Annual Report 2023

2023

AnnualReport1

Annual Report 2023

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01

02

Adyen at a glance

03

Management report

Governance

Message from the Co-CEOs

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Steering our business responsibly

15

Corporate governance72

Highlights in 2023

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Committed to driving positive change

18

Management Board

78

Adyen at a glance

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Making an impact with our technology

19Supervisory Board

80

Business strategy

8Community impact

24

Report of the Supervisory Board

82

Discussion of financial results

12

People & culture29

Remuneration report

90

Financial objectives

13

Responsible conduct

41

Risk management

54

Statement by the Management Board of Adyen N.V.

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04

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Financial statements
Financial statements table of contents

Other information
101

Other information

162

Independent auditor’s report

163

Glossary

182

GRI Index

183

EU Taxonomy report

185

Disclaimer: This document is only a "printed version" and is not the official annual financial
report, including the audited financial statements thereto pursuant to article 361 of Book 2 of
the Dutch Civil Code. The official annual financial report, including the audited financial
statements and the independent auditor's report thereto, are included in the single reportpackage which can be found via investors.adyen.com/financials.
In case of any discrepancies between the printed version and the annual financial reporting
package, the aforementioned financial reporting package prevails. Note that the auditor's
opinion included in the printed version does not relate to the printed version but only to theofficial annual financial reporting. No rights can be derived from using the printed version,
including the unofficial copy of the auditor's report. Our auditors did not determine (nor dothey need to) that the printed version is identical to the official version.

Annual Report 2023

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Message fromthe Co-CEOs
Dear reader,
As we look back on 2023, it is clear to us that this was a successful
year for our company. It is one that we will remember both for its
valuable learnings and our continued discipline along the way.
However, we do not look at our business in isolation, and havecontinued to see a range of global conflicts, humanitarian crises, andclimate emergencies affect many parts of the world. We did not turnaway from these difficult realities, but rather further tapped into ourpeople and platform to drive positive change. We believe that this is
not just our responsibility, but one that should be shared by all
businesses.
We also recognize that our ability to meaningfully respond to suchglobal crises relies on the strength and stability of our business. In
past Annual Reports, we talked extensively about how we are shaping
Adyen for long-term success. In 2023, this meant building upon oursolid foundation to bring us into our next phase of scale. Fromdeveloping our platform entirely in-house, to investing in our banking
and branch licenses, opening new regional offices, and continuously
solidifying our commercial reputation, we have been playing the longgame in the lead-up to what has been a critical year for us.
As a business, we experienced our own unique dynamics throughout
the year. Market volatility and shifting customer priorities led us toincorporate meaningful changes into the way we externally engage.
As was the case during other tumultuous periods that have occurredsince our founding – the COVID-19 pandemic being a prime example– this year again proved that we are capable of effectively addressing
and adapting to the landscape around us. As a partner to ourcustomers, one of our key differentiators is our ability to identify
opportunities amid complexity. In 2023, we applied the same mindset
to our own approach by embracing the call to thoughtfully evolve. Our
Investor Day in San Francisco was one such expression. By providing
deeper insights into our business performance and objectives in
November, we were able to improve our dialogue with the investor
community and further demonstrate that we are proceeding with aclear vision toward our promising horizon ahead.
Nowhere was our long-term view more apparent than in our countercyclical decision to build our global team at an accelerated rate. 2023
marked the close of a two-year initiative in which we significantly
invested in positioning our team to become its most far-reaching andeffective to date. We are proud to have remained laser-focused on
executing against our strategy, which made this the year we
successfully brought to life our plan of expanding our global team toits next maturity level.
This hiring initiative took place as the broader tech industry took
measures to reduce their team sizes. Fortunately, our healthybusiness standing enabled us to proceed in the way we knew would
be essential to achieving our growth ambitions: by doubling-down on
the necessary technical and commercial hires, particularly in offices
outside of Amsterdam. Along the way, we benefited from a favorable
talent market as a tailwind. By the end of the year, our global team
totaled 4,196 FTEs – a quantity with equal parts quality, as we went togreat lengths to ensure Adyen’s well-known talent standards
remained at the high level we pride ourselves on upholding.
To ensure we preserved our exceptional talent bar, we continued toprioritize Formula fit, rolled out a standardized global onboarding
program, and conducted final interviews with members of ourManagement Board or Global Leadership Team (GLT). In 2023, thisgroup of senior leaders was more diverse than ever before, and theirwealth of perspectives, backgrounds, and experience levels
thoroughly enriched the recruitment and decision-making process.
With their dedicated involvement, we ended the year with a global

Annual Report 2023

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team equipped with the skills required to deliver on our key
growth ambitions.

broaden their decision-making resources, reduce fraud, andultimately drive end-conversion uptick.

We know that facilitating fast and effective collaboration at a larger
and more international company requires a deliberately global
mindset. For that reason, we continued to champion an office-first
approach across our 27 locations and enjoyed coming together again
for our ‘Connect’ event during the summer. During this week-long,annual gathering, we enabled in-person connection through a rangeof content-rich programming spanning our business priorities andstrategy. 'Connect’ presented an ideal opportunity to host many of ourglobal team and functional meetings in person, and organizedvaluable team-building and networking exercises. During the event,many colleagues also utilized their time to make a wider impact, witharound 2,600 volunteering hours facilitated for worthwhile causes.

Alongside our cost optimization capabilities – a benefit we have more
actively incorporated into our sales and account management
strategies – 2023 saw us roll out a number of exciting innovations.
This year, we satisfied consumer demand for more sophisticated inperson payment experiences by launching Tap to Pay on Android.
This software-based solution allows both SMBs using Adyen for
Platforms and enterprise Unified Commerce customers to convert
any compatible Android device into a payment terminal accepting
contactless payments, with benefits ranging from enhanced checkout
experiences, to more streamlined operational processes, and reduced
hardware costs. Following the launch of Tap to Pay on iPhone in the
US in 2022, we also expanded this service into the UK, France, theNetherlands, and Australia over the course of the year.

Nurturing our relationships was not only a priority internally, but also
across our global customer base. This year, we drove forward ourcornerstone land-and-expand strategy, which continued to unlock the
majority of our annual growth – more than 80% of which came fromexisting customers once again. The strength of this approach lies indemonstrating the upfront value of our offering, then proving what ourpartnership can do on a larger scale and longer-term, securing
notable wallet-share gains as we go.
To meet our customers’ needs, we always listen carefully to theirpriorities, which shifted notably during 2023. Their valuable insights
helped shape our product roadmap. Our customers’ increased
attention on cost optimization allowed us to leverage our single
platform to help lower their total cost of ownership. From network
tokenization, to optimized debit routing, and a wide range ofalternative payment methods, our single integration increased
conversion and enabled significant operational efficiencies for ourcustomers. Our ability to save on costs was also seen in our advanced
authentication suite, which in 2023 expanded to include a Data-Only
and Trusted Beneficiaries functionality, empowering businesses to

Beyond innovating across our product offering, we further served ourcustomers by deepening our local presence and end-to-end
capabilities throughout the regions in which we operate. This year, wewere pleased to be among the first to receive certification to utilize the
FedNow(R) Service, the Federal Reserve’s instant payment
infrastructure. Sitting at the forefront of fund transfer, this certification
sharpened upon our capabilities in order to keep our customers at theindustry's cutting-edge, and further optimize costs throughout thetransaction flow along the way. In a similar vein, in the second half of
this year, we expanded our global acquiring footprint by obtaining our
UK license, with which we were able to obtain direct access to the
Bank of England's (BoE) centralized clearing and real-time payment
rail (the Faster Payments Services, or FPS).
Lastly, in 2023, we continued to ensure we were meeting ourcustomers’ needs while honoring our shared responsibility to protect
the future of our planet and its people. The principal embodiment of
this commitment is our annual pledge to dedicate 1% of our annual
net revenue to initiatives that support the United Nations’ Sustainable
Development Goals (UN SDGs). Through our donations product,

Giving – which you will read about in greater detail later in this report –we spent 2023 empowering more businesses to incorporate ourleading donation technology into their payment flows. Bolstered by
the resources of our 1% fund, we ensured that 100% of contributions
reached the intended nonprofits by absorbing scheme fees that would
otherwise dilute donations before they reach the intended parties.
2023 was certainly one to be remembered. We are proud to havenavigated its polarities with the continued focus, resilience, andadaptability that Adyen considers second nature. We took many
learnings with us and ended the year as a stronger team, company,
and partner as a result of having gained them. Still, we would be
remiss to close only on a note of positivity. After all, we are living intimes of persisting unrest, and it is a testament to our global team that
we continue to find ways to support the planet and its people amid theworld’s challenges.
As we look ahead to 2024 and beyond, we remain committed todriving positive change wherever we can. We stand firmly behind thelong-term vision for our business, determined and ready to propel
ourselves closer to realizing it. We’ve reached the next phase of scale,
yet this is only the beginning. Now is the time to keep our heads down
and execute on our substantial opportunity. 2023 marked anotherdecisive step on the path to getting there.
Pieter and Ingo

Annual Report 2023

Processed volume
2023

26% YOY

5

2021

2022

2023

516.0 BN767.5 BN970.1 BN2023

22% YOY

•
•

2021

2022

2023

1,001.5 MN

1,330.2 MN

1,626.1 MN€ 1.6 BNEBITDA*2023

2% YOY 46% MARGIN€ 743 MN
* Refer to Note 2.4 for further explanation on the non-IFRS measures reported by Adyen.

Reaching the next stage of scale across our team•

€ 970.1 BN
Net revenue*

Highlights in 2023

Empowering our customers’ ambitions with product innovation
•
•

•

2021

2022

2023

630.0 MN

728.3 MN

743.0 MN

We concluded a two-year accelerated investment period in
our global team, which brought the company to a total of
4,196 FTEs at the end of 2023.
We continued to prioritize hiring outside of Amsterdam
across our tech and commercial domains.
We remained laser-focused on maintaining our high talent
standards, keeping Formula fit top of mind as we scaled ourcompany culture and ways of working.
With more than 80% of our growth in 2023 coming fromexisting customers, we reaffirmed the efficacy of our landand-expand approach.
We proactively met our customers’ needs by investing in arange of new and existing functionalities, including
alternative payment methods, platform automations, andoptimized routing.
We further deepened our global presence to support ourcustomers' expansion efforts, as exemplified when we
obtained our UK banking license in H2.

Driving positive impact by tapping into the potential of ourplatform and people•••

We developed Campaign Manager – the biggest update to our
Impact technology to date – allowing customers to scale theircharitable donations and positive impact with greater flexibility.
In its first year, our Global Volunteering Time Off program
saw global Adyen teams engage in a range of volunteeringand impact initiatives in their local communities.
To optimize our 1% fund, we scaled and doubled-down on
2022 projects including absorbing scheme fees, donation
matching, and volunteering with local nonprofits.

Annual Report 2023

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Adyen at a glance

6Annual Report 2023

Adyen at a glance
Adyen is the global financial technology platform of choice for leadingbusinesses. With a single integration, Adyen manages the entire
payments lifecycle, encompassing gateway, risk management,
processing, issuing, acquiring, and settlement. This comprehensive
approach includes direct connections to local and international cardand banking networks, underpinning Adyen’s role as a strategic
partner across multiple verticals. With a strong focus on security,
performance, and continuous innovation, Adyen’s ambition is toenable businesses to succeed in the future of global commerce.
Powered by Adyen’s unique data ecosystem, both in-person anddigital-native businesses can meet today’s consumer expectations
while increasing efficiency and growth. Adyen generates revenue
primarily through processing and settlement fees for its gateway andacquiring services, respectively. For a detailed breakdown of Adyen’s
revenue structure, please refer to Note 2, ‘Revenue and segment
reporting’ in the attached Consolidated Financial Statements forfurther insights.

7

Annual Report 2023

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Business strategy
At Adyen, our success is directly linked to that of our customers.
This connection is why we prioritize partnering over the long-term –a philosophy reflected in our long-standing land-and-expand strategy.
By proving our value upfront and progressively broadening our scope
as we grow together, we keep collaboration at the core of ourapproach, actively addressing our customers’ challenges andsupporting them in reaching their ambitions over time.
In 2023, over 80% of our growth came from existing customers.
Our collaborations expanded to encompass new product features,channels, and regions. Attributing the large majority of our expansion
to pre-established partnerships serves as another testament to ourland-and-expand strategy. It reinforces a consistent trend observed
every half-year since our IPO in 2018, next to a steadily low volume
churn of less than 1%.
To continuously increase share of wallet with our customers, wehave structured our engineering and product organization to mosteffectively support our commercial strategy. Our highly autonomousand impactful domains consist of product and technical teams that
understand, prioritize, and address customer needs. Their solutions
ultimately drive our opportunities and new partnerships.
In addition to this, to capitalize on the highly specific technicaladvantages we bring across all products, we have ‘pillarized’ our sales
force – moving it toward a more functional structure. Rather thanselling our single platform at the highest level, our commercial team is
becoming better positioned to tailor our offering and functionality to
the specific needs of each current and potential customer.

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DigitalIn our Digital Pillar, we aim to be the first-choice financial technology platform for enterprises, leading the global shift to effortless
payments in the digital economy. Recognizing the need for online payments to evolve continuously with new payment methods,
regulations, and technology, we enable our customers to simplify complexities through our single, integrated solution. In the coming
year, we will continue to focus on adding value to our merchants beyond processing, enhancing performance, and driving costsavings at scale.
Unified Commerce
Our Unified Commerce solution continues to power sophisticated cross-channel experiences, providing valuable data insights andunparalleled point-of-sale (POS) technology. As businesses around the world increasingly digitalize, our solution bridges multiple
geographies, powering seamless in-store, digital, and in-app payments through our single platform. Looking ahead, our focus is on
facilitating intricate customer journeys, reducing complexity, and optimizing checkout funnel performance by leveraging Adyen’s
data network.
Platforms
Within Platforms, our embedded payments offering provides SMBs with a high-quality, multi-channel-solution, serving as agateway to broader adoption of our EFP suite. Our ambition is to elevate platform businesses to reach their peak potential byenabling maximum competitive advantage, primarily through the dual strengths of our superior Digital and Unified
Commerce solutions.

Across our three key commercial pillars – Digital, Unified Commerce,and Platforms – the Adyen team looks within our relationships toassess customer needs, as well as externally to uncover market
trends, challenges, and opportunities.

and create the solutions our customers require – but also do sowhen they are required. This can involve implementing new payment
methods or creating entirely new functionalities, to name just a
few examples.

Innovating across these pillars enables us to maintain our leading
position in a fast-paced and ever-evolving commercial landscape.
Our end-to-end, in-house built tech stack is engineered for speed andflexibility. Having this proprietary platform provides us with fulltechnical autonomy, meaning we not only continuously iterate, adapt,

While our journey started in online payments, we by no means
consider this pillar to have reached its full maturity. In an increasingly
complex digital landscape, which is often distinct across regions, wemust stay ahead of continually shifting payment preferences,
regulation, and technology. In doing so, we create value for ourcustomers by simplifying the complexities they must address, andhandling them on their behalf. With our consolidated reporting,reconciliation, local acquiring, and more, we are uniquely positioned
to simplify the payments flow for our merchants and drive costsavings at scale. We also continue to expand our offering and add
value beyond processing by combining payments, data, andbanking products.
By supporting businesses across in-store, digital, and in-app
channels via a single integration, our customers gain strategic
advantages including: simplified multi-region processing, scalable
opportunities in new markets, optimized total cost of ownership, andthe insights needed to transform transactions into meaningful
relationships. Our platform’s data ecosystem is also highly valuable toUnified Commerce (multi-channel) customers that benefit from ourholistic view of consumer transaction activity. In this way, our unique
Unified Commerce solution is designed to empower businesses byenhancing their understanding of consumer behavior across diverse
sales channels, facilitating seamless customer journeys and capturingrich insights along the way.
Through our Platforms offering, we bring the unparalleled strengths of
our enterprise-grade software to the long-tail of the market. By taking
a white-label approach to our far-reaching services, Adyen enables
platform businesses – and the small and medium-sized businesses(SMBs) utilizing them – access to our end-to-end financial ecosystem.
With more than 85,000 platform business customers currently served,
this is a high-potential gateway to a section of the market we can now
capture indirectly.
In 2023, we increased our focus on rolling out our Embedded
Financial Product (EFP) suite, which equips platform businesses todeliver superior financial experiences to their users. With options
including business bank accounts, cash advances, pre-paid spend
cards, and issued debit cards, our services allow platforms to not only
further differentiate their offerings and increase stickiness – but also
elevate their users’ payment experiences in a single destination.

Annual Report 2023
Our long-term view of building our business continues to reap new
rewards. However, inherent to this big-picture horizon view is also
accounting for what we see occurring in the world around us. At
Adyen, we not only make good decisions for the sake of ourcustomers and company – we also consider the long-term needs ofthe world at large. After all, there will be no world to succeed in if we
do not protect it along the way.
To build a solid foundation for this ambition, we conducted a Double
Materiality Assessment in 2023 to gain a deeper understanding of
which Environment, Social, and Governance (ESG) topics matter mostfor our long-term sustainability and value creation. The results of thisassessment are helping us build upon the fundamental tenets of ourlicense to operate, the safety and well-being of our employees, as well
as a workplace environment in which people are encouraged to speak
up, maintain ethical standards, and welcome different perspectives.
The findings from our 2023 Double Materiality Assessment also led to
us officially articulate these dimensions of the business in the form offour new strategic objectives, which we aim to actively execute on up
to and beyond 2030. These are:1.

DEI: Diversity and inclusion are a shared responsibility forwhich the global Adyen team is collectively accountable.

2.

Community: We generate a positive impact in the communities
where we operate.

3.

Environment: Sustainability is a key decision-making factor inoperating and growing our business.

4.

Impact technology: We tap into our platform to drive
environmental and social change.

We want each member of our global team to understand the uniquerole they play in contributing to these priorities, as well as why they are
our shared company priorities to begin with. By weaving relevant
programs and initiatives into all layers of our business, we encourage

10
our employees to continue prioritizing sustainable, long-term value
creation and socially responsible decision-making.
To make a sustainable impact not only within our company, but also
throughout the world around us, we have annually committed 1% of
our net revenue to causes that support the United Nations’Sustainable Development Goals (UN SDGs). By opting for a variable
percentage rather than a fixed annual amount, we can be sure that as
our business grows, so too will our impact scale in parallel.
This commitment has in part been used to further enable our Impact
technology, which connects businesses, consumers, and nonprofits
around the world. By developing this functionality, we have tapped
into the unique potential of our platform, people, and partnerships toaccelerate positive change for the world’s most pressing causes.
While processing donations, we ensure that 100% of consumer
contributions reach the intended charity. It has been hugely
encouraging to witness an increasing appetite for our Impact suite,with 113 merchants now using Adyen Giving, 149 nonprofits
onboarded into our NPO portfolio, and 11 Moments that Matter
campaigns launched throughout 2023.
Adyen is at an exciting moment in our history. Though we havedemonstrated our technological capabilities, we currently only
account for a small percentage of market share even in our mostcommercially established regions – meaning our opportunity to growremains substantial. We see significant untapped potential in highgrowth regions like the US, as well as in nascent countries like Brazil,
Japan, and India, where our offering is in its earliest phase of local
adoption. We also continue to support Chinese brands that wish tosell internationally outside of China, and see ongoing opportunities to
do so. Across our product suite, we have a long runway ahead in termsof what we can achieve through continued product innovation, even in
our longest-standing platform areas, such as our Digital pillar.
With an exceptionally strong team across our 27 global offices, andour combination of global and local expertise, we are well-equipped topartner with customers of every size, industry, and region. Along theway, we plan to accelerate positive change from the inside-out of ouroperations, guided by our strategic priorities. Throughout this report,
you will read in greater detail the philosophy behind our approach,
the goals we have set, and the progress we are proud to have madethis year.

