Financial Results Briefing for Q2 FY2021
Key Message
A strategy for expanding market share as an offline payment platformer

May 13, 2021

GMO Financial Gate, Inc.
(Ticker:4051; TSE-M)

Fourth IR Presentation
https://www.gmo-fg.com/

Copyright (C) 1999 GMO Financial Gate, Inc.

All Rights Reserved.

Cautionary Note Regarding Presentation Materials

The content of these presentation materials is based on
generally recognized economic and social conditions, aswell as assumptions judged to reasonable by GMO
Financial Gate as of May 13, 2021
Note that presentation material content is subject tochange without prior notice in response to changes inthe business environment or other unforeseen
circumstances

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

2

Meeting agenda

1. Summary of Financial Results for Q2 FY2021
2. Growth Strategy and Progress
3. Financial Highlights
4. Appendix

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

3

1.

Summary of Financial Results for Q2 FY2021

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

4

1.1

Q2 FY2021 Summary

Experienced steady business progress under 2nd State ofEmergency Declaration. No. of payment terminals grewsteadily as well

Comments

Financials/KPIs

P6

Progress (toward original FY2021 guidance) : Revenue：58.7% OP：54.2%•‐ Revenue：Q2 cumulative YoY＋37.3%（surpassed FY2021 guidance of +30% YoY）

‐ OP：Q2 cumulative YoY-7.7% as planned（due to special spot profit recorded in Q1 FY2020）•

No. of active terminals (end of Q2) ：93.1K（Q on Q：+12.4K）
P16•

Upgraded revenue guidance FY2021：¥4,800 M → ¥5,249 M (＋9.4％)•

Sales of payment terminals, especially stera, grew steadily
Launched a new type of business in the long tail domain•

Action plans for IoT/Unattended progressed as planned•

Expanded in the mobility industry
Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

5

1.2

Summary of Financial Results

Sales of terminals grew steadily. Stock-model revenue rose thanks tothe activation of installed terminals. OP & KPI are on schedule
toward FY2021 guidance
FY2020(Millions of yen)Q2 cumulative
actualFY2021Q2 cumulative
actual%Q2 FY2020/
Q2 FY2021*cumulative
basis

Revenue

2,050

2,816

＋37.3%

Gross profit

924

980

＋6.1%

Operatingprofit

345

319

-7.7%

Profitattributable toowners ofparent

198

212

+7.1%

FY2021
Guidance

FY2021 Progress toward
FY2021 Guidance（FY2021（FY2021

1st Half Guidance）

Progress toward 1st half）

4,800

58.7％

(2,367)(119.0％)

1,894

51.7%

(902)

(108.6%)

589

54.2％

(284)

(112.3％)

368

57.6％

(178)

(119.1％)(End of Q2)

TRX Volume(Q2 Stand-Alone)

TRX Value(Q2 Stand-Alone)

KPI

93,093

Approx. 27.7 million

Approx. 236.1 billion（YoY）（＋61.7％）（＋85.7％）（＋53.9％）Active terminal units

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

6

1.3

Major Topics Regarding Financial Results

Achieved profit growth as planned, reflecting sales of less-profitablestera terminal and investment in growth for the future◼ Revenue(Unit: Millions of yen)

Revenue（+37.3％ YoY）

3,000

2,500

After considering
special factors(＋)Sales of stera terminal rose(＋)Expanded stock-model revenue by acquiring new merchants acrossmultiple industries; also experienced growth in demand for IoT/Self-checkregisters due to COVID-19(±)Software development in points payments as well as in FY2020◼ Gross Profit＋46.2％ YoY

2,000(＋)Continuous revenue growth(－)Profitability declined due to increased sales of stera terminals,
which have a higher COGS ratio than traditional models(－)System investments looking ahead to increased paymenttransactions in the future

124【Special Spot Revenue】
Software development
in cashless-point 1,500
business

Gross Profit（+6.1％ YoY）

2,816

After considering
special factors

2,051

1,000

◼ Operating Profit(±)Continuous hiring to sustain revenue growth(＋)Proper cost management＋16.1％ YoY

1,927

Operating Proft（-7.7％ YoY）

80

After considering
special factors

500

924

844

＋20.1％ YoY

980
80【Special Spot Profit】
Software development incashless-point business

345

265

319

Q2 FY2020
Cumulative

Q2 FY2021
Cumulative0
Q2 FY2020
Cumulative

Q2 FY2021
Cumulative

Q2 FY2020
Cumulative

Q2 FY2021
Cumulative

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

7

1.4

OP trends（Quarterly）

Anticipating well-balanced quarterly profit this year. Making steadyprogress toward FY2021 guidance (+30% YoY) even under COVID-19
Anticipating＋30% YoY◼ Operating Profit
250

