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STOCK CODE : 9449
Fiscal Year 2015
Results Presentation
February 8, 2016
2 2
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
3 3
Overview
Executive Summary: FY2015
・Internet Infrastructure Revenue up 20.0% profit down 19.9%
Aggressive investment in minne (JPY 1.5B)
・Internet Securities Profit up 61.0%
Global No. 1 in FX trading volume for fourth
consecutive year
・Online Ad & Media Revenue up 14.9% profit down 38.9%
Accelerated investment in technology shift
・Mobile Entertainment Release of titles developed completely in-house,
building expertise, aiming for hit title.
Segment Report
• Forecasts achieved for 6 consecutive years
• Operating profit JPY14.8B Up 14.5% after accelerated strategic investment
• 2.24B allocated to share buyback as 50% shareholder returns policy comes into effect
Earnings
4 4
Strengthening strengths and Enhancing Weakness with
No.1 Products
Current Themes Overview
Internet Infrastructure Strengthening Strengths In Japan: Brand Reinforcement
Globally: Expansion into global markets
Internet Securities Strengthening Strengths Expanding market share with technology-edge
and cost leadership strategy
Online Ad & Media Introducing No. 1 Products
Focus on technology, proprietary product
development
Mobile Entertainment Introducing No. 1 Products Leveraging expertise with aim to produce hit title.
5 5
(JPY billions)
Net Sales
Operating
Profit
Ordinary
Profit
Net Profit
YoY Growth
Overview
Financial Results
Forecasts achieved for 6 consecutive years. Net profit doubles on sale of shares
in GMO CLICK HD.
2014 (Actual)
109.3
12.93
12.73
5.84
126.3
14.80
13.41
+15.5%
+16.7%
+14.5%
2015
+129.7%
14.85
Forecast Actual
121.0
14.3
13.0
14.3
6 6
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
7 7
(JPY billions)
Net Sales
Operating
Profit
Ordinary
Profit
Net Profit
2015
(Actual)
126.3
14.80
14.85
13.41
YoY Growth
135.0
16.50
16.50
7.0
+6.9%
+11.1%
+11.5%
2016
(Forecast)
-47.8%
Infrastructure and media to drive double digit profit growth
Net profit to decrease after one-time profit (on sale of share in GMO CLICK
HD) this year
Guidance
FY2016 Earnings
8 8
JPY Q1 Q2 Q3 Q4 Total
2014
Upward
Revision - - - 1 1 17
Initial
Forecast 4 4 4 4 16
2015
Upward
Revision 2 - 2 14+1 19
38 Initial
Forecast 4 5 5 5 19
2016 Dividend 5 5 5 5 20
Guidance
FY2016 Dividends
Dividend payout ratio 33.4% in 2015
Total dividend per share to reach JPY20 in 2016
UP
UP special UP
9 9
Guidance
FY2016 Dividends
Dividend Payout
Ratio
Share Buyback
33%
17%
Total Shareholder
Returns Ratio
50%
Quarterly dividend
Net profit at end of fiscal
year to form basis of
buyback in following year
Over
10 10
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
11 11
Generating
High Profits
even after
Strategic
Investment in
2016
Quarterly Earnings
Overview
(JPY billions)
Net
Sales
OP
minne promotion -JPY580M
Game promotion -JPY300M
Technology shift -JPY140M
4.36
3.74
4.00
31.5 31.2
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
29.4
12 12
Revenue up
6.9%
4th consecutive
quarter over
JPY30B
Incubation
Mobile Entertainment
Internet Securities
Online Ads/Media
Internet Infrastructure
Overview
Net Sales by Segment
(JPY billions)
6.9
1.4
9.4
11.9
9.5
7.6
14.1
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
31.5
29.4 31.2
10.3
6.7
0.7
14.8
0.9
13 13
Strong Securities
Accelerated
Strategic Investment
Profit by Segment
Overview
(JPY billions)
Incubation
Mobile Entertainment
Internet Securities
