results presentation · 2018-11-30 · (thailand) gmo-z.com netdesign holdings co.,ltd (vietnam)...

1

STOCK CODE: 9449

February 9, 2018

Supplementary Materials

Fiscal Year 2017

Results Presentation

2

(UAE)

GMO GlobalSign FZ-LLC

(India)

GMO Research Pvt.Ltd.

GMO GlobalSign Certificate Services

Private limited

(Myanmar)

GMO-Z.com ACE Co. Ltd.

(Thailand)

GMO-Z.com NetDesign Holdings Co.,Ltd

(Vietnam)

GMO-Z.com Runsystem JSC

GMO-Z.com Vietnam Lab Center Co. Ltd.

(Philippines)

GMO GlobalSign Inc.

Significant Group Companies

1. GMO Internet Group

131 Group Companies (104 consolidated, 19 non-consolidated, 4 equity method affiliates, 4 non-equity method affiliates)

Internet Finance

GMO Financial Holdings, Inc. (JASDAQ:7177)

GMO CLICK Securities, Inc.

FX PRIME by GMO Corporation

GMO Coin

Incubation

GMO Venture Partners, Inc.

Mobile Entertainment

GMO APP STUDIO, Inc.

(and other companies)

Online Advertising & Media

GMO AD Partners, Inc. (JASDAQ:4784)

GMO NIKKO, Inc.

GMO AD Marketing

GMO Insight, Inc.

GMO Research, Inc. (MOTHERS: 3695)

GMO Media, Inc. (MOTHERS: 6180)

GMO Solution Partner, Inc.

GMO TECH, Inc. (MOTHERS: 6026)

GMO Kumapon, Inc.

(and other companies)

Internet Infrastructure

GMO Internet, Inc. (TSE:9449)

GMO Payment Gateway, Inc. (TSE:3769)

GMO CLOUD, Inc. (TSE:3788)

GMO Pepabo Inc. (JASDAQ: 3633)

GlobalSign K.K.

GMO CARS, Inc.

GMO MAKESHOP Co. Ltd.

GMO Commerce, Inc.GMO Epsilon, Inc.

GMO Payment Services, Inc.

GMO Financialgate,Inc.

Global Card System,Inc.

GMO Registry, Inc.

GMO System Consulting, Inc.

GMO Creators Network, Inc.

GMO Brights Consulting, Inc.(and other

companies)

(Osaka Sales Office)

GMO CLOUD,K.K

GMO Payment Gateway, Inc.

GMO Solution Partner, Inc.

GMO DigiRock, Inc.

GMO CLOUD, Inc. (Shimonoseki Branch)

GMO Pepabo, Inc. (Fukuoka Branch)

GMO Internet, Inc. (Miyazaki Office )

GMO NIKKO, Inc. (Miyazaki Office)

GMO TECH, Inc. (Miyazaki Office)

(UK)

GMO-Z.com Trade UK LTD.GMO GlobalSign Ltd.

(Belgium)

GlobalSign NV (CA)

(China)

GlobalSign China

(Hong Kong)

GMO-Z.com Forex HK Limited.(US)

GMO GlobalSign, Inc.

GMO-Z.com USA,Inc

GMO DIGITAL Lab, Inc.

Listed Company

(total 9 companies)

(as of December 2017 )

(Singapore)

GMO-Z.com Pte. Ltd.

GMO GlobalSign Pte. Ltd.

GMO PAYMENT GATEWAY Pte. Ltd.

(Malaysia)

MACRO KIOSK BERHAD

3

Group News (1)1. GMO Internet Group

GMO Internet’s Bitcoin mining business launches token sale (ICO) for the sales of next-generation mining boards

GMO Internet Group and Aozora Bank Group decide to launch a new Internet bank “GMO Aozora Net Bank” in July 2018

GMO Internet launches KYC making it easy to quickly verify identity, the 5th phase of GMO Blockchain Open Source Software Project: Reduces identification costs when opening bank accounts

GMO Media's online gaming platform "Gesoten" provides 9 titles to Saison Point Mall: Runs campaign for customers who can receive points

GMO-PG to launch a comprehensive payment solution "GMO-PG Processing Platform": Payment infrastructure to support card issuing and merchant business

GMO NIKKO develops a new service "Rich Advertising Creative Template," the 2nd phase of a Next-Generation Ad Creative Lab: Producing 11 types of advertisement designs, such as weather information and 3D