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“I love the rush of excitement you get when you
start a new adventure. There’s something sosatisfying about tackling problems with an
unknown solution. Now that I think about it, I’m
always chasing that feeling — and Adyen givesme the perfect environment to find it. I thinkthat’s why it’s the right place for me to be.”Jeyne — SVP of Merchant Finance & Treasury

Annual Report 2023

Discussion offinancial results
Processed volume for 2023 was €970.1 billion, up 26% year-on-year.
Following the precedent set in previous years, the majority of ourprocessed volume growth once again stemmed from the success of
our land-and-expand commercial strategy, as we grew further withexisting customers.
In 2023, our point-of-sale (POS) volumes were €159.9 billion,
comprising 16% of total processed volume, up from 15% in 2022. This
growth reflects the persisting appetite for advanced, in-person
experiences – a demand permeating new verticals every year.
Net revenue was €1.6 billion for the year, up 22% from 2022.
Full year take rate for 2023 was 16.8 bps, down from 17.3 bps
compared to 2022. This decline is a natural outcome of our tiered
pricing model, in which we embrace the land-and-expand strategy
that fuels our growth.
Operating expenses for 2023 came in at €944.2 million, up 42% yearon-year. The largest contributor was employee benefits, which totaled€594.0 million, up 56% year-on-year. To achieve our long-term
ambitions, 2023 was the second year of accelerated investment in our
global team. Adyen’s global team totaled 4,196 FTEs at the end of theyear, up from 3,332 FTEs at the end of 2022. With 2023 marking thefinal stretch of our significant headcount growth, we intentionallyslowed hiring as our heightened investment period came to a close.
Looking ahead, it is our intention to grow our team by a couple ofhundred net-new joiners in 2024.
In 2022, we announced that we will annually commit 1% of our net
revenue to initiatives that support the UN SDGs. This year, this12
commitment resulted in an additional amount of €16.3 million for theyear. During the year, approximately €10.1 million of the funds werespent on a range of initiatives and nonprofit organizations. An amountequal to €13.2 million will therefore carry over into 2024.
Full year EBITDA was €743.0 million for 2023, up 2% year-on-year.
Full year EBITDA margin was 46%, compared to 55% in 2022, driven
by employee benefits exceeding net revenue growth as we continued
to hire at an accelerated rate.
Net income was €698.3 million in 2023, up 24% year-on-year. We
generated significant interest income of €246.4 million during theyear, primarily stemming from our balances at central andcommercial banks.

Figure 1
Net revenue per region (in EUR millions). Comparative figures have been updated toreflect the Net Revenue geographical breakdown as disclosed further in Note 2.4
Non-IFRS financial measures, in the 2023 Consolidated Financial Statements.

+22% YoY+25% YoY+28% YoY+8% YoY

908.2

746.8

2023 free cash flow was €639.5 million, up 5% year-on-year. Full year
free cash flow conversion was 86%, up 4% year-on-year.
CapEx was €69.7 million and 4% of net revenues for the full year.
Owing to the fact that our investments are not always linear orbalanced throughout the year – but rather executed in line with ourtechnical needs – CapEx spend was higher in H1 2023 than H2 2023.

429.5
343.2

142.4

EMEA

North America
2022

182.3

Asia-Pacific2023

97.8 106.0

Latin America

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Financial objectives
Adyen’s substantial long-term opportunity remains in place, and wecontinue to build the business guided by decisions that benefit us overthat horizon. We updated our financial objectives at the time of ourInvestor Day in November 2023. Those standing financial objectives
remain unchanged.
Net revenue growth:
We aim to continue to grow net revenue annually between the lowtwenties and high-twenties percent, up to and including 2026.
EBITDA margin:
We aim to improve EBITDA margin to levels above 50% in 2026,
as we expect to benefit from operating leverage inherent to ourbusiness model.
Capital expenditure:
We aim to maintain a sustainable capital expenditure level of up to 5%of our net revenue.

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02

Management report14Annual Report 2023

15

Steering ourbusiness responsibly
Introduction
Since our founding in 2006, Adyen has been committed to building
our business for the long term. This focus on longevity serves as acompass guiding our decision-making – and is an intentional
approach that reaches beyond our core business. Along the way, wetake seriously the trajectory of the world around us. Innovation powers
our product and drives our technical solution forward, but we believethat this spirit must also extend to our sustainable long-term value
creation. We firmly hold that everyone has a role to play in protecting
the planet and its people, and consider a sustainable approach
fundamental to every businesses’ license to operate – including
our own.
Later in this report, you will learn how we remained committed tobuilding a responsible business across our operations, product,
people, and nonprofit partnerships in 2023. While we are pleased withour continued progress, we believe that embedding this mindset into
the fabric of our business is an ongoing, ever-evolving process. Thereremains a long way to go. However, each year, we look forward to
deepening our understanding and iteratively improving our practices.

disclosures mandatory starting from 2025 (financial year 2024). As alarge company, Adyen is required to increase its transparency into
non-financial information, in addition to identifying both the impact ofAdyen’s business on global ESG issues (inside-out) and the impact ofsuch issues on Adyen's long-term health and longevity (outside-in).
Following the 2024 financial year, Adyen will mandatorily increase its
disclosures in line with the requirement of the Corporate
Sustainability Reporting Directive (CSRD). Further details on how
Adyen is preparing for this extensive regulation change are outlined
further below.
Adyen’s 2022 materiality assessment marked an important step in our
long-term ambition to build an ethical business and create
sustainable value for our stakeholders – one we remain committed tobuilding upon. For that reason, in 2023, we were pleased to iterate
and improve our methodology in order to deepen our understanding.
This year, we expanded our dedicated ESG Working Group, which
comprises members from Adyen’s reporting, corporate risk, legal,communications, and sustainability teams. This ESG Working Groupwas responsible for driving 2023’s more extensive Double Materiality
Assessment, with the primary objective of identifying which ESG
matters are most material to Adyen from both an impact and risk oropportunity perspective. While maintaining a centralized approach,the assessment was performed at the group level, taking into
consideration the activities and presence of Adyen’s subsidiaries
and offices.

Materiality assessment
To gain a stronger understanding of which Environment, Social, and,Governance (ESG) topics matter most for long-term sustainability andvalue creation, Adyen conducted its first materiality assessment in
2022. Alongside our own ambitions to refine our ESG activities andambitions, European regulation evolved in parallel to make ESG

Note: For a more comprehensive understanding of some of the concepts andmetrics used throughout this annual report, please refer to the glossary on
page 182.

Annual Report 2023

Approach
Adyen's 2023 materiality assessment was conducted with therequirements of the Corporate Sustainability Reporting Directive(CSRD) in mind. While the CSRD officially applies to disclosures from2024 onwards, Adyen is taking steps today to prepare for theupcoming disclosure requirements.
Below is a summary of the methodology followed by the ESG Working
Group to complete the 2023 materiality assessment, which aligns, asmuch as possible, with the available guidance from the newly adopted
European Sustainability Reporting Standards (ESRS).

Impact and financial materiality
assessment
The impact and financial materiality assessment sought to gauge thesignificance of these topics within the dual framework of 'financial'and 'impact' materiality principles. The assessment adhered to the
double materiality principle, considering both internal (inside-out) andexternal (outside-in) perspectives.
For reference, we followed these important definitions as part of
the assessment:
Impact materiality: When a sustainability topic is material from an
impact perspective, it means that the Adyen has actual or potential,
positive or negative impact on people or the environment.

16

payments, financial services, and technology industry. Leveraging
insights from the 2022 materiality assessment, a refined list of 30
topics was created, setting the foundation for the 2023 assessment
and providing continuity for subsequent years. Next year, we will carryour 2023 findings into 2024, with the aim of annually iterating andbuilding upon our foundation.
To complete the assessment, the ESG Working Group collected
information from diverse sources, such as prior disclosures, internal
web pages, and existing policies, in order to establish apreliminary context.
When looking at the criteria over which to assess these topics, theimpacts, risks, and opportunities were assessed. For the impact
materiality assessment, the criteria considered were severity (scale,scope, and irremediable character) of the events and the likelihood ofsuch events occurring. For financial materiality, the criteria
considered were scale, scope, and likelihood. In order to conduct acomprehensive assessment, an impact, risk, and opportunity analysis
was performed across the full list of 30 topics. Throughout thisassessment, Adyen identified a total of 8 material topics. It is worth
mentioning that the criteria for financial materiality and impact
materiality are distinct. These unique criteria guided the materiality
assessment by quantifying the materiality of impacts, risks, andopportunities relevant to Adyen in order to identify the material topics.

Financial materiality: A sustainability topic is material from a financial
perspective if it triggers or may trigger material financial effects on
Adyen. This is the case when it may generate risks or opportunities
that have a material influence on Adyen’s cash flows, development,
performance, position, cost of capital, or access to finance.

To enrich the assessment, internal experts were identified for each
topic and invited to participate in interview sessions exploring Adyen's
impacts, risks, and opportunities. The internal experts also offeredinsights into Adyen's approaches, policies, and governance for eachsustainability topic. The interviews with internal experts andstakeholders further enriched the assessment process, whichfeatured a deepened level of consideration – the first time this depthof dialogue was formally conducted.

The initial step involved compiling a comprehensive list of ESG topics
derived from the ESRS and peer research, specifically tailored to the

ESRS guidelines strongly encouraged Adyen to also involve external
stakeholders in the materiality assessment process. External

stakeholders can provide unique insights, and their views can offer amore holistic perspective on the company’s societal andenvironmental impact, in addition to their distinct perspectives on
potential risks affecting the company. The main objective inincorporating these perspectives into the assessment was to ensure awell-rounded approach was taken in assessing and scoring theimpact, risk, and opportunity of the ESG topics.
Following this line of thinking, in 2023, the working group short-listed
and invited a select number of external stakeholders to participate in
the assessment and provide their unique viewpoints through astructured engagement process.
Once the feedback of all stakeholders was reflected in theassessment, the 2023 materiality assessment was complete.

Material topics
Adyen’s 2023 materiality assessment resulted in the identification of 8
material topics. Below is a summary of the topics identified based on
the impact, risk, and opportunity considerations. This exercise led to
new insights and helped us develop a stronger, more concretely
founded sustainability strategy. Throughout this report, you can readabout each topic in greater detail, including why they are material,
how these topics are managed, and relevant progress.

Annual Report 2023

17

ESG governance and oversight
Diversity, Equity, and Inclusion (DEI):

Data privacy:

We believe that robust and effective DEI policies and commitments
enhance our team’s working conditions, morale, and the overall well-beingof our workforce. Our goal is to have everyone contribute to building acompany with diversity, equity, and inclusion at its core, and to continuously
embed it throughout the organization. This topic is actively managed by
Adyen throughout the employee lifecycle, from the recruitment process tointernal mobility, and more. For more information, see page 32.

Data privacy poses a risk to Adyen given our inherent exposure to handlingsensitive data. It is critical that we properly oversee and manage the privacyof data related to shoppers, customers, suppliers, and employees at thehighest standard. For more information, see page 52.

Community impact:

Information security:

Our volunteering program grants all employees at least a four-day
allowance to engage in local community projects. These initiatives aredesigned to generate a positive impact and create a multiplier effect on
both people (internal and external) and the environment – particularly in thecommunities in which we operate. For more information, see page 24.

Adyen recognizes the criticality of safeguarding sensitive information on acontinuous basis to maintain its operational license. The potential risk of
intrusion or disruption is kept limited due to the safeguards we have put inplace to mitigate and promptly escalate incidents when or if they occur. For
more information, see page 49.

Environmental sustainability:

Anti-financial crime:

Adyen's primary climate change impacts stem from greenhouse gas (GHG)
emissions associated with our operations, including energy consumption,purchased goods and services, and business travel. While Adyen's net
emissions remain relatively modest compared to other institutions andcorporations, we recognize that even limited impact carries a serious
responsibility and the importance of playing a role in addressing ourcontributions to this global challenge. For more information, see page 42.

Due to the nature of Adyen’s business, there is an inherent risk of exposure
to illegal financial activities. Adyen invests significant resources to minimize
the likelihood and impact of financial crime occurring through our platform,
products, and services. These policies and procedures contribute to theintegrity of the financial system for society and individual consumers. For
more information, see page 47.

Impact technology:

Learning & development (L&D):

Adyen utilizes our core technical expertise in payment processing and thereach of our platform to unlock collective fundraising for global nonprofitsthat support the United Nations’ Sustainable Development Goals (UNSDGs). By investing in developing this solution to enable wide-scale
donations, our platform positively impacts people and the planet. For more
information, see page 19.

We believe that by investing in a high-quality, innovative, and equitablelearning and development program, which prioritizes both evergreen andtopical learning, we ensure that our team members sharpen the skills theyneed to innovate the best technology for our customers. Maximizing
individual impact also enables us to remain critical about the number ofpeople needed on our global team. For more information, see page 36.

Building an ethical business means establishing and maintaining solid
governance practices. With this well-established understanding,Adyen has a two-tiered board structure enabling sound oversight,
transparency, and accountability. The governance of specific ESG
topics is distributed amongst various Management Board members
and generally overseen by the Supervisory Board as the highest
governance body.
Adyen’s ESG Working Group collaborates closely with theManagement Board and the Supervisory Board to ensure there iscontinuous awareness and understanding of the three dimensions of
ESG across our organization, and that there are ongoing efforts tocontinually improve our reporting practices. The Working Groupsupports Adyen’s ongoing commitments to ESG matters by assessing
our relevant ESG-related risks, opportunities, and impacts. This
includes expanding upon and refining Adyen’s 2023 Double
Materiality Assessment. The findings from this assessment contributeto shaping the company’s long-term mission, business activities, andvalue chain.
The ESG Working Group meets weekly and periodically holds
sessions with identified subject-matter experts to track progress anddrive success in their respective material areas. Throughout the year,
the Working Group regularly reported on its 2023 activities to Adyen’s
CFO, and updated the Management Board on relevant ESG matters.
The company’s overall ESG strategy and activities are discussed at
Supervisory Board level at least on an annual basis. In 2023, ESG was
discussed in three Supervisory Board and committee meetings —during the materiality assessment process, the ongoing preparations
for the 2023 Annual Report, and as part of the annual strategy
session. In two meetings, the external auditor was also present toreview and assess the company’s current preparations for the
Corporate Sustainability Reporting Directive (CSRD).

Annual Report 2023

18

Committed to driving
positive change
As described in our Business Strategy section on page 8, alongside
our expertise in financial technology, we are committed to utilizing ourunique position to support economic growth, sustainable
development, and climate action around the world. This ambition
stems from our firm belief that every business has a role to play inprotecting the planet and its people. No matter a company’s industry,size, or location, we all have a shared responsibility to work together toshape a sustainable future.
To materialize this ethos, in 2022, we announced that Adyen will
annually commit 1% of our net revenue to initiatives that support theUnited Nations’ Sustainable Development Goals (UN SDGs). Byaligning with this global framework, our fund has become a vehicle foraccelerating sustainable change where it is needed most.
This year, we committed an additional amount equal to €16.3 million
to support the UN SDGs. As this was only our second year utilizing 1%of our net revenue to support the UN SDGs, 2023 marked anotherperiod of intense learning, expanding our awareness, and evolving.
Each year, our understanding of the best way to contribute thisamount and any rolled-over accumulation strengthens as wepermeate deeper in the global nonprofit organization (NPO)landscape, advance our Impact technology, and partner in our
local communities.
At its core, the 1% is intended to generate maximum, long-term
impact. Thus, in 2023, we scaled and doubled-down on supporting
the projects we piloted in 2022. These initiatives included absorbing
scheme fees, donation matching, volunteering with local nonprofits,
and running our Accelerator program in key geographies around theworld. We also identified and pursued new opportunities, such assustainability grants. What we learned throughout this process is thatit takes time and resources to intentionally spend and track theoutcomes of our investments, with some 1% ambitions potentially not
being fully realized for several years. Nevertheless, we remaincommitted to spending the funds on causes where the need isgreatest, and where we can pair this resource with our technology,
talent, or network to increase the total impact.
To ensure we remain on track with this ambition and criteria, weformalized our governance by establishing a 1% Working Groupconsisting of representatives from our Impact technology andSustainability teams, which together report their progress to thegroup and to Adyen’s CFO. Up next in this report is a recap of the
primary channels the 1% was spent on this year, which we lookforward to building and iterating on in the years to come.

Annual Report 2023

Making an impact
with our technology
Our aim is to give every payment the opportunity to have purpose.
In a consumer culture comprising increasingly digital payments –a landscape in which we built the forerunning technology – we are
uniquely equipped to introduce online donations to digital consumers,
and optimize their efficacy along the way. To realize this meaningful
opportunity, Adyen’s Impact technology was developed as part of oursingle platform to enable businesses to seamlessly integrate
donations into their payment flows.
In the process, we use our 1% commitment to absorb scheme andinterchange fees when donations pass through our Giving product –which would otherwise be diluted in the process – to ensure 100% of
the intended funds reach the end cause. We do so by creating distinct
payment routes, which ensure donations and payments areprocessed as different transactions in our backend, without sacrificing
ease of integration for our customers on the frontend.
By transforming the traditionally complex process of accessing global
digital consumers, we ease the operational burden that hinders
nonprofits that are in need of business partnerships, but that may nothave the resources to form them. When choosing which nonprofits to
onboard onto our Impact portfolio, we focus on:
1.

Nonprofits chosen by our customers, which may include longstanding relationships or those that are brand-resonant.

2.

Global nonprofits that are well-equipped to address the world’s
biggest issues and emergencies.

19

3.

Locally relevant nonprofits that help customers and our
employees to make a positive impact on the immediate
community.

Across all categories, we have thorough selection and onboarding
criteria. Adyen’s due diligence process includes stringent KYC (knowyour-customer) and registration requirements. Nonprofits must also
support at least one of the UN SDGs, and global NPOs should ideallyhave specialized emergency response. At the same time, we look for
nonprofits that embody humanitarian principles, including neutrality
and impartiality.
In 2022, our Ukraine emergency campaign became our largest to dateand set a benchmark for global, emergency response fundraising.
Though we saw lower processed donation volumes in 2023, we
nonetheless continued to seek opportunities to innovate and pivot
toward new strategies that drove charitable impact. As part of this, wedeveloped our biggest product update yet: Campaign Manager.
Launching in 2024, this exciting feature enables greater freedom andflexibility in scaling charitable donations and accordingly positive
impact. By simplifying the process of activating and deactivating
campaigns, Campaign Manager provides our customers with greater
autonomy. It allows them to tailor their charitable initiatives to local
market preferences and cater to the diverse causes that mostresonate with their consumers.
To get to this point, we invested in our team on both the commercial,
product, and development side. With additional resource support, ahuge amount of technological work was done to iterate our Giving
product for greater reach across all channels. While e-commerceremained our strongest channel for donations in 2023, point-of-sale
donations saw an impressive year-on-year increase as well.

Figure 2
Total Giving processed volume in 2022 and 2023

2022

€7,724,998

2023€6,788,740

Figure 3
Number of nonprofits available in the platform

2022

94

2023

149

Figure 4
Number of merchants processing through Giving

2022
2023

87

113

Annual Report 2023

Impact technology
Given the multiplier effect of this product suite, thesignificant resources we invested to build it in-house,
and the collective global fundraising we unlock, our
Impact technology is considered a material topic dueto the positive impact on people and the planet.

Our Impact technology aligns with our strategic priority of tapping into
our platform to drive environmental and social change. With scale
being a key motivator, we seek opportunities that generate a multipliereffect. Fortunately, many of our customers naturally align with ourappetite for doing good, enabling synergistic partnerships thatmaximize our unique, combined strengths.