Online Ads/Media
Internet Infrastructure
2.72
0.82
2.28
4.36
-0.10
1.28
2.46
-0.45
0.35
0.12
3.58
0.88
2.55
-0.13
0.21 Technology shift
minne promotion
0.28
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
Game promotion
-JPY140M
-JPY580M
-JPY300M
14 14
Financial Results
Consolidated Profit and Loss
(JPY 100 millions) 2014 2015YoY
Change
Net Sales 1,093.6 1,263.3 15.5%
Cost of Sales 508.3 600.6 18.2%
Gross Profit on Sales 585.3 662.6 13.2%
SGA 456.0 514.6 12.8%
Operating Profit 129.3 148.0 14.5%
(OP Margin) 11.8% 11.7% -0.1pt
Ordinary Profit 127.3 148.5 16.7%
Extraordinary Profit 19.0 136.1 615.4%
Extraordinary Loss 20.6 33.2 61.3%
Profit before Tax 125.7 251.4 100.0%
Corporate Tax 46.6 103.1 121.2%
(Corporate Tax Rate) 37.1% 41.0% +3.9pt
Minority Interests 20.6 14.1 -31.8%
Net Profit 58.4 134.1 129.7%
15 15
Consolidated Balance Sheet
Financial Results
(JPY 100 millions) 12/2014 12/2015 ChangeGMO CLICK HD
(12/2015)Change
Current Assets 4,612 5,313 15.2% 4,473 11.9%
Cash & deposits 695 759 9.2% 203 -23.1%
Fixed assets 221 232 5.3% 35 -6.0%
Goodwill 39 22 -43.6% - -100.0%
Software 42 46 9.3% 14 15.6%
Investment securities 23 43 83.0% 2 237.8%
Total Assets 4,833 5,546 14.7% 4,509 11.8%
Liabilities 4,394 4,924 12.1% 4,271 11.4%
Interest-bearing debt 300 398 32.8% 375 86.2%
Net Assets 438 621 41.7% 237 20.0%
Minority equity 146 224 53.6% - -100.0%
Shareholders' Equity 292 396 35.6% 237 25.8%
Earned Surplus 194 301 55.2% 205 26.7%
(Shareholders' Equity Ratio) 6.1% 7.1% +1.0pt 5.3% +0.6pt
Liabilities/Net Assets Total 4,833 5,546 14.7% 4,509 11.8%
16 16
Market Cap / Equity Share in
Listed Group Companies
Financial Results
17 17
Stock Code Stock Name Exchange Market Cap (JPY 100millions)
% Ownership Equity Share (JPY 100millions)
Market Cap/Equity Share Ratio
9449 GMO Internet TSE 1 1,670
3769 GMO Payment Gateway TSE1 2,128 51.6% 1,098
7177 GMO CLICK Holdings TSE JQS 918 82.8% 760
3633 GMO Pepabo TSE JQS 110 65.1% 71
3788 GMO CLOUD TSE1 79 51.3% 40
4784 GMO AD Partners TSE JQS 68 54.8% 37
6180 GMO Media TSE MOTHERS 51 65.5% 33
6026 GMO TECH TSE MOTHERS 24 52.2% 12
3695 GMO Research TSE MOTHERS 17 53.9% 9
Group Total 5,065 2,060
*1 *2
Group Listed Companies – Equity Share
Group News
*1 Market value as of 5/2/2016
*2 Includes indirect holdings
*3 Calculated as the sum of the listed market cap values
*3
18 18
145.0
-55.1
27.5
120.9
-126.2
58.8
286.6
4.9
650.3 658.4
-204.0
26.0
151.8
-26.5
194.7
Financial Results
Consolidated Cash Flow
(JPY 100 millions) FY2014 FY2015 GMO CLICK HD
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow
Change in Cash and
Equivalents
Balance of Cash and
Equivalents
19 19
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
20 20
Business Segments (Composition)
Market share growth accelerating across all segments
Group Overview
*1 Customer contracts in Internet Infrastructure (excluding Provider)
*2 Customer contracts in Provider sub-segment
21 21
全商材フルスクラッチで内製 販売・サポートまで全て自社提供
顧客満足度ナンバーワン
GMOアプリクラウド 最優秀賞4年連続1位
GMOクラウド 2014年ビジネスクラウド
総合評価AAA受賞
GMOグローバルサインUS
情報セキュリティ
グローバルエクセレントアワード2013
金賞受賞
GMOクリック証券 2015年度顧客満足度
ランキングネット証券総合1位
GMOグローバルサイン
4年連続Online Trust Alliance「オンライントラスト栄誉賞」受賞
0
1,000
2,000
3,000
4,000
5,000 その他職種
エンジニア
クリエイター
All products
developed, sold
and supported
in-house
グループスタッフ数:4,415人 インターネットの基盤を支える高度な技術者集団
No.1 in Customer
Satisfaction
Staff
% Engineers
Goal: Workforce of over 50% engineers
Strengths - Technology
Group Overview
4,600
42.5% 42.5%
4,198
3,800
40% 37%
