY2023

Initial

855

1,103

1,525

1,682

1,454

1,643

2,136

1,927

2,220

2,905
Record high for the quarter

Stock-model

430

427

495

569

687

683

841

921

1,047

1,091

Stock

135

145

160

182

185

206

229

244

259

283

Fee

101

99

149

183

261

259

361

434

519

539

Spread

193

181

185

203

239

217

250

242

268

268

Sales have been on a downward trend every year due toseasonality, Secured the same level as 1Q in this fiscal year

Total

1,286

1,531

2,020

2,252

2,141

2,327

Copyright 2023 GMO Financial Gate, Inc.

2,978

2,849

3,267

3.997

33

5.4 Balance sheet
Achieved accumulation of merchandise inventories following Q1 on the back of strong demand
Borrowed an additional ¥1 billion in both long and short-term loans to secure working capitalEnd of Q2 FY2023（Thousands of yen）

Merchandise:Cash & Cash equivalents(19.4%)

2,190,347

Current liabilities

Merchandise (Payment terminal)

Non-current liabiliries

3,131,357◼ Points

3,220,711

539,974

Increased by ¥620 Millions from the end of Q1. Inventorybuildup based on future sales forecast
Current Liabilities:¥500 Millions in short-term debt

Other current assets

1,520,248

Total net assets(55.7%)

4,732,654

Non-current liabilities:¥500 Millions in long-term debt

Non-current assets

1,651,387

Asset

Cash and Cash Equivalents:
Total liabilities
and net assets

Increased by ¥470 Millions from the end of Q1 due toborrowing, despite an increase in merchandise
Copyright 2023 GMO Financial Gate, Inc.

34

5.4 Balance sheet (Quarterly)
B/S expanded following 1Q due to borrowing for aggressive purchasing
Increase in other current assets was mainly due to an increase in accounts receivable
Q4
FY2021Q1
FY2022Q2
FY2022Q3
FY2022Q4FY2022Q1
FY2023

Cash and cash equivalents

3,434

1,425

1,618

2,231

2,519

1,720

2,190

+470

+572

Merchandise

1,615

2,177

2,523

1,545

1,507

2,511

3,131

+620

+608

Others

741

868

1,007

884

990

1,527

1,520

▲7

+513

Non-current assets

1,347

1,409

1,445

1,497

1,622

1,567

1,651

+84

+207

Total assets

7,136

5,879

6,593

6,157

6,638

7,326

8,493

+1,168+1,900Current liabilities

2,720

1,538

2,135

1,575

1,929

2,801

3,221

+419

+1,085

Non-current liabilities

40

37

33

30

39

39

540

+501

+507

Net Asset

4,376

4,304

4,425

4,552

4,671

4,485

4,733

+248

+308

Total liabilities and net assets

7,136

5,879

6,593

6,157

6,638

7,326

8,493

+1,168+1,900（Unit : millions of yen）

Current
assetsAsset

Q2
FY2023

QoQ

YoY

Liabilities

Copyright 2023 GMO Financial Gate, Inc.

35

5.6 Consolidated KPIs（No. of Active Terminal）
Steady growth in the number of active terminal driven by manned type terminals
Steady expansion of unmanned terminals in response to the trend of self-checkout penetration andmanpower saving at merchants（Unit:
thousand）

FY2021Q1

FY2021Q2

FY2021Q3

FY2021Q4

FY2022Q1

FY2022Q2

FY2022Q3

FY2022Q4FY2023Q1

FY2023
Q2

Manned

36.7

45.4

56.8

68.7

83.0

95.4

111.6

126.0

142.2

155.4

29.1

30.9

33.6

39.8

42.3

43.2

44.6

45.6

47.0

49.0

Sold by others

14.9

16.7

16.7

16.4

17.9

17.7

18.0

17.9

18.5

18.7

Total

80.7

93.1

107.2

124.9

143.2

156.3

174.2

189.5

207.7

223.0

Unmanned(IoT)

Copyright 2023 GMO Financial Gate, Inc.

QoQ
(%)

YoY
(%)

+13.2

+60.0

(+9.3％)(+62.8％)

+2.0

+5.8

(+4.2％)(+13.4%)

+0.2

+1.0

(+0.9％)(+5.7%)

+15.3

+66.7

(+7.4％)(+42.7%)36

5.7 Progress of GMV by quarter (vs. original plan)
Steady progress toward the mid-term target of ¥5 trillion in GMV
Continued expansion of scale and progress rate on par with past results in this fiscal year
FY2021 (Actual)

Percentage of GMV progress against initial plan
FY2021

FY2022

FY2023Plan
Result0.9trillion yen
1.1trillion yen

25.9%
1Q

29.2%
25.0%

FY2022 (Actual)
52.1%
2Q

Plan
Result

57.9%
50.5%

1.8trillion yen
2.5trillion yen

87.0%
3Q

94.8%

FY2023 (In process)

Excess overinitial plan

Plan
Result129.4%
4Q

136.7%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Copyright 2023 GMO Financial Gate, Inc.

3.7trillion yen
1.9trillion yen(1H)

FY2024～FY2025：¥5 trillion
375.8 Capital Allocation Policy
Aim to achieve continuous business growth in accordance with the investment funding policy andcapital allocation policy
Investment Source Funding Policy⚫

Priority of investment resources
Interest-bearing debt, (3) Equity

Capital Allocation Policy(1) Operating cash flow, (2)⚫

Priority will be given to business investment and growthinvestment in accordance with our business strategy, while atthe same time, we will continue to provide a certain level ofshareholder returns.

Business Investment(1) Operating Cash Flow
Leverage operating CF from continuous profit growthBusiness investment to implement market share expansion strategy(2) Favorable sub liabilities, etc.
Flexibly consider the use of interest-bearing debt in accordance with ourinvestment policy based on our financial condition, market environment, andinterest rate levels

Growth Investments
Strategic investments in preparation for profit margin increase strategy(3) Equity
We will make a comprehensive evaluation of the stock price level, market
environment, financial condition, and other factors. and financial conditions,etc., and consider capital procurement to realize continuous business growththrough investment. Consider capital procurement to achieve sustainablebusiness growth through investment based on a comprehensive assessmentof stock price levels, market environment, financial conditions, etc.

Shareholder Returns
Stable and continuous dividend payments while securing internal reserves forbusiness and growth investments to support continuous business growth

Copyright 2023 GMO Financial Gate, Inc.

38

5.9 Investment Policy
Proactive business investment to execute "market share expansion strategy" necessary for medium tolong-term operating profit growth of +25% YoY
Growth investment

Business investment
・Investments in data centers, terminal development, and internal
systems
Main
Investment
TargetBasic
Investment
Policy・Investment in human resources (organizational enhancement, hiring,
performance-linked compensation, etc.)
・Development investment for IoT (mobility), touch settlement intransportation systems (trains, buses, etc.), and labor-saving/selfsupport

・In principle, business investments are made within the budgetedframework based on the assumption that the profit plan will beachieved, and additional investments are made according to theprogress of actual performance.

・Support for cashless transactions in the area of small and medium-sized
merchants
・New business related to money services/payment
・Data service/marketing support business・Building alliances (business alliances, capital tie-ups, etc.)

・Careful verification of business profitability and growth potential
・Start lean and small
・Expand investment limits in phases where return on investment is
expected

Copyright 2023 GMO Financial Gate, Inc.

39

5.10 Shareholder Return Policy
Aiming to increase corporate value through business growth while providing stable and continuous
dividends simultaneously
Basic Policy on Shareholder Returns
Increase in corporate value

Stable and continuous dividends

・Aim to increase market capitalization over the medium tolong term through continuous business growth
To increase net income attributable to shareholders throughbusiness growth in sales (CAGR 25%) and operating profit(+25% YoY or more) . Increase net income attributable toshareholders through business growth・Stable and continuous dividend payments
Aim for shareholder returns of 50% or more while
ensuring capital needs and internal reserves to support
business growth (currently in place).