Donation matching
Another worthwhile avenue for our 1% fund is donation matching tosupport the causes most important to our customers and the Adyen
team. We use our donation matching system to encourage further
adoption of Giving, as well as to incentivize donors at checkout, who
are informed that any donation will be doubled, thus creating a
multiplier effect in the process. In 2023, we are proud to havematched €3.3 million in donations.
When donation matching via our Impact suite, we launch timesensitive Moments that Matter campaigns and open the donation
pool to global consumers. These fundraising moments typicallysupport humanitarian and climate emergencies through an NPO
already onboarded to our Giving portfolio. In 2023, these campaigns
spanned Earth Day, Pride, and the holiday season, along with globallysupported emergencies including the earthquake in Türkiye and Syria,

20

the war in Ukraine, and more locally supported crises including
wildfires in Greece and Hawaii, and Libyan floods.
We also matched donations from our team members in employee-led
campaigns. These internal fundraisers may relate to global
emergencies, as demonstrated in our internal response to theearthquakes in Morocco. In these cases, we cap the length of timethat the campaign runs, but put no upper limit on the matching
maximum. For compliance reasons, we only work with the charity
partners already onboarded to our portfolio.
A key distinction between making a donation and donation matching– the latter being Adyen’s preference – is that rather than contributing
funds alone, our goal is to pair each partnership with a match in timevolunteered or amount of money contributed, etc. in order tomaximize our impact. This also takes the form of investing in the
future, and maximizing our impact today by funding preventative
measures that work to negate climate and humanitarian crises
tomorrow.

Figure 51% for the UN SDGs 2023 categorization based on total funds (in EUR)

€2,377,414€5,000,000€957,238€1,090,562€708,994€13,213,791

Donation matching - Emergency relief
Donation matching - Moments that Matter
Scheme & interchange fees
Rollover to 2024
Ad-hoc donations
Onboarding global nonprofits

Annual Report 2023

“What stands out for me about working at
Adyen is all the smart and ambitious people I
get to work with every day. Being surroundedby the best of the best helps me sharpen myown ideas and pushes me to do better. I alsofind that my colleagues show a lot of humility— we aren't led by our ego. Everyone is eager
to collaborate and always happy to extend ahelping hand when needed.”
Lina — Commercial Content Manager

21

Annual Report 2023

22

“It was great to be able to turn on
fundraising for UNICEF at the end of 2023
with speed. We wanted to adopt a multicountry campaign with them and with thehelp of Adyen's partnership we were able toget up and running without the need to go
through lengthy negotiations. We raisedsome really impressive numbers in a shortspace of time.”"We are inspired by our recent partnershipwith Adyen. This innovative collaboration ispart of the future of digital fundraising —providing us access to thousands ofpotential corporate partners through Adyen
Giving, instead of the traditional 1:1. The
possibility for scale is incredible and thepositive impact for children in need,exponential."

Alice Mazzola — Global Head of Advocacy Campaigning at The
Body Shop

Carla Haddad Mardini — UNICEF Private Fundraising andPartnerships Director

Annual Report 2023

23

“Over the past three years, Hamilton Families
has been honored to work with Adyen andform a deep partnership. In 2023, theirunwavering support materialized through aseries of impactful initiatives benefiting
families experiencing homelessness in the San
Francisco Bay Area. From beautiful Mother's
Day bouquets to backpacks brimming withessential school supplies to hundreds ofgenerous holiday gifts, Adyen's dedication has
touched lives in profound ways.
As we eagerly anticipate the future, ourcommitment to this partnership remains
steadfast, driven by the shared vision ofcreating positive change for the families in our
programs.”
Elisa Bargetto — Events & Community Partnerships Manager,
Hamilton Families

Annual Report 2023

24

Community impact

volunteering efforts. As in other areas where we utilize this fund, it is a
dynamic vehicle to advance the UN SDGs, and to create a multipliereffect, amplifying our volunteering endeavors on a broader scale.

At Adyen, we find it important to make a lasting and meaningful
impact at both a global and local level, especially in the communities
where we operate. As our global team continues to grow, so too does
our ability to affect positive change in the world around us. To realize
this impact now and in the future, we have established a multifaceted
approach to giving back, which encompasses a wide range ofinitiatives and projects.

While our CFO holds accountability for community impact as a whole,creating positive change in our communities requires participation at
every level of our business. Crucially, many impact initiatives are led at
a grassroots level by Community Impact Champions, who receive thefull support of our Sustainability and Social Impact team to drive local
initiatives, and act as a voice for the unique needs of theircommunities. Currently, we have Impact Champions at 25 of ouroffices, with plans to extend this to all offices in the near future.

Volunteering
Community impact
As informed by our materiality assessment, we believe ourcommunity impact initiatives can generate a positive
impact and create a multiplier effect on both people(internal and external) and the environment – particularlyin the local communities in which we operate. The
opportunities we provide through our Global Volunteering
Time Off program can also have a positive effect on ourcompany culture, employer brand, and retention.

Community impact serves as the umbrella category under which werun various initiatives that foster lasting change in our communities.
These efforts broadly span volunteering, grants, pro bono projects,
local charity partnerships, and our Accelerator programs. They arealso bolstered by our 1% commitment, which helps provide thefinancial bandwidth to, among other things, make impactful
donations, strengthen our partnerships, and support organizedIn line with the increasing demand of our employees for driving local
impact, as well as to better track our efforts, we have introduced a
Global Volunteering Time Off program, which stands as another pillarof our commitment to driving positive change in our communities.
This global initiative enables employees to actively engage involunteering and pro bono opportunities, booking time to give backjust as they would for holiday or personal time off.
Much as we empower our customers to select the UN SDGs that bestalign with their business and ambitions, we extend the same level offlexibility and choice to our employees. Thus, instead of aligning withany particular UN SDG, we recognize the importance of all of them,and encourage our team to contribute to the causes they find mostmeaningful.
2023 marked the first official year of this Global Volunteering Time Off
program, in which we saw 1,390 employees participate and over
8,700 volunteer hours logged globally. Through continuous feedbackon the program, we also saw employees report an increased sense of
belonging, a greater sense of purpose in their work and workplace,

improved connections with colleagues, and development of skills that
benefit their daily work.
To further structure and streamline our volunteering and community
impact efforts, we have established a framework based on our four
distinct levels of engagement: individual, team, office, and companywide volunteering.

Annual Report 2023

"I view volunteering at Adyen as a fantastic
opportunity. Through 'The Boardroom', aprogram dedicated to educating and inspiring
young people on entrepreneurship, I got towork with individuals whose lives looked very
different to mine. Many faced social andeconomic challenges and lacked role models.
My role involved helping them craftcompelling pitches. Seeing their small
victories and the way they supported eachother was heartening. By the end of the day,these young people left feeling more confident
and assured of themselves. In just a few hours,
I could see the direct, tangible impact of myefforts - something that you tend not toexperience so much as you advance in yourcareer and outcomes become more abstract.
I cycled home that day with a huge smile on
my face.”
Hemmo — SVP, Platforms & Financial Services

25

Annual Report 2023

26

Team volunteering

Mexico City teams

Recognizing the power of collaboration, we facilitate opportunities for
employees to come together and amplify their impact. Group
volunteering initiatives also play a crucial role in fostering a sense ofunity in our growing company. On this page, you will find some of ourteam volunteering highlights from 2023.

Embracing the spirit of giving back, our team in Mexico City identified
a range of local causes during their team off-site that they felt would
generate a lasting impact. In collaboration with a local NPO, the teamcame together to clean up waterways, plant trees and greenery for
local land restoration, and provide other kinds of support to theircommunity. Together, the team collected more than 87 kilos oforganic garbage, over 14 kilos of inorganic garbage and planted 30
trees, tracking over 130 volunteering hours.

Amsterdam teams

North America teams

Working with Serve The City, a local charity that aligns corporate
teams with community needs in Amsterdam, six team members fromour Tech Academy dedicated their time to cleaning up a local park.

Colleagues from across North America, including at our San
Francisco, New York, Toronto, and Chicago offices, participated invarious volunteering activities throughout 2023; these included
distributing groceries, assembling bikes for children, assisting local
NPOs in their holiday preparations, and park maintenance and street
clean-up. Their collective efforts, comprising an estimated 800+ hours
in total, helped make a truly meaningful impact on various local
causes.

Also in Amsterdam, Adyen’s EMEA recruitment team hosted acommunity impact event at our offices. In collaboration with an NPO
that addresses diversity gaps in high school technology programs in
the Netherlands, the Adyen team arranged for a class of 30 students
from an underserved community in the city to participate in hands-on
workshops, learn about ‘unobvious’ career paths, receive advice on
crafting CVs, and have professional headshots taken for theirLinkedIn profiles.

Annual Report 2023

27

Office-led activities

Toronto office

Our office-led volunteering efforts also tap into the power of collective
action, enabling regional offices to address local needs, strengthencommunity partnerships, and foster unity in their teams. On this page,
you will find some of our office volunteering highlights from 2023.

In Toronto, our team participated in a range of causes throughout theyear. Their active participation in a North America clothing drive incollaboration with Adyen’s Pride ERG resulted in a significant
donation to a LGBTQIA+ organization of their choosing. The team also
continued their support for global conservation organization with apark clean-up, and participated in the WWF Climb for Nature
initiative, climbing 1700+ steps up the CN Tower to raise money for
the NPO.

Stockholm office
Our Stockholm office actively supported various causes and initiatives
close to their community during 2023. From purchasing, wrapping,and donating holiday gifts for children with a local NPO, to spendingtime cleaning local waterways with a group of local volunteer divers
and learning about the impact of this waste on the environment, theteam continued to support their community’s needs andstrengthened their local charitable partnerships throughout the year.
Singapore office
As part of an APAC-wide community impact event and in celebrationof International Day of Charity, more than 80 team members from ourSingapore office volunteered across four different local organizations.
Their efforts included cleaning activities, sorting incoming donations,packing food bundles for distribution in their communities, spending
an afternoon with the elderly at a community center, and organizing
outings for children from low-income families. Throughout the year,
the Singapore team also donated refurbished and unused techequipment to a range of local NPOs.

Company-wide initiatives
As a business, we recognize our potential to enact significant change.
When we come together, our company-wide events ignite a sharedpurpose and inspire our colleagues to carry the spirit of volunteering
back to their communities, creating a ripple effect of positive impact.
A great example of this in 2023 was our first-ever company-wide
Community Impact Day, organized in Amsterdam as part of ourcompany event week. During the event, which was attended by our
global team, we facilitated over 2,600 hours of volunteering for 960
employees across 27 different activities. These activities, many ofwhich were supported by a local NPO, Serve the City, included
repairing and cleaning bikes, working at local food banks, andpackaging gifts for children in hospital. Employees also supported
and raised awareness for charity partners enrolled on our Giving
product.
Later in 2023, building on our global Community Impact Day, we also
hosted Community Impact days in our Mexico and Sāo Paulo offices,
and in multiple offices across APAC and North America. Given the
success of these events and the high levels of engagement theyreceived from our employees, we intend to formalize the inclusion ofcommunity impact initiatives at future Adyen events, and widen thereach of Community Impact days across our global offices.

Annual Report 2023
GrantsIn line with Adyen’s impact ambition, 2023 was our first year tapping
into our 1% fund to write grants that help scale the efforts ofbusinesses solving a range of sustainability challenges. Our grantthesis is built on the belief that by actively fostering sustainable
solutions, we can advance the environmental responsibility and social
impact of our global customers.
The first grantee was United Repair Centre (URC), an award-winningB2B clothing repair enterprise providing employment opportunities toindividuals distanced from the labor market, while guiding clothing
brands toward improved circularity. Our funding will help grow theirtechnology platform, which helps businesses automate the status of
items in repair. The URC already partners with some of our global
retail customers, marking another symbiotic intersection. We believethat supporting the URC will enable more of our merchants to benefit
from their services and increase participation in the circular economy.
We also worked with CarbonX to provide grant funding to support themeasurement, reporting, and verification (MRV) efforts of carbon
removal projects – ultimately helping companies improve the integrity
and credibility of their carbon removal solutions. This year, our grants
supported UNDO, Vesta, and InPlanet, from each of which we alsopurchased Carbon Dioxide Removal (CDR) credits as part of our 2022
contribution portfolio. To meet the targets that have been set out by
the Paris Agreement to limit global warming to below 1.5 degrees
Celsius by 2050, it is estimated that the world will require 8-10
gigatons of carbon removal per year, globally. The market is still in its
infancy and will require significant investment and innovation to reachthe scale required. We believe that being an early mover in this space
will have a catalytic effect, encouraging others to follow our lead.
Accelerator program
The 1% commitment also supports Adyen’s Accelerator program,
through which we engage a community of startups and social
enterprises. Launched in 2020, 2023 was the first year that we

28
geographically expanded the initiative to appeal to global
entrepreneurs. This year saw us host Accelerator programs in North
America, LATAM, and EMEA with specific focus on supporting earlystage impact startups that advance one or more of the SDGs and arelooking to scale their impact. Businesses that participated in our
Accelerators learned from an in-person program of workshops, talks,
and activities, alongside a range of networking opportunities spanning
Adyen employees, investors, and our broader network. Along the way,participants had the opportunity to discuss business challenges withfellow impact entrepreneurs and Adyen’s subject-matter experts.
The first Accelerator of the year took place in Chicago, with 13
companies from across North and Central America taking part. Joni, aCanadian startup focused on democratizing access to period care,
was selected as the winner. Next, we hosted our Amsterdam
Accelerator, which accepted business applications from across
EMEA. The winner of this event was DOT Glasses, a Kenyan company
working to combat the most prevalent disability worldwide – poor
vision – by providing low-cost eye tests and glasses in developing
countries. The Accelerator season concluded with our first nonEnglish language program hosted in São Paulo, which was conductedin Portuguese to ensure that a diverse group of participants
representing the Brazilian population could apply. The winner of the
LATAM prize was Papoom, an online food marketplace that links
buyers and sellers in favelas, enabling them to conduct business andgenerate income.
Using the 1%, Adyen covered the cost of accommodation and travel tothe program location for two representatives from each of theparticipating enterprises. The winner of each Accelerator received€30,000 in prize money to grow their business, as well as two weeks ofdedicated pro bono time from the Adyen team, tailored to the winners’
needs. Adyen is in a favorable position to support budding businesses
advancing the UN SDGs. With our experience in sustainably scaling acompany and partnering with some of the world’s largest enterprises,
this was another year of sharing actionable learnings and tools toaccelerate the growth of impact-driven startups.

Annual Report 2023

29

People & culture
At Adyen, we believe in constant iteration in pursuit of improvement.
Whether through the continual development of our platform or the
careful, constant shaping of our culture to meet our team’s evolving
needs, we recognize that growth and change should always go handin hand.
In 2023, we grew our team to its largest size to date, marking the
culmination of a two-year accelerated investment period. With a morediverse and dispersed workforce than ever, we established two central
priorities to help guide us: focus and efficiency. Automation, inparticular, was top of mind, as we sought to simplify and streamline
our processes and position ourselves to seize the opportunities ahead.
At the same time, the Adyen Formula continues to be foundational to
our approach. It not only guides our day-to-day decisions and shapes
our behaviors, but also empowers employees to act ethically andresponsibly. For that reason, the Formula remains an essentialconsideration when hiring new team members and evaluating theperformance of existing ones. Embracing its key values of speed andautonomy, we maintained our rapid pace of innovation, effectively
scaling our processes as our team quickly grew throughout the year.
Across our 27 offices, we celebrate a diverse range of perspectives,
and the rich variety of backgrounds, outlooks, and experiences that
our employees bring to the table. By representing and championing
this diversity, we both continue to shape an inclusive workplace, andrecognize that no one-size-fits-all approach is sufficient for meetingsuch a range of unique needs.
Instead, we implement tailored strategies that consider personal
preferences and circumstances as much as possible. In 2023, to help
underpin our approach to meeting our peoples’ diverse needs andperspectives, we spent time refining our DEI policy. In doing so, we

The Adyen Formula

further strengthened and reflected our commitment to cultivating amore diverse, equitable, and inclusive company; further detail on thisis provided in our DEI section.
Just as we excel in solving complexity for our customers, we recognizethat simplicity is the key to effective people management. In all
aspects of our business, we prioritize creating streamlined and flexible
solutions. Our learning and development programs, for example, are
not designed to offer a set of firm guidelines to our employees, but togive them the tools they need to create their own path. By offering
choice and nuance in how people develop themselves, we help
remove unnecessary rigidity in our processes, and provide our
employees with the freedom to decide what works best for them.
While we are focused on shaping a diverse workplace with speed andautonomy at its core, we also seek people who will thrive in thisenvironment. We have always maintained a high bar for talent at
Adyen, and above all else, we search for talent that reflects ourambition back at us. Regardless of their role or region, we search forpeople who will take the freedom we offer and use it to achieve
extraordinary things. With a strong team and culture, we are fully
equipped to seize the opportunities ahead of us, knowing that ourshared sense of individual commitment and responsibility will
together drive our future success.

2022

We build to benefit all customers (not just one)

2023

413

230

We make good decisions and consider the long-term benefits
for our customers, Adyen, and the world at large
We launch fast and iterate
Winning is more important than ego; we work as a team acrosscultures and time zones
We don’t hide behind email; instead we pick up the phone
We talk straight without being rude
We seek out different perspectives to sharpen our ideas
We create our own path to grow toward our full potential

Annual Report 2023

“At Adyen we build our team like we build ourplatform: purposefully, and for the long term.
We believe in giving small teams the freedom
and resources they need to grow and take on
new challenges. We set high standards andwe’re not afraid to push each other toward
them. Having reached a new stage of scale
across our company in 2023, I’m confident
that this is the team that will take Adyen to
the next level.”
Brooke — Chief Human Resources Officer

30

Annual Report 2023
Figure 6
Adyen’s overall FTE per office in 2023

31

Total FTEs*
4,196
Total headcount* 4,207

Europe, Middle East &Africa2022

2023

Amsterdam

1,941

2,326

London123

Madrid2022

2023

Singapore

127

165

133

Sydney

41

53

64

133

Shanghai

29

36

Paris

75

96

Tokyo

23

33

Berlin67

91

Mumbai

10

12Stockholm

55

76

Hong Kong

9

9

Milan

27

32

Kuala Lumpur 2

3

Dubai

23

27

Melbourne

1

Warsaw

14

18

North America

Munich11

21

Brussels

15

15

Manchester

12

14

Latin America* Total FTE and total headcount excludes contingent workers.
** Contingent workers are presented in unit of headcount.

Asia-Pacific

1

2022

2023

San Francisco 270

299

New York

139

186

Chicago53

155

Toronto

20

26

2022

2023

São Paulo

146

170

Contingent workers**

São José

18

39

2022

2023

Mexico City

17

27

413

228

GlobalAnnual Report 2023

Diversity, Equity, and Inclusion
At Adyen, DEI is a top priority. Its importance to us was underlined byour materiality assessment, in which we concluded that robust DEI
policies are materially fundamental to working conditions, morale, andoverall employee well-being. It is a topic intrinsically linked to our
Formula: seeking out other perspectives to sharpen our ideas. This
concept is a driving force behind our innovative spirit, and has
consistently produced our most successful outcomes. We understandthat diversity of perspective can stem from differences in age, gender,
sexuality, race, ethnicity, religion, and beyond. Our DEI approach is tomake it an integral part of our way of working, ensuring fairness andequity of opportunities for all.

Diversity, Equity, and Inclusion
Adyen recognizes that robust and effective DEI policies
and commitments enhance working conditions, morale,
retention, and the overall well-being of our employees.
The topic is actively managed and enforced by Adyen
throughout the employee lifecycle, from recruitment tointernal mobility and other areas within Adyen's control.
Thus, DEI is considered a material topic due to the impact
on Adyen’s employees.