200

(Unit: Millions of yen)

FY2020(Unit: Millions of yen)

FY2021

600＋30％ YoY

The rest of FY2021¥270 M（Plan）

195

500

（Actual）

164
150（Actual）

150 155

400

300
589

100
200

71
50

36

452

100

0

0

FY2020 A

Q1 Stand-Alone

Q2 Stand-Alone

Q3 Stand-Alone

FY2021 E

Q4 Stand-Alone
Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

8

1.5

Revenue by Business Model

Initial sales pushed higher due to sales of stera, which leads togrowth in terminal-originated sales. Stock and Fee also grewsteadily, even though Spread was affected by COVID-19
FY2020(Millions of yen)

Q2 Cumulative
ActualFY2021Q2 Cumulative
ActualComposition
Ratio%
Q2 FY2020/
Q2 FY2021*cumulative basis

Initial

1,320

1,959

69.6％

+48.4％

Stock

228

282

10.0％

+23.3％

Fee

145

201

7.1％

+38.6％

Spread

358

375

13.3％

+4.8％

Total

2,051

2,816

100.0％+37.3％

Before COVID

Under COVID※State of Emergency Declaration :January 8th –March 21st
Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

9

1.6

Revenue by Business Model (Quarterly)

Initial sales grew steadily. Stock also grew, thanks to an increasing
number of active terminals. We maintains Spread sales at preCOVID-19 levels by acquiring participating merchants in clinic andbeauty salon industries, even though Spread was impacted slightly
by COVID-19
SOE ①*SOE : State of Emergency Declaration(Millions of yen)

InitialSOE ②

FY2020Ｑ1

FY2020Ｑ2

FY2020Ｑ3

FY2020Ｑ4

FY2021Ｑ1

FY2020Ｑ2Stand-Alone

Stand-Alone

Stand-Alone

Stand-Alone

Stand-Alone

Stand-Alone

626

693

451

465

855

1,103

Recorded advanced
terminal sales

Stock

110

118

128

132

136

146

Fee

75

70

80

80

101

99

Spread

178

180

125

179

193

182
SOE

SOE

Total

990

1,061

784

856

1,286

1,531

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

10

1.7

Expansion of Stock-Model Revenue

Stock and Fee sales made steady progress, covering decelerated
growth in Spread due to COVID-19. We are implementing actionplans for further expansion of Spread under COVID-19
Stock-model revenue (Subtotal of Stock, Fee, and Spread）+15.7％ YoY
After considering special factors＋19.6％ YoY(Unit: Millions of yen)

282
228
Stock

201

121

Fee：145

Subtotal of
Stock and Fee+29.5% YoY
After considering special factors＋38.4％ YoY

24【Special Spot Revenue】
Software development
in cashless-point
business

358

+4.8%

375

SpreadFY2020 Q2 Cumulative

Before COVID-19

Action plans under COVID-19
1. Expansion in IoT domain
2.

FY2021 Q2 Cumulative（Checkout machines, ticket
machines, self-checkout register）

Acquiring participating
merchants in clinics/medical
industries

Under COVID-19※State of Emergency Declaration :January 8th – March 21st

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

11

1.8

Consolidated KPIs (Active Terminals)

No. of total active terminals driven higher up by payment terminals(ex. IoT), especially stera. We also observed well-balanced growthin IoT and Alliance partner sales
FY2020Q2

FY2020Q3

FY2020Q4

FY2021Q1

FY2021
Q2

26.5

27.7

30.3

36.7

45.4

IoT

21.5

26.1

28.0

29.1

30.9

Alliance partner
sales

9.6

13.6

14.4

14.9

16.7

Total

57.6

67.3

72.7

80.7

93.1

(Unit: Thousand)Payment
terminals(excluding IoT)

QoQ
(%)

YoY
(%)

+8.7

+18.9

(+23.7％)(+71.3％)

+1.8

+9.4

(+6.2％)(+43.7%)

+1.8

+7.1

(+12.1％)(+73.9％)

+12.4

+35.5

(+15.4％)(+61.7％)

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

12

1.9

Consolidated KPIs (TRX Volume, Value/Q)

TRX Volume and TRX Value in stand-alone Q2 surpassed our target(+50% YoY), as we minimized the impact of COVID-19◼ TRX Volume
30◼ TRX Value

State of Emergency Declaration, (SOE)+85.7％ YoY(Unit: million)

2,600State of Emergency Declaration, (SOE)+53.9％ YoY(Unit: 100 million Yen)

2,400
SOE

25

SOE

2,200
2,000

20

1,800

BeforeCOVID19

1,600

BeforeCOVID19

1,400

15

①

②

③

Q2 FY2021

Q3 FY2021

10

1,200

①

②

③

1,000
Q1 FY2020

Q2 FY2020

Q3 FY2020

Q4 FY2020

Q1 FY2021

Q1 FY2020 Q2 FY2020 Q3 FY2020 Q4 FY2020 Q1 FY2021 Q2 FY2021 Q3 FY2021* In Q2 FY2021, we observed steady growth in both TRX volume and TRX value, despite seasonality and the stateof emergency declaration. This outcome was due to two main factors. First, merchant category sales increasedin grocery supermarket stores and medical drug stores (pharmacies), which are less affected by COVID-19.
Second, we accelerated activations of stera.