Copyright 2023 GMO Financial Gate, Inc.

40

Supplemental Agenda
ESG Initiatives (Details)

6
Copyright 2023 GMO Financial Gate, Inc.

6.1 Status of ESG Initiatives
Disclosed "Minebea Group's ESG-related Initiatives" on its website last December. Currently conducting
third-party data review to obtain external certification of supply chain CO2 emissions, including
SCOPE3
ESG-related disclosure schedule
Oct

2022
Nov

Dec

Jan

Feb

Mar

Apr

2023
May

Jun

Our Specific Efforts for Environmental Consideration
Jul

Aug

Sep

Supply chain CO2 emissions (SCOPE 1-3)
Grasping based on our own
standards⚫

Recycled paper is used for receipts (paper rolls) used at each payment terminal.

⚫

Provide electronic storage services for sales slips to reduce the number of receipts(sales of rollpaper)⚫

Use of environmentally friendly materials for payment terminal components⚫

Reuse of payment terminals returned by merchants as replacement terminals(refurbished terminals) in the event of malfunctions, etc.

May 12 : Disclosure of "Third
Party Assurance Report"

External Certification

Next action
Acquisition of Certificate
regarding renewable energy

Dec 9 : Announcement of ESG
initiatives on website⇒ Aim for zero CO₂ emissions in
FY2023*.

*Considering acquisition of non-fossil certificates to offset power consumption at business locations in FY2023

Our supply chain CO2 emissions*2022/12/9開示 「当社グループのESGに関する取り組み」より抜粋

Our Supply Chain
GMO-FG

upstream

SCOPE 3SCOPE 1SCOPE 2

Procurement, Manufacturing and
FuelElectricity use
Distribution
Combustion
payment
terminal

Sales ofroll paper-

FY 9/2022

downstream
SCOPE 1 (t-CO2)

0

SCOPE 2 (t-CO2)

105

SCOPE 3Use and disposal

Office,Settleme
Payment
nt Centers
Terminal Use

Payment
terminal
Disposal

Electricity consumption for SCOPE 1 and 2 (kwh)

231,210(Reference) SCOPE 3 is being coordinated with a third-party certification organization, and data is being
collected with the aim of identifying and disclosing SCOPE 3 in the first half of this fiscal year
and disclosing it in the second half of the fiscal year.
*The subject companies are GMO Financial Gate, GMO Card Systems, and GMO Data, a consolidated group of companies.
*Data for SCOPE 1 and 2 will be verified by a third-party verification organization in the future.

Copyright 2023 GMO Financial Gate, Inc.

42

6.2 ESG Initiatives / Environment
In the provision of our payment platform, we promote business operations that consider environmental
impactSpecific Efforts

Environment Related Data
Our Supply Chain⚫
⚫

Provide electronic storage services for sales slips to reduce thenumber of receipts (paper rolls)⚫

Use of environmentally friendly materials for payment terminal
components⚫

Reuse of payment terminals returned by merchants as
replacement terminals (refurbished terminals) in the event ofmalfunctions, etc.

GMO-FG

upstream

Recycled paper is used for receipts (paper rolls) used at eachpayment terminal.

SCOPE 3SCOPE 1SCOPE 2

Procurement, Manufacturing and
FuelElectricity use
Distribution
Combustion
payment
terminal

Sales ofroll paper-

downstream

SCOPE 3Use and disposal

Office,Settleme
Payment
nt Centers
Terminal Use

Supply chain CO₂ emissions

FY 9/2022

SCOPE 1 (t-CO2)

0

SCOPE 2 (t-CO2)

105

Electricity consumption for SCOPE 1 and 2 (kwh)Payment
terminal
Disposal

231,210(Reference) Data on SCOPE 3 is being collected for future disclosure in cooperation withpayment terminal manufacturers, etc.
* The subject companies are GMO Financial Gate, GMO Card Systems, and GMO Data, a consolidated group ofcompanies.

* Data for SCOPE 1 and 2 will be verified by a third-party verification organization in the future.

Copyright 2023 GMO Financial Gate, Inc.

43

6.3 ESG Initiatives / Social
Aiming for sustainable growth by hiring excellent human resources and enhancing various systems
that contribute to improving the capabilities of all partners* in order to create corporate value and solve* We refer to our employees and other officers and employees as "partners.
social issues
Specific Efforts

Social Related Data
FY 9/2022⚫ Human Resource Development and Welfare System•

career design system ： System to provide advice and support on
career development•

360-degree multidimensional evaluation system ： A system thatallows partners to evaluate their supervisors without a name.

•countermeasures to the falling birthrate ： Financial benefits andspecial exceptions for work at various stages of marriage, childcare, etc.

Promote a telework work system that takes into consideration the safetyof executives and employees

124 persons(Breakdown) Number of employee partners

96 people(Breakdown) Number of temporary partners

28 people

Percentage of women among employee partners

22.8%

Percentage of women in management partners

14.3%

Average years of service⚫ work-style reform•

Number of Partners

3 years and 7 months

average age

40 years old

job turnover

9.5％

•

Promotion of maternity and paternity leave*Number of partners" covers the consolidated corporate group GMO Financial Gate, GMO Card Systems, and GMO Data.

•

Encouraging shorter working hours for childcare*Number of partners" is the total number of regular employees, rehired employees, contract employees, and seconded
employees (excluding employees seconded from our group to outside the group, but including employees seconded fromoutside the group to our group) as of the end of FY9/2022.

•

Providing post-retirement reemployment opportunities•

Providing an hourly annual leave system, etc.

*Number of temporary partners" is the average total number of part-timers and temporary employees during the past year.
* Figures for "Ratio of women among employee partners" and "Ratio of women among management partners" are for"employee partners.
* Average years of service, average age, and turnover rate are non-consolidated figures for GMO Financial Gate.

Copyright 2023 GMO Financial Gate, Inc.

44

6.4 ESG Initiatives / Governance
Focus on enhancing corporate governance by establishing a decision-making structure that responds
quickly and appropriately to changes in the business environment and a fair, transparent, and efficientbusiness execution structure
Governance Related Data

Specific Efforts•

Establishment of a new management committee for agile
management decision making

Percentage of Independent Outside Directors andPercentage of Female Directors

FY 9/2022
seven people

Number of directors
Number of independent outside directors (%)

two people (28.6%)

Number of female directors (%)

one people (14.3%)*Number and percentage of directors expected to be in office as of December 31, 2022

Attendance rate at Board of Directors meetings (FY9/2022)
Number of
times
implemented

17 times

AoyamaFukuda

Koide

Shimamura

AsayamaPresident andchairman of board
Representativeof directors
Directorboard member

board member

board member

Independent
Outside Director

Independent
Outside Director

Number of
Attendances

17 times

17 times

17 times

17 times

14 times

17 times

14 times

attendance
rate

100％

100％

100％

100％

100％

100％

100％

Number oftimes/percen
tage

TakanoSugiyama* Directors in office as of the date of submission of this document (12/9/2022)*For directors appointed during the term, indicate the number and rate of attendance since their appointment.

Board of Statutory Auditors (FY2022/9)
Number of times
implemented

14 times

Number oftimes/percentage
Number of Attendances
attendance rate

Nagasawa

Ozawa

Independent Outside
Corporate Auditor

Independent Outside
Corporate Auditor

auditor

14 times
100％

14 times
100％

14 times
100％

IR Activities

FY 9/2022

Financial Results Briefing

４ times

1-on-1 meeting

267 cases

Group meetings sponsored by brokerage firms

３ timesIinuma* 1-on-1 meetings include brokerage-sponsored conferences (1-on-1 format)

Copyright 2023 GMO Financial Gate, Inc.