10/24

10/26

10/18

10/27

10/19

10/24

4

Group News (2)1. GMO Internet Group

GMO Internet launches cryptocurrency mining business

GMO CARS' used vehicle flea market site "culumo byGMO" launches a free solution for sellers and buyers, the 2nd phase of service collaboration: Operating at about 3,000 body shops nationwide and offering car maintenance after purchase

GMO Pepabo's Color Me Shop! is the first ASP online store to adopt Yamato Transport's service that allows customers to receive parcels at TA-Q-BIN Agencies: Launches its service at more than 25,000 locations nationwide on November 27

GMO Internet Group’s partners can receive part of their salaries in Bitcoin

GMO Internet launches Pay@Table for autonomous at-the-table bill payment, the 6th phase of the GMO Blockchain Open Source Software Project

Total annual transaction volume of GMO Pepabo's minne, Japan's leading handmade market, has increased about 10-fold over the past 3 years, and has exceeded JPY 10 billion in 2017: Drawing attention as "Sharing Economy Service," a service that enables sharing of skills

12/20

11/27

11/30

12/12

10/30

12/25

5

Listed Group Companies (3 mths to December)


Stock Code

TSE 1st Section 3769

Internet Infrastructure (Payment)

Q1 FYE 9/2017 Q1 FYE 9/2018 FYE 9/2018

(3mths to Dec) (3mths to Dec) Forecast (Progress)

Net Sales 4,826 6,098 26,107(+23.4%)

Operating Profit 1,238 1,594 6,475(+24.6%)

Net Profit 609 860 3,953(+21.8%)

(JPY millions)

*Compiled from each companies’ quarterly P/L statements

6


Stock

Code

JASDAQ Standard 7177

Internet Finance

Q3 FYE 3/2017 Q3 FYE 12/2017 Q3 FYE 12/2017 FYE 12/2018

(3mths to Dec) (3mths to Dec) (9 mths to Dec) Forecast

Net Sales 6,771 7,826 21,657 ー

Operating

Profit 2,309 2,637 7,462 ー

Ordinary

Profit 2,261 2,625 7,349 ー

Net Profit 1,573 1,476 5,141 ー

(JPY millions)



7

Stock Code

TSE 1st Section 3788

Internet Infrastructure (Hosting & Cloud, Security)


(3mths to Dec) (3mths to Dec) (12mths to Dec) Forecast (YoY)

Net Sales 2,971 3,172 12,206 12,825 (+5.1％)

Operating Profit 189 350 1,075 1,167(+10.0％)

Ordinary Profit 206 347 1,101 1,167 (+7.4％)

Net Profit 72 132 678 700(+10.1％)

(JPY millions)




8

Stock Code





Net Sales 7,878 7,672 31,961 33,500(+4.8％)

Operating Profit 39 101 542 600(+10.6%)

Ordinary Profit 38 104 558 615(+10.1％)

Net Profit -49 264 163 200(+22.7%)

(JPY millions)




9

Stock Code


Internet Infrastructure (Domain, Hosting & Cloud, Ecommerce Solutions)



Net Sales 1,670 1,880 7,365 7,800(+5.9％)

Operating Profit 129 -79 143 330(+129.7%)

Ordinary Profit 131 -64 172 330(+90.9%)

Net Profit 30 -95 119 259(+116.2%)

(JPY millions)




10

Stock Code

TSE MOTHERS 3695




Net Sales 820 812 3,185 3,497(9.8%)

Operating Profit 78 57 325 325(0.0%)

Ordinary Profit 102 59 321 305(-5.1%)

Net Profit -24 25 207 207(0.0%)

(JPY millions)




11

Stock Code

TSE MOTHERS 6026




Net Sales 641 732 2,818 2,900(102.9%)

Operating

Profit 39 41 104 110(105.3%)

Ordinary Profit 37 38 103 110(106.6%)

Net Profit 33 8 47 65(136.3%)

(JPY millions)




12

Stock Code

TSE MOTHERS 6180




Net Sales 1,265 1,127 4,377 4,700(7.3%)

Operating

Profit 90 74 371 372(0.1%)

Ordinary Profit 89 73 368 368(0.0%)

Net Profit 49 51 252 252(0.0%)

(JPY millions)




