Financial results briefing for the 2Q of FY2016（October 1, 2015-March 31, 2016）
Themes：Achieving continued high growth as a result of ourinitiatives driving the expansion of the EC market

May 2, 2016

The 45 th IR Meeting

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

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

The contents of this document are based on generally
recognized economic and social conditions, as well as
premises judged to be reasonable by GMO Payment
Gateway as of May 2, 2016.
However, please note that they are subject to change
without prior notice in the event of changes in thebusiness environment or other unforeseen occurrences.

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

2

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

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

3

1. Summary of Financial Results for 2Q FY2016

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

4

1.1

Summary

OP up 32.3％(2Q, YoY), reflecting the continued strength ofpayment service & MSB（Million yen）

1H of
FY2015

1Q of FY2016

ActualForecast

Actual

Sales

4,162

5,216

5,730

Gross income

3,304

Operating income

1,487

1,741

1,879

Ordinary income

1,530

1,742

Net income

937

1,075

KPI

A/F%

2Q of
FY2015

2Q of FY2016

ChangeChange%ActualActualChange%

1,567

37.7%

2,204

2,997

36.0%

1,127

34.1%

1,728

2,314

33.9％

+7.9

391

26.3%

762

1,008

32.3%

1,918

+10.2

388

25.4%

772

994

28.7%

1,151

+7.1

214

22.9%

461

554

20.3%

+9.9

4,432

Number of operating stores

Amount of processed
payments

Number of processed
payments

67,921470 Billion Yen

228 Million■ Key points
1. Showing steady advances above OP growth forecast

Existing business (Foundation for 20% growth)：Major KPI in good shape, monetizing the large-scale projects
New buziness (To achieve more than 5％ growth)：MSB continued to grow steadily
2. The actions for the future steadily implemented such as strategic investments and overseas businesses
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

5

1.2

Sales/Gross income

Sales up 36.0％, gross income (adjusted basis) up 27.3％■Sales■Gross income

YoY+36.0％（1,000yen）

YoY（1,000yen）+33.9％

2,997,800
3,000,000• YoY of Gross income(adjusted basis :excluding outsourcing
expenses of SG&A）+27.3％

2,314,995

2,732,786
2,117,708
2,500,000
2,204,334

2,000,000

2,049,413

2,603,210

1,756,677
1,728,329

1,576,636

1,958,642
1,842,793

1,825,574

1,523,691

1,892,030

1,459,601
1,327,468

1,645,144
1,500,000

2,000,000

2,264,704

1,420,034

1,469,820

1,458,499

1,563,063
1,079,523

1,208,584

1,278,482

1,166,681

1,311,166
1,000,000
1,000,000

500,000

0

1Q

2Q

FY2013

FY20143Q

4Q

FY2015FY201601Q
FY20132Q

3Q

4Q

FY2014FY2015FY2016

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6

1.3

Operating income/Ordinary income

Operating income up 32.3％, Ordinary income up 28.7％■Operating income（1,000yen）（1,000yen）

YoY +32.3％

1,100,000

Growth rate differencesarose due to exchange
rate fluctuations■ Ordinary income
YoY +28.7％

1,008,236
1,000,000

994,429

1,000,000

924,496900,000

870,919

800,000

812,277
800,000

762,315758,080

725,596700,000
600,000

661,953

675,999

772,486

787,380
684,886

677,081
641,092

600,113

601,701

577,208536,273

561,408561,247

500,000 479,031

600,000
540,382

400,000

560,812

480,414472,151

682,507465,943

400,000

300,000
200,000

200,000

100,000
00

1Q
FY20132Q
FY20143Q

4Q

FY2015FY2016

1Q

2Q

FY2013

FY20143Q

4Q

FY2015FY2016

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7

1.4

Forecasts and results

Quarterly forecasts and actual results■ Forecast for the period ending September 30, 2016
（1,000yen）