45

6.5 ESG Initiatives / Board of Directors
Governance structure built around technology and financial background
Internal Director (Managing Director)
Kentaro Sugiyama ／President and Representative Director
Worked in the systems industry for 14 years with clients in thefinancial industry; joined GMO-FG in May 2017 after having worked
for GMO-PG since 2014; became President and Representative
Director in December

Akio Aoyama ／Director, General Manager of Sales Division
Worked in the systems industry for 21 years with clients in thefinancial industry; joined GMO-FG in April 2018; became Director in
December 2018, responsible for Sales Division; also President andRepresentative Director of GMO Data since August 2019

Tomonaga Fukuda ／Director, General Manager, System Division
18 years in the systems industry, working with clients in the financial
industry; joined GMO-FG in September 2019, appointed as Director
in December 2020, in charge of the Systems Division

Tomoki Tamai ／Director, General Manager, Administration Division
Engaged in sales and corporate affairs at major banks and operatingcompanies; joined GMO-FG in August 2021; appointed Director in
December 2022; in charge of Administration Division

Director concurrently serving as GMO-PG
Tatsuya Koide ／ Director
35 years in the systems industry, working with clients in the public
and manufacturing industries Joined GMO-PG in September 2021,
also serving as Director of GMO-FG Appointed Senior Executive
Officer of GMO-PG in December 2021

Independent External Director
Nao Shimamura ／ External Director
Engaged in legal practice in the legal industry for 15 years; appointed
as an outside director in September 2019 (appointed as an outside
director because he has the knowledge and experience to makedecisions on important management matters of the Company and tosupervise the execution of business operations in an accurate andfair manner).

Rie Asayama ／ External Director
Engaged in finance-related business for 36 years at a major banking
group; appointed outside director in December 2021 (appointed as
outside director because of his experience in promoting diversity andas executive vice president of a general business company).
Definition of notation
GMO-FG: GMO Financial Gate, GMO-PG: GMO Payment Gateway

Copyright 2023 GMO Financial Gate, Inc.

46

6.6 ESG Initiatives / Executive Skills Matrix
Appointment of human resources that contribute to the enhancement of corporate value as directors,
with a view to building a system that enables the Board of Directors to function effectively* GMO-ism is the collective name for the company motto and company precepts that express the "Spirit Venture Declaration" and "55-Year Plan," the unchanging goals of the GMO Internet Group, as well as "Executive
Principles" and "Laws of Victory.
* Describes directors in office as of March 31, 2023.

Copyright 2023 GMO Financial Gate, Inc.

47

Supplemental Agenda
Appendix

7
Copyright 2023 GMO Financial Gate, Inc.

GMO-FG Business Domain

Business Model

GMO-FG is focusing on offline payment（リアル店舗決済 ＋ IoT決済）

Company nameBusiness
Domain

GMO Financial Gate
(Payment at Brick & Mortar + IoT)

GMO Payment Gateway(EC)

Payment by passing card/QR codeover the reader

Payment by entering credit card
information in PC / mobile phone

Payment terminal

EC (terminal is unnecessary)

Payment
methodMedium• Physical hardware network• Proprietary programming code specifications• Regulation

Copyright 2023 GMO Financial Gate, Inc.

49

Rev Models: Financial Gate vs. Payment Gateway

Business Model

Initial revenue in offline payment is tend to be fluctuate because of its seasonality of terminal delivery

Revenue

Revenue

１Q

２Q

３Q

４Q

Time

１Q

１Q

２Q

３Q

４Q

Initial Revenue（Terminal Sales・Software Development）

Initial Revenue（Initial Set up Fee, etc…）

Stock, Fee, Spread Revenue

Stock, Fee, Spread Revenue

Copyright 2023 GMO Financial Gate, Inc.

１Q

Time

50

Three Biz Models Over a Single, One-Stop Platform

Business Model

One-stop platform covering all settlement processes between merchants and acquirers
Consumer

Merchants

FG

Various
Payment
Methods

Terminals

1
Payment
Terminal

Various Payment
Methods

Acquirers

Terminal Sales
Business

Credit Card Issuer

Flow Revenue

Bank
Payment
Terminals

Payment Scene

2

RetailRestaurants

Service

Mobility

Payment
Processing

Payment Processing
Business

Payment
Processing

E-Money Vendors

Stock Revenue

etc

Points Vendors
Purchase

IoT

Vending Machines/
Coffee Machines
Checkout Machines(Country Club/
Hotel)

3
Comprehensive
Clearing

Acquiring
Business

Clearing

QR Code Payment
Vendors

Stock Revenue

Metered Parking
etc
EV Meter

Copyright 2023 GMO Financial Gate, Inc.

51

Stock Revenue Expansion Originating From Terminal Sales

Business Model

Stock revenue grows with flow model revenue which is mainly coming form the sales of payment
terminals
Revenue Model

Flow Model Rev

3 Business

4 Types of Revenue%(FY2023 Q2
cumulative)

Initial

70.6％

Stock

7.5％

Fee

14.6％

Spread7.3％① Terminal
Sales
Business② Payment
Processing
Business

Stock Model Rev③ Acquiring
Business

Copyright 2023 GMO Financial Gate, Inc.

52

Players in offline cashless payment setting

Business Model

Sales activity to merchants/Clearing of merchant transaction
offlinePayment Processing
CenterMerchants

Offline market
POS vendor

Terminal manufacturer
Domestic makerOverseas maker

Processing center (CCT)

Payment
Network

Domestic network

Acquirer

International network

Card company
Bank etc

Legacy POS
Mobile POS

Vending machine manufacturers /Self checkout register manufacturers

Financial
Institutions

Payment Brand

ASP center (POS)
E-money center

Code payment gateway

Int’l card brandE-money
Domestic code payment
Foreign code payment

Acquiring Partner
Mobile POS

Our monetization points
Initial Revenue
Stock Revenue※Activation of payment terminals～Connect to our processing center

Alliance partner

Fee Revenue※Booked in stock revenue occasionally depending on contract type※Excluding roll paper sales

Copyright 2023 GMO Financial Gate, Inc.

Spread Revenue

53

CCT (Credit Center Terminal, ⇒Card company-owned terminal)

Business Model

CCT(Credit Center Terminal)
It is a terminal name authorized by the information processing center (CCT Center) designated by the Japan Credit Card
Association (JCCA) and operated in accordance with the guidelines, etc., established by the JCCA. A single card company
owns the terminal on behalf of another card company and lends it to a merchant for installation. Multiple card companies
jointly use the terminals and pay usage fees to the card companies that installed themMerchants
From the installing cardcompany Loaned/provided
terminals

CCT rental and provision

Installed card company
Owns the terminals andbear the associated costs

Agreement
Terminal Application
DLL Information※
Information Processing

Merchant
Information
Terminal usage
Usage Fee Settlement
fee(Settlement)
Data Provision
Japan Credit Cards
Association(JCCA)

Agreement

Center(CCT Center)
GMO-FG, INFOX, etc.

DLL Information

Carpooling Card Company A

Merchant information sharing

Carpooling Card Company B

Terminal usage fee (payment)

Carpooling Card Company C※DLL (down line loading) information
Information used to link the terminal identification number to the merchant number.
In CCT, the terminal identification number is issued by the card company that installed the terminal identification number.

Copyright 2023 GMO Financial Gate, Inc.

Pay usage fees to installed credit cardcompanies according to terminal usage
according to the use of the terminal

54

Merchant POS (Merchant-owned terminals)

Business Model

Merchant POS
In general, POS (Point of Sales) is a generic term for a service that provides information on sales performance trends such as
the date, time, quantity, and price of products sold, but in the credit industry, the term merchant POS is customarily used torefer to all terminals capable of processing credit card transactions that are not CCT terminals. In a merchant POS, themerchant itself owns the terminal, prepares the card payment environment, and makes a separate contract with the credit
card company. While this requires more time and effort on the part of the merchant, it also allows for a more flexible designthat is not bound by the JCCA (Japan Credit Card Association) guidelines
Merchants
Own terminal

Agreement

Merchants pay roll paper cost andelectronic receipt storage cost

Japan Credit Cards
Association(JCCA)

Contracted
credit cardcompany A

DLL Information※

Agreement
Information Processing Center(merchant POS centers)
GMO-FG, INFOX, etc.