13

Revenue Breakdown by Segment


(百万円)(JPY millions) Q3 2016 Q4 2016 2017/1Q 2017/2Q 2017/3Q Q4 2017

◆Internet Infrastructure

　Internet provider 3,497 3,653 3,968 4,455 4,766 5,205

　Domain 2,045 1,910 1,995 2,046 2,015 2,138

　Cloud & hosting 3,451 3,554 3,532 3,533 3,494 3,511

　Ecommercd solutions 2,021 2,299 2,146 2,109 2,167 2,448

　Security 1,378 1,255 1,281 1,291 1,282 1,443

　Payment 3,184 4,243 5,534 5,590 5,951 7,313

　Other 952 759 1,268 1,424 1,401 1,401

Segment total 16,531 17,677 19,727 20,452 21,080 23,462

◆Online Advertising & Media 0 0

　Internet media 3,633 3,400 3,379 3,056 3,160 3,037

　Online advertising 6,806 6,983 7,373 7,160 6,818 6,928

　Internet research, other 695 798 819 785 736 822

Segment total 11,134 11,182 11,572 11,001 10,715 10,789

◆Internet Finance 0 0

　Internet Finance 6,036 6,771 5,578 6,869 6,847 7,824

Segment total 6,036 6,771 5,578 6,869 6,847 7,824

◆Mobile Entertainment 0 0

　Mobile Entertainment 472 403 299 232 204 157

Segment total 472 403 299 232 204 157

◆Incubation 0 0

　Incubation 210 205 70 253 337 654

Segment total 210 205 70 253 337 654

◆Other Businesses 0 0

　Other Businesses 51 59 52 919 52 64

Segment total 51 59 52 919 52 64

Internal Transactions Adjustment (1,260) (1,158) (1,260) (1,430) (1,169) (1,106)

Consolidated Net Sales 33,176 35,142 36,040 38,299 38,068 41,847,237

14


Cost Composition (Consolidated)

(JPY millions)

4,2685,448 6,563

5,071 6,079145

180207

224177

5,971

6,5166,143

5,8645,941

3,451

3,4773,814

3,6153,7901,158

1,2171,170

1,1621,1833,489

3,6894,019

4,2914,5382,537

2,4482,458

2,568

2,6272,033

1,8051,854

2,055

2,068

1,526

1,592

1,792

1,630

2,3406,523

6,126

6,3147,092

7,445

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2016/Q4 2017/Q1 2017/Q2 2017/3Q 2017/Q4

Human resources

Advertising and promotion

Depreciation and leases

Outsourcing costs

Communication costs

Rent

Commission paid

Media costs

Goodwill depreciation

others

15

1,939 1,995

1,949 2,046

2,045 2,015

1,9102,138

0

2,000

4,000

6,000

8,000

10,000

2016 2017

Q4

Q3

Q2

Q1

0

400

800

1,200

1,600

0

500

1,000

1,500

2,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2012 2013 2014 2015 2016 2017

Registrations

(thousands)(JPY millions)

Domain Registration

Revenue

2. Internet Infrastructure

+11.9％

Renewals

(thousands)

Registrations

(thousands)

Revenue

(JPY millions)

(JPY millions) (3 mths to December) (3 mths to December)

+0.2％

16

716,382742,966

765,464782,565

801,901

0

200,000

400,000

600,000

800,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2013 2014 2015 2016 2017

(JPY millions)

Hosting & Cloud - Performance

ContractsRevenue


(thousands)

(3 mths to December) (3 mths to December)

-1.2％ +2.5％

3,430 3,532

3,445 3,533

3,451 3,494

3,554 3,512

0

5,000

10,000

15,000

2016 2017

Q4

Q3

Q2

Q1

17

1,883 2,146

1,9732,109

2,021

2,167

2,299

2,448

0

2,000

4,000

6,000

8,000

10,000

2016 2017

Q4

Q3

Q2

Q1

69,043

71,985

74,076

75,629 75,523

60,000

65,000

70,000

75,000

80,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2013 2014 2015 2016 2017

Ecommerce Solutions - Performance

Contracts

-0.1％(JPY millions)


＋6.5％

Revenue

(thousands)(3 mths to December) (3 mths to December)

18

Total

Stores(Paid)

59,000 16,000 75,000

Transaction Volume(Quarterly)

JPY34.0B JPY40.3B JPY74.3B

Ecommerce Business Parameters


(As of December 2017)

19

2.312.50

FY17

JPY 10.29B

(22.6％ YoY Growth)

FY18 annual transactionvolume target of JPY 12.5B

2015

Q1 Q2 Q3 Q4

2016

Q1 Q2 Q3 Q4

2017

Q2Q1 Q3

2.86

1.68

Q4

| Historical Performance by Quarter


(JPY billions)

20

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0

50

100

150

200

月末有効枚数※2

海外国内セキュリティ売上

売上高（百万円）

0

10,000

20,000

30,000

40,000

50,000

60,000

16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4

新規発行枚数※1

海外国内

Issued digital

certificates

Issued digital

certificates

(ten thousands)

Security - Performance


Overseas Domestic Overseas Domestic Sales of security

Sales

(JPY millions)

Newly Issued

Digital Certificates ＊1

Valid Digital Certificates(as of the end of the month)＊2

The Company created the above graphs based on GMO CLOUD‘s “Fiscal Year 2017 3rd Quarter Results Presentation - Supplementary Materials“.