Sales

Forecast

3,000,000（1,000yen）

Operating income
Forecast

1,000,000

2,500,000
800,000

2,000,000
600,000
1,500,000
400,000

1,000,000

200,000

500,000

0

FY20130

FY2014FY2015FY2016FY2013

FY2014FY2015FY2016

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

8

1.5

Revenue breakdown

Up over 25% in three major revenue models（1,000yen）

Spread+46.7％・MSB continued to grow steadily
・Amount of processed payment increased

3,000,000

2,500,000

1,280,987

Fee+25.3％
・Expansion of “Payment after delivery”
and Remittance Service (MSB)

2,000,000
873,483
1,500,000

Stock+38.0％
・Cultivating large-scale merchants(regional bank, etc)
・Expansion of “Online Advertising Service“

826,928
1,000,000

500,000

0659,842

528,120
142,887
15/3 (2Q)
InitialStock728,714

Initial +12.8％
・System development revenue
・Cultivating major / growing merchants

161,170
16/3 (2Q)
Fee

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1.6

Sales/Operating income by Segment

Exceeded the forecast％:■Sales (segment)■ Operating income (segment)
593,850+57.7％

6,000,000 （1,000yen）

YoY(vs. Forecast)（1,000yen）

76,480+78.2％（+31.5％）（+97.5％）2,400,000

5,000,000

947,523+216.9%376,555

42,909（+24.3％）

1,900,000

4,000,000

95,879Turned into
gains（+41.1％）

298,959
1,400,000

3,000,000

2,000,000

4,189,435+20.1％（+4.5％）

3,488,155

1,000,000

900,000

2,051,662

2,488,036+21.3％（+7.3％）

400,0000
2015/1H
Payment processing business-100,000

Forecast 2016/1H
Money service business

Others-25,8142015/1H

Payment processing business

Forecast 2016/1H
Money service business

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

Others101.7

Relative comparison

Growth outperforms other competitors related to EC
Revenue index of EC-related listed firms (quarterly)（DEC-14=1)
23.0%

1.6

Comparison of operating income / operating
income growth rate / operating income marginof payment processing firms (FY2015)
Size: the amount ofoperating income●GMO-PG●Company A●Company B●Company C

1.5

OP growth rate

1.4

1.3

18.0%

1.2
13.0%

1.1

1

0.9

8.0%

Dec-14Mar-15EC malls

Jun-15

Sep-15EC businesses

Dec-15Mar-16

5.0%

15.0%

25.0%

35.0%

45.0%

OP margin

GMO-PG※GMO-PG estimate
EC malls：Big 2 EC malls in Japan (average)
EC businesses：Big 3 EC related businesses (average)※Source: Prepared by GMO-PG

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

11

2. Progress of the growth strategy

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

12

2.1

Quantitative performance targets

Sustaining more than 25% income growth is our mission
 Developing new business areas(To achieve more than 5％ profit growth)・FinTech / Money Service Business

3

・Upfront investments (Global business)4 Growth of existing business(Foundation for 20% profit growth)

25％ growth line
20％ growth line

Ordinary ¥0.19bil
income2005

・Cultivate large merchants within
and outside Japan1・Approaching to all EC market(BtoC, CtoC, BtoB)

2¥3.7bil¥10bil¥25bil

2016

Around 2020

Around 2025
※Ordinary income：2005:actual, 2016:forecast, Other number: targets

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

13

2.2

Economic trends and our results

Economy slowdown but our performance have been favorable
Real GDP and our sales of payment processing business（Forecast vs actual）（Sales：1,000yen）（Real GDP：％）

Revenue exceeded our plan

2200000

1.5

12000000

Japanese research organization’s
forecasts (average) 0.5
as of August, 2015

180000001600000

The downturn ofJapanese economy

1400000-0.5-11200000-1.5

1000000-2
10-12.

1- 3.

4- 6.

7- 9.

2015
売上高（予想）Sales(Forecast)

10-12.

1- 3.

4- 6.

7- 9.