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

13

1.10

Consolidated KPIs (TRX Volume, Value/M)

Even though we experienced the impact of seasonality and thestate of emergency declaration in January and February, we
returned to growth in March◼ TRX Volume◼ TRX Value

State of Emergency Declaration, (SOE)(Unit: million)

State of Emergency Declaration, (SOE)(Unit: 100 million Yen)

14

1,200

12

1,000
SOE

10

SOE

800
8
600

Seasonality
+
SOE

6

400

4
2

①

②

Seasonality
+
SOE

③

0

200

①

②

③

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Jan Feb Mar Apr May Jun※TRX volume from Jan 2020 to Mar 2021

※TRX value from Jan 2020 to Mar 2021

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

14

1.11

Comparison of Growth (Market vs GMO FG)

We accomplished significantly higher YoY growth than the market,
even during the second state of emergency declaration
Left Axis ：TRX Value YoY

GMO FG

ALL

Other retailors

Restaurants

Hotels/Inn

Right Axis：GMO FG TRX value (Monthly)(Unit: 100 million Yen)

State of Emergency
Declaration ①（Unit：%）

250

216

215

211

State of Emergency
Declaration ②

216

193

200
186

1,000
203

202
192

186

183

176

173
153

160

150

1,200

800

140

148

143
600

113

113

111

110

108

100

99

97

96
84

102

97

101

98

91

82

93

91

400

50

200

0

0
Oct

2019～

Nov

Dec

Jan

Feb

Mar

2020～

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

2021～

*Source: Ministry of Economy, Trade and Industry
Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

15

1.12

Upward Revision to FY2021 Revenue Forecast（no revision to profit forecasts)

We recorded steady terminal sales in the first half FY2021.
Accordingly, we upgraded revenue guidance for FY2021, adding
overachievement in the first half while leaving our second half
estimate unchanged. We did not change our profit forecast due tothe potential negative impact of COVID-19, as well as investment
for future business expansion(Millions of yen)

FY2020

FY2021

Full year actual

Full year guidance（Original）

FY2021
Full year guidance（Upward revision）

YoY% change（Vs. Upwardrevision）（vs Original
forecast）

Revised

Revenue

3,691

4,800

5,249

＋42.2%+9.4％

Gross Profit

1,617

1,894

1,894

＋17.1％－

Operating Profit

452

589

589

＋30.1％－

Profit attributableto owners of parent

291

368

368

＋26.1％－

Earnings per share¥79.84¥92.76¥91.27ー－

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

16

1.13

Breakdown of Guidance

Revenue：Added the overachievement (=¥449M) from the first half
to the original full-year guidance for FY2021
Profit：Left the original guidance unchanged, considering theimpact of COVID-19 on the rest of FY2021 and investment
for future business expansion◼ Revenue（Revised）◼ OP（Not revised）

1H FY2021（E）

1H FY2021（E）

Overachievement

Overachievement
1H FY2021（A）

1H FY2021（A）¥449 M
0

1,000

2,000

3,000

¥34 M
0

100

200

300

• Overachievement in first half (=¥449 M)• No change to profit guidance
FY2021(=¥589 M), considering thepotential impact of COVID-19• Upward revision for revenue guidance
for FY2021 is ¥5,249 M•+ original FY2021 guidance(=¥4,800 M)

400

Overachievement toward full-year guidance for
FY2021 to be allocated to business expansion
investment/employee rewards

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

17

2.

Growth Strategy and Progress

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

18

2.1

Assessment of Action Plan for Profit Growth

We are making steady progress toward ¥1 billion in operating
profit for FY2024, in line with our action plan
*ActualFY2020

FY2021

FY2024FY2025aroundFY2035more than¥1.5 billion¥10 billion¥5 trillion¥30 trillion*J-GAAP

TargetOP¥0.45 billion ¥0.59 billion

GMV¥0.6 trillion¥1.0 trillion¥1 billion◼ Action plan and progress（assessment of action plan）◼ Medium- to long-term strategy (2025~)