*1 Adjusted number of unlimited issuance contract and monthly high-volume issuance.*2 The number of valid digital certificates is the number of certificates that are actually used.

21

0

50

100

150

200

250

300

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3 16/6 16/9 16/12 17/3 17/6 17/9 17/12

Recurring payment volume Online payment volume

Operating stores: 86,136; Transaction: ¥770 billion (value), 313 million (volume)

Annual transaction value reaches ¥3 trillion

Transaction value

*Number of operating stores represents end-of-quarter figure, transaction value/volume represents figure during quarter

Share of spread

revenue within

transaction value:

45%

（Reference）Transaction value（cumulative 12 months） ¥2.76 trillion

Including GMO Financial Gate ¥2.99 trillion (million)(stores)

(billion yen)

600

500

400

300

*17/9 operating store number dropped QoQ due to a batch of merchants going idled in response to the end of a service of a partner

700

Payment Processing - Key Indicators


*Based on GMO-PG data.

22

We connect merchants and payment companies incontracts, payment information and money transactions

Offline

etc.

GMO payment after delivery

G l o b a l p ay m e n t

BitCoin payment

Carrier billing

Comprehensive payment

processing serviceMoney service business

Online Advertising

(Demand generation)

Online banking

E-wallet

Account transfer

Physical store

Online

Smartphone

PC

Apple Pay payment

32,191 terminals(end of December, 2017)

Cash on delivery

Consumer Merchant Our Company & Service Payment company<merchants=Our Customers>

About 86,136 stores(end of December, 2017)

Narrowly defined EC・Online Shopping

Public money・National Broad Casting

・Prefectures

(Tokyo, Osaka)

Service Commerce・Donation

・House rent

・Tuition fee

・Wi-fi charge

Credit card

companies

Convenience stores

E-money

Comprehensive payment

processing serviceMoney service business

Payment Processing - Overview


※GMO Payment Gateway’s presentation materials

23

Domains Industry Structure


・Operators of .com, .net, etc.

・Only one operator per domain

・Global domain management

・NPO

・Domain registration sales

・Many registrar resellers

Registrar

Registry

ICANN

370

2,100

Agency

Registrar

・Agency

24

Domains Registry Share


Japan gTLD Operation and Management Market

Share

No.1in Japan

81.7%

81.7%

others

+

25


Global top 10 registrars

Source: http://webhosting.info/domain-names/registrars (as of December 2017)

Domains Global Registrars

1 6

2 7

3 8

4 9

5HICHINA ZHICHENG

TECHNOLOGY LTD 10

http://webhosting.info/domain-names/registrars

26

FX

Securities

Trading Volume Share of

Trading Volume

JPY 213tr

Trading Volume Margin Transaction

Balance(As of December 31, 2017)

JPY 129.1B

JPY 102.1B(As of December 31, 2016)

(Oct-Dec,2017)

(Oct-Dec, 2017)

6.7%

22.7%

26.6% YoY

7.5% YoY

JPY 351tr YoY

JPY 6.0tr

JPY 5.1tr YoY

Customer Assets

Balance

JPY 157.2B

(As of December 31, 2017)

JPY 132.4B(As of December 31, 2016)

Segment Report: Internet Finance

GMO Financial HD: KPI

Prepared based on Results Presentation of GMO Financial HD for Q4 of FY2017

(Oct-Dec, 2017)

Share of

Trading Volume

(Oct-Dec, 2017)

27

Business Model

Risk Minimization. Cover transactions executed with counter parties as soon

as customer orders exceed acceptable risk position

Acceptable risk

limit for own

position

CustomerCustomer

Display

rate

Buy OrderSell Order

Counter Parties

Cover trade

Display

rate

Display

rate

GMO Financial HD Group

Matchingorders

Cover customer transactions in

excess of certain limit

3. Internet Finance

*from GMO Financial HD FYE3/2016 Financial Results Presentation

28

FX Volatility and Revenues

Increase in

VolatilityIncrease Increase

Decrease in

VolatilityDecrease Decrease

(Customer spread x Trading volume) －(Cover spread x Cover trades)Revenue

Structure

Customer Trades Cover Trades

Trading Volume Cover Costs

(Concept diagram)

*From GMO Financial HD FYE 3/2017 Financial Results Presentation

3. Internet Finance

29

4. Reference

Domain Terminology (1)

1. Domains

Domain/Domain

Name

A domain name is a string of letters that identifies a computer on the Internet in accordance with a set of rules. Although it is

often referred to as an Internet “address,” in fact only an IP address can enable access to a computer on the Internet. More

accurately speaking, a domain is a string of letters that enables addresses on the Internet to be easily located. Each domain

name is associated with an IP address, and this relationship is managed on the name server (DNS server).