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
22 22
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
23 23
Domestic market share at 55.7% *3
Segment Report: Internet Infrastructure
Segment Composition
Number one across all infrastructure products
Domain Registrar
Hosting & Cloud
Ecommerce
Security
Payment
Domestic gTLD market share at 90.3%*2
74,000 paid stores
55.3% YoY increase in certificate issues
65,000 merchants *1 Based on our own data
*2 Based on ICANN data
*3 Based on Webhosting.info data
No. 1
No.1
No. 1
Strong
No. 1
Domain Registry Brand TLDs / Geo TLDs
81.7% of gTLD market in Japan *1
Strong
No. 1
Strong
No. 1
24 24
Historical Performance by Quarter
0.82 0.88
1.28
14.8 14.1
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
11.9
-JPY580M
Net
Sales
OP
(JPY billions)
minne promotion
Segment Report: Internet Infrastructure
Revenue up 24.3%
Profit down 35.8% YoY
25 25
Record High
JPY14.8B
Net Sales by Sub Segment
Segment Report: Internet Infrastructure
2.9
2.6
1.1
1.8
3.5
1.7 1.3
3.4
1.1
1.0
1.8
2.0
1.4
3.4
1.6
1.0
2.5
2.7
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
11.9
14.1 14.8
Other
Provider
Payment
Security
Ecommerce Solutions
Cloud & Hosting
Domain
(JPY billions)
26 26
6.41M contracts
10.6%
YoY growth
5.79
Internet Infrastructure Contracts
*Excludes Provider contracts (approx. 350,000 contracts)
6.41 6.28
(millions)
*
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
Segment Report: Internet Infrastructure
27 27
Segment Report: Internet Infrastructure
Internet Infrastructure Contracts
New contracts
Stable
Earnings
Base
Yearly 600,000
Monthly 50,000
Daily 1,500
28 28
Segment Report: Internet Infrastructure
Strategic Investment: C2C Handmade Market (minne)
Rapid growth in KPI
Sellers: 174,000
Products: 2.09M
App downloads: 4.41M
Transactions: JPY1.68B/Q
Japan
No1
Japan
No1
Q/Q
+36%
Q/Q
+38%
29 29
0
2
4
6
8
10
12
14
16
0
20
40
60
80
100
120
140
160
180
Sellers Products
Sellers: 174K
Products: 2.09M
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1
2012
Q3 Q4
Strategic Investment: C2C Handmade Market (minne)
Q2 Q3 Q4
Toward a
strong
No. 1
Sellers
(10,000s) Growth in number of sellers and products Products
(10,000s)
Segment Report: Internet Infrastructure
30 30
Segment Report: Internet Infrastructure
Strategic Investment: C2C Handmade Market (minne)
1.68
0.92
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
1.23.
Transaction Volume
(JPY billions)
Annual
Transaction
volume
4.4B
31 31
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
32 32
(JPY billions)
OP
Net
Sales
Segment Report: Internet Securities
Historical Performance by Quarter
Profit down
7.4% YoY
7.68 6.98
2.55 2.46
2.28
6.76
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
Goodwill amortization completed in Q3 +JPY170M
High profit
levels
maintained
33 33
Global No.1 in
FX Trading
Volume for
4 Consecutive
Years
Global
Segment Report: Internet Securities
Global Global Global
GMO CLICK Securities – FX Trading Volume
316tr 921tr 919tr 1,321tr
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4 Q2 Q1 Q3 Q4
2013
34 34
Segment Report: Internet Securities
New FX System
New FX System
Execution Speed
6x faster
4 New Currency
Pairs NZD/USD EUR/GBP
EUR/AUD GBP/AUD
Place Large Orders Trade up to
5M currency units
2/8/2016
Official release
* Execution speed measured by GMO CLICK Securities in the company’s development environment
* Availability of large orders varies according to currency pair
World’s
Fastest!