1① Acquire high-growth participating merchants across various industries by
delivering new models of multi-payment terminals⚫ Steady installations and activations of stera terminal⚫ Acquired new participating merchants, including medical drug stores andmajor restaurant chains in Japan①(Diverse alliances in terms of payment methods,
functions, and channels for acquiring participating
merchants)

2② Expand IoT/Unattended business by promoting contactless payment (touch payment)
and unattended⚫ Delivered high number of terminals for use as unattended checkout registers(hotels/metered parking lots/self-checkout registers); currently focusing on
beverage vending machines⚫ Providing our platform for use in the mobility domain

Aim for continuous 25% growth YoY inrevenue and operating profit throughdiversified alliances②

Expand stock-model revenue by focusing
on finance-related businesses③

Expand monetization of points by utilizing
data from the IoT/Unattended business3③ Acquire major participating merchants by promoting alliances with QR businesses/epoint issuers⚫ Accelerating number of alliances related to QR/e-wallet/e-point payments⚫ Promoting QR payments in IoT domain

4④ Reinforcement of payment processing center functions⚫ Providing merchants with payment data from our processing center⚫ Upgrade back-office functions (billing and payments, etc.)⚫ Ongoing preparation

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

19

2.2

Strategy to Maximize TRX Value

Action Plan:

1

2

3

4

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

RetailRestaurants

Acquirers

Conventional
RouteMerchants
Competitor/Peer
Terminals
Processing
Center

Payment
Network

1

2

Vending
Machines
MeteredParking/
EV Meters

New GMO FG
RouteServices

New Terminal
Modeletc.・・・

Reduced costs toparticipating
merchants◼ Cost savings via new route leads to

Major Cost Reductions

CreditCard
IssuerBank

compared to conventional route

gateway
Global payment network

Reduced costs toacquirers

improved competitive capability of alliance partners
Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

20

2.3

Action Plan:

Global Payment Network Progress

1

2

3

4

Backlog forecast for Q3 and Q4 FY2021 is more than 17,000 units. Making
steady progress toward terminal sales projections for FY2021◼ No. of active terminals *Payment terminals (excluding IoT)
（単位：千台）(Unit: Thousands)

FY2020End of Q2

FY2020End of Q3

FY2020End of Q4

FY2021
End of Q1

FY2020End of Q2

QoQ
1Q→2Q

YoY
(%)

(%)
Launched stera

Payment
terminals(excluding IoT)

26.5

27.7

+1.2

30.3

+2.6

◼ Backlog forecast in Q3 and Q4
Service

RetailRestaurant

MedicalClinicand so on. Expecting

more than

17,000 terminals as forecast

36.7

+6.4

45.4

+8.7

+18.9

(+23.7％)(+71.3％)+8.7

Accumulating backlog beginning in thenext fiscal year and onward•

Accumulating backlog across a variety ofindustries•

Launched new type of business in the longtail domain

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

21

2.4

IoT/Unattended Market Growth

Action Plan:

1

2

3

4

The number of machines in the unattended market (e.g., vending
machines, service machines) exceeds that of the offline market.
The unattended market is expanding rapidly due following factors:

4.5 million
Unattended
Market*Number of vending
machines, ticket machines, etc.

Goods/
commodities

CoffeeOfflineMarket◼ Factors that accelerate
IoT/Unattended

Tickets

Beverages/
sweet treats

Metered parking/ Self-checkout
EV chargers
register

Self-checkoutmachine(Golf/Hotel)

・Decline in labor force
・Push for unattended
systems
・Inbound demand
・In-office vending
machines becoming
more popular
・Amendments to theSales Act・COVID-19

Steady growth 3.1+0.2◼ No of active IoT terminals
2.9

2.8

（Unit：10 thousand）

2.6
2.2
1.4

Coin-operated
washing machines

Q1

Q2

Q3

Q4

Q1

Q2

FY2020

FY2020

FY2020

FY2020

FY2021

FY2021

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

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

22

2.5

Action Plan:

Progress of IoT/Unattended

1

2

3

4

We have begun to expand business steadily in hotel checkout registers.
Accelerating terminal deliveries to both new and current customers. Starteddelivering a new type of terminal for beverage vending machines and coffee
machines
To be completed
Flow revenue model
Hotel/golf
Stock revenue model

Mar

Jun

Progress

2022

2021

Completed

Sep

Dec

Mar

Delivered approximately 40K terminals
Fee revenue coming from active terminals
Expanding business

Metered parking

Ticket vending machines

Flow revenue model

Delivered terminals to leading metered parking company

Stock revenue model

Securing stock, fee and spread revenue via active terminals
DX
DX: Digitalize parking ticket, Online reservation & payment

Flow revenue model

Demand is expanding due to new normal policies under
COVID-19 announced by Japanese government
Growing stock revenue by adding new functions
available to all e-money brands
QR codeStock revenue model
Self-checkout registers