Top Level

Domain

Domain names have a hierarchical structure. For example, in the domain www.gmo-registry.com, “.com” on the far right is the

top-level domain. To the left of top level domain, separated by a dot, is the second level domain (SLD), and next to that is the

third level domain (3LD). Top level domains are managed by a registry, and second level domains are managed by a registrar

under contract with the registry.

2. Domain Structure

IP AddressAn IP address is a numerical identification assigned to computers on the Internet in accordance with Internet Protocol. Eg.

123.456.12.3 All computers connected to the Internet have an IP address.

DNSDomain Name System The network that handles domain names and IP addresses. When a user accesses a web site, their local

name server queries DNS servers to determine the IP address of the domain name. DNS returns the IP address allowing the

user to view the web server at that address.

DNS ServerA server that supports the operation of DNS, also known as a name server. DNS servers are used to translate a hostname or

domain name to its corresponding IP address.

Root ServerThe root server is a DNS server that operates the DNS root zone at the top level of the DNS hierarchy. When a new domain is

registered or a domain name server is changed, it is first recognized as valid by the root server. There are currently 13 root

server networks worldwide, including Japan, that balance server load and reduce risk.

3. Types of Domains

ccTLDCountry code Top Level Domain Eg. .jp (Japan), .us (US), .uk (UK) Top level domains based on two letter ISO 3166-1 country

codes. There are approximately 250 ccTLDs used to identify countries including .jp (Japan), .us (US), .cn (China), .uk (UK) and .be

(Belgium).

gTLDgeneric Top Level Domain Eg. .com, .net, .org etc. Before the establishment of ICANN there were 8 gTLDs. Today there are over

1,000.

Premium DomainShort, memorable, generic terms that have high value as marketing and branding tools and are traded around the world at

premium prices.

30

5. New Domains

New gTLDThe new gTLD program was opened in 2012 to allow for the expansion of new Top Level Domains and to promote diversity and

competition in the domain industry. Some of the TLDs introduced as a result of the new gTLD program include

GeoTLDs .tokyo, .yokohama, brand TLDs such as .canon, .hitachi and generic TLDs such as .shop and .eco.

Brand TLDA type of new gTLD. A brand name or corporate name TLD in which all the registrations belong to the brand. The TLD is closed to

the general public. It is a branding tool that also promotes consumer trust.

6. TLD Launch Schedule

Sunrise Period An application period ahead of the official launch open exclusively to trademark holders.

Early Access Period

(EAP)

An advance registration phase open to all during which a one-time early access fee is charged at the time of registration. This

fee reduces over the course of the EAP.

General AvailabilityAfter the completion of the Sunrise period and any other launch periods (such as EAP), when registrations are open to all at the

standard registration fee.

4. Domain Industry Structure

ICANNInternet Corporation for Assigned Names and Numbers is a US based not for profit organization responsible for managing the

assignment of domain names and IP addresses. ICANN also holds the authority to designate official domain registrars. ICANN

holds international conferences three times a year, in between it also hosts workshops and other events.

RegistryAn organization that maintains a central database of domain names data for a particular domain. Different domains are

managed by different registries. Registries are required to maintain neutrality and guarantee equal access to the Shared

Registry System (SRS) for all registrars. GMO Registry is the registry for .shop, .tokyo and other domains.

RegistrarICANN accredited registrars can directly register domain data into registry databases under contract with the relevant registry.

While there is only one registry for each top-level domain, multiple registrars exist to promote competitive pricing and service.

Onamae.com is one of 18 ICANN accredited registrars in Japan.

7. Other

Registration/Renewal

Fee

A Domain registration fee is charged at the time the domain name is created. Each year after, a renewal fee is charged. This fee

varies between registrars and domains.

Domain Terminology (2)

4. Reference

results presentation · 2018-11-30 · (thailand) gmo-z.com netdesign holdings co.,ltd (vietnam)...

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