Agreement
Contracted
credit cardcompany C

Contracted
credit cardcompany B※ DLL (down line loading) information
Information used to link the terminal identification number to the merchant number.
In merchant POS, the terminal identification number is issued by the merchant.

Copyright 2023 GMO Financial Gate, Inc.

55

Image of rise in Rev & OP

Business Model

Phase1: Focus on sales/activation of payment terminals and revenue will be fluctuated.
Phase2: Expansion of Stock-Model revenue

Increase of Market Share (approx. up to 2025)

Rise in Profit Margin

Revenue: Increase at a CAGR of 25% or more, although the extent of increase will vary from period to period

Operating profit: Continue to grow 25% or more every fiscal year
RevenueOP

Sales may fluctuate significantly from period to period

Copyright 2023 GMO Financial Gate, Inc.

56

Leveraged Growth Model

Business Model

Fee and spread revenue are expanding with the market /growth in membership merchants

Leveraged Growth
N＋1
Stock revenue

N
Stock revenue

Stock-Model Revenue
SpreadLinking with the growth of
TAM / membership merchants

Fee

Stoc-model
revenue before N-1

Stock
Q1
1Q

Q2
2Q

Q3
3Q

NN期

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

N+1
N+1期

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

Linking with the number ofaffiliated merchants

Q4
4Q

N+2
N+2期

Stock
N-1期（ストック）Fee
N-1期（フィー）SpreadN-1期（スプレッド）

N期（ストック）
Stock

N期（フィー）Fee

N期（スプレッド）SpreadStock
N+1期（ストック）

Fee
N+1期（フィー）SpreadN+1期（スプレッド）

Copyright 2023 GMO Financial Gate, Inc.

57

Details on each revenue ①
InitialBusiness Model

Content

Payment terminal
sales

This is a sales revenue of payment terminals from merchants or credit card companies.
All of first, we purchase hardware from manufactures. And confirm certain measures of
payment methods that each merchant needs to accept. Then make these methods toconnect to our processing center（Occasionally, we put some customization to theseterminals)

Softwaredevelopment

It is a type of development that meets customers needs such as widening acceptablepayment measures and adding point-payment functionality

Stock

Rev Model• Terminal Selling Price × Units Sold
✓ There’re around 10 types of terminals✓ Price range is from about ¥20K up to ¥100K• No. of Deals × Ordered value✓ Since software development is tailor madetype revenue, deal size and margin vary fromtime to time

Content

Data sharing

It is a service that provides merchants with their daily sales data that go through ourprocessing center. We charge it as monthly fixed fee

Points＆QR

It is a service to add point/QR payment app to the terminals merchants have. We charge it
as monthly fixed fee

Rev Model• No. of contracts × Service Price

Rental(Mobile terminal)
Mobile SIM

It is a SIM card fee to use mobile type terminals. We charge it as monthly fixed fee

Processing

It is a processing fee based on monthly fixed rate

(Monthly fixed fee model)✓ Service price is around ¥500 to ¥1K per
terminal per month

It is a service to rent mobile type terminals that enable merchants to use them in wirelesssetting. We charge it as monthly fixed fee*Basically, it is defined as “Fee” revenue when it comes to the case we charge as Pay As You Go billing, not fixed rate

• No. of contracts × Monthly Fixed Fee✓ Monthly fixed fee will vary depending on thesize of contract etc..

Generally, the economics of services above vary depend on merchants. And there are services that some merchants do not apply
Copyright 2023 GMO Financial Gate, Inc.

58

Details on each revenue ②

Business Model

Fee

Content

Processing

It is a fee we charge toward monthly transaction volume based on the rate per transaction

Sales ofroll paper

This is a sales of roll paper that is used with payment terminals at stores

Rev Model• TRX Volume× Processing Fee

Electronic storageof sales receipts✓ Processing fee is about ¥2 to ¥3 pertransaction• No. of Order × Price of Roll Paper

Optional service to store vouchers electronically, sales to be billed based on the number ofpayment transactions subject to the contract✓ The price range of roll paper is about ¥130 to¥200.

• Number of settlement
processes subject to contract x
unit processing fee✓ Unit processing fee is about ¥1 per transaction

SpreadAcquiring（Settlement agent）

content
We charge spread fee (α) towards clearing amount to merchants
We received indicator rate (N) from acquirers, then we acquire merchants instead ofacquirers with the new rate (N+α＝merchant fee)

Copyright 2023 GMO Financial Gate, Inc.

Rev Model

GMV of Agent Contract
×
Spread fee we charge (about 0.3～0.4%)

59Fee ARPU (Fee revenue divided by Transaction volume)

Business Model

Strengthening electronic slip storage services in anticipation of a paperless society in the future.
Although there is a possibility of offsetting paper roll sales in the future, currently it is a factor that
increases the unit price of fee◼ Fee ARPU（Fee revenue divided by Transaction volume）

6.00

Low
5.50

4.92
5.00

High

5.00

4.71

③
②
①

4.39

4.50

4.03
4.00

Image of linkage ratio to the number oftransaction volume

3.87

3.78

4.12

3.74

3.59

Electronic voucher storage fee

Growing trend of subscriptions

Roll paper sales
Processing fee
Number of transaction volume

3.50*Length is an image and does not reflect actual numbers or scale

3.00
FY2021
1Q

FY2021
2Q

FY2021
3Q

FY20214Q

FY2022
1Q

FY20222Q

FY2022
3Q

FY20224Q

FY2023
1Q

FY20232Q

Copyright 2023 GMO Financial Gate, Inc.

60

Software assets and depreciation

Business Model

Assets, mainly software assets, increased due to the development investments for large merchants.
Depreciation and amortization expenses are also on the rise, but will contribute to the expansion ofstock-type revenues in the future

1800

140

Software assets (millions of yen)
ソフトウェア資産(百万円)
1600

減価償却費(百万円)
Depreciation & Amortization (millions of yen)

Due to office expansion Lump-sum depreciationof some equipment / facilities
104

1400

89

1200

1000

120

74
67

94

100

Assuming accumulation
through active investment
for the future growth.

80

69

800

60

600

400

653

782

840

989

990

991

40

20

200

0

0
End of Q1
FY2022End of Q2
FY2022End of Q3
FY2022End of Q4
FY2022End of Q1
FY2023Copyright 2023 GMO Financial Gate, Inc.

End of Q2
FY202361

Number of Employees(Consolidated basis)

Business Model

Plans a net increase of 15 to 20 employees per fiscal year to achieve the management benchmarks.
Assumed composition of work force is approximately 40% sales, 40% systems, and 20% administration

Plan to hire 15-20 people (consolidated basis) each fiscal year
Plans
130
Sales

115
SystemAdministration

96

Sales：
Talents who can build alliances andpromote solutions to merchants'
issues.

104

100

81

System：Talents who can promote strategies
to leverage digital technologies.

58

Administration：
Talents who can promote theestablishment of an advanced
management system in line withbusiness expansion.
End of Q4
FY2020End of Q4
FY2021

End of Q4
FY2022End of Q1
FY2023End of Q2
FY2023End of Q4
FY2023Copyright 2023 GMO Financial Gate, Inc.

End of Q4
FY202462

Concept of Spread revenue ratio to GMVBusiness Model

Our total GMV is the sum of ①and ②below. Spread revenue is generated only in the case of ②Agent
contract. Since ① also contributes significantly to GMV, the linkage between total GMV and Spreadrevenue tends to decline
1①Direct contract

InitialMainly large merchants

The merchant discount rate (aka MDR) is deducted fromthe sales clearing. Remittance of sales amount without
MDR from acquirers to merchants is taken place.