Our DEI policy
In 2023, we dedicated time to revising and enhancing our DEI policy
to further strengthen our stance and ensure that our approacheffectively combines our Formula principles, regulatory requirements,32
and relevant leadership drivers. The Management Board remains
accountable for the implementation of this policy, demonstrating ourcommitment to DEI at the highest level of our company.
The guiding principles of the policy are:
• Improving diversity is a top priority for us. We actively include adiverse group of people and perspectives to sharpen our ideas
when making decisions.
• We proactively look for ways to add diversity to our teams. During
the hiring process, our diverse hiring team assesses individuals
based on the same performance, skills, and Formula fit criteria.
• When we hire, promote, or reward, we question who wasconsidered, whether we were fair, and why we made each decision.
We provide credit where credit is due, and explain the reasoning to
all that were considered in the process.
• We treat each other fairly and adapt our approach to individual
needs. We support each other in navigating the normal courseof life.
• By conducting an annual Culture & Inclusion survey, we measureprogress and aim to improve our efforts every cycle to build a morediverse and inclusive Adyen.
• We make a conscious effort to avoid decisions based on
unconscious biases.
• We take every form of discriminatory attitude or harassment
seriously, including micro-aggressions in the form of jokes orinsinuations, based on an individual’s protected characteristics.
Since our employees are the key affected stakeholders of the policy,
we feel that it’s important to actively think along with our global teamwhen it comes to our DEI efforts. As outlined in the guidelines above,
employees annually provide feedback on our approach and how weare putting our policy into practice through our annual Culture &Inclusion survey. In 2023, we achieved a solid participation rate of
86%. The results of the survey provide a key measure of our progress,and helped us decide where to place focus each cycle to build a morediverse and inclusive company.
However, while these insights remain helpful, we also want to betransparent about limitations to advancing and accurately measuring
our DEI efforts. We are, for example, conscious that DEI initiatives
need to be tailored to different cultural contexts. What works in one
region may not work in another, and due to the unique demographic
composition of each country, global, standardized metrics for hiring
practices should always be applied thoughtfully and with due
consideration to this.
When it comes to measuring the effectiveness of our efforts, we mustalso consider varying comfort levels and societal norms acrosscultures regarding the sharing of personal information. In addition,
data collection practices themselves are subject to varying legal andregulatory frameworks across different countries. The challenges toeffective data collection pose a potential barrier to fully understanding
and addressing disparities in representation in our organization.
To ensure as much as possible that representation is increasingly
balanced across our business at all levels, we are committed to thefollowing targets. First, maintaining a Supervisory Board with no morethan two-thirds (66%) of a single gender identity by 2028, andensuring there is no more than two-thirds of a single gender identity
on our Management Board by 2030. We also aim for a Global
Leadership Team (GLT, also defined as ‘senior leadership’ or ‘subtop’)with no more than two-thirds of a single gender identity by 2028.
More information on Adyen’s DEI Policy can be found in the Report of
the Supervisory Board in the ‘Corporate Governance’ section.

Annual Report 2023

33

The implementation of our policy builds on and enhances the strong
progress we continue to make in DEI. A selection of our other key DEI
initiatives are detailed below.

• We continued to iterate on our demographic data collection
initiatives in a number of geographies to better measure andassess the candidate experience in relation to DEI.

Candidate attraction

Continuous education

Employee Resource Groups

In our candidate attraction efforts, we have actively implemented
measures to encourage diversity, eliminate gender bias, and foster an
equity of opportunities in our recruitment activities, including:

Recognizing that understanding and embracing DEI is a journey, not adestination, we ensure that we integrate this focus area into ourcomprehensive learning & development program, including ouronboarding training. This is to ensure that employees at all levels
engage with DEI principles from the very first day with us. Other waysthat we continuously educate our employees on this topic include:

Even with our formal efforts to shape a more diverse, equitable, andinclusive organization, we have never seen DEI as a top-down
directive. In line with our culture of individual autonomy, we are proud
to see how our employees have organized themselves to continue
driving representation. A great example of this is our employeefounded and led Employee Resource Groups (ERGs) which celebrate,endorse, and share perspectives from our diverse communities. Ourcurrent active ERGs include Black at Adyen, Asians at Adyen, South
Asians at Adyen, Pridyen, Women at Adyen, Jews at Adyen, Muslims
at Adyen, Working Parents at Adyen, Latine at Adyen, Neurodiversity
at Adyen, and AdaptAdyen (focused on driving inclusivity for thosewith disabilities).

• Introducing functional DEI guidelines for our marketing andrecruitment teams, in order to ensure diverse representation in ourmaterials and creative assets.
• Launching a dedicated DEI careers page on the public
Adyen website.
• Continuing our collaboration with organizations that serve
underrepresented groups.

Recruitment activities
As we have deliberately focused on accelerating our hiring over thelast two years to reach our next intended phase of scale, we placedcorresponding focus on how we could effectively attract a diverse poolof candidates, as well as enhance the subsequent stages of theemployee journey. To uphold our commitment to inclusivity:• Regions committed to increasing the diversity of their workforce;starting this year, this commitment will be translated throughannual targets, which we will strive to achieve while maintaining an
inclusive environment where talent can flourish.
• We set an ambitious global objective & key result (OKR) for gender
parity in our tech organization, as well regional OKRs for each of
our regions that account for local context.

• Investment in specific DEI learning and development initiatives
aimed at key audiences, including leaders, HR Business Partners,
and ERG leaders, as well as the company as a whole.
• Ensuring our training materials embrace a diversity of viewpoints
and perspectives, and challenging our employees to cultivate
inclusivity by considering and valuing different outlooks.
• Introducing English-language training for candidates fromunderrepresented backgrounds in LATAM.

Mitigating measures
While DEI is an integral part of every employee’s continuous
education, we also have a series of safeguards to address andminimize instances of discrimination should they occur. These
measures include:• Ensuring guidance on reporting incidents to Team Leads and HR
Business Partners is readily available and accessible.
• Establishing transparent reporting procedures for unethical,
immoral, or unjust behavior.
• Introducing a calibration process within our performanceassessment cycle to ensure consistent ratings across functions,teams, and regions. This aims to eliminate unconscious bias
through facilitated dialogues and deliver fair assessments,
particularly for globally reporting teams.

In 2023, to further empower our ERGs, and ensure that theircommunities’ experiences are taken into account across our businessactivities – from our product design to people processes – weconstructed an ERG governance framework. The policy, which will
officially come into action in early 2024, will provide guidance,
financial resources, and time to ERG leads to enable them to build
safe spaces and advocate for the needs of their communities. Our
senior leaders will also sponsor our ERGs, and voluntarily dedicate
their time to assist in the planning and execution of their activities.

Annual Report 2023

34

Figure 7
Adyen’s overall FTE per Job Family Group in 2022

Figure 9
Gender and age diversity at Adyen in 2022 and 2023

Management Board gender diversity

Total headcount gender diversity

13%

54%

33%

Tech
Commercial
Staff

2022

38%

62% —%

2022

2023

39%

61% —%

2023

Female

Male

17%

83%
29%

71%

Female

Other

Male

xxx

Global leadership gender diversity

Team Leads gender diversity

Figure 8
Adyen’s overall FTE per Job Family Group in 2023

2022

39%

61%

2022

50%

50%

2023

39%

61%

2023

52%

48%

FemaleFemale

Male

Male

12%
Management Board age diversity

Total headcount age diversity

31%

57%

Tech
Commercial
Staff

2022
2023

35%
30%

< 30

30 - 50

63% 2%

2022

83%

68% 2%

2023

86% 14%

> 50

< 30

30 - 5017%> 50

Annual Report 2023

“Adyen is a place that hums with energy.
Managing PR across APAC presents a range
of opportunities to connect with diverse
audiences, from Tokyo to Sydney. But myfocus goes beyond crafting messages; it’s also
about making meaningful connections withcolleagues around the world, bridging borders
and time zones. Seeing the impact of ourefforts as we grow in this vast region isincredibly exciting. It feels like we’re only
scratching the surface of what we’recapable of.”
Melody — Head of PR, APAC

35

Annual Report 2023

Learning & development
We recognize that our success is rooted in the growth of each of ourteam members. After all, a great strategy is only as effective as theteam executing it. At Adyen, we are fortunate to have a group ofindividuals who are not only exceptionally talented, but are also
naturally curious, ambitious, and driven by a desire for personal andprofessional development. By creating a culture of continuous growth,
we also have the opportunity to boost employee satisfaction, improve
retention and increase our overall productivity — helping us better
serve the needs of our customers.
Our approach to L&D at Adyen is to create best-in-class, inclusive andscalable opportunities to support growth and career exploration in ourcompany. Driven by the principles of autonomy and empowerment,
we equip our employees with the tools they need to own their growth.
Additionally, we help match the right people with the rightopportunities for their personal growth, and the growth ofour business.
We focus on the 70-20-10 approach in our L&D programs:
experiential learning, or learning by doing (70%), social learning (20%),and formal learning (10%). This helps ensure a dynamic and wellrounded approach to continuous learning, which is well suited to ouremployees’ day-to-day activities.
In 2023, we focused on expanding self-led learning and extending thereach of our in-person facilitated offerings, as well as strengthening
the inclusivity and accessibility of our training programs. We alsoprioritized further building out each of the three main elements of our
L&D strategy, as outlined throughout the rest of this section.
We additionally focused on establishing clearer data tracking andimpact measurements across our learning and development
initiatives, to better measure our effectiveness. Selected metrics wefocused on in 2023 include the level of attendance at our Feedback &36
Praise training and the level of Team Lead participation in leadershiptraining.
To enhance our feedback culture this year, we implemented a global,
standardized model (COIN) to guide employees in delivering
structured, effective feedback; this was integrated across all of ourAdyen learning and development initiatives. 23% of our employees
attended a Feedback & Praise training in 2023, with 6% of thoseattendees cross-trained through our Paying it Forward Program,which provides employees with the skills to facilitate the Feedback &Praise trainings in their local offices.
As our global team quickly grew, we also placed significant emphasis
on leadership training. In 2023, 45% of leadership, spanning first-timeleaders to more senior positions, participated in a leadershipdevelopment program. This excludes those who had participated inprevious years' trainings due to program eligibility criteria, which alsoprecluded some leaders based on their tenure. Underscoring ourcommitment to enhancing leadership skills, this percentage
demonstrates increased uptake for our training offerings at all levels.
Having laid a strong foundation across our main L&D pillars, we are
set to advance our initiatives in 2024 by scaling, embedding, andcommunicating our offering in line with our evolving business needs.

Onboarding
We believe that our onboarding process sets the tone for our
employees’ career with us and sets them up for their future success.
In early 2023, we launched a ‘first 100 days’ e-learning program; thisis a self-paced online course that provides new starters with acomprehensive view of who we are as a company and who we are as
people. Offering tips on how to build a network, information on thetools available to us, advice on how to navigate the first few months,
and more, this program provides clear and consistent information to
all employees, regardless of their role or region.

To ensure that we can effectively iterate this program over time, we
also launched our first-ever global onboarding survey this year. Thissurvey measured our employees’ sense of belonging and theirunderstanding of our company and their role after completing ouronboarding program. In addition, we introduced supportive materials
for managers of new hires to provide clear expectations and support.
This helped new employees find success in their roles quickly bygiving managers visibility on the onboarding journey and equippingthem to offer ongoing support and advice.

Leadership development
We foster a dynamic learning environment that fuels the rapid
development of our people throughout their leadership journeys. By
evaluating individuals based on their impact, we enable them toadvance rapidly in our organization, entrusting them with significant
responsibilities, and offering them promotions faster than theindustry standard.
With a focus on supporting our leaders through key transition
moments, we provide them with clear development frameworks,
along with coaching and development options designed to guide andenable their success. As leaders thrive, it sets off a ripple effect,
nurturing the potential within their teams.
In 2023, we spent time refining the Team Lead journey and tailoring
our programs to address the needs of our expanding teams. A pivotal
aspect of this was iterating our Leadership Drivers. This set of corevalues guides our leaders to give support and flexibility to their teams,
to model accountability, and to build diverse teams to help ourbusiness grow and scale.
We also initiated the Future Leader Track in 2023, a comprehensive elearning course covering the fundamentals of being a leader at Adyen,
accessible to all our employees. For those identified as having
leadership potential, our global Incubator program also provides in-Annual Report 2023
person training, Q&A sessions, challenges, and a peer network to
prepare them for the transition to Team Lead.
Throughout 2023, we placed particular focus on tailoring programs todifferent leadership levels. Team Leads, for example, now have accessto CoachHub, a digital platform offering four months of unlimited
coaching each year. Our fast-track program for seasoned external
leaders supports the integration of fresh perspectives with the Adyen
way of working. This marks a shift from our historical focus ondeveloping internal leaders. We now rely on the strength of our Adyen
culture to scale effectively, incorporating fresh perspectives forongoing iteration and improvement.
At the executive level, our dedicated Executive Coaching Program
offers professional coaching for both our Management Board andGlobal Leadership Team.
While our focus over the past year centered on developing skills andmindsets for inclusivity, our plans for 2024 involve laying an evenstronger foundation for what inclusive leadership means by fully
embedding DEI in our leadership tracks.

Professional development
When it comes to professional development, our guiding philosophy
is simple yet powerful: ‘Own Your Growth’. In other words, we
encourage our employees to create their own path, pursuing theirunique passions and interests in alignment with the needs of our
growing business. We recognize that there is no one-size-fits-all
journey for career advancement, so we offer our employees autonomy
and support them on their unique path. As long as a colleague
embodies the Adyen Formula and is ready to drive impact, our doors
are fully open to them.
This year, our primary focus has been on ensuring that our extensive
range of professional development resources are not only moreaccessible to our colleagues, but also more widely known around ourbusiness. As an example of this, we bolstered our communication

37
channels this year through a quarterly newsletter, ensuring thatvital information and resources are disseminated throughout
our company.
To advance our business and HR goals, we developed a variety ofshort-form and self-led learning opportunities that cater to specificlearning needs. These include resources such as e-learning modules,
on performance management and our ‘Growth 2 Go’ podcast
episodes, designed to be readily available when our employees needthem. These are timely and targeted learning moments that can beaccessed on demand.
To measure the adoption of our programs and help gauge theeffectiveness of our efforts, we are actively working on establishing
more robust metrics and measurement dashboards. Alongside this,we continue to listen closely to our employees’ feedback.
One example of how we have heard and responded to feedback isthrough our 2023 People & Culture audit. Based on employee input,
we refined our ‘Own Your Growth’ philosophy to emphasize that
employees are in the driver seat of their own growth journey. As such,they are fully empowered to tailor their development in partnershipwith their Team Lead. In 2024, we will roll-out a self-led workshop tofurther support our colleagues to gain clarity on the immediate next
steps they can take to enhance their development.
On top of this, in response to valuable feedback from employees in
our annual Culture & Inclusion survey, we have taken significant
strides in scaling our feedback culture, emphasizing the importance ofopen and constructive dialogues. This has primarily been achieved
through our Feedback & Praise programs and our Pay It Forward
program, both of which are detailed above. We are also fostering a
growing community of feedback ambassadors to reinforce thedevelopment culture, currently numbering 50 people globally.

Annual Report 2023

38

Our culture of open and continuous feedback seamlessly extends into
our performance management process, where we ensure regularcheck-ins on performance, progress, and improvement points. We
conduct formal performance evaluations for our employees twice ayear to monitor and maintain our employees’ skill sets and identify
potential areas for support or guidance. Beyond these two formal
evaluation moments, we actively encourage constructive dialogue
throughout the year, and help to facilitate this through toolkits that
support both managers and employees to have continuous
discussions about development.
To further support our employees’ growth, we offer a range ofopportunities for them to explore. Through our internal job board, forexample, we list all open roles at our company, which employees arefree to apply to. In addition, we hold an exchange program, where
employees can apply to work in one of our other 27 global offices for
between 1 to 3 months. This approach both benefits employees'
growth and facilitates knowledge sharing across our business.

Learning & development
Adyen believes that by investing in a high-quality,
innovative, and equitable learning & development
program, which prioritizes both continuous and timely
learning, we ensure that our team members sharpen theskills they need to innovate the best technology for ourcustomers. Maximizing individual impact also enables us
to remain critical about the number of people needed on
our global team. Thus, the topic is material from an
opportunity perspective.

Adyen Academies
Complementary to the foundational skill development that our L&D
initiatives provide, the Adyen Academies further support our businesswith role-specific development opportunities matching our teammembers’ functional expertise. These academies currently span the:Operations Academy, Commercial Academy, Product Academy, Tech
Academy, and Marketing Academy.
As we continue to invest in our commercial teams and theirperformance, we expanded our Commercial Academy, bringing
training and other learning initiatives to all commercial teams (800+people) globally. In addition to delivering our skill-based training
programs, initiatives included introducing Onboarding Guides tobring consistency in the onboarding journeys, customized sales decks
to position our value across different industries as our platform
continues to diversify, and a series of talk shows to share our bestcommercial tactics globally.
Similarly, our Tech Academy embodies our commitment to technicalexcellence. Founded and led by an in-house team of trainers, theAcademy serves as a hub for our employees to learn new skills andrefine their technical expertise in a collaborative environment. In 2023,
the Academy focused on optimizing its knowledge-sharing
capabilities by bringing experts to our global Tech Hubs and setting
up local training initiatives. Additionally, the Academy expanded its
training base during the year by adding 660 distinct offerings andlaunching 139 unique trainings. This contributed to achieving asignificant milestone of over 1000 training sessions delivered since
the Academy was established in 2021.

Annual Report 2023

“There is truly no one-size-fits-all approach at
Adyen. Whether in the path we take to grow,the flexible benefits we receive, or the way wedevelop ourselves, individuality is built into ourculture. In fact, we celebrate the uniquestrengths and perspectives everyone offers —because innovation only happens when you
can embrace new ways of thinking."
Nancy — Global Head of Real Estate39

Annual Report 2023

40

Employment & benefits

Adyen+: The unobvious benefit

Normal Course of LifeAt Adyen, we have a long-term perspective, and this extends to how
we build our global team. We don’t cut corners or make compromises
when it comes to hiring talent, nor when it comes to rewarding ourteam members for their contribution to our growth. Instead, we match
significant contributions with strong remuneration, which we review
annually and on an individual basis. This means that we keep ourearning trajectories flexible. As fast as our employees grow, so too cantheir salaries.

At Adyen, we believe there is no one-size-fits-all approach to benefits
for such a diverse, global team. One of the ways that we recognize andaccommodate this diversity of needs and interests is through Adyen+,
our benefits initiative that provides a monthly stipend for employees tospend as they see fit.

In the same way that we believe in a flexible approach to our employee
benefits, we also recognize that flexibility is needed when dealing with
our employees’ life events. Our ‘Normal Course of Life’ policy is there
to support our team members through extraordinary times, whether
starting a family, or coping with difficult circumstances. We approachevery employees’ personal situation with nuance and understanding,
supporting them to navigate their circumstance in the way that works
best for them. Recognizing the significance of one's role as a parent,
we provide parental leave benefits to all our employees. Our goal withthis is to maintain global consistency while respecting regional
practices, which differ from country to country.

To stay competitive in our industry, we benchmark our salaries against
what our peers pay for the same role, at the same seniority, in thesame location. We also prioritize fair and equitable remuneration.
In line with this, we iterate our approach to Equal Pay & Equal
Chances each year to ensure contributions are fairly rewarded, as
well as calibrate any adjustments to ensure equal treatment acrossour business.
The philosophy behind our compensation approach is to attract great
team members who we hope will grow alongside our business, feel
motivated to drive our sustainable growth, and benefit from thatgrowth over time. To that end, we also include a form of equity in every
offer. This nurtures a vested interest in our business performance andmotivates employees to take a long-term outlook on their career withus. It also ensures that when we win, we win together.

This significant monthly contribution is designed to give our people
autonomy and flexibility. Whether our employees put the benefit
toward childcare, language courses, or another interest or
responsibility, is up to them. We do not assume the perks that would
be most desirable for our employees, but rather empower them toenjoy the benefits most relevant to their situation.

The Essentials
In addition to our equity models, ‘The Essentials’ form
the foundation of our benefits system. These are thebenefits applicable and relevant to all employees, plus
the benefits mandated by local governments. No
matter which office our employees work from, we
provide paid holidays, health insurance, long-termsavings incentives, disability insurance, commuting
allowances, and lunch at our offices. All practices are
regionally adapted, keeping local practices in mind.