2016
売上高（実績）Sales(Actual)

実質GDP
Real GDP

実質GDP予想
Real GDP(Actual)(Forecast)

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

14

2.3.1

Existing business：Online payment
1

Cultivating major/growing merchants
Sales composition by scale of merchants（compared with the same period）

Positive factors
 Cultivating major merchants（Project with system development, etc）

600,000（1,000yen）

Total+29.9％

500,000

The sales composition ratio of new merchants
400,000
Mar.2015
Mar.2016

Others+25.2％

1.0％ → 3.5％

Growing sector

300,000

 Growth of our merchants（Cultivating growing merchants）（Expanding our value-added service）
Comparable 79 merchants of the Top100

Sales growth ratio (average)：+57.6％

Goods+41.0％
Apparel+36.3％
Digital contents+33.9％
Service commerce +25.2％

Top100+34.5％

200,000

100,000

0Mar.2015
TOP100Mar.2016
Others※non-consolidated sales analysis, ex MSB related sales
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15

2.3.2

Existing business：Tax, utility payments
2

Our services chosen by local government

Promoting marketing activities
for future adoption

National tax, etc
Number of public institutions
which have implemented
GMO-PG services
orincreased the number of
items introduced

2016
Apr

・Japan Pension Service：Insurance premiums under
the national pension scheme

2015
Apr “zei.tokyo” started

・Tokyo Metropolis：Automobile taxes
Water charges and etc.

2011
Start of development and operation of paymentsites in addition to payment services

・Osaka Prefecture： Automobile taxes
・Fukuoka City／Sapporo City
： Water charges

May

Taxes of Fukuoka City
Automobile taxes of Oita
Automobile taxes of Fukushima

2007
Start of credit card payment services formunicipalities and public institutions

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16

2.4.1

New business ：MSB

MSB-related asset increased more than annual plan
MSB-related sales MSB-related sales
About ¥0.4bil/1Q
About ¥0.9bil(annual)

MSB-related sales
About ¥1bil/1H

3

MSB-related sales（Plan）
About ¥1.7bil(Annual)About ¥10bil

MSB-related asset
About ¥5bil

About ¥6.2bil

Balance Amount of
Balance Mar.
Balance Dec.
of Sep. processedof Mar.
of Dec.
2015 payment (Sep.)
2016
2015
（Payment after
delivery）
Transaction lending
Early payment
Finance lease

Balance Sep.
of Sep. (Plan)
2016(plan)
Payment after delivery

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17

2.4.2New business：MSB

To develop lending businesses in stages
Representative
contract（Spread）

Payment due
twice

Early payment(Upgrade)×2 Lending

3
Transaction
Lending

Measures to increase conversion rate・Speed up the credit review process・Expanding the scope of target merchant・Expansion of credit limit / addition of function

About ¥800bil（Amount of processed payments:
representative contract）

0.5％

0.08％

About ¥4.4bil（Balance of Mar. 2016）

About ¥0.6bil（Balance of Mar. 2016）

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

18

2.4.3New business：MSB
3

Asset of Transaction Lending steadily increased
Asset of TL

About¥0.6bil※

About our TL service
About¥0.4bilAbout¥0.2bil

Balanceof Sep.
2015

Total number ： Above 300
Average interest rate： 4～7％

+50.9％

Bad debt ratio： less than 0.5％

+55.6％

Balanceof Dec.
2015

Balanceof Mar.
2016※ Track record of GMO-PG and GMO Epsilon
Total number : cumulative TL transition
Average interest rate : recent track record
Bad debt ratio : (bad debt losses)/(average loan balance)

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19

2.5.1

New business：Global business4

Expanding geographic coverage in India
TaiwanIndia※

Hong Kong

30～100％ growth area
US (Bay Area)

Philippines

Thailand

Viet Nam

6.2 times

Malaysia

1.6 times

Singapore

500～900％ growth area
Our oversea entities

Indonesia
2014※2016/4/27

2015

2015

2016

GMO-PG made investment through GMO-GPF in “MobiKwik”, which offers mobile wallet services in India.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

20

2.5.2New business：Global business

Steady progress in oversea business, especially in Taiwan■Started advertisement in Taiwan
As we confirmed the effects,
strengthening the activity tocultivate new merchants