Merchants

Stock

Acquirers

Use ofterminals

2②Agent contract

Enjoyable revenue

Directly acquiring

Fee

Payment processing

Acquiring

Offer a reimbursement rate

Mainly small medium merchants

Our
Spread revenue (B)Settlement of the amount(A-B) after deduction of
our agent fee

InitialStock

Remittance of sales
amount(A) after
deduction of the“reimbursement rate”

Fee

SpreadMerchants

Acquirers
Use ofterminals

Payment processing
Copyright 2023 GMO Financial Gate, Inc.

63

Relationship between number of active terminals & stock rev

Business Model

In addition to the increase in the number of active terminals, revenue opportunities for Stock revenue
will increase, but the status of subscriptions to paid services will differ depending on the needs/demandof merchants
Terminals we are offering

Merchants（Acquisition opportunity image of Stock revenue）
Stock Revenue
Non-Stock Revenue

Floor-Standing Model

Mobile Modelmerchant B
merchant A

Embedded Model

POS Model

merchant C

The status of subscriptions to paid services that
contribute to Stock revenue varies depending on thetype of merchants and terminals

merchant D
merchant F
merchant E
Copyright 2023 GMO Financial Gate, Inc.

64

Monetization by Payment Method

Business Model

We operate different business models according to payment method as a cashless platformer. Growthin each payment method contributes to our growth as well
Flow model revenue① Initial

Stock model revenue➁ Stock③ Fee④ Spread

Credit・China Union Pay・J-debit＊
E-money＊

QR code

＊
Point

＊

House point・House E-money＊
Duty exemptionーーー*There is no "processing fee" that constitutes Fee revenue because the transaction is
not processed at our processing center, but the paper rolls consumed inconjunction with the transaction contribute to the increase of Fee revenue.

Copyright 2023 GMO Financial Gate, Inc.

65

Revenue Model by Merchant SizeBusiness Model

We mainly acquire medium- to large-sized merchants through alliances with major financial institutions.
We mainly acquire small merchants (=long tail segment) through our subsidiaries◼ Revenue model related to the size of merchant◼ Four types of revenue model① Initial

Terminal sales, Softwaredevelopment, Initial registration
fee, etc…

➁ Stock

Monthly recurring revenue,
communication fee of terminals, etc…

③ Fee

Processing revenue related to TRX
volume, Receipt paper sales, etc…

④ Spread

Commission fee based on TRX value

①

①

①

Large

➁

③

Medium

➁

③

Small

➁

③

④

④

④
：Main revenue stream

Copyright 2023 GMO Financial Gate, Inc.

：Realization of therevenue varies fromcontract to contract

66

Medium-Term Strategy Acquiring major merchants by focusing on alliances

Business Model

Meeting customer needs through enhanced credit payment functions and alliances with QR / points
vendors

CreditJ-debitE-moneyHouse points

QR codeDuty exemption

Common Points

Terminals we offer

Floor-Standing Model

Mobile Model

Embedded Model

POS Model

Cashless Platform

Copyright 2023 GMO Financial Gate, Inc.

67

TRX-increase through cashless penetration

Business Model

TRX volume & value tend to go up in a few months to six months after the merchants introduced
cashless payment for the first time
◼ Merchant A（Tokyo） Monthly TRX trend
TRX Volume

TRX Value

Merchant

Cash only ⇒ Introduce cashless
payments
N
N月

N+1
N+1月

N+2
N+2月

N+3
N+3月

N+4
N+4月

N+5
N+5月

◼ Merchant B（Miyagi）Monthly TRX trend
TRX Volume

Consumer（Successful experience⇒change in payment method）

TRX Value

Merchant
N
N月

N+1
N+1月

N+2
N+2月

Recognize convenience

N+3
N+3月

N+4
N+4月

TRX volume/value
per terminal will increase◼ Merchant C（Wakayama）Monthly TRX trend
TRX Volume

TRX Value

Stock-Model revenue will increase
N

N月

N+1

N+1月

N+2

N+2月

N+3

N+3月

N+4

N+4月

Copyright 2023 GMO Financial Gate, Inc.

68

TAM(Total Addressable Market)

Market Environment

Transaction Value of cashless (face-to-face) payment is expanding rapidly, as the value of IoT /Unattended◼ Offline Transaction value in Japan
Private sector final
consumption expenditure in
Japan (includes cash
payments)◼ Potential market value of IoT/Unattended
Potential market size for
IoT/Unattended (our prediction)¥278 trillion*2(2020)* Due to the spread of coronavirus infection
Dropped to the same level as during the Lehman shock¥30 trillion*3(2020)¥128 trillion*1(2025)¥0.2
trillion¥89 trillion*1(2022)GMO Financial Gate Transaction value
in IoT/Unattended business¥2.5
trillion

Market foroffline cashless (face-to- face)payments

GMO Financial Gate TRX value(FY2022 Actual)◼ One of the measures to achieve a leap in operating income:Expand IoT/Unattended business driven by contactless payment(touch payment) and unattended registers(*1) Based on "Trends in the Breakdown of Cashless Payment Amounts and Ratios (2010-2022)" by the Ministry of Economy, Trade and Industry and "Actual Conditions and Future Forecasts of the Domestic Cashless Payment Market in 2022" by Yano Research Institute Ltd.
(*2) Excerpted from "Composition of Final Consumption Expenditures by Household Type" in "FY2020 National Accounts" by the Cabinet Office.
(*3) Based on the "Breakdown of Domestic Household Final Consumption Expenditure" by the Cabinet Office, Japan Vending Machine Manufacturers Association, and Japan Parking Business Association's "Survey on the Coin-operated (pay-by-the-hour) Automobile Parking
Market," etc. The potential market size of unattended parking facilities is calculated based on the market size of buses/rail ways, hotels/inns, amusement, vending machines, and parking lots/EVs, which are the areas where IoT/Unattended is expected to grow in the future.

Copyright 2023 GMO Financial Gate, Inc.

69

Growth trend of domestic offline cashless market

Market Environment

The market for offline cashless payments is currently ¥89 trillion, six times larger than the
online market. Cashless penetration is expected to rise to as much as 80%, driven by
government-led cashless policies（Unit : trillion yen）
Offline cashless market size (Left axsis)

Cashless penetration rate (Right axsis)

Online cashless market size (Left axsis)

80%

80％

140
127.7

70%

Long-term

116.3

120

60%

105.7
100

89.2

80

74.3

50%

40％

36.0%

66.5

40%

32.5%

60

30%
29.7%

40

20

20%
19.3

20.7

21.8

23.0

24.3

25.7
10%

0

0%
2020(actual)2021(actual)2022(Estimate)2023(Estimate)2024(Estimate)2025(Estimate)

Source: Cashless Roadmap 2022, PAYMENTS JAPAN; Yano Research Institute Ltd.

Copyright 2023 GMO Financial Gate, Inc.

70

Composition Ratio of Domestic Cashless Payment Methods

Market Environment

Even in an environment of significant growth in the proportion of QR codes, transaction value andvolume of credit continue to grow
NewTransaction Value
Composition

2019

2020

2021

2022

Credit

89.7%

86.8%

85.3%

84.5％

Debit

2.1%

2.5%

2.8%

E-money

7.0%

7.0%

QR code

1.2%

3.7%

2019

2020

2021

Credit

60.7%

58.2%

55.3%

2.9%

Debit

1.8%

2.3%

2.5%

6.3%

5.5%

E-money

33.1%

27.1%

Data notupdated
yet
22.8%

5.6%

7.1%

QR code

4.3%

12.4%

19.4%

(Unit : trillion yen)Transaction value(absolute value)
CreditE-moneyDebit

QR code

100
1.0
5.8
1.7

3.2
6.0
2.2

5.3
6.0
2.7

30
7.9
6.1
3.2

2022

Credit73.4

74.5

E-moneyDebit

QR code

25

20

15

81.0

Transaction volume(absolute value)

4.9

60

40

Composition(Unit : 100 million yen)

120

80

Transaction Volume

0.8
0.4
6.2

2.7
0.5
5.9

0.7
5.7

93.8
10

20

5

11.4

12.7

13.9

2019

2020

2021

0

0
2019

2020

2021

2022

Source: Cashless Roadmap 2022, Cabinet Office of Japan

Copyright 2023 GMO Financial Gate, Inc.