Just as we take care of our employees through pivotal life moments,
we are equally dedicated to fostering an environment where they can
express themselves and advocate for their collective interests. All of
our employee contracts are structured to align with local regulations,ensuring the rights of the worker, including the right to collective
bargaining and freedom of association, are safeguarded. We alsooffer every full-time employee an indefinite contract upon successful
completion of their probationary period, underpinning our dedication
to employee stability and helping to foster a more empowered andsecure global team.

Annual Report 2023

41

Responsible conduct
To catalyze lasting and sustainable change, we keep responsible
conduct at the core of our operations. Our commitment is reflected in
the integration of environmental sustainability, integrity, data privacy,
information security, and responsible tax behavior into every part ofour business — these elements collectively constitute our license tooperate. The deliberate alignment of our business with these
responsible practices not only ensures adherence to our mission, butalso fosters a culture that genuinely embodies our values.

Annual Report 2023

Environmental sustainability
Adyen recognizes the urgency with which all companies mustcollectively take bold action to mitigate the effects of climate change.
As a material topic explored in our materiality assessment,sustainability is a key decision-making factor in operating andgrowing our business. In 2022, we prioritized data visibility andcapture improvements, which resulted in our first comprehensive
GHG inventory measured in-house. These insights provided astronger understanding of our environmental footprint and key
hotpots. While the data still contains known gaps, it has helped ushone our focus areas and prioritize where to hold our value chainaccountable.

42
We measure and report on Scope 1, 2, and 3 emissions. In 2023, wewere able to improve our data quality through supplier engagement
and to periodically monitor it throughout the year in real time, versus
annually and therefore with a delay. We also engaged a third party to
do a life-cycle assessment (LCA) on most of our terminal offerings.
Through this process, each terminal was deconstructed to its
individual components (down to the screw level) and fully assessed formaterial usage and embedded carbon. With this process complete,
we gained a much more comprehensive picture of how our portfolio of
terminal models compare from an environmental sustainability
perspective. Emissions related to the manufacturing of terminals areincluded in Scope 3 under Purchased Goods and Services.

The nature of Adyen’s platform offering andsurrounding activities make our carbon emissions
relatively limited. However, we acknowledge that the
only path to mitigating the global impact of climatechange is by collectively sharing this responsibility. For
this reason, in 2023, Adyen deemed environmental
sustainability a material topic.

Another notable milestone was sharper visibility into our supply chain.
We take end-accountability for the devices we provide customers,
despite not manufacturing them and only selling them on. Our
lifecycle findings could theoretically help us identify ways to increase
the lifespan of terminal devices, for example by reducing the plastic
used, and more. As a result of this study, we can now better attribute
each single device to its own data, rather than taking the average ofthe most popular terminal model. Improving data quality to be moreaccurate and specific is an iterative process. We view making these
improvements as helping us establish our foundations as we prepare
for CSRD compliance and the extensive disclosure requirements
coming in FY 2024.

While Adyen’s footprint is relatively modest from a net GHG
perspective (measured in tCO2e: tonnes of carbon dioxide
equivalents), we find it crucial to identify leverage points and help
drive the ecosystem we are a part of toward collective action. Adyen’s
ultimate strength is the power of our global network of partners,
customers, and vendors. Our vision is to leverage this intersection todrive significant positive effects across our industry and those we
service.

Though we are excited by the progress we are making year-on-year,
we feel that we are in the earliest stages of our environmental
sustainability journey. We have a long way to go, and will therefore
continue evolving, enriching, and iterating our approach to ensure we
improve our environmental accountability. We are committed to
expanding our knowledge and keeping abreast of updates in thecorporate sustainability landscape. This includes continuously
engaging with suppliers and reviewing our baseline. Below we haveoutlined where we currently stand across all material categories of
Scope 1, Scope 2, and Scope 3 per the GHG Protocol.

Environmental sustainability

Annual Report 2023

43
Adyen’s 2023 operational GHG emissions, measured in tCO2e
2023
Scope
Scope 1: direct GHG emissions
Scope 2: indirect GHG emissions
from purchased electricity,
heating and cooling

Emissions(tCO2e)2022% of total

Emissions(tCO2e)% of total

134

—%

112

—%

10,034

13 %

4,449

8%

Market-based*

2,436

2,025

Location-based

10,0344,449

Scope 3: other indirect GHG
emissions

69,19787 %

53,43292 %Category 1: Purchased goods
and services

23,721

30 %

7,676

13 %

Category 2: Capital goods

11,90415 %

16,21528 %Category 6: Business travel

15,213

19 %

11,53620 %Other categories (4, 7, 9, 11, 12)

18,35923 %

18,00531 %

79,365100 %57,993100 %Total GHG emissions*only related to data centers

From 2022 to 2023, our Scope 2 emissions increased due to higher
energy consumption across our top ten office locations and our data
centers. The context behind this growth is detailed in the energy(electricity) consumption section below, which illustrates our office,data center energy consumption, and methodology developments.
Scope 3 emissions increased as a result of the continued growth of
our global operations, an increase in purchased goods and services,
and an increase in business travel correlated with our workforce
growth. In addition to these growth drivers, the continuous
improvement in data visibility across our value chain also led to amore detailed picture of our emissions, as we were able to include two
additional Scope 3 categories, including upstream transportation andend-of-life treatment this year, as detailed above. On an ongoingbasis, we continue to refine this approach and work with our suppliers
to obtain more comprehensive data. Emissions data from 2023 willserve as the baseline for relevant measurements going forward.
Building on the learnings we have gathered up to now, this year we
proceeded with a similar approach as in 2022 by contributing toprojects that support durable carbon removal at scale. The
determined contributions follow the total Scope 1 and Business travelemissions at €92/tCO2e. More information on our portfolio is detailed
in the ‘Environmental sustainability projects and climate
contributions’ section below.

Annual Report 2023

44

Figure 10
Percentage of electricity consumption for 2023

Scope 1
Scope 1 emissions are direct emissions from our offices.
With limited access to primary data, we fully estimate refrigerant
usage for our offices. We use emissions factors to estimate Scope 1
emissions based on building location, climate zone, and floor area forour top ten office locations, which corresponds to 89% of ourglobal FTEs.

24%

We use a combination of primary energy consumption data as well as
estimates for energy consumption where invoiced data is unavailable,
and combine this with local grid factors to account for our top ten
office locations by FTE, as well as any additional offices that are
metered and invoiced. This year, in addition to our top ten officelocations, we included three locations that brought our corresponding
FTE coverage for Scope 2 to 92%.

76%

Top Office Locations

Scope 2
Scope 2 emissions cover indirect emissions from energy
consumption, including purchased electricity for our offices. While thelargest portion of our energy consumption is attributed to data
centers, we are pleased to report that our renewable energy coverage
across our global data center footprint remains high at over 95%.

Data Centers

Our primary data center provider gives us a breakdown of locationand market-based emissions per site as a result of purchasing
renewable energy certificates (RECs) on our behalf. Due to adifference in reporting cycles with this partner, we leveraged locationand market-based data from 2022 and then cross-checked it against
2023 power consumption metrics for key data center sites. The
consumption data was consistent with what we were able to validateusing the portal’s power consumption data for 2023.
Scope 3
Scope 3 emissions stem from activities across our value chain that are
not directly owned or controlled by Adyen. Our top Scope 3 emissions
categories include purchased goods and services, capital goods, andbusiness travel. Other categories include upstream and downstream
transportation associated with our terminals, use of sold products(lifetime energy consumption of terminals), end-of-life treatment ofterminal devices, and employee commuting.
In order to measure Scope 3 emissions, we use a combination of
supplier data and spend-based emissions factors to calculate CO2e
for all relevant Scope 3 categories. .

Energy intensity in 2023
Our energy intensity metric captures the electricity consumed (inkWh) per euro of net revenue. Energy intensity in 2023 was 0.015
kWh/Euro. This year, approximately 76% of our energy consumption
was attributed to our global data center footprint, with the remaining
24% generated by our global offices. Consistent with theaforementioned Scope 2 measurement, we included our top ten officelocations as well as three additional offices which possessed
consumption data, in total corresponding to 92% of our FTE. As
mentioned above under Scope 2, we obtain data from our primarydata center partner on a cadence which differs from our reporting
cycle, however we were able to validate our power consumption withactual figures from 2023. In addition to a large increase in data center
power consumption year-over-year as a result of new site openings
and an increase in hardware driving demand, our data center
partner’s methodology improved year-over-year as well, leveraging
actual data consumption metrics rather than estimates. Energy
consumption attributed to our top offices locations grew modestly incomparison, increasing approximately 11% due to new office buildouts and expanded sites.

Annual Report 2023

Environmental sustainability projects andclimate contributions
In 2023, we continued to gather learnings from our first carbon
removal procurement cycle. Over the course of the year and throughour existing partnership with Carbonx, we saw the delivery of several
projects for our initial portfolio including UNDO and InPlanet. We
followed the carbon removal space closely, and were pleased to see
more momentum in the market from other corporate buyers. We also
stayed close to the projects in our portfolio on a quarterly cadence totrack developments around operational and commercial milestones
as well as additional funding rounds.
Key highlights per project from our 2023 portfolio include:
UNDO
UNDO hit a number of key milestones, scaling its rock spreading
operations while also delivering Adyen's 1,840 tonnes of CO2 in Q3 ofthis year. The company also expanded its operations into Canada.
InPlanet
InPlanet announced its seed financing round in Q4 2023.
The company also spread and delivered the rock associated with
Adyen's purchase.
CarbonCapture
In August, CarbonCapture and its ecosystem partners were selectedby the US Department of Energy for funding of $12.5M to develop a
regional Direct Air Capture Hub in Wyoming.

45
Sonnenerde

InPlanet

Sonnenerde made significant strides in scaling its biochar production
over the course of 2023. While Adyen's commitment secured allavailable removals for the year, the company remains on track todeliver Adyen's removals ahead of schedule.

InPlanet harnesses the power of Enhanced Rock Weathering (ERW),
deploying crushed basalt onto agricultural fields in the tropics
to remove atmospheric CO2. InPlanet also empowers farmers toactively remove CO2 and adopt more environmentally friendly
agricultural methods.

Vesta
Vesta made progress in refining the measuring, reporting, andverification (MRV) methodology. The company's operations continued
to scale as it prepared for its next deployment.

2023 additions to our carbon removal portfolio
For our 2023 allocation, we leveraged the same methodology for ourbudget allocation as in 2022, applying a €92/tCO2e reference fee(based on UN Global Compact guidance) to our Scope 1 and businesstravel emissions. The budget set aside for carbon removal
procurement does not come from our 1% pledge, but rather is inaddition to this annually committed amount. Projects underconsideration are initially vetted and undergo a technical due
diligence process through the support and expertise of Carbonx, andare then scored on integrity, impact, and certainty of delivery.
We continued to build on a diversified portfolio of high-tech carbon
removal solutions, encompassing different pathways for durable
carbon removal. The four projects selected for this year’s
procurement cycle are expected to deliver an aggregate of 4,346
tCO2e removed between 2024 and 2029. This year’s project selection
included another purchase from Brazil-based InPlanet (already in theportfolio), alongside three new additions. The projects are detailed asfollows:

Equatic
Equatic has developed an electrolytic process for atmospheric CO2
removal that leverages the size and scale of the oceans. The process
stabilizes CO2 permanently in the form of dissolved bicarbonate ionsin seawater, and in the form of solid mineral carbonates. Moreover,the process produces hydrogen – a green fuel – as a co-product thatgenerates clean energy.
Charm Industrial
Charm's technology uses fast pyrolysis to convert biomass into biooil, a stable, carbon-rich liquid that is then pumped underground ingeological formations, removing CO2 permanently from theatmosphere, out of reach of wildfires, soil erosion, and land usechange.
Andes
Andes adds microorganisms to the soil along with agricultural seeds,
such as soybeans and wheat. The microorganisms accelerate theconversion of CO2 into minerals in the soil. With rainfall, the minerals
move deeper within the soil and create a carbonate layer, making
room for more CO2 removals.

Annual Report 2023

46

“Switching from a job in retail to the realm offinancial technology at Adyen a few years ago
was like stepping into a world of color. Now, I
am part of a dynamic community where I get
to work with incredibly talented people andbuild strong connections across cultures andtime zones. Everyone at Adyen brings uniqueand diverse perspectives, weaving theircolorful thread into our fabric. We prioritize
helping each other grow and, as a team,rapidly driving innovation and turning ideas
into reality. This is exactly what propels ourcompany forward, every day."Luis — Campus Recruitment Business Partner

Annual Report 2023

Anti-financial crime
At Adyen, anti-financial crime measures form a central andindispensable part of our business operations and strategic planning.
As a topic that is material to us due to its intrinsic link to our businessactivities, we actively factor it into our decision-making. We also
encourage every employee at Adyen to act as our “eyes and ears” – aprinciple which is reflected in our three-lines-model of risk
management.
In line with the growing maturity of Adyen, we have continued to focus
on deploying a scalable strategy and policies for maintaining a global
set of compliance standards and anti-financial crime measures that
address integrity risks and ensure compliance with all laws andregulations applicable to our operations.

Integrity risk management
Our annual Systematic Integrity Risk Assessment (‘SIRA’) serves as
the steering document for the Adyen Compliance Programme.
Through the SIRA, we ensure that our control framework is up to date,robust, and fit for purpose – ensuring proactive identification andmitigation of financial economic crime and integrity risks. For more
information on the SIRA, see the ‘Event identification and risk
assessment’ section below.
Adyen maintains strict policies to prevent bribery and corruption, tax
evasion, and all other forms of corporate and economic malfeasance.
Every Adyen employee is expected to uphold the highest level ofintegrity, and we strive to maintain a culture where everybody is
encouraged to ask questions and raise concerns about all aspects ofthe business. This promotes internal discussions and sharing of
ethical principles and behaviors.
We actively encourage individuals to test their concerns with our ‘noblush’ principle, and to discuss matters with colleagues or their Team
Lead where needed. Whenever a social or business interest might be
at risk as a result of an actual or threatened breach of any laws,

47
suspected wrongdoings, or apparent violations of business conduct
standards, employees are required to report their concerns internally.
This report is made either to managers, via our anonymous
whistleblower hotline (SpeakUp), or, in case of escalation, externally to
the Dutch Central Bank (DNB). Our full Reporting and Whistleblower
policy can be found on our Governance webpage atinvestors.adyen.com/governance.

Anti-money laundering, CTF, and sanctions
As a global financial institution, Adyen has always taken its
responsibility to prevent abuse of the financial system for money
laundering and terrorist financing (amongst other key integrity risks)very seriously.
We assign responsibility for upholding our anti-financial crime policies
at the highest level of our organization with our Chief Risk andCompliance Officer. Given the broad impact of these policies to our
workforce, our customer base, third-party businesses and partners,
and society at large, we ensure our policies are closely aligned with
global regulations, and we maintain a transparent dialogue withregulatory authorities to ensure our continued compliance. Awarenessand implementation of these policies is further ensured through ourannual compliance refresher training, which is mandatory for all
Adyen employees.
We have adopted and implemented extensive Know-Your-Customer(‘KYC’), Know-Your-Business (‘KYB’), and Customer Due Diligence(‘CDD’) practices, which serve to identify, verify, and assess all
merchants, relations, and affiliated persons, to avoid the processing oftransactions that are not aligned with the laws and regulations in the
countries where we operate. We also consistently monitor and update
our sanctions screening program to align with our responsibility toprevent the misuse of the financial system through the circumventionof sanctions.

To continue to meet our responsibility to prevent abuse of theinternational financial system, we further strengthened relevant AML/
CTF controls during 2023 – including improving our detection
methods, screening, and quality assurance verifications in line withour company’s growth. In addition, with Adyen’s continued expansion
into new product offerings, our Compliance team has continued tofocus on assessing and mitigating AML/CTF risks related to new
products and services to ensure they meet the highest possible
integrity standards – an effort which benefited in 2023 from thecreation of specialized AML compliance sub-teams focusing on
financial economic crime governance, monitoring, and analytics.

Anti-financial crime
Adyen’s core business in financial technology inherently
exposes us to illegal financial activities, including potential
money laundering, terrorism financing, and enabling
sanctioned individual and regions. Regarding this as amaterial topic, Adyen invests significant resources tominimize the likelihood and impact of financial crime
occurring through our platform, products, and services.
These policies and procedures contribute to the integrityof the financial system for society and individual
consumers.

Annual Report 2023

48

Event identification and risk assessment
Adyen conducts a comprehensive, annual top-down risk assessment
across the business to identify and evaluate existing and emerging
risks. In 2023, the Management Board completed its company-widerisk assessment, which is detailed in the ‘Risk Factors’ section of thisAnnual Report.
In addition to the top-down approach, Adyen employs targetedbottom-up risk assessments conducted at the process level orfocusing on specific risk categories. A notable example is theaforementioned Systematic Integrity Risk Assessment (SIRA),
focusing on integrity risks. Adyen has continued to expand the use of
its Governance, Risk management and Compliance (GRC) tooling in
2023, to ensure the effectiveness of its control framework is subject torobust evaluation. This aligns with our Corporate Risk and Internal
Control team’s integral risk management philosophy, emphasizing
the importance of a comprehensive approach to risk assessment andcontrol evaluation.

Annual Report 2023

Information security
At Adyen, we have always recognized the importance of laying solid
foundations. Just as we have built our single platform, we approach
information security with the same careful attention and foresight.
Looking at our business and our customer relationships through along-term lens, we prioritize deliberate and scalable growth. Thismeans that we consciously build with a focus on scale, flexibility, andmaintaining full control over our operations.
As a financial technology company, Adyen processes and stores large
amounts of sensitive and non-sensitive data. A priority since day one
has been to ensure that this data remains secure. To do so, we havelong ingrained security measures into each area of our platform andorganization. The conscious and strategic decisions behind theseform the bedrock of our security foundations.
On top of this, Adyen has long had a comprehensive Information
Security Policy in place, which is owned by the Head of Security. The
purpose of this policy is to minimize the risk of loss or exposure ofsensitive information maintained by Adyen. The policy also applies tousers of Adyen’s platform, to those working in Adyen environments —including all Adyen employees, contingent workers — and to allcomputers, servers and applications operating for Adyen’s businesspurposes. This policy is implemented through an operational security
program, which encompasses a variety of daily activities aimed atensuring compliance with our security standards.
In 2023, Adyen directed its security program efforts primarily towardfacilitating its business and technology, ensuring alignment withregulatory objectives, supporting successful expansion to new
regions, and evolving our technology stack.
Furthermore, the security program’s reporting activities were further
enhanced to provide more structured and comprehensive insights tomanagement and key stakeholders across multiple regions.

49
This included providing insight into the program’s structure and its
role in aligning Adyen’s security practices with our risk appetite levels.

Further scaling our security culture
To ensure we maintain our security mindset as our company scales,
Adyen continuously educates our global team on our high security
standards. Every Adyen employee – no matter their region, team, or
domain – is required to participate in our security training program aspart of their onboarding. This program is regularly updated to include
the latest threats from the market as well as those pertaining to thegrowth phase of the organization. The content ranges from sharing
security principles to scaling specific processes such as incident
handling and reporting, threat modeling, and security penetration
testing.
Over the course of 2023, Adyen’s security training activities were also
restructured, to further establish a “security culture program”.
Additional activities, channels, and content were added tocomplement training sessions, supporting and scaling Adyen’s
security culture across all regions.

Securing our products as we innovate
Product security is another essential pillar of our security strategy,
centered on safeguarding our products from potential design flaws or
security vulnerabilities that could compromise data confidentiality,
integrity, and availability. Our commitment to product security
includes ensuring that our software and hardware products comply
with rigorous security requirements and best practices across theentire lifecycle.
Throughout 2023, Adyen worked to further refine its threat modelingand offensive security testing activities to ensure our broader andricher product offering was delivered in line with our high security
standards.