Vending machines(Beverages/coffee)

Flow revenue model

payment
Delivered to major restaurant chains, grocery store
chainsStock revenue model

Securing stock and fee revenue via active terminals

Flow revenue model

Delivered terminals to leading operators(settlement/maintenance of vending machines)

Stock revenue model

Securing stock and spread revenue via active terminals
DX: Optimize stock delivery route, and optimize merchandise mix

DX

Growth in stock-model
revenue by acquiring
business in hotel checkout
registers. Deliveringterminals to new andcurrent customers
Started delivering terminals
to a leading parking
machine vender. Planningto deliver 10K terminals
over the next 2 years. DX
service will be delivered in
the future.

New

Started delivering terminals
steadily in Kansai area inJapan. Launch of QR code
payment expected to bedelayed to after Dec 2021.

New

Accelerated delivery ofself checkout register
terminals to dollar shop
chain

Allied with leading vending
machine operator to create
new types of terminals in the
future. QR code payment iscurrently under discussion for
acceptance

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

23

2.6

Action Plan:

Accelerating business in mobility

1

2

3

4

We are entering into the mobility domain (smaller payments than othertypes of consumption), offering Cashless Platform x Touch Payments
New

April 2021～◼ Fukuoka City Transportation Bureau Launched trial ofticket buying service via VISA touch payment（Partners: SMCC,

New

Aquabit Spirals, QUARDRAC, Toppan Printing, VISA, THE BANK OFFUKUOKA, GMO-PG）Source: GMO-FG HP
April 2021～◼ Nankai Electric Railway Began accepting VISA touch payment.
Trial started in limited area!（Partners: Nankai Electric Railway、
SMCC、QUADRAC、VISA）Source: Nankai Electric Railway HP

April 2021～◼ HOKUTO KOTSU First adoption of Visa touch-payment in public
transportation in Hokkaido (Partners: SMCC, QUADRAC, ODAWARA
AUTO-MACHINE MFG, Hokkaido Atlas, Visa Worldwide Japan) Source:
HOKUTO KOTSU HP
December 2020～◼ Fasstap (allied with Soft Space) Started providing NFC
payment without terminals Source: GMO-FG HP

November 2020～◼ Kyoto Tango Railway (managed by WILLER) First time in Japan!
Adoption of Visa touch-payment in railway ～Ride with a simple touch!
More convenient fare payments (Partners: SMCC, QUADRAC, Visa Worldwide Japan,
SMBC) source: WILLER HP

July 2020～◼ Ibaraki Kotsu (managed by Michinori HD) Cashless payments
on highway buses for the first time in Japan! Adoption of Visa
touch-payment in buses (Partners: SMCC, Visa Worldwide Japan, ODAWARA
AUTO-MACHINE MFG)

Cashless Platform

Source: Michinori HD HP

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

24

3.

Financial Highlights

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

25

3.1

Profit & Loss

The sales of stera terminal increased steadily in Q2. Q2 COGS ratio
increased due to revenue increase and higher stera terminal sales.
SG&A growth was lower in comparison to sales growth due to costmanagement measures(Unit: Thousands of yen)

Q2 FY2021
Accumulated basis

YoY(Q2 FY2020 accumulated basis)

QoQ（Ｑ1 FY2021）

ActualYoY

ActualRevenue

2,816,315

2,050,754

37.3%

1,285,793

COGS

1,836,706

1,127,211

62.9%

819,605

Gross profit

979,608

923,5426.1%

466,187

SG&A

660,695

578,069

14.3%

302,684

Operating profit

318,912345,472-7.7%

163,502

Ordinary profit

319,549

335,350-4.7%

163,539

Profit attributable to ownersof parent

211,636

197,6137.1%

110,204

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

26

3.2

Balance Sheet

Maintaining steady cash and equity balances through stablecashflows generated by our businesses
Q2 FY2021 (Unit: Thousands of yen)
Cash &
cash equivalents◼ Points(43%)

2,850,391

Current liabilities

2,393,753
Non-current liabilities•

Holding adequate stock toward sales forecastof payment terminals such as stera (stock:¥1.86 billion out of other current assets)

48,933
Other current assets

2,578,445

Total equity(63%)

4,171,566
Non-current assets

1,185,416
Asset

Debt
Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

27

3.3

Revenue by Business Model (YoY)

Achieved steady growth, even compared to the pre-COVID-19
period (Jan-Mar 2020)
3,000(Unit: Millions of yen)

+37.3％

2,500

2,000

358
1,500

145
228

375

13.3%

◼ Points

201

7.1%

•

282

10.0%

Revenue approximately +30% YoYcompared to the pre-COVID-19 period(Jan-Mar 2020)•

Composition ratio of Initial revenue
increased due to the sales growth of thestera terminal•