71

IoT/Unattended Market GrowthMarket Environment

The number of terminals is expected to be equal to or greater than the market for payment terminals inreal stores. Unattended market (= general term for vending/service machine market) is expected to
expand further due to changes in the external environment such as a decrease in the working
population◼ No of active IoT terminals
2Q sales were strong with a net increase in QoQ(+2,000 units)Sales are piling up every quarter. Aiming
for further acceleration in the future

4.5 million◼ Push factors associated with changes in theexternal environment• Declining workforce• Labor-saving support

Unattended

Goods/
commodities

Tickets

Beverages/
sweet treats

MarketSelf-checkoutmachine(Golf/Hotel)（Unit : 1,000）• Obtaining inbound demand

39.8• Retailers moving into offices
26.1• COVID-19
CoffeeSelf-checkout
registerCoin-operated
washing
machines

47.0

49.0

33.6

• Revision of the Pro-Sales Act

Metered parking/
EV chargers

42.3 43.2

44.6 45.6

28.0 29.1

30.9

21.5
14.1

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022 FY2022 FY2023 FY2023

OfflineMarket

4 million
Source: The Japan Vending System Manufacturers Association, Japan Ministry of Health Labor and Welfare, Yano Research Institute Ltd.

Copyright 2023 GMO Financial Gate, Inc.

72

Trends in the number of foreign visitors to Japan

Market Environment

The number of foreign visitors to Japan decreased sharply due to the COVID, but we are also focusing
on preparations for a recovery in demand
Number of visiting foreigners (annually)

Our inbound-related industry merchants（Unit : 10K）

6,000
Government’s target
by 2030

6,000

5,000
4,000

Aggressively cultivate merchants in related industries in
preparation for recovery of inbound demand
Drug store

3,000

3,000

1,000

2030年

2023年

2022年

2021年

2020年

2019年

2018年

2017年

2016年

0

2015年

(medicine/cosmetics)

High-end retail/
Department
store

IoT
Vending machines/Selfcheckout machines

Service/
LeisureOne dollar
shopElectronics
chain-retailers

Medical /ClinicAchieved back in 2018

March 2023 Cumulative
total up to thepreliminary report

2,000

Hotel/Travel

Publictransportation(Train/bus etc.)

Number of visiting foreigners (Monthly)

500,000（Unit : 10K）
350

March 2023: 1.81 million

300

450,000

Transaction volume

Hotel/Travel
Merchant B

400,000

Transaction value(GMV)

350,000

300,000

250

250,000

200

200,000

Seasonality＆
Quasi of SOE

150
100

150,000

100,000
50,000

50

23/3

23/2

23/1

22/12

22/11

22/10

22/9

22/8

22/7

22/6

22/5

22/4

22/3

22/2

22/1

21/12

21/11

21/10

21/9

21/8

23/1

22/10

22/7

22/4

22/1

21/10

21/7

21/4

21/1

20/10

20/7

20/4

20/1

19/10

19/7

19/4

19/1

21/7

0
0

*Source "Number of Foreign Visitors to Japan," Japan National Tourism Organization (JNTO)

Copyright 2023 GMO Financial Gate, Inc.

73

Our philosophy on growth strategies

Growth Strategy

Our growth strategy is based on the perspective of "a payment platform that provides value to society
as an infrastructure company supporting a cashless society”. We develop growth strategies focusing on“value creation”
growth strategy⚫ Market Share Expansion Strategy⇒Provision of multiple payment terminals, accumulation ofsolution assets through Vertical deployment⚫ Operating profit growth of +25% every fiscal year (Operating
profit 1.5 billion in FY2025, GMV ¥5 trillion)

Value⚫ GMO Financial Gate pursues the value of existence⚫ Progressive, growth, profitability, immediacy, rationality, social,diversity

Mission⚫ We support value creation for our customers by demonstrating a highlevel of professionalism and encouraging them to take the initiative.
⚫ We will contribute to the progress and development of society throughour strong will to develop and create new markets and by conducting
our business with integrity, fairness and honesty.

VisionRevolutionizing Payments: Becoming the No. 1 Cashless Platformer that Transforms Society

Copyright 2023 GMO Financial Gate, Inc.

74

Strategy to Maximize Transaction Value

Growth Strategy

We created a new payment processing route with alliance partners. This route increases GMV, as theroute reduces costs to participating merchants and acquirers

Merchants

Restaurants

Conventional
Route

RetailAcquirersCompetitor/Peer Terminals
Processing
Center

Payment
Network

1

2
Credit Card
IssuerServices

MeteredParking/
EV Meters
etc・・・

Reduced costs toparticipating
merchants

New GMO FG
Route

Vending
Machines

Cost Reduction

Bank

compared to conventional routeg a t e w a y
Global payment network

Reduced costs toacquirers

Cost savings via new route leads toimproved competitive capability of alliance partners
Copyright 2023 GMO Financial Gate, Inc.

75

Strategy to Maximize Transaction Value

Growth Strategy

Maximize GMV through a new processing network and by pursuing B-to-B alliances(*1)

Offline Cashless (face-to-face)Market (2025 E)

GMV： ¥128 trillion/year

Offline Cashless (face-to-face)Market (2022 E)

GMV： ¥95 trillion/year

Continuous
GrowthAim to achieve
morethan 10x+α
GMV in toward 2030
with achieving
higher growth rate
than market.

Alliance partner
VJA (Visa Japan) Group,
including Sumitomo Mitsui Card
Company, Limited

GMO-FG(*2)

GMV：¥26.5 trillion/year

GMV：¥2.5 trillion/year

approx.

10x2022

2030～2035(*1) Source: Cashless Roadmap 2019, PAYMENTS JAPAN; Current Status and Future Forecasts for Online Payment Service Providers, 2018, Yano Research Institute Ltd.
(*2) Source: VJA

Copyright 2023 GMO Financial Gate, Inc.

76

Expansion of stadium installation cases

Growth Strategy

Catching the wave of resumed economic activity, mobile vending at stadiums, which used to be cashonly, is steadily increasing
GMO SONIC 2023 (2023/1)

Sports spectator facilities, etc.

⚫ Establish a completely cashless payment environment⚫ Promoting cashless facilities at professional sports spectator
facilities, etc.
⚫ More and more facilities are going completely cashless
to reduce cash management costs, etc.
⚫ For spectators, the convenience of cashless payment, suchas "contactless" and "reduced waiting time," is high andcontributes to a successful experience.

Installation area

Sequential expansion

Copyright 2023 GMO Financial Gate, Inc.