Expanding our product offering and market presence in 2023 also
required us to address the risks associated with specific regulatory
and compliance requirements. Fortunately, our strong security
foundations and extensive compliance coverage enabled us to meetthose obligations without requiring significant changes that might
impact the services we provide to our customers.
As a company that collects, processes, stores, and transmits
cardholder data, Adyen is required to comply with the Payment Card
Industry Data Security Standard (PCI DSS). Our PCI DSS attestation
was successfully renewed during 2023 under the latest version of thestandard (v4.0), with new regions added to the scope of our regional
expansion. Furthermore, Adyen achieved recertification of other PCI
compliance programs applicable to our solutions, such as PCI PIN,
PCI 3DS, PCI P2PE, etc.

Annual Report 2023

Trust and regulatory oversightIn addition to our stringent technical standards, Adyen regularly
evaluates the effectiveness of our internal controls framework for theannual SOC 2 Type 2 report (Service Organization Control for Security
and Privacy criteria), which provides an overview of the test results
throughout the year that are reviewed and discussed withmanagement. This report is made available to all Adyen customers tofurther bolster confidence in the control environment.
With regards to regulatory requirements, Adyen is supervised andcontinuously examined by authorities around the globe to ensure
adherence to the standards defined for the regions and countries inwhich we operate (US FFIEC, FEDline, India PA Directives, EU EBA,
GDPR, PSD2, etc.), on topics including services and data
confidentiality, integrity, and availability.

Monitoring and proactively addressing an evolving
landscapeEven with Adyen’s full confidence in our security foundations andcontrols, we remain vigilant of our environment, industry, and theever-evolving technology space. As in previous years, we havecontinued to scale our security monitoring and detection capabilities,
taking a close, continuous, and structured look at the threat landscapeto ensure a fast and precise response to relevant events.
Adyen has been setting a roadmap to address upcoming regulatorychanges applicable to the multiple regions it operates in, such as
those introduced by the European DORA (Digital Operational
Resilience Act) mandate, leveraging our strong resilience perspective
and regularly tested platform to fulfil new requirements and expand
our incident response readiness.
Adyen is again closing the year without experiencing any information
security breaches nor notable security incidents that required
reporting to our regulators, customers, or other stakeholders. This is a50
clear testament to the consolidated security foundations and controls
we have in place.

Information security
Adyen recognizes the criticality of safeguarding
sensitive information continuously to maintain its
operational license, making the topic material. The
potential risk of this issue is limited, as we havesafeguards in place to mitigate and promptly escalate
incidents if or when they occur. However, security is ajourney rather than a destination, and we must
continue iterating and improving.

Figure 11
Responsible business practices trainings & completion rates (per 31 December 2023)

Life at a Public Company

98%

Data privacy & security
refresher training

95%

Compliance refresher
training

92%

The completion rates also include workers on leave (e.g., parental leave and longterm sick leave).

Annual Report 2023

51

“The level of autonomy we have at Adyen issomething that inspires me every day. It was ahuge part of what made my transition from
Regulatory Counsel to Strategy & Program
Manager for India so seamless. From day one,
I was trusted to dive straight in, take the leadon projects, and help craft our strategy in what
can often be a complex market. It’s a perfect
example of our culture-first approach, where
everyone is empowered to make significant
contributions from the outset. I find it
motivating to see how our individual efforts
contribute to collective impact for ourcustomers.”
Janak — Strategy & Program Manager, India

Annual Report 2023

Data privacy
At Adyen, data privacy is of the utmost importance, and we take ourcommitment to protecting our customers and the data we hold very
seriously. As we work to build the most customer-focused financial
technology platform, we recognize that the security of our customers’
data is an essential component of how we build an ethical business.
This is especially important given the sensitive nature of the data
we handle.
In addition to transaction information, we systematically process andcollect registration details from our customers and personal data fromour employees. The safeguarding of this data is integral to every
aspect of our company, and is governed by our Adyen Privacy
Principles. Our employees are made aware of the expectations placed
upon them to uphold our data privacy and security measures, and the
responsibility for ensuring our overall compliance sits with our Data
Protection Officer.
We base our global policies on the stringent data protection
standards of the General Data Protection Regulation (GDPR), making
necessary adaptations to suit local nuances — and we measure our
success through an annual Internal Audit and our SOC 2 certification.
When anticipating changes in data privacy laws and regulations, or
guidance in the regions where we operate, we take a proactive
approach to making adjustments where necessary and possible.
The global spotlight on data privacy continues to intensify, alongside a
growing complexity in privacy laws and regulations in regions such as
India, the US, and China. In 2023, the Adyen Privacy team focused on
driving awareness and ensuring continued education for ourworkforce on our privacy obligations; ensuring our products continue
to be compliant; and advising internal stakeholders on how to process
personal data in a compliant manner.

52

Knowledge and awareness
Every employee at Adyen is responsible for managing data
responsibly. The Adyen Privacy Principles underpin this approach,which are a set of practical guidelines designed to help our employees
make day-to-day decisions on the handling of personal data. These
principles are guided by our Privacy compliance framework, which
consists of different policies and procedures.
As our workforce has expanded, we have heightened our focus on
cultivating a deep understanding of our data privacy principles andpolicies in our organization. We ensure there is educational material
continuously available to our employees — starting at onboarding —to inform them about the type of data they have access to and theregulatory and compliance policies governing that data. Our annual
mandatory refresher training is a vital component of this, acting as areminder to employees about the importance of safeguarding thedata that Adyen holds. By the end of 2023, 95% of our employees had
successfully completed this refresher training.

Product compliance & data ethics
At Adyen, we adhere to the approach of ‘Privacy by Design’. Thatmeans ensuring that we work with personal data in a considered andprivacy compliant manner when building our products and services.
We believe this is a core element of how we build an ethical business,and training on this topic is available for employees as part of our
Product Academy.
Especially as we build more data-driven products, we find it essential
to continue to educate our product teams, maintain the right controls
for data management, and only provide access to personal data on aneed-to-know basis. Following the creation of our AI & Data Ethics
Working Group in 2022 to assess new products and services thatleverage AI, we focused this year on integrating these assessments
into our product approval and review process.
In addition, we continue to monitor data privacy laws and regulations,which are becoming more intricate and regionally varied. Thus, weensure a compliant product offering for all of our customers, anddeliver on our promise of being a reliable, long-term partner.

Reportable data breaches and substantiatedcomplaints
In 2023, Adyen suffered one reportable data breach, which wasreported to the Dutch supervisory authority. The breach was unlikely
to result in a risk to the rights and freedoms of natural persons,however due to the nature of the data, Adyen decided to notify thesupervisory authority and our affected customers.
We believe that open communication is vital to our data privacy
approach, as well as to building trust with our stakeholders. Rather
than setting the bar too high, where incidents might be concealed or
downplayed, we prefer a proactive approach. In the event of a data
breach, we acknowledge and report the incident promptly, enabling
us to swiftly address and mitigate any potential impact. By being open
about our experience and learnings, we aim to demonstrate ourcommitment to continuous improvement in our dataprotection measures.

Data privacy
Data privacy is a material topic since it poses a risk to Adyen
given our inherent exposure to handling sensitive data. It is
important that we properly oversee and manage the privacyof data related to shoppers, customers, suppliers, andemployees at the highest standard. Similar to how we see thesecurity of this information, we continually iterate andimprove our approach to data privacy.

Annual Report 2023

Tax
At Adyen, our commitment to responsible tax practices isfundamental. By integrating this into our broader business strategy,
we want to fulfil our legal duties and pay our fair share, upholding our
responsibility to stakeholders and the communities we serve. The
integration of a responsible tax approach into our overall businessstrategy reflects our dedication to transparency and responsible
corporate (tax) behavior.
This responsible approach to tax is guided by a conservative strategy
and underpinned by a low risk appetite, prioritizing sustainable andscalable practices that enable the business over aggressive
tax planning.
We pay our fair share in all countries where we operate and do not1
seek refuge in tax havens. Understanding how and where thedifferent companies in our group create value is therefore key, andAdyen’s tax team is tracking this in close collaboration with all
stakeholders involved. In line with this, we only set up entities incountries where we actively do business, highlighting that we do notcreate entities solely for the purpose of gaining tax advantages. This
also means that Adyen will not enter into set-ups or transactions thatare not aligned with Adyen's business model to apply for a tax
incentive or subsidy only.
We strive to maintain a balanced relationship with tax authorities andengage in regular dialogue, fostering a climate of mutual respect andunderstanding. We are open to participate in cooperative complianceagreements to seek an active real-time audit. This may result in Adyen
concluding a tax agreement with a tax authority to get upfront
certainty on material tax implications that may arise.

1

53

We ensure that all tax filing positions are supported by documentationand thorough analysis, and if specific knowledge is not available inhouse, we seek external advice.
We support the principles of the OECD’s work on Base Erosion andProfit Shifting (BEPS), including country-by-country reporting. We
also value the importance of taking the spirit and purpose of the law
into account when making tax decisions, and complying with theEnvironmental, Social and Governance (ESG) framework from a
tax perspective.

Tax governance, control, and risk management
Adyen utilizes a tax control framework to manage and control Adyen’s
global tax risks. Having a robust governance, control, and risk
management system for tax ensures that Adyen’s tax strategy andresponsible approach to tax are properly embedded within theorganization.
The tax control framework defines the roles and responsibilities within
Adyen when it comes to managing tax risks and ensures thatcompliance requirements are met. For this, members of the tax teamparticipate in relevant internal and external trainings.
Compliance with the tax control framework is effectuated throughinternal controls for which evidence is documented and collected on aregular basis. The internal control team continuously monitors andtests compliance with the tax control framework. As part of ourinternal control processes, we provide an annual tax in-control
statement. We continuously seek new ways to embed technology
across all areas of our tax control framework, including tax processes.
The tax team reports on its tax risks to the Audit and Risk Committee
at least yearly.

Adyen follows the EU list of non-cooperative jurisdictions to determine which country qualifies as 'tax haven'.

Under our Whistleblowing Policy, anyone at Adyen can reportconcerns about unethical or unlawful behavior in relation to tax. In
2023, there have been no reports of incidents, breaches, or claims
that exceed Adyen’s tax risk appetite. For more information on risk
appetite, please refer to the Risk Management section.
The tax strategy is monitored by the tax team on a continuous basis
and is formalized in the responsible approach to tax (which takes theform of a tax policy). The tax team updates this at least annually or incase of significant changes. The Audit and Risk Committee reviews
the policy before submitting it to the Management Board andSupervisory Board for their ultimate approval.

Stakeholder engagement and management ofconcerns related to tax
Adyen maintains an open relationship with all relevant tax authorities.
Adyen refrains from lobbying activities related to tax. We have noactive involvement in the development of tax systems, legislation, or
administration. However, we are open to provide practical input on tax
experiences within our operations.
Within Adyen, tax follows the business. Adyen’s tax team is wellembedded in the organization to engage with (external) stakeholders
and address any views and/or concerns. Our responsible approach totax, as presented in this Annual Report, is constantly evaluated anditerated upon following active dialogue with stakeholders. In this way,
we make sure that it stays aligned with our organizational values andbusiness strategy.

Annual Report 2023

54

Risk management
Adyen recognizes that risks are associated with achieving its strategy
and business objectives. Adyen aims to be risk aware without being
unduly risk averse, and therefore actively manages its risks to protect
and grow the company. Adyen has adopted a uniform and systematic
approach for managing risks. This integral risk management
framework is based on the Enterprise Risk Management (ERM) model
as issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).

Risk governance
Adyen has established a risk governance that is consistent with thesize, international presence, complexity, and risk profile of thecompany. Adyen's governance identifies, establishes, and reinforces
the importance of oversight responsibilities for risk management. The
Supervisory Board supervises and advises the Management Board.
The Audit and Risk Committee is charged with supervising,monitoring, and advising the Management Board in relation to thefunctioning of the internal risk management and control systems.
The Management Board is responsible for maintaining an adequate
system for risk management and internal control. The Management
Board has instituted a Risk Committee to support them with risk
management oversight. The CFO, CRCO, and CTO represent theManagement Board in the Risk Committee. The Corporate Risk andInternal Control team reports its findings from monitoring Adyen’s risk
profile to the Risk Committee. The Risk Committee keeps theManagement Board informed on the observations, recommendations,and deliberations on findings regarding risk management and internal
control. The Risk Committee reports any material risk limit breach thatwould place Adyen at risk of exceeding its risk appetite promptly to
the Management Board.

Three lines model
Adyen has adopted the three lines model, as published by the Instituteof Internal Auditors (IIA), which reflects the segregation between
operations (first line management), the risk management, security andcompliance functions (second line), and the independent internal
audit function (third line). The first line owns and manages risks, thesecond line sets control standards and monitors adherence to them,and the third line — internal audit — provides assurance on theadequacy of the first two. The Corporate Risk and Internal Control
team supports the Management Board and Risk Committee with its
risk oversight, management of the risk framework, setting of therelevant risk management policies, risk appetite, and independent
monitoring of key risks, limits, and controls.

Risk culture
Culture is a key aspect of risk management at Adyen. Our people
establish the mission, strategy, and business objectives, and put risk
management practices in place. Adyen believes that a strong culture
serves as a safety net to guide people in making good decisions.
Culture can never be seen as a substitute for a mature, tested, andevidenced control framework. Rather, the right risk culture enables
effective risk management through constructive behavioural norms.
Therefore, Adyen actively promotes and safeguards the key elementsof culture through the Adyen Formula and the Adyen Way of Being
in Control.

The Adyen
Way of Being
in Control
We challenge each other and always ask why.
We don’t just tick the box
We take ownership and deliver quality
in everything we do
If you see a problem, act on it and involve others
Every mistake has potential for successand growth
Always look for improvement and automation
with 10X in mind
The Adyen Formula guides our behavior,policies support itAnnual Report 2023

Strategy, objective setting, and risk
appetite
At Adyen, risk management, strategy, and objective setting work
together. Operational objectives put strategy into practice whileserving as a basis for identifying, assessing, and responding to risk.
Risk appetite defines the amounts and types of risk Adyen is willing toaccept in pursuit of its objectives. Adyen identifies risks in two stages:
inherent risk and residual risk. Inherent risk is defined as the risk to
Adyen in the absence of any actions taken to alter the likelihood or
impact of that risk, therefore also sometimes described as ‘untreatedrisk’. Residual risk is the remaining risk after consideration of the
mitigating actions taken to alter the likelihood or impact of that risk.
Risk appetite is defined at residual risk level. A low risk appetite
implies a low residual risk acceptance, and therefore requires the risk
response and internal controls to reduce the residual risk tocorresponding levels. A higher risk appetite may allow for additional
activity and more lenient risk limits compared to a moderate or low
risk appetite. Adyen's risk appetite is aligned with its strategy.
Changes in strategy and willingness to assume risks or external
developments may necessitate Adyen to update its risk appetite,which is ultimately bound by Adyen’s risk capacity.
Adyen has translated its view on risk appetite into risk appetitestatements, which set the overall tone for Adyen's approach to risktaking. In 2023, the Management Board performed its annual review
and updated Adyen’s risk appetite statements and risk limits, whichwere discussed in the Audit and Risk Committee, and approved by theSupervisory Board.

2

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Event identification and risk assessment
Adyen performs a top-down, company-wide risk assessment on atleast an annual basis. The purpose is to identify and assess principal,
established and emerging risks. For a detailed description of thecurrent principal risks to Adyen, see the ‘Risk Factors’ section of thisAnnual Report. The top-down and strategic company-wide risk
assessment is complemented by multiple targeted, bottom-up risk
assessments. Bottom-up assessments are conducted at process levelor aimed at specific risk categories, such as the Systematic Integrity
Risk Analysis (SIRA), the climate and environmental risk materiality
assessment, or the Information Security Risk Assessment.
During 2023, Adyen grew its Corporate Risk team with additional
experienced resources for specific risk categories, most notably for
ESG, financial, and model risks. The Risk team also hired Internal
Control Officers located outside of Amsterdam to account for thecompany's growing presence in certain regions.

Control activities
Control activities are typically embedded in processes, to facilitatesound and controlled business practices. They also provide
reasonable assurance regarding the achievement of company
objectives, compliance with laws and regulations, and the integrity ofAdyen’s financial reporting. Adyen uses COSO's Internal Control —Integrated Framework (2013) as a reference for its design,
implementation, and evaluation of control activities as part of asystem of internal control. Adyen has implemented internal risk
management and control systems to manage the risks effectively andefficiently and to provide reasonable assurance that objectives can be
met. Policies and procedures ensure that employees understand theirrole in Adyen's risk and control systems.

More information on Adyen’s capital and liquidity ratios can be found in the 2023 Transparency and Disclosure Report (Pillar 3) via investors.adyen.com/financials.

During 2023, the Internal Control team created control activities forthe new processes relating to Adyen’s Embedded Financial Products(EFPs), to support controlled growth in that area. Furthermore, theteam facilitated regulatory gap assessments via Adyen’s GRC tool andupdated and promoted the Adyen Way of Being in Control throughout
the company.

Stress testing
Adyen uses stress testing to understand the potential impact ofadverse events on its business model, capital, and liquidity ratios.
The stress scenarios are based on exceptional yet plausible eventswith a sufficient degree of severity. Adyen also performs stress testing
to evaluate the adequacy of capital and liquidity plans under stressed
conditions using scenarios and risk factors prescribed by theregulator. Adyen performs these tests in accordance with EBA
guidelines on stress testing. In 2023, Adyen’s Internal Capital and
Liquidity Adequacy Assessment Process (ICLAAP) confirmed its highfinancial shock absorption capacity and strong capital and2
liquidity ratios .

Effectiveness of risk management andinternal control systems
In compliance with principle 1.2 of the Dutch Corporate Governance
Code, the Management Board is responsible for establishing andmaintaining an adequate system for risk management and internal
control. Adyen has implemented internal controls to provide
reasonable assurance on the reliability of financial reporting and the
preparation of financial statements for external purposes, following
financial reporting standards. In compliance with Best Practice
Provision 1.4 of the 2022 Dutch Corporate Governance Code, theManagement Board annually evaluates the effectiveness of the design

Annual Report 2023

and operation of its risk management and control systems. Per
December 31, 2023, no major failings in the effectiveness of theinternal risk management and control systems were observed, norwere significant changes to these systems made or major
improvements planned. The Management Board has discussed theevaluation of its risk management and control systems with the Audit
and Risk Committee and Supervisory Board.

Risk factors
In compliance with Best Practice Provision 1.4 of the 2022 Dutch
Corporate Governance Code, the Management Board has executed
its company-wide risk assessment in 2023 and reconstructed its viewon inherent and residual risks. This section describes the principal
inherent risks that could potentially affect Adyen, with further detail on
financial risks provided in Note 12 of the Consolidated Financial
Statements. Additionally, this section also documents Adyen’s
company-level risks.

56

Principal risks
Adyen recognizes that there are inherent risks fundamentallyconnected and relevant to Adyen’s business model and the financial
technology sector. While the risk profile of Adyen varies acrossproducts and geographies, the four risks mentioned below are key
considerations whenever we explain our risk profile to regulators,
investors, customers or other interested external parties. That is why
we start by describing these topics, which are: information security,
regulatory compliance, platform availability, and operational liquidity
risk. We will then recount the most relevant risk developments in
2023, and conclude this section with a comprehensive description of
relevant residual risks to Adyen.
Information security

While Adyen believes that the risks described below are the material
risks concerning Adyen's business, they are not the only risks relevant
to Adyen. Other risks, facts, or circumstances not presently known toAdyen or that Adyen currently deems to be immaterial, could
individually or cumulatively prove to be significant and could have amaterial adverse effect on Adyen's business, operations, financial
condition, and prospects.

Adyen and its customers and partners obtain and process a large
amount of sensitive data. The systems involved in processing this data
are inherently prone to attacks by cyber-criminals, internet fraudsters,
employees, or other actors that intend to breach them. These events
could lead to, amongst other things, unauthorized access to or
disclosure of customers’ data, unlawful destruction of data, andinability or delays in processing transactions. As Adyen provides a
global financial technology platform that works with some of theworld’s largest businesses, this leads to an inherently high risk
exposure to intrusion and disruption attacks.