On the other hand, composition ratio of
Spread revenue decreased. This is due totransaction value declined in SME
merchants, especially restaurant industry,
after the announcement of a state of
emergency declaration in January 2021

17.4%
7.1%
11.1%

1,000

1,959
1,320

69.6%

64.4%

500

0

Q2 FY2020 Cumulative
InitialStock

Q2 FY2021 Cumulative
Fee

SpreadCopyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

28

4. Appendix

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

29

GMO-FG Business Domain
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 code over
the reader

Payment by entering credit card
information in PC/mobile phone

Payment
methodMediumPayment
Center/Network

Payment terminalEC（terminal is unnecessary）

・Physical hardware network
・Proprietary programming code specifications
・Regulation

・Integrate lots of payment functions
・Providing all services frominstallment to maintenance

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

30

Rev Models: Financial Gate vs. Payment Gateway
Initial revenue in offline payment is tend to be fluctuatebecause of its seasonality of terminal delivery

PG

FG
Revenue

Q1

Revenue

Q2

Q3

Q4

Q1

Time

Q1

Q2

Q3

Q4

Q1

Initial Revenue（Terminal Sales・Software Development）

Initial Revenue（Initial Set up Fee, etc…）

Stock, Fee, Spread Revenue

Stock, Fee, Spread Revenue

Time

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

31

Three Biz Models Over a Single, One-Stop Platform
One-stop platform covering all settlement processes between
merchants and acquirers
Consumer

Merchants

FG

Various
Payment
Methods

Terminals

1

Various Payment
Methods

Payment
Terminal

Acquirers

Terminal Sales
Business

Credit Card
IssuerFlow Revenue

Bank

Payment
Terminals

2

Retail Restaurants

Payment
Scene

Service

Mobility
etc

Payment
Processing

IoT

Purchase

Payment
Processing

E-Money
Vendors
PointsVendors

Stock Revenue

Vending Machines/
Coffee Machines

3

Checkout Machines(Country Club/
Comprehensive
Hotel)
Clearing
Metered Parking
EV Meteretc

Payment
Processing
Business

Acquiring
Business

Clearing

QR CodePayment
Vendors

Stock Revenue

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

32

Stock Revenue Expansion Originating From Terminal Sales
Stock revenue grows with flow model revenue which is mainly
coming form the sales of payment terminals
Model
Flow Model Rev

3 Businesses① Terminal
Sales
Business

4 Types of Revenue
InitialOne-time revenue via
terminal sales

Stock

Monthly recurring revenue
via active terminals

Fee

Processing revenue via
transaction volume

SpreadSpread revenue via
transaction value② Payment
Processing
Business

Stock Model Rev③ Acquiring
Business

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

33

Relationship Between Spread Revenue and GMV
We do not necessarily generate spread revenue for every transaction.
This is due to the fact that credit card companies have historicallyacquired major participating merchants on their own. Therefore, we
calculate spread revenue as GMV × Take Rate × Contribution Ratio◼ Direct Contract

Enjoyable Revenue
Payment Processing

Payment Processing

InitialMerchant Fee

Stock

Clearing

Fee

Merchant

Acquirer◼ Agent Contract（*Clearing amount for Agent Contract ÷ GMV＝Contribution Ratio）
Payment Processing

Spread Revenue (B)Payment Processing

InitialStock

Remittance (A-B)

Clearing Amount (A)Fee

Merchant Fee

Merchant（In cases where participating merchants pay
membership fee to acquirers directly）

SpreadAcquirer

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

34

Leveraged Growth Model
Fee and spread revenue are expanding with the market /growthin participating merchants
Leveraged Growth
N＋1
Stock revenue

N
Stock revenue

SpreadExpanding stock revenue
with the market/growthin participating merchants

Fee

Stock revenue
before N-1

Stock
1Q

2Q

3Q

N期

4Q

1Q

2Q

3Q

N+1期

4Q

1Q

2Q

3Q

4Q

Stock revenue linked withaffiliated stores

N+2期

N-1期（ストック）

N-1期（フィー）N-1期（スプレッド）

N期（ストック）

N期（フィー）

N期（スプレッド）N+1期（ストック）

N+1期（フィー）N+1期（スプレッド）

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

35

TAM (Total Addressable Market)
Value of cashless (face-to-face) payment is expanding rapidly,
as the value of IoT/Unattended◼ Offline TRX 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 (ourprediction)¥298 trillion*2¥33 trillion*3(2019)(2019)¥118 trillion*1(2025)

TRX value ofvending machines¥92B*4(2019)¥92 trillion*1¥18B(2021)GMO Financial Gate TRX value
in IoT/Unattended business¥0.6
trillion