77

Progress in Unmanned Terminal (IoT) Business

Growth Strategy

Strengthening alliances in the unmanned terminal (IoT) field in response to the trend toward manpowersaving. Promoting various projects with an eye on future IoT-related data monetization

To be released

Hotel/golf course self
checkout machine

2023

2022

Launched

Oct

Dec

Mar

Progress
Jun

Sep

Replacement of existing installed terminals

Flow model biz

・Orders for successor units of installed payment
terminals (delivery of terminals in 3Q, installation tostart in 4Q)・Fees and spreads on existing terminals remained
steadyDelivery of approximately
40,000 payment terminals completed

Fees and spread revenue from terminal operation

Stock model biz
No change
since last time

Expansion into comprehensive business

Parking lot
checkout machine

Flow model biz

Commenced full-scale operations for a major parking facility operator
Stock, fee, and spread revenues from terminal operations
DX Deployment

Stock model biz
ticket machine

Flow model biz

No change
since last time

DX: Digitalization of parking tickets, planning to unify online reservationand payment settlement
Growing demand associated with new lifestyles

Stock model biz
Self checkout register

Expansion of stock-type earnings
Electronic money and QR codesDevelopment
and certification completed

Adopted as a successor terminalof a major ticket vending machine vendor

No change
since last time

Flow model biz
Stock model biz
Plans for further expansion

Started installing new beverage vending machine vendors

No change
since last time・Started to introduce terminal-less payment system(code payment on LCD (code payment on LCD
panel) at cold food vending machines.

Switchover installation of terminals for beveragevending machines at highway SAs
Began installing payment terminal-less QR payment for cold food vending machines

Copyright 2023 GMO Financial Gate, Inc.

・Installed terminals against self-checkout machines in
100-yen uniform stores and large shopping malls.
・ Plans to introduce the product to major restaurants
and other customers in the next fiscal year and beyond

New Topic

Flow model biz
Stock model biz

・Received order for successor machine from a major
ticket vending machine vendor, an existing alliancepartner. Installation begins in 3Q.
・At several other ticket vending machine vendors
Completed development of electronic money and
QR code payments

New Topic

Deployment in multiple smart stores

Beverage and vending
machines/Coffee Machines

New Topic
・Commenced full-scale operations for a major parking
facility operator
・Development of e-money and QR code paymentscompleted at several settlement machine vendors
・Plans to expand to outdoor checkout machines
outside of parking lots
・Started linking member apps of major malls

No change
since last time・Installation of vending machines made overseas is
growing, with installation scheduled to start in Q3

78

Growth Strategies for 2025 and Beyond

Growth Strategy

For 2025 and beyond, we aim to grow stock-model revenue in the payment-related field.
Aim at a continuous 25% growth in OP through business diversification：High inbound tourism demand

Image of service expansion

Area of focus
Money services / Payment related New Biz

OP (100 million yen)

• Fintech (Lending / Factoring / BNPL etc.)

Profitability increase phase100

Data service• DX/marketing support using payment data

OP of 25% or more
Continuation of growth curve
Money services/Payment related New Biz

Diversification of alliancestrategies

IoT (Mobility)• Contactless payment processing fortransportation systems (trains, buses, etc.)

Data service

IoT (Vending / checkout machines)

Stock-Model Revenue

Market share increasephase• With & post COVID-19 / labor-saving / selfservice support

IoT (Mobility)

Payment terminals (excluding IoT) / Payment processing / Acquiring

15
Payment Center• Continue to acquire a balanced
member merchant base, regardless of
size or industry, as our businessfoundation

Payment terminals(excluding IoT)

Payment terminals (excluding IoT) / Payment
processing / Acquiring

Initial & Stock-Model

IoT (Vending /checkout machines)

Time
2021

2025

2035

Copyright 2023 GMO Financial Gate, Inc.

79

Data Services in the IoT Domain

Growth Strategy

Started providing payment data service for merchandise vending machines, contributing to stock-model
revenue. Supporting merchants' operational efficiency improvement and sophistication (DX) using data
IoT
Payment
terminals

Appropriate stock replenishment and cash
collection

Vending machine operator

payment processing

Start providing data sharing service to merchandise
vending machines for food service (ramen, gyoza, etc.)⇒Contribution to stock-model
revenueAchieve efficient staffing andfood loss reduction

Vending
machinemanufacturer

DX Support

Provide payment data (sales
information)

Image of introduction

phase ２DX in member merchants

New

Provide payment data (sales information) to alliance partners⇒Strengthen marketing and increase revenue by using sales
information (product, season, region, etc.)

Provision of payment data (sales information) to vending machine
manufacturers⇒Improve operational efficiency by remotely managing inventory at an
appropriate level

phase 1
IoT payment/acquiring

Provision of IoT platform

Payment terminals (IoT)

Initial &Stock-Model

Payment Center

Stock-Model
Revenue

Present

phase ３
DX in member merchants(sales improvement)

Time
Copyright 2023 GMO Financial Gate, Inc.

80

Alliance Overview

Growth Strategy

Working with alliance partners allows us to secure participating merchants consistently and steadily

Alliance Partners

Payment/
Financial
Institutions

Unattended
Terminal
Manufacturers

POS
Manufacturers

GMO Group
Synergies

Copyright 2023 GMO Financial Gate, Inc.

Vending Machines

Metered Parking
EV Meters

Laundries

Entertainment

TravelWholesalers

Real Estate

Occupation/
Vocational Schools

Healthcare/Welfare

Hotels/Inns

Bus/Train

Restaurants

Retail Stores

Merchants81Unique Positioning

Competitive Advantage

End-to-end solutions via one-stop platform allows us to create alliances with many players in themarket◼ Solutions in Offline Payment Market
Customization(Customize Payment
Methods)

Adaptation of
Top-End POS
Register Models

Terminal
Settlement

ーー

Payment
Processing

Clearing/
Adjustment

Maintenance/
Support

FG

N
N社

Leading payment
大手決済ネット
network playerーー

ワーク事業者

R
R社

Major operating
大手事業会社
companyーー
Using their own registers only

P
P社

Leading payment
大手決済事業者
vendorーーーー

Copyright 2023 GMO Financial Gate, Inc.

82

Barriers to Entry （Regulations to be Followed）

Competitive Advantage

Many kinds of regulations exist in the face-to-face payment market depending on the payment method,
and the number of regulations are increasing. As payment methods become more diversified, thebarriers to entry become more challenging

Law

E-money
Regulation

Modified Partial
Revision of the
Installment Sales
Act

Brand Test
Credit Card
Regulation

Security Standard

PCI DSS
Global security standard in credit card industry
created by international big 5 credit card
brand, Visa, Mastercard, JCB, American
Express and Discover

Payment Center
Regulation

JCCA Certified
Center

EMV Test
International standard of IC Card created by
Europay, Mastercard and Visa

JCCA：Japan Credit Card Association

Copyright 2023 GMO Financial Gate, Inc.

83

Government Promotion of Cashless Payments

Industry Topic

METI announced its Cashless Vision policy to encourage cashless payments. We expect the Japanese
cashless market to expand rapidly in response
Impact on our business

Present

Casino (Integrated Resort) will start in Osaka

Osaka Expo

Issuance of new bank notes

expansion

Lifting the ban on digital salaries

My number point

My number point

Tokyo Olympic/Paralympic

My Number Point

Cashless Consumer Returns Policy

Implementation plan announced for the security ofcredit transactions (by the Council for credit
Transaction Security)

by METI）

Enforcement of Revised Installment Sales Act

Announcement of Cashless Vision（2

2

Apr 2029

Apr 2025

Apr 2024

Apr 2023

Jun 2022

Jan 2022

Jul-Sep 2021

Sep 2020

Jul 2020

Oct 2019

Jun 2018

Apr 2018

Copyright 2023 GMO Financial Gate, Inc.