Adyen’s risk appetite — and broader risk management approach — isset in the context of residual risk. We believe this approach creates
most risk awareness across all three lines as it is nested in the daily
practice of running a technology company.

To counter this risk, Adyen has implemented an Information Security
Program, which is continuously updated to address new threats.
Please find a more detailed description of information security risk to
Adyen on page 63.
Regulatory compliance
Adyen operates in highly regulated business environment, subject tolocal and supranational regulatory frameworks . If Adyen's efforts tocomply with laws, regulations, and standards differ from the activities

intended by regulatory bodies or supervisory authorities, they may
initiate legal and regulatory proceedings against Adyen. To ensurethat applicable laws and regulations are identified and mapped to theactivities and services Adyen offers in local markets, Adyen’s
regulatory compliance specialists continuously screen the local
regulatory landscape with validation from external legal counsel.
Adyen believes that the use of a single platform is best overlaid with a
global compliance and risk framework, whereby Adyen strives forconsistent application of best practices — while remaining cognizantof the need to implement local deviations where needed.
Adyen maintains a proactive approach to regulation, and actively
commits to regulatory frameworks via licenses and externally audited
standards. In 2023, as part of this, Adyen further expanded its license
portfolio. Notable examples include obtaining a branch banking
license in the United Kingdom and an authorization to operate as a
Payment Institution in Brazil. Relying on our own licensing stack has
always been part of the Adyen strategy, as it facilitates global growth,
keeps control over the process and knowledge in-house, and instils
confidence in customers. As a result, Adyen is well-placed to deal
with regulatory complexity and differences in supervisory approaches
in a sustainable manner.
Nevertheless, supervisors tend to have varying focus points aroundthe world, irrespective of regulation. To manage the variety ofsupervisory conversations and agendas, Adyen actively invests in local
compliance and regulatory teams. We invest in strong, transparent
and active relationships with regulators and payment schemes. Our
strategy, our global reach, as well as the continuous increase ofregulatory pressure in the financial industry, all contribute to theheightened inherent risk profile of regulatory compliance.
Platform stability and availability
Platform stability and availability are key determinants of Adyen’s
performance as a payments platform. Downtime, deteriorated

Annual Report 2023

57

performance, or connectivity issues can lead to transactions being
rerouted away from Adyen’s platform or to transactions being
aborted. This can negatively impact Adyen’s transaction volume.
Moreover, deteriorated performance could lead to reputational
damage amongst both current and prospective customers. As Adyen
generates a large portion of its volume growth from expanding with its
already transacting customer base, platform stability and availability
are a priority for Adyen. This is why we acknowledge a heightened
inherent risk profile on platform stability and availability. This is thecase for payments processing, data products, and financial products.
Nevertheless, incidents occur, which can result in real-time impact forcustomers and shoppers alike. In 2023, there were instances ofplatform incidents that reduced the availability of Adyen’s platform tocustomers and the overall payments infrastructure. Adyen has madeadditional investments into its platform stability program and incident
management framework to help reduce the possibility of such eventsoccurring, as well as mitigate potential impacts.
Decreased platform stability and availability can have various causes
including intrusion, disruption, or physical events. Adyen monitors its
operational performance on a large number of indicators, often
focused on specific platform sections, or products and services.
The quantitative limits monitored on this risk type focus on platform
uptime, and are in line with supervisory requirements. The design ofAdyen’s infrastructure and related controls and processes aim toprovide highly available services and ingrained operational processes
to maximize platform stability and availability. Adyen invests
continuously in resources and training to maintain its high level of
performance.
Operational risk and liquidity
A payments platform plays a central role in revenue generation forcustomers, as well as in providing liquidity. To Adyen, it all starts withrealizing a payout at the right time, in the right currency, in the rightmanner, according to the preferences of the involved customer. We

do this with a high degree of automation and by deploying
sophisticated processes and procedures. This also creates aninherently higher operational risk profile. Furthermore, the payments
ecosystem often involves multiple partners, which can lead todependencies on other financial institutions and card schemes. At
Adyen, an operational issue somewhere in the payment chain has thepotential to result in a liquidity event for a customer. Adyen in itself has
a strong liquidity position (please refer to Note 12 ‘Financial Risk
Management’ of the attached Consolidated Financial Statements for
additional disclosures). Nevertheless, liquidity management isfundamental to our service offering and therefore is also key to ourrisk management.
Adyen has a structured approach in place to handle operational
incidents. We have prepared root-cause analyses (RCAs) for
operational events within risk appetite, and evaluated the impact on
the overall risk and control framework. The lessons learned from the
RCAs are used to strengthen processes and risk management going
forward.

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58

Risk developments
2023 External risk developments
The global macroeconomic environment affected discretionary
spending by consumers and businesses, which led to economic
headwinds in major economies. While inflation remained high, interest
rates also increased amongst efforts to reduce inflation to more
moderate levels. Many businesses affected focused on cost reduction,rather than on growth in new markets. As a result, more businesses
started working with lower cost payment providers in 2023. Adyen
employs a value-focused strategy that provides sustainable, longterm, premium functionality, while remaining conscious of pricing
dynamics. Some other market participants focus on a low-pricestrategy, or on developing specific functions or functionalities thatallow them to specialize in niche markets and features.

In 2023, geopolitical tensions intensified in many parts of the world,and division and fragmentation continued. While Adyen does not havepersonnel or business presence in countries with major armed
conflicts, our customers, employees and other partners in our network
may experience its negative ramifications. Fundamental elements ofAdyen’s risk monitoring include Adyen’s physical presence in any
given region. If needed, Adyen will take mitigating measures to reduce
the residual risk arising from any kind of geopolitical tensions.
2023 Internal risk developments

The macroeconomic environment also impacted the expectations offinancial markets and investors. Adyen experienced a sharp decline inits share price following the publication of its mid-year results. Afterreporting a stronger set of third quarter results, elaborating on
Adyen's strategy and updating financial objectives, a recovery wasseen in the final months of 2023. While the share price has a very
limited effect on Adyen’s own financial performance, it does reflect
investors’ perceptions of Adyen’ strategy, which is deemed relevant
and important.

In 2023, Adyen grew its Embedded Financial Product suite withproduct offerings such as Adyen (Bank) Accounts and Adyen Capital.
The market potential for these products remains strong, especiallywith platform businesses, as it provides banking services with the
integration with an innovative payments solution. These products
come with a different risk profile compared to payment processing,which required the continuation of risk investment during 2023. A
good example of this is the growth of the model risk management
framework and the number of model validations. These developments
help mitigate the operational risk that lies in the increased use offinancial models outside of the payments platform. While the EFP
offering provides opportunity for growth in the near future, thefinancial risk related to these products is not yet significant.

Simultaneously, Adyen is expanding its footprint around the globe
through locations, licences — and the products offered through thoselicenses. Across the board, data regulation is impacting the reach ofglobal tech players. This development requires Adyen to evaluate its
practices. Another example of relevant new regulation is theintroduction of the Corporate Sustainability Reporting Directive(CSRD) in the EU. Whereas regulation is plentiful, Adyen is committed
to its proactive strategy in 2023, in which in-house expertise is built up
without reliance on third-party licensing or outsourced compliance.

Adyen remained focused on its payment platform and acquiring
business as the central tenets of its business. As identified in the‘Principal risks’ section, the availability of Adyen’s platform andservices is key to its contribution to customers’ success. Adyen has
made several investments in its platform availability and stability inlight of incidents during 2023, which Adyen believes will reduce thelikelihood and scope of operational incidents even further going
forward. An important example of this during 2023 is the emphasis on‘alert ownership’ across the organization.

Annual Report 2023

Strategic and business risk
In pursuance of its strategic objectives Adyen values a solid financial
and (regulatory) capital outlook. Adyen accepts that in order to grow, it
will consume some of its reserves to invest in assets, people andprocesses.
Execution risk
Central to the success of Adyen has always been the ability toinnovate and respond quickly to opportunities that arise. The
organizational competences of speed and decisiveness are key inrealizing future strategic objectives. Adyen therefore actively mitigates
its execution risk, which it has defined as increased complexity leading
to a loss of organizational focus and loss of ability to act effectively.
While Adyen has a relatively flat organizational structure andgovernance aimed at direct co-creation, it has grown in size in recent
years, as exemplified by growth in personnel, products, and global
footprint. Adyen has implemented a strategy focused on Embedded
Financial Products (EFP) and platforms to further expand its productand service offering. Execution risk is top-of-mind for Adyen given theorganization’s growth stage. Adyen has a low risk appetite for
execution risk, believing focus on the priorities within the strategy
keeps execution risk within appetite. To apply this organizational focus
within its current growth stage, Adyen has selected a small number ofpriority objectives and set up specific program management activities
to achieve them.
Macroeconomic conditions
Monitoring macroeconomic conditions is important to Adyen in orderto adapt Adyen’s strategy to changing market conditions. Adyen
accepts that entering and operating in markets with somemacroeconomic volatility could lead to financial losses. Uncertainty
about global and regional economic events may result in shoppers
and customers postponing spending, which could have a material
adverse impact on the demand for Adyen's products and services.

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Adyen therefore monitors relevant indicators and has observed
inflation rates, energy prices, and interest rates going up in recent
years in the majority of its key markets. In 2023, interest rates rose,
which has its effect on investments by companies, discretionary
spending, and overall price levels. Adyen is continuously monitoring
the risks and opportunities provided by local and regional
macroeconomic conditions and formulates appropriate responses inorder to minimize the negative impact to Adyen and its stakeholders in
the long term.
Competition
Adyen divides competition risk into competition on pricing andcompetition on functionality. Adyen competes against a wide range ofbusinesses such as banks, payment service providers, industryspecific software platforms, and orchestration platforms. These
competitors might have a dominant position, or offer products andservices to shoppers and customers that Adyen does not offer. They
may apply pricing strategies that give rise to short-termcompetitiveness. Some competitors have greater merchant bases,
volume, scale, resources, and market share compared to Adyen,
which may provide significant competitive advantages. Furthermore,
Adyen is facing competitive pressure from non-traditional payments
processors and other parties entering the digital payments industry,
which may compete in one or more of the functions performed inprocessing merchant transactions. Adyen has a moderate risk
appetite for competition on price as it has accepted that competitors
attempt different pricing strategies as they attempt to increase market
share while reducing profit margins. If this competition leads tounsustainable pricing pressures, Adyen will not pursue a deal. In lightof global macroeconomic conditions, Adyen experiences an increased
focus on price from customers.
Adyen has a low risk appetite for competition on functionality as
Adyen aims to offer premium products and services that provide
superior functionality toward merchants, platforms, and shoppers.

While cost is an important factor in any commercial decision, Adyen
focuses on functionality over price, as this strategy is in line with thevalue that our in-house development of features and products brings
to merchants.
Adyen is in constant dialogue with its merchants on service quality
levels, feature developments, and pricing. While the dynamics ofcompetition will always change, Adyen’s growth in processed volume
combined with its competitive strategy indicates that the residual risk
to these risk factors is within appetite. One example of this is the very
low churn rate (<1%) that Adyen has experienced in 2023, a
continuation of a trend from previous years.
Reputational risk
Adyen has low appetite for reputational risk and aims to avoid actions
that trigger negative international media attention and/or significant
reputational damage. Any negative publicity about Adyen, the quality
and reliability of its products and services, changes to its products andservices, its ability to effectively manage and resolve complaints, its
privacy and security practices, litigation, regulatory activity, and theexperience of customers and shoppers with its products or services,
could adversely affect its reputation and the confidence in and use of
its products and services. Harm to Adyen's brand can arise from manysources, including failure by Adyen or its partners to satisfy
expectations of service and quality, inadequate protection of sensitive
information, compliance failures and claims, litigation and otherclaims, employee misconduct, rumours or false stories, andmisconduct by its partners, service providers, or other counterparties.
Adyen wants to build an ethical and sustainable business andtherefore actively mitigates risks that could negatively affect the
Adyen reputation or brand.

Annual Report 2023

Access to card networks
The majority of transactions processed on the Adyen platform go
through international credit and debit card networks. In order toaccess these card scheme networks to provide acquiring, processing,and issuing services, Adyen must have the relevant regional operating
licenses or memberships. In some markets, where it is not feasible nor
possible for Adyen to have a direct license with a card network, Adyen
has a relationship with a local financial institution to act as a local
sponsor for the license. Adyen has low appetite for failure to comply
with card network rules or for any other deterioration in its
relationships with the card networks, which could result in the
restriction, suspension, or termination of Adyen's own licenses, or theuse of sponsoring banks’ licenses. In 2023, no significant
impediments in relation to the access to card networks or sponsoringbanks occurred. Given the increased global footprint and local
licenses obtained by Adyen (e.g. the United Kingdom and Brazil
during 2023), the reliance on local financial institutions is becoming
less apparent while maintaining an adequate level of access to card
networks and local financial environments.
Concentration of customers
Some of Adyen's largest customers provide significant contributions
to its net revenue. Large enterprise customers typically havearrangements with multiple payment service providers (primarily inorder to mitigate their single-point-of-failure risk). These customers
could terminate their contracts or shift business away, leading tolower processed volumes and net revenue. Adyen has low risk
appetite for commercial dependency on single customers andtherefore continues to execute its growth strategy to onboard newcustomers from different verticals on its platform. Adyen believes thatits merchant portfolio is well-diversified, especially given the multiple
payment channels supported by Adyen’s single platform. Taking into
consideration the macroeconomic forecasts globally, thediversification of customers and payment channels simultaneously

60

reduces the risk in concentration of customers. Across the last years
Adyen’s overall growth has reduced the concentration of customers
that contributed most to Adyen’s revenues. However, large volumes
from new merchants (existing and new) can result in an increase inconcentration in the short term. The concentration of customers (theircontribution to net revenue) is monitored by Adyen in order to aid
decision-making and risk management. In 2023, the global
concentration of customers remained within Adyen’s risk appetite.
Intellectual property rights
As substantially all of Adyen's intellectual property is developed inhouse, the protection of such intellectual property, including Adyen's
platforms, trademarks, copyrights, domain names, trade dress, andtrade secrets is important to the success of its business. Adyen seeks
to protect its intellectual property rights by relying on applicable laws
and regulations, as well as a variety of administrative procedures.
Nevertheless, Adyen's intellectual property rights may be contested,circumvented, or found unenforceable or invalid, and Adyen may not
be able to prevent third-parties from infringing, diluting, or otherwise
violating them. Any failure to adequately protect or enforce Adyen's
intellectual property rights or significant costs incurred in doing so
could diminish the value of its intangible assets.
As the number of products in the technology and payments industries
increases and the functionality of these products further overlaps,
Adyen may become subject to intellectual property infringement andother claims. Adyen’s international growth and development ofintellectual property in new jurisdiction can also influence its risk ofclaims. The ultimate outcome of any allegation is often uncertain and,regardless of the outcome, any such claim, with or without merit, may
be time-consuming, result in costly litigation, divert management's
time and attention, and require Adyen to, among other things, stop
providing transaction processing and other payment-related services
or redesign, stop selling its products or services, pay substantial
amounts to satisfy judgments or settle claims or lawsuits, pay
substantial royalty or licensing fees, or satisfy indemnification

obligations that Adyen has with certain parties with whom Adyen hascommercial relationships. Adyen has not experienced amaterialization of this risk in 2023.
Disruptive innovation
Adyen expects that rapid and significant advancements in technology
will continue. These changes may alter the desirability of the products
and services Adyen offers. If Adyen is unable to provide
enhancements and new features that achieve market acceptance nor
keep pace with rapid technological developments and evolving
industry standards, its business could be materially and adversely
affected. Adyen aims to provide best-in-class products and services inorder to combat commoditization of payment products. Adyen
accepts disruption and innovation as standard market practices. As
such, Adyen continues to build and actively invest in its single
platform solution, license framework, and complementary products.
An example of this investment in complementary products is thelaunch of Embedded Financial Products (EFP) on Adyen’s technology
platform. Adyen has established pillars, solutions and workstreams
that continuously work on improving its service offering based on
customers’ needs and innovations. Through the setup of the solutions
and workstreams with product, technical, and commercial staff,
Adyen can work closely with its customers and quickly address their
evolving needs.

Annual Report 2023

Sustainability risk
Sustainability factors (e.g. environmental, climate, social andemployee topics, human rights, and other societal developments) canpose a risk to Adyen. The risk might materialize through its
employees, operations, reputation, or via external stakeholders Adyeninteracts with. Sustainability risk at Adyen includes social
responsibility, ethical business practices, and governance asunderlying topics. These topics are becoming key to the mission andpurpose of entities in the financial sector and the corporate world.
Initially, the focus in the financial sector on sustainability topics was onbanks’ assets, and more specifically the lending activity, especiallywith regards to climate- and environmental risks. Fuelled by a strong
push from European regulators, that focus is now shifting toward a
broader application, including payments, and incorporating a wider
lens of sustainability topics.
A specific subset of sustainability focuses on environmental
sustainability or Climate- and Environmental (C&E) risk. C&E risks arecommonly understood to comprise two main risk drivers: physical andtransition risks. Physical risk refers to the financial impact of achanging climate. Physical risk is categorized as “acute” when it
arises from extreme events, such as droughts, floods, and storms, and“chronic” when it arises from progressive shifts, such as increasing
temperatures, sea-level rises, water stress, biodiversity loss, land usechange, habitat destruction, and resource scarcity. This can directly
result in, for example, damage to Adyen property or reduced
productivity, or indirectly lead to subsequent events, such as the
disruption of the Adyen supply chain. Transition risk, on the other
hand, refers to a financial loss that can result, directly or indirectly,
from the process of adjustment toward a lower-carbon and moreenvironmentally sustainable economy. This could be triggered, forexample, by a relatively abrupt adoption of climate and environmental
policies, technological progress or changes in market sentiment andpreferences.

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In 2023, Adyen has renewed and improved its methodology for theassessment of C&E risk. An in-depth review of its exposures,
merchant base, and geographical risk led to the result that Adyen has
a low residual risk exposure to physical and transition risks due to its
business model, operational risk management capacities, andreduced exposure to financed emissions, real estate or other physicalrisks.
Adyen has incorporated the outcome of the C&E risk assessment
outcome in the CSRD Double Materiality Assessment (DMA) as
further documented above. The outcome of the DMA led to theidentification of 8 material topics, of which 3 are from a financial
materiality perspective related to risk. While these material topics andtheir assessment are further outlined above, it should be noted thatthe definitions align with the related risk topics (information security,
data privacy, and anti-financial crime) in this chapter.

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62

“A guiding principle at Adyen is to seek out
different perspectives to sharpen our ideas.
I see this reflected all the time in the way thatdifferent teams work together. Everyone isencouraged to share their opinion and maketheir own decisions, rather than taking a more
traditional, top-down approach. We feelempowered — and I think this brings out thebest in all of us.”
Guillaume — Privacy Counsel

Annual Report 2023

Operational risk
Adyen recognizes that operational risks are associated with achieving
its business objectives and are particularly prevalent in its techbusiness model. Operational risk concerns the risk of losses resulting
from inadequate or failed internal processes, people, and systems, orfrom external events, including legal risk. Adyen has a moderateappetite for operational losses. In 2023, Adyen remained well within
its risk limits. There was also a large focus on automating andstreamlining processes throughout the year, to set Adyen up for future
scale and reduce operational risks originating from manual tasks.
Customers’ potential liability for shopper chargebacks
When shoppers claim that a business has not delivered goods orservices as agreed, issuing banks can file chargebacks. Adyen seeks
to offset such chargebacks with the payouts to the merchant, but may
not be able to succeed in full. In such cases, Adyen is exposed to
Merchant Potential Liability (MPL) risk. While Adyen has implemented
risk mitigation, including withholding reserve funds from the payouts
to its customers based on assumptions and estimates that Adyen
believes are reasonable to cover such eventualities, the measures,
including the withheld funds, may not be sufficient.
Adyen has a dedicated MPL team that closely follows thedevelopment of this risk. The team frequently discussed its
observations and recommendations with the Merchant Risk
Committee, Management and Supervisory Board throughout 2023.
Despite challenging macroeconomic conditions in several key
markets, Adyen did not incur sizeable MPL losses due to chargebacks
during the year. The cumulative MPL losses were well within the set
risk appetite. The MPL team has further invested in their internal
automated monitoring procedures, contributing to Adyen's strategy ofdelivering performance at scale. For more details on MPL reserves,
please refer to note 16 ‘Trade, other payables, and payables tomerchants and financial institutions’ in the 2023 Consolidated
Financial Statements.