Market foroffline cashless(face-to- face) payments

GMO Financial Gate TRX value(FY2020)◼ To achieve ¥1.5 billion in operating profit for FY2024：
Expand IoT/Unattended business driven by contactless
payment (touch payment) and unattended registers(*1) Source: Cashless Roadmap 2019, PAYMENTS JAPAN; Current Status and Future Forecasts for Online Payment Service Providers, 2018, Yano Research Institute Ltd.
(*2) Source: Cabinet Office, Government of Japan(*3) GMO Financial Gate internal forecast based on statistical data published by the Cabinet Office, Government of Japan, the Japan Vending System Manufacturers Association, and the Japan Parking Business Association(*4) Source: Japan Ministry of Economy, Trade and Industry

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

36

Market Growth of Offline Cashless (face-to-face payments)
The market for offline cashless payments is currently ¥92 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
80％

¥238
trillion

120

100（Unit：trillion yen）

96.7

50.0%

91.9

87.4
81.6
80

40.0%

73.8
64.5

60

Long-term
vsion

60.0%

32.5%

59.6

30.0%
29.4%

Around 2025

30.9%
20.0%

21.3%

20.0%

¥119
trillion

26.8%

24.1%
40

40％

20

10.0%

0

0.0%
2016

2017

2018
Offline Cashless TAM

2019

2020（E）

2021（E）

2022（E）

Offline Cashless Penetration

Source: Cashless Roadmap 2019, PAYMENTS JAPAN; Yano Research Institute Ltd.

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

37

Government Promotion of Cashless Payments
METI* announced its Cashless Vision policy to encourage cashless
payments. We expect the Japanese cashless market to expand
rapidly in response
Events4/2018

Our BusinessAnnouncement of Cashless Vision（by METI）

6/2018

Enforcement of Revised Installment Sales Act

3/2019Implementation plan announced for the security of credit
transactions (by the Council for Credit Transaction Security)

10/2019

Cashless Consumer Returns Policy

7/2020

Go To Campaign

9/2020My Number Point

Present

7/2021

Tokyo Olympic/Paralympic

9/2024Issuance of new bank notes

4/2025

Osaka Expo

Demand for cashless terminals
increases as business owners
are forced to adopt cashless
payment systems

Payment processing expands in
response to Cashless Consumer
Returns Policy

Demand for cashless terminals
increases due to expanding
inbound consumption growth

Demand for cashless terminals
to increase due to the cost of
new bank note issuance

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

38

Strategy to Maximize TRX Value
Maximize GMV through a new processing network and by pursuing
B-to-B alliances
Offline Cashless (face-to-face)Market (2025 E)

Offline Cashless (face-to-face)Market (2020 E)(*1)

TRX value: ¥118 trillion/year

Continuous Growth

TRX value: ¥87 trillion/year

Aim to achieve
more than

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

(*2)

37x+α

(*actual)

TRX value：¥22 trillion/year

TRX value in 10
to 15 years

approx.

(*actual)

GMO-FG

37x

TRX value：¥0.6 trillion/year

2020

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 (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

39

Composition of Cashless Payment Methods
While cashless payments have become more diversified, credit
card use is still high◼ TRX value of cashless payment◼ Credit card brand share in Japan (2020)（Unit：trillion yen）
100

クレジットカード
Credit card

デビットカード
Debt card

QRコード
QR codeキャッシュレス決済比率
Cashless penetration（右軸）（Right axis）

80

電子マネー
Eーmoney

0.2
5.5

60
40
20

４.5
18.2%
49.5

5.１

50.0%

1.1
40.0%

5.8

5.2

20.0%

21.3%

53.7

58.2

30.0%

24.1%

26.8%
20.0%

66.8

73.0

10.0%

0

2016
2016年

2017
2017年

2018
2018年

◼ Composition of cashless payment methods
8.3%

8.5%

8.0%

0.2%
7.4%

2019
2019年

1.4%
7.1%

80.0%

VISA
50.8%

Master
17.8%

60.0%
40.0%

31.4%

0.0%

2015
2015年

100.0%

Others

91.0%

90.3%

90.5%

89.5%

2015
2016
2017
2015年
2016年
2017年
Credit card
Credit card
クレジットカード
デビットカード2018
2018年
E-money
電子マネー

2019
2019年
QR code
QRコード

90.0%

20.0%
0.0%

*Source: Ministry of Economy, Trade and industry*Source: Ipsos Financial Service

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

40

Unique Positioning
End-to-end solutions via one-stop platform allows us tocreate alliances with many players in the market◼ 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 (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

41

Barriers to Entry （Regulations to be Followed）
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
E-money
Regulation