Increasing demand for cashless terminals as merchants are
obligated to use credit card IC Expanding demand forcashless terminals as merchants become obligated to use
credit card ICConsumer redemption projects have resulted in Increase in
the amount of payments processed
With/after COVID, the Expanding Contactless and IoT
Payment Needs
Inbound Demand Leads to Expanding need for cashless
payment terminalsExpansion of mobility payment needs
In line with the cost of adapting to the new banknotes
Stimulus to introduce cashless payment terminals
Expanding needs for small payments due to the spread of
terminal-less payment taps to pay/phones

New

Government Announces Policy of Going Completely
Cashless for Osaka Expo; Demand for Cashless
Terminals Growing

New

Osaka IR to be Approved by Government, Targeting
Opening in Latter Half of 2029Expanding demand forcashless terminals

84

Expansion of credit card payment eligibility

Industry Topic

The "Cashless Law" will go into effect in November 2022. Expansion of areas where payment can bemade by credit card

Feb 2008～ national pension contribution

Application ofindividual law
provisions

Jan 2017～ national tax
Apr 2019～ Patent and other fees

Dec 2021～ Unmanned Aircraft Registration Fee

2022 Vehicle inspection and registration fee
2022～ Passport issuance fee
2024～ Registration-related fees

Application ofCashless Laws

Expandingconvenience in the
public sector

Jul 2021～ tariff (import tax)

2024～ Traffic Anti-Counterfeit

Copyright 2023 GMO Financial Gate, Inc.

85

New topic of credit card industry

Industry TopicIn response to a request from the Japan Fair Trade Commission, Visa, Mastercard, and UnionPay
announced their intention to disclose their interchange fee rates by the end of November
Breakdown of MDR（model case：AOV ¥5K SME merchant）

METI requires fee among credit card companies
Fee among credit card companies is
actually paid by merchants

Brand fee

3.5

Internation Brand fee
al Brands①Brand fee
0.05

3Fee among cardcompanies(Interchange fee)

2.5

2.3%

Card
company(Acquiring)

②IRF

Card
company(Issuing)

Billing
Reimbursing

Merchant fee

Billing

Reimbursing

Rate in longtail could
be higher than thisMerchants

1.5

Payment

Goods/Service
s

2.30

2

3.25

Billing➂Remittance fee④Network fee

1➄Acquiring fee

0.16

Consumers

0.14
0.5

0

Copyright 2023 GMO Financial Gate, Inc.

0.3

⑥Others

Our monetization points 0.3

86COVID infections

Industry TopicHigh level of infected cases observed in the 8th Wave, but movement toward normalization of economic
activity continues
Number of new cases of COVID-19 infection（Unit: persons）
300,000

8th wave
250,000

From "Category" to"Category
Government
policy to change thedesignation from "Class

200,000

150,000

5

100,000

2

50,0002

Source: Ministry of Health, Labor and Welfare

2Q
Copyright 2023 GMO Financial Gate, Inc.

3Q

4Q

1Q

23/04

23/03

23/02

23/01

22/12

22/11

22/10

22/09

22/08

22/07

22/06

22/05

22/04

22/03

22/02

22/01

21/12

21/11

21/10

21/09

21/08

21/07

21/06

21/05

21/04

21/03

21/02

21/01

20/12

20/11

20/10

20/09

20/08

20/07

20/06

20/05

20/04

20/03

20/02

20/01

0

2Q
87

Initiatives for terminal-less payments

Industry Topic

Implemented various measures to prepare for future handset-less payments. Strengthening Initiatives in
the Mobility Domain and Beverage Vending Machines
Status of Our Efforts
Tap to Phone

NFC tagging touch payment

Dec 2021～
Started handling touch settlement of JCB at Nagaden-bus

Launched in FY2023
Aiming to provide services with major food manufacturers

NFC tag on vending machines

Dec 2020～
Launched handset-less NFC-touch payment service with Soft Space

Terminal-less

Automatic connection
to the internet byholding a smartphone

Select productNo app is needed

Pay with biometrics
Merchandise receipts

Settlement completed(Apple Pay, Google Pay)

High Security
Tap to Phone: Mobile payment service where merchants do not need to prepare cash registers and terminals for payments, and NFC-enabled devices can be used as payment reception terminals.
NFC: An abbreviation for Near Field Communication, a communication standard that can be communicated using contactless IC chips and simply by holding them over.
NFC tag: Tags that allow NFC-enabled devices and devices to perform various operations simply by holding up an NFC-enabled smartphone.

Copyright 2023 GMO Financial Gate, Inc.

88

Share holder structure

Company Profile

The ratio of foreign institutional investors increased again as a result of aggressive IR activities fordomestic and foreign institutional investors through 1-on-1 meetings and conference appearances
GMO-PG
PG

Japanese

国内機関
institutional investors

Foreign

Other enterprises
その他法人

外国機関
institutional investors

Individuals
個人

100%
90%
80%
70%
60%

13.2

15.1

12.8

21.9

18.5

23.5

8.1

1.5
6.3

1.7
7.7

1.4
5.6

59.7

57.1

57.1

56.7

20/9期末 2020
End of September

End ofMarch 2022
22/3期末22/9期末 2022
End of September

End of23/3期末March 2023

16.3

7.8
8.1

50%
40%
30%
20%
10%
0%

Copyright 2023 GMO Financial Gate, Inc.

89

Promotion of DX introduction to improve business efficiency
Department
in charge

Company Profile

Content

Whole

VDI (virtual desktop) implementation for enhanced security

Whole

Integrated operation of scheduling, internal portal, workflow, attendance system, andexpense reimbursement

Whole

Paperless by promoting the introduction of electronic signatures

Legal

Automated credit management operations by introducing RPA. Reduction of workload
by up to 4 days per month

Accounting

Systematization of payment operations, electronic storage of receipts and otherevidence

HR

Centralized management of human resource systems through the introduction of a
new system

GMO-FG
Cashless Platform

Full compliance with PCI DSS for services providing
Continued to obtain Privacy Mark certification
Copyright 2023 GMO Financial Gate, Inc.

90

Affiliated Companies

Company Profile

GMO-FG serves in offline face to face payment market as a consolidated subsidiary of GMO-PG

GMO INTERNET GROUP（Internet infrastructure business）

GMO PAYMENT GATEWAY（Online payment/Payment section of GMO internet group）

Consolidated

GMO EPSILON100%

GMO PAYMENT SERVICE

100%
Equitymethod40%

57.3%（Online payment/Longtail）（Online payment/Deferred payment）

SMBC GMO PAYMENT（Online/Offline payment/）

GMO FINANCIAL GATE

（Offline payment）

Consolidated

100%

51%

GMO CARDSYSTEMGMO DATA

Consolidated subsidiary

Sumitomo Mitsui Credit Card

（Offline payment/Longtail）（Payment processing center）

Copyright 2023 GMO Financial Gate, Inc.

49%

91

Company Profile

Company Profile■Company

GMO Financial Gate, Inc.（TSE Growth Ticker:4051）■Foundation■Address■Stock Capital■Major Shareholder■Board Member

September 1999
Humax Shibuya Building 7F, Shibuya Dogenzaka 1-14-6, Tokyo¥1,618 Million(end of December 2022)
GMO Payment Gateway, Inc.
Representative Director, President
Kentaro Sugiyama
Director
Akio Aoyama（Sales Division Executive Manager）
Director
Tomonaga Fukuda（System Division Executive Manager）
Director
Tomoki Tamai（Administrative Division Executive Manager）
Director
Tatsuya Koide（GMO Payment Gateway, Inc. Chief Managing Executive Officer）
External Director
Nao Shimamura
External Director
Rie Asayama
External Auditor
Takayoshi Nagasawa
External Auditor
Satoru Ozawa
AuditorTakashi Iinuma（CPA)■Auditing Firm
■Subsidiary

Ernst & Young ShinNihon LLC
GMO CARD SYSTEM, Inc. shareholding ratio:100％
GMO DATA, Inc.

■Businessshareholding ratio: 51.0% (Mitsui Card Company, Limited:49.0％）

Cashless payment infrastructure service (credit card, debit card, e-money etc.)

Floor-Standing Model

Mobile Model

Embedded Model

Copyright 2023 GMO Financial Gate, Inc.

POS Model（ As of May 12, 2023 ）92Thank you

GMO Financial Gate, Inc.
(TSE Growth 4051)
IR web site URL

https://www.gmo-fg.com/ir/

Copyright 2023 GMO Financial Gate, Inc.