35 35
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
36 36
(JPY billions)
Segment Report: Online Advertising & Media
Historical Performance by Quarter
OP
Net
Sales
Revenue up 8.8%
Profit down 63.8%
0.21 0.12
0.35
-JPY140M
9.5 9.4
10.3
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
Recruiting investment in
technology shift
YoY
37 37
Strong Ad
Network
Performance
Net Sales by Sub-Segment
Segment Report: Online Advertising & Media
(JPY billions)
Internet Media
Online Advertising
Internet Research/Other 3.4
6.2 5.7
3.1
0.6
0.6
5.5
3.2
0.7
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
9.5
10.3
9.4
38 38
FY2015 revenue up 18.4%, profit down 54.6% YoY
Technology shift continues
FY2015 revenue up 13.5%, profit up 26.5% YoY
Strengthening own smartphone ad products.
FY2015 revenue up 15.2%, profit down 34.1% YoY
Domestic research business flat
FY2015 revenue up 15.9%, profit up 41.0% YoY
Ecommerce media double in 3 years
Online Advertising & Media Segment Companies
Segment Report: Online Advertising & Media
39 39
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
40 40
Net Sales
OP
Historical Performance by Quarter
Segment Report: Mobile Entertainment
0.78
Building Expertise
through Internalization,
Releasing New Titles
-0.45
1.48
-0.1
0.98
-0.13
収益性は改善 テストマーケティング開始
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3
(JPY billions)
Q4
-JPY300M Chain Heroes promotion
41 41
1. Overview
2. Guidance
3. Financial Results
4. Segment Report
i) Group Overview
ii) Internet Infrastructure
iii) Internet Securities
iv) Online Advertising & Media
v) Mobile Entertainment
5. Group Strategy
42 42
Strengthening strengths and Enhancing Weakness with
No.1 Products
Current Themes Overview
Internet Infrastructure Strengthening Strengths In Japan: Brand Reinforcement
Globally: Expansion into global markets
Internet Securities Strengthening Strengths Expanding market share with technology-edge
and cost leadership strategy
Online Ad & Media Introducing No. 1 Products
Focus on technology, proprietary product
development
Mobile Entertainment Introducing No. 1 Products Leveraging expertise with aim to produce hit title
43 43
Strengthening Strengths
Developments in Finance and Payment
44 44
Group Strategy
Progressing fintech strategy,
forming alliances with major
financial institutions
Securities/FX
Payment Net Banking
Finance and Payment – Alliance Strategy
45 45
Finance and Payment – Alliance Strategy
Launched on February 2
Group Strategy
46 46
Strengthening Strengths
Acquisition of New gTLD .shop
47 47
・Operators of .com .net etc.
・Only one operator per domain ・新gTLD販売世界4位
・新規登録230万件/年
Registrar
Registry
ICANN
※1) 出典 https://ntldstats.com/
※2) 2015年度当社グループ新規ドメイン
登録数合計
・Global domain management
・NPO
370 registries
2,100 registrars
・Domain registration sales
・Many registrar resellers
Group Strategy
Domain Industry Structure
48 48
↓
Crowded namespaces
Few attractive names available
.com
.net
.jp
.org
Group Strategy
Domains Until Now…
49 49
New
Domains
New Applications Opened
↓
Group Strategy
New Domains
50 50
Auction Date 28/1/2016
Auction Price USD41.5M
Contract Date H1 2016
Launch End of 2016
.shop rights acquired in new gTLD auction!