Law
Modified Partial
Revision of the
Installment Sales Act

Brand Test

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
CenterCredit Card
Regulation

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

JCCA：Japan Credit Card Association

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

42

Monetization by Payment Method
We operate different business models according to payment method
as a cashless platformer. Growth in 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ー

QR code

ー

Point

ー

ー

House point・House E-money

ーー

Duty exemptionーー

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

43

Revenue Model by Merchant Size
We mainly acquire medium- to large-sized merchants throughalliances with major financial institutions. We mainly acquire small
merchants (=long tail segment) through our subsidiaries◼ Four types of revenue model① Initial

Terminal sales, Softwaredevelopment, Initial
registration fee, etc…

➁ Stock

Monthly recurring revenue,
communication fee ofterminals, etc…

◼ Revenue model related to the size of merchant

Large

①

➁

③

④

Medium
③ FeeProcessing revenue related
to TRX volume, Receipt
paper sales, etc…

④ Spread

Commission fee based on
TRX value

①

➁

③

④

Small

①

④

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

44

Medium-Term Strategy

Acquiring major participating merchants by focusing on alliances

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

CreditE-money

QR

J-debit

Point

House point/House E-money

Duty exemption

Terminals we offer

Floor-Standing
Model

Mobile Model

Embedded Model

POS Model*Alliance partner
terminals

Cashless Platform

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

45

Alliance Overview
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

Vending Machines

Metered Parking
EV Meters

Laundries

Entertainment

TravelWholesalers

Real Estate

Occupation/
Vocational Schools

Healthcare/Welfare

Hotels/Inns

Bus/Train

Restaurants

Retail Stores

Merchants

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

46

stera Network Real-World Implementations(July 21, 2020)(November 20, 2020)

First adoption of Visa Touch for public
transportation in Japan (highway bus operated by
Ibaraki Kotsu)

First adoption of Visa Touch in railways. Ride
with a simple touch! Kyoto Tango Railway is
Earliest Adopter◼ First-ever adoption of Visa Touch payment for public
transportation in Japan (Katsuta Tokai-Tokyo Line highway
bus operated by Ibaraki Kotsu).

◼ WILLER, SMCC, QUADRAC, Visa Worldwide Japan and
SMBC launched a cashless payment service offering Visa
Touch readers for use in railways for the first time in Japan.
Kyoto Tango Railway became the first company to adopt
this service◼ Pay bus fare by simply touching eligible credit cards or
smartphones on readers. New system provided by SMCC
and Visa Worldwide Japan utilizing the stera platform
offered by SMCC
◼ Visa Touch payment expected to be used in more than 500
cities worldwide in the future. Already implemented in New
York, London, Singapore, and Sydney. More recently, public
transportation in Brussels, Bratislava, Bucharest, Hong Kong,
Sant Domingo, and Torino have started to accept Visa Touch*Source: Impress Watch◼ This Visa Touch system, commonly used overseas, is now
available for Japanese railways, offering rapid payment
processing of the type in high demand for speedy
payments in Japan◼ The service allows daily commuters and visitors from othercountries to pay with credit cards, eliminating the need tobuy train tickets. With wider adoption, public
transportation will become much more convenient for all*Source: WILLER Inc. HP

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

47

Company Profile■Company

GMO Financial Gate, Inc.（TSE Mothers■Foundation■Address■Stock Capital■Major Shareholder■Board Member

September 1999
Humax Shibuya Building 7F, Shibuya Dogenzaka 1-14-6, Tokyo¥1,594 Million
GMO Payment Gateway, Inc.
Representative Director, President
Kentaro Sugiyama
Director, Chairman
Akira Takano
Director
Akio Aoyama（Sales Division Executive Manager）
Director
Masamitsu Ikezawa（Administrative Division Executive Manager）
Director
Tomonaga Fukunaga（System Division Executive Manager）
Director
Masaru Yoshioka（GMO Payment Gateway, Inc. Executive Officer）
External Director
Nao Shimamura
External Auditor
Takayoshi Nagasawa
External Auditor
Satoru Ozawa
AuditorTakashi Iinuma （CPA)■Auditing Firm
■Subsidiary

Deloitte Touche Tohmatsu LLC
Global Card System, Inc. shareholding ratio:100％
GMO DATA, Inc.

■Business

Ticker:4051）

shareholding 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

POS Model（As of May 13, 2021）

Copyright (C) 1999 GMO Financial Gate, Inc. All Rights Reserved.

48

T h a n k

Y o u

GMO Financial Gate, Inc(Tokyo Stock Exchange Mothers
IR website

4051)

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

Contact:
TEL：+81-3-6416-3881
E-mail：irpr@mail.gmo-fg.com

Copyright (C) 1999 GMO Financial Gate, Inc.

All Rights Reserved.