4■Amount of processed payments, Sales
in upward trend
3 times

The number ofinquiries has
increased

10 times

https://www.gmo-pg.com/lpc/taiwan/

Sales

Mar-16

Jan-16

Feb-16

Dec-15Oct-15

Nov-15

Sep-15

Jul-15Aug-15Jun-15

Apr-15May-15Mar-15Jan-15

Feb-15

Dec-14

Nov-14Oct-14Compare to last year

Amount of processed payments

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21

3. Financial highlights

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

22

3.1

Summary of the consolidated results

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

YoY

ActualSales
composition

Sales

5,730

100.0

Cost of sales

1,297

Gross income

1H of FY2015

Growth rate

ActualSales
composition

1,567

37.7％

4,162

100.0

22.6

439

51.3%

858

20.6

4,432

77.4

1,127

34.1％

3,304

79.4

SG&A

2,553

44.6

736

40.5%

1,817

43.6

Operating income

1,879

32.8

391

26.3％

1,487

35.7

Ordinary income

1,918

33.5

388

25.4％

1,530

36.8

Net income

1,151

20.1

214

22.9％

937

22.5

Net income
per share(Yen)

31.01

-

-

-

Growth

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

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

23

3.2

Summary of the consolidated balance sheets

MSB linked to current assets（Million yen）

Results for
2Q, FY2016

Current assets

43,788Cash and deposits

Results for 2Q,
FY2015

Change（Million yen）

Results for
2Q, FY2016

Results for 2Q,
FY2015

Change29,17814,609Current liabilities

32,35524,4707,884

31,171

26,0685,103

26,92322,166

4,756

Lease receivables

4,713

143

4,570

Related to Finance Lease

Advance payments

3,191

943

2,248

Increase of Early Payment Service

Deposits

Accounts payable

Deposits by merchants through representative merchantservice*Discrepancy occurs with the pace of merchants’ sales
growth due to change in merchants’ cutoff date andpayment cycle

2,574

1,119

1,455

2,858

1,185

1,673

Non-current liabilities

217

177

39

Shareholders’ equity

16,548

7,150

9,398

Capital stock

4,712

710

4,002

80

110

△30

Increase of Payment after delivery

Accounts receivable

1,354

776

578

Allowance for
doubtful accounts

△258

△123

△134

Other current assets

3,617

1,371

2,246

5,414

2,734

2,680

Fixed assets
Tangible fixed assets

204

209

△4

Intangible fixed assets

1,153

819

333

810

673

136

SoftwareInvestments andother assets
Total assets

Other current
liabilities

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

Total Accumulated
other comprehensive
incomeTotal net assets

Third-party allotment

16,630

7,264

9,365

Increase in investment securities and investments in other securities of subsidiaries and affiliates

4,056

1,705

2,351

49,203

31,912

17,290Total of liabilities andnet assets

49,203

31,912

17,290

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

24

3.3

Revenue Breakdown

Spread revenue up 46.7％（1,000yen）

YoY

1,280,987

Initial1,200,000

1,000,000+12.8％

Stock＋38.0％

Fee＋25.3％

Spread＋46.7%

1,155,545

1,148,987※Specialfactor873,483

800,000
670,573
568,811600,000

526,214464,540
401,280
390,290
400,000
374,667

431,131
396,019

470,792
464,560

505,369
483,241

526,041

540,507

501,688

499,083

565,664

728,714708,637

681,844584,529
516,330

826,928
771,471752,202659,842582,291

529,688441,038

689,264

705,327

889,917663,581594,679

528,120425,963363,264

183,609200,000
93,072

117,872

112,981

127,249

127,499

147,110
108,580

105,579

142,887

127,279

150,905

142,188

161,170012/12 (1Q) 13/3 (2Q)

13/6 (3Q)

13/9 (4Q) 13/12 (1Q) 14/3 (2Q)

Initial14/6 (3Q)Stock

14/9 (4Q) 14/12 (1Q) 15/3 (2Q)Fee

15/6 (3Q)

15/9 (4Q) 15/12 (1Q) 16/3 (2Q)

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

25

3.4

Cost of sales ratio/SG&A ratio

The sales-cost ratio increased due to the sales mix※Excluding MSB-related outsourcing expenses（1,000yen）※50.2％
3,000,000
45.8%