*
*Acquisition cost to be amortized over 20 years
Group Strategy
About .shop
51 51
2010
Q2 FY2010 Earnings Presentation Materials
2016
Application
Announced
Acquired
Group Strategy
New gTLD .shop
52 52
・Global strategy product
・Cannot be copied – the only one
・Long term recurring revenue
・Established sales channels
・Ecommerce gateway
・Highest industry evaluation
Group Strategy
.shop Strengths
53 53
Source: http://webhosting.info/domain-names/registrars (as of 2/8)
Global top 10 registrars
1 6 HICHINA ZHICHENG
TECHNOLOGY LTD
2 7
3 8
4 9
5 10
Group Strategy
New gTLD .shop Sales Channels
54 54
1 SHOP 2 WEB
3 SITE
4 MUSIC
5 HOTEL
6 ONE
7 BLOG
8 ECO
9 SPORT
10 LOVE
Top 10 new gTLDs
Ranking of new gTLDs by value/potential
Source: https://sedo.com/fileadmin/documents/resources/gTLD_Values_Factsheet_US_RGB.pdf
■Evaluation Basis
- Number of applicants for the new gTLD
- Number of Google searches for keywords
- Expected Cost-per-Click from online ads
- Pre-registrations at United Domain
sedo: United Internet Group domain aftermarket brand
90,000 regs (6mths)
Avg: USD37
*Based on retail price at top 5 global registrars according to our own research
(of 1,000 domains)
No.1 *
Group Strategy
.shop Value
50,000 regs (8mths)
Avg: USD13 *
55 55
Pre-registrations ranking
Source: https://www.uniteddomains.com/newgtld-ranking/
United domains: The domain registrar brand of Europe’s largest Internet Group, United Domains
Group Strategy
.shop Value
No.2
56 56
Legacy gTLD, new gTLD average registration volume
.com .net .xyz .top
Rank gTLD
No. 1 gTLD
No. 2 New gTLD
No. 1 New gTLD
No. 2
Cumulative
Registrations 123M 15.6M 1.93M 1.06M
Average Yearly
Registrations
4.1M 0.52M 0.96M 1.06M
Average Price USD17.8 USD18.9 USD14.5 USD16.9
potential 200,000 - 300,000 registrations
*
Group Strategy
.shop Potential
*Based on retail price at top 5 global registrars according to our own research
57 57
Group Strategy
Internet Infrastructure Strengths
World’s Only Internet services group
to aggregate these core Internet resources
Domain name source
Only one registry per domain
SSL Certificate source
Few globally trusted players
Domain
Registry
SSL Certificate
Authority
Overwhelming competitive strength
58 58
レジストリ
SSL認証局
Wholesale Sales
Global Strategy
Products =
Group Strategy
Global Strategy
59 59
Strengthening Strengths
Bringing our Number 1 Products to
the Global Market
60 60
Global Strategy
Group Strategy
Global
Brand
Direct Sales
=
(Infrastructure, FX)
61 61
Global Growth - Locations
17 countries, 43 locations, 730 global staff
As of 12/2015
Myanmar
10/13 Launch
Philippines
Pre-launch
Korea
Pre-launch
Singapore
10/6 Launch
Thailand
Pre-launch
NEW
Vietnam
10/20 Launch
Infrastructure
FX UK
11/11 Launch
イギリス
11/11 営業開始
Hong Kong 11/9
Z.com Forex
(Re-branding)
Group Strategy
62 62
Global Growth: Global Net Sales
Global Net Sales
up 52.4%
Global Net Sales
4.0%
Net
Sales
1.26
0.88
3.0%
3.9%
Global
Sales
Ratio
1.21
4.0% (JPY billions)
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q2 Q1 Q3 Q4
Group Strategy
63
Internet for Everyone
64
This document includes projections based on expectations, premises and plans as of February 8, 2016. These projections may
differ from actual results due to factors including changes in the global economy, competition, exchange rate fluctuations, natural
disasters and other unforeseeable events. Some of the figures given, such as market share are based on our own calculations.
These figures may differ from research agency figures.
Information contained in this document is provided for information purposes only and does not constitute solicitation of investors.
Further, results forecasts and other forward-looking statements are based on premises that include risks and factors that are
largely indeterminable. Please understand that actual results may differ significantly as a result of forces including economic
conditions and market environment. No responsibility for any reason is accepted for damage sustained as a result of actions taken
based on this information.