44.4%

44.0%

50.9%
45.6%

43.2%

2,732,786
43.5%

2,500,000※39.8％※41.5％

1,842,793 1,825,574

1,500,000

1,420,034

1,892,030※42.6％

1,645,144

30.0%

1,469,820

17.8%

17.8%

18.2%

19.3%

20.9%

20.0%

19.5%

1,000,000
806,331
600,49140.0%

1,958,642

1,311,166

17.7%

43.6%

45.6%

41.7%
2,204,334 2,264,704

2,000,000

50.0%

2,603,210

43.8%

42.9%

1,563,063

2,997,800

52.7%

51.6%

630,40719.5%

851,039750,260

796,546

783,601

22.4%

21.6％

966,013944,400

21.3%

1,372,331

22.5%

22.8%

20.0%

1,246,788

1,306,759

962,443

647,175
10.0%

500,000

231,643

253,353

261,235

284,580

317,675

384,293

365,973368,339

382,006

476,005

508,027

553,797

615,078

682,8040

0.0%
12/12 (1Q) 13/3 (2Q)

13/6 (3Q)Sales

13/9 (4Q) 13/12 (1Q) 14/3 (2Q)

Sales-cost

14/6 (3Q)

SG&A

14/9 (4Q) 14/12 (1Q)

15/3(2Q)

Sales-cost ratio

15/6(3Q)

15/9(4Q)

15/12(1Q)

16/3(2Q)

Sales-SG&A ratio

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

26

3.5

Transition of the major factors

Amount of processed payment will exceed ¥2 trillion
Number of operating stores 67,921 / Amount of processed payments ¥470 billion / Number of processed payments 228 million
Amount ofprocessed payments（100 million yen）
Number ofoperatingstores

4,000

60,0003,000（Reference） Amount of processed payments (12 months)
Include GMO FG’s amount of processed payments

1.80 trillion yen

Number of processed
payments (10,000 trx)

1.96 trillion yen

20,0002,000
50,00015,000Share of themerchant acquiring
service revenue
in the settlement
amount: 40%

40,00030,00010,00020,0005,000
10,0000

0

10/6

10/9 10/12 11/3

Recurring payment

11/6

11/9 11/12 12/3

Online Payment

12/6

12/9 12/12 13/3

13/6

13/9 13/12 14/3

Number of operating stores

14/6

14/9 14/12 15/3

15/6

15/9 15/12 16/3

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

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

27

3.6

Summary of the consolidated results

Forecast: income growth of +25%, dividend of ¥22.0 per share¥22.00(1,000yen)

11,413,000¥18.00¥15.0010,000,000¥12.25※％ yoy¥9.75

8,000,000

9,030,892

¥7.75
¥5.25

¥4.38

7,205,542¥5.88
5,764,085

6,000,000

Sales:+26.4％

Operating income:+25.7％

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

4,708,097
3,866,316

4,000,000
2,207,071

2,546,550

2,048,865

3,145,901

1,753,759

776,2532,527,793

756,506
440,080

1,764,325

926,288

1,147,552

1,431,391

927,535
524,259

763,774

585,206

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

1,441,214
1,169,694

2,000,000

2,476,408

960,761

2,047,552
1,217,025

2,335,000
1,855,037

1,853,449

0
2008/92009/9Sales

2010/92011/9Operating income

2012/9Ordinary income

2013/9Net income

2014/92015/92016/9E

Dividend

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

28

3.7

Revenue Breakdown

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

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

+9.9％

+4.1％

0

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

2008/92009/9Spread529,138Fee

816,868

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

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

666,209934,441

1,274,419

1,636,774

2,089,254

2,647,458

3,664,591

4,918,924

897,658

1,060,123

1,235,737

1,418,822

1,663,741

2,042,710

2,634,854

3,265,310

608,236

702,946

839,522

1,022,263

1,251,675

1,559,914

1,948,574

2,204,794

2,513,386

252,828

279,735

311,813333,895

400,823

451,175

566,799

526,652

716,252

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

29

Thank you very much!

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

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

TEL:+81-3-3464-0182