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Availability, connectivity, and performance of products
and services
Adyen has a low risk appetite for issues surrounding the availability,
connectivity and performance of the platform. There is a risk that
Adyen's systems and those of its third-party service providers,
including data center facilities and communication networks, may
experience significant service interruptions in the future. Frequent or
persistent availability, connectivity, or performance issues could cause
current or potential customers to believe that its systems areunreliable, leading them to switch to a competitor or to avoid Adyen's
products and services, potentially harming Adyen's reputation andbrand permanently. Moreover, to the extent that any platform failure
or similar event results in damages to Adyen's customers or theirbusiness partners, the customers or partners could seek significant
compensation or contractual penalties from Adyen for their losses,
which, even if unsuccessful, could be time-consuming and costly for
Adyen to address, and may divert management attention.
Furthermore, frequent or persistent interruptions could lead toregulatory scrutiny, significant fines and penalties, and/or mandatory
and costly changes to its business practices. It could ultimately cause
Adyen to lose existing regulatory licenses or prevent or delay Adyenfrom obtaining additional regulatory licenses that Adyen needs toexpand its business.
Adyen has built its platform and services to avoid the presence of
single points of failure, and to ensure that sufficient capability exists tocontinue normal operations for critical processes in the event of a loss
or unavailability of corporate resources. This applies to resources
ranging from information technology, physical locations, to personnel
and whole departmental structures. Adyen’s highly available platform
is designed to withstand individual telecommunications, systems anddata center instance failures. Adyen workforce is fully equipped towork remotely, and some have been doing so without impact to our
payment processing ability during 2023. Furthermore, this year,
Adyen improved its incident management framework and madeadditional investments in the stability of its platform.

Information security risk
As highlighted in the Principal Risks section, Information security
remains an important risk area for Adyen. Strengthening ourcapabilities to mitigate the evolving risk is therefore a continuous
effort.
Adyen has a low appetite for information and cyber security risk.
Information security risk was not found to be higher in 2023
compared to the previous year. Some specific developments in thethreat landscape for the financial industry, such as ransomware andthird party risks, are continuously evaluated, but so far found lessrelevant for Adyen’s environments because of in-house development
and the lack of dependency on external parties for core businessactivities. Security risk management efforts during 2023 were focusedon strengthening security controls, testing the product portfolio andmaintaining a strong security culture in a fast-growing globalorganization. Please find a more detailed description of information
security risk to Adyen on page 49.
Third-party risk
Vendors and supply chain dependencies could negatively impact
Adyen’s operations and security of data, systems, and services. Adyen
has a low appetite for dependency on third parties in its criticalbusiness functions. Adyen strives to minimize outsourcing of activities
directly related to its critical processes or platform to avoid
dependency on third parties. Adyen believes that not being limited bythird-party software in its core operations is a key factor in its ability to
rapidly increase the number of transactions that the platform canprocess. Adyen maintains a Third-Party Management Policy, which
defines a framework, including clear ownership, for assessing thirdparty risk. Adyen monitors third-party risk on a continuous basis withsupport of a third-party risk management tool.

Annual Report 2023

Data privacy
Adyen is subject to several privacy and data protection laws andregulations around the globe, such as the GDPR, CCPA, and LGPD
(referred to as "privacy laws"). These privacy laws regulate thecollection, use, retention, security, processing, and transfer of
personal data that Adyen holds about its customers, shoppers,
employees and other individuals. Adyen’s expanding global footprint
and product offering requires Adyen to steadily adapt, improve, andstrengthen its processes and procedures and closely monitor any
changes to new and existing privacy laws.
Any failure, or perceived failure, by Adyen to comply with its privacy
policies or with any applicable privacy laws in one or morejurisdictions could result in proceedings or actions against Adyen by
supervisory authorities or others, including class action privacy
litigation in certain jurisdictions, significant fines, penalties,
judgments, and reputational damage. Adyen has a low appetite fordata privacy risks and promotes a culture of diligence and high ethicalstandards with regards to the processing of personal data. Data
privacy compliance is a key commitment Adyen makes toward its
customers and stakeholders. Please refer to the ‘Data Privacy’ sectionin this Annual Report for more information on the topic.
Company culture
Adyen is committed to maintaining its entrepreneurial company
culture, which fosters innovation, diversity, and talent development,
and therefore has a low appetite for elements threatening this culture.
Adyen's entrepreneurial culture has been one of the primary drivers of
its historical growth. As Adyen continues to grow, there is a risk it may
not be able to maintain its entrepreneurial culture. If Adyen does not
successfully manage its growth, and is unable to differentiate its
business from those of its competitors, drive value for customers, or
effectively align its resources with its objectives, Adyen may not beable to compete effectively against its competitors, leading to
declining growth and net revenue.

64

Adyen promotes and safeguards the key elements of its culture
through the Adyen Formula. When it comes to professional growth,
Adyen encourages its employees to create their own path, pursuingtheir unique passions and interests in alignment with the evolving
needs of the business.
During 2023, Adyen continued to build and invest in its culture, withrisk awareness as a key component of this. This commitment was
exemplified through strengthening its leadership frameworks andtailoring its programs to accommodate the diverse needs of its
growing team. The ‘People & culture’ section in this Annual Reportprovides more information on Adyen’s culture and leadershipdevelopment efforts. Additionally, we reinforced our risk-aware
culture through the continued implementation of mandatory training
on responsible business practices.
TalentAdyen's future performance substantially depends on the continued
services of key talent and its ability to attract, retain, and motivate
such talent. The loss of services of any of Adyen's key talent orAdyen's inability to attract highly qualified key talent may adversely
affect its operations.
Adyen has low appetite for the loss of key talent and strives tomaintain a strong and diverse talent pool. Adyen deployed a numberof actions during 2023 to realize this objective. For example, Adyen
revised and enhanced its Diversity Equity & Inclusion policy to further
strengthen its stance and ensure that its approach effectively
underpins the Formula principles. Furthermore, Adyen focused on
expanding self-led learning programs and extending the reach of its
in-person facilitated offerings, as well as strengthening the inclusivity
and accessibility of its training programs to cultivate and meet thediverse needs of key talent. Please refer to the ‘People & culture’
section in this Annual Report for more information on this topic.

Integrity risk
Managing integrity risk in a scalable manner continued to be the focus
of Adyen’s Compliance Team in 2023. In accordance with Adyen’s
Global Integrity Strategy, integrity risks faced by Adyen continue to be
identified, monitored, and managed through a global set of integrity
standards that cover several integrity risk types such as bribery andcorruption, conflicts of interest, and socially unacceptable behavior,as well as fraud, AML, CTF, and Sanctions, which are further
discussed below.
This approach ensures that the risks, as well as the range of laws andregulations applicable to Adyen’s operations around the globe, areproperly accounted for, while also enabling scalable compliance. As aresult, Adyen is able to continue delivering on its commitment tosolving challenges with technology by embedding the global integrity
standards in the heart of Adyen’s technology stack.
Internal and external fraud
Adyen recognizes that fraud risks will always be possible, particularly
external fraud attempts. Adyen sets limits on the acceptance ofprospective customers or third parties based on the potential risk of
fraud across several dimensions, such as geography or industry. We
employ several methods to monitor developments in these
dimensions (e.g. CDD upon onboarding and on an ongoing basis,
watchlists and country risk ratings).
Adyen’s fraud assessment starts with the identification of potential
internal and external fraud risk scenarios in the SIRA. This
identification is a process that continues throughout the year, with anotable detailed analysis during the annual SIRA exercise,
supplemented by dynamic SIRA workshops in response to internaland external triggers to ensure proactive and ongoing risk
identification. As a first step the identification, analysis anddetermination of the internal and external fraud risks relevant toAdyen takes place, followed by the nature and inherent size of theseAnnual Report 2023

risks. Subsequently, the relevant controls that are in place aremapped to the risks. Finally, Adyen concludes on the overall residual
risk and an assessment is made to what extent the remaining residual
risk is within Adyen’s risk appetite. Adyen has a low risk appetite forinternal and external fraud.
Adyen’s key internal fraud risk scenarios include the manipulation offinancial results, the misuse of confidential information, and themisappropriation of assets. Relevant mitigating controls mapped tothese internal fraud risk scenarios vary in origin. There are governancemeasures, such as oversight by the Management Board, Internal
Audit, Compliance and the Supervisory Board’s Audit and Risk
Committee. Adyen also applies measures aimed at people, conductand culture, such as an anti-fraud policy, employee backgroundscreening, a whistleblower policy and a targeted training program.
Furthermore, a broad range of detective controls at process level arepresent, such as system monitoring, reconciliation and auditing.
These are complemented by preventive measures that include review
and approval flows and segregation of duties. Whenever fraud issuspected or reported, an internal investigation is conducted andcorrective actions are taken.
Adyen’s key external fraud risk scenarios include customers providing
Adyen with fraudulent documents, circumvention of Adyen’s fraud
prevention system through brute force or fraud rings, and customers
initiating fraudulent transactions. Relevant mitigating controls
mapped to these external fraud risk scenarios include both preventive
and detective controls, such as customer due diligence, customer
screening, security monitoring, vulnerability management, access
controls, and transaction monitoring.

65

Adyen has assessed that the relevant controls and mitigating
measures in place sufficiently mitigate the identified internal andexternal fraud risk scenarios. There were not any significant fraudcases identified. Upon identification of fraud, our policy (or as part ofour corrective actions) describes that we perform a root-cause
analysis, and assess if there are any shortcomings or weaknesses indesign and/or effectiveness of our internal controls. Further, weevaluate the significance of potentially identified weaknesses ininternal controls and we embed further improvements in internal
controls to mitigate any identified residual risk below our risk appetite.
During 2023 no material weaknesses were identified in our internal
controls.

Annual Report 2023

66

Anti-money laundering (AML), Counter terrorist-financing (CTF)
and preventing the circumvention of sanctions
In 2023, Adyen strengthened relevant AML/CTF controls – including
to improve detection methods, screening, and quality assurance
verifications in line with Adyen’s growth. Adyen also consistently
monitors and updates its sanctions screening program to align with
its responsibility for preventing the misuse of the financial systemthrough the circumvention of sanctions. Following on from theunprecedented changes in international sanctions arising in 2022,
ongoing focus on Adyen’s end-to-end sanctions screening program
was prioritized in relation to the evolving geo-political climate in 2023.
Adyen leveraged its systematic integrity risk assessment cycle toidentify and account for new/changing integrity risks faced by Adyen,with integrity topics including anti-money laundering and counter
terrorist-financing (AML/CTF), preventing the circumvention of
sanctions, and managing a global regulatory landscape as particularfocus points in 2023.
Tax
Adyen has a low appetite for risk forthcoming from its tax obligations.
As outlined further in the Tax section above, Adyen’s approach totaxation is guided by a conservative strategy. Adyen wants to be fullycompliant with tax laws and regulations, including taking into accountthe spirit and purpose of the law, to fulfil its legal duties and pay its fairshare, upholding its responsibility to stakeholders and thecommunities it serves. During 2023, the residual risk related toAdyen’s tax obligations remained within risk appetite.

Financial reporting
Adyen has a low appetite for errors in financial reporting and does not
accept material misstatements in the financial statements. As a result,
Adyen has implemented a system of internal control aimed at
reducing the risk of error or loss, which provides reasonableassurance that the financial records can be relied upon for the
preparation of the annual financial statements in accordance withfinancial reporting standards. However, any system of internal control
can provide only reasonable, and not absolute, assurance againstmaterial misstatement or loss.
Adyen’s first and second line teams systematically evaluate theeffectiveness of internal controls on an ongoing basis, actively
engaging in the adaptation and improvement of these controls to
address dynamic environments and evolving risks throughout
the year.

Annual Report 2023

Financial risks
Adyen has a limited appetite to incur losses from financial risks,
please refer to Note 12 ‘Financial Risk Management’ of the attached
Consolidated Financial Statements for additional disclosure.
Credit risk in respect of counterparties, including other financial
institutions
Credit risk arises when a counterparty of Adyen cannot settle the fullvalue of an obligation — when it becomes due, or thereafter. In
addition, credit risk also has a concentration dimension with the risk oflosses stemming from on- and off-balance sheet positions related toclustering in exposures to a single counterparty or a group ofconnected counterparties. Adyen is exposed to credit risk primarily
through receivables from financial institutions regarding settled
payment transactions, through cash held at partner banks as well as
through pre-financing services to merchants. Adyen is careful inselecting counterparties and actively monitors the resulting exposure.
When it comes to partner banks whose services are necessary toprovide payment services in specific circumstances, Adyen seeks towork with at least two different partner banks. Where applicable andpossible, Adyen ensures that one of these providers is the central
bank of the respective region.
During 2023, Adyen remained comfortably within its internally set risk
appetite limits for its credit risk and credit concentration risk related
indicators, as well as within the relevant regulatory limits.
Fluctuations in foreign currency exchange rates
A stronger or weaker euro (EUR) versus foreign currencies (primarily
US Dollar or USD) impacts the translation of Adyen's net revenues
generated in these foreign currencies into EUR. Similarly, such foreignexchange movements impact balance sheet positions denominated incurrencies other than EUR (primarily in USD) including contract
assets, deferred tax assets, shares, own funds as well as assets and67

liabilities of foreign subsidiaries. Additionally, in connection with
providing its services in multiple currencies, Adyen generally sets its
foreign exchange rates once per day. Thus, Adyen is also exposed toforeign exchange risk if it incorrectly sets its foreign exchange rates, orif there are fluctuations in foreign exchange rates between the rate
fixing times. Adyen pays particular attention to the foreign exchange
risk related to its international payment services for merchants. Adyenmanages its foreign exchange risk on a continuous basis in reference
to its risk appetite. Any foreign exchange exposure outside of theestablished risk appetite is actively hedged.

Interest rate risk of cash and cash equivalents

There were no material FX losses to be reported during 2023. Still, thedaily treasury processes on FX trading were improved to further
account for scale and keep mitigating the risk of a loss occurring.
Given the volatility of macroeconomic conditions in various
jurisdictions, Adyen sees this as a key component of prudent FX risk
management to remain within its internal risk appetite.

• Adyen’s assets mainly consist of interest-bearing cash and cash
equivalents at central banks and partner bank accounts,

Price risk of financial instruments

As a result, changes in interest rates only translate into the price ofassets, but not in that of liabilities. This profile creates an inherent net
interest income sensitivity to interest rate changes. Since the cash isheld in relation to merchant payables and as a liquidity buffer, therelated interest rate risk is considered innate to Adyen’s businessmodel and is accepted as part of doing business. The net interest
income sensitivity only has the potential to turn into actual losses inthe event of negative interest rate levels in material currencies. During2023, interest rates have continued to increase in Adyen’s mostsignificant currencies (EUR, USD and GBP), which has strongly
increased Adyen’s passive interest income from cash holdings. During2023, Adyen navigated within its risk appetite on interest rate risk.

Price risk is defined as the risk of financial losses occurring due tochanges in the market prices of financial instruments that arerecognized at fair value. Adyen is exposed to such price risk throughits holdings of Visa Inc. preferred stock as well as a derivative liability.
Adyen’s holding of Visa Inc. shares resulted from the 2016 acquisitionof Visa Europe by Visa Inc. when Adyen’s holdings in the former wereconverted into preferred stock of the latter. The exposure from these
Visa Inc. shares consists in potential financial losses due tomovements in the underlying share price of Visa Inc. The derivative
liability is related to the remaining tranches of a merchant contract
where the exposure is dependent on the share price movement of
Adyen stocks. Both positions are not material and Adyen has noappetite to take on additional equity positions and resulting price risk.
Please refer to Note 12 of the Consolidated Financial Statements formore information.

Interest rate risk is defined as the risk that changes in interest rates
lead to an adverse impact on Adyen’s income or value of equity.
Adyen’s business model is primarily fee-based, while interest income
does not constitute a key revenue component of its client-facing
product offering.
Despite the fee-based business model, Adyen’s balance sheet hasvarious characteristics that are relevant from an interest rate risk
perspective:• Adyen is fully equity financed, i.e. its liabilities are interest rateinsensitive,• Adyen’s balance sheet is of distinct short-term nature.

Annual Report 2023

Liquidity and funding risk
Liquidity risk is the risk that Adyen cannot meet its intraday, shortand/or medium-term payment and collateral obligations without
affecting daily operations. Given its payments-centered businessmodel, Adyen is mainly exposed to intraday and short-term liquidity
risks. Adyen has no appetite for not meeting its payment and collateralobligations. Adyen is abundant in liquidity reflected by a very highLiquidity Coverage Ratio (LCR) throughout 2023.
Funding risk is the risk that Adyen will not have stable sources offunding in the medium- and long-term, resulting in the current orprospective risk that it cannot meet its financial obligations, such as
payments and collateral needs, as they fall due in the medium- tolong-term, either at all or without increasing funding costs
unacceptably. Adyen aims for a simple, stable, and solid funding
position and the central ratio it monitors in this context is its Net
Stable Funding Ratio (NSFR). For context, the NSFR remained stable
and within acceptable ranges in 2023.
Secure financing on favorable terms
Adyen has funded its operations through equity financing since
inception of the company. As in previous years Adyen continues to beable to generate sufficient excess cash through financial results tofund all new operations. Despite the current capacity to generate large
retained earnings, there is no guarantee that Adyen will continue to do
so in the future. Going forward, Adyen may require additional funding
to respond to business opportunities or unforeseen circumstancesand may decide to engage in equity increases, debt financings, oralternative credit facilities for other reasons, and may not be able tosecure any such debt or equity financing or refinancing on favorable
terms in a timely manner, or at all. If Adyen is unable to obtainadequate financing or financing on satisfactory terms when it requires
it, its ability to continue to grow or support its business and to respondto business challenges could be limited.

68Annual Report 2023

69

Statement by the Management Board of Adyen N.V.
The Management Board of Adyen N.V. is responsible for establishingand maintaining an adequate system for risk management andinternal control. This system is designed to manage risks effectively
and efficiently, to provide reasonable assurance that objectives can be
met, that financial and non-financial reporting is reliable, and that laws
and regulations are complied with.
Internal control over financial reporting is an integral part of the risk
management and control systems of Adyen N.V.. Internal control overfinancial reporting is a process to provide reasonable assurance
regarding the reliability of our financial reporting for external purposesin accordance with IFRS and IFRIC interpretations, as endorsed by theEuropean Union and in accordance with sub article 8 of article 362,
Book 2 of the Dutch Civil Code. Internal control over financial
reporting includes:• Maintaining records that, in reasonable detail, accurately, and fairly
reflect our transactions• Providing reasonable assurance that transactions are recorded asnecessary for preparation of our financial statements
Due to its inherent limitations, internal control over financial reporting
is not intended to provide absolute assurance that a misstatement of
our financial statements would be prevented or detected. Also,
projections of any evaluation of the effectiveness of internal control
over financial reporting to future periods are subject to the risk thatthe controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies orprocedures may deteriorate.
The Management Board of Adyen N.V. has performed a companywide risk assessment and described the principal risks facing theCompany in relation to its risk appetite in the section ‘Risk factors’ of
this Annual Report.
The Management Board of Adyen N.V. has assessed the effectivenessof the design and operation of the risk management and control
systems as of December 31, 2023. The results were shared with the
Audit and Risk Committee and the Supervisory Board and discussedwith the independent external auditor (hereafter “external auditor”).
Based on the assessment and with reference to Best Practice
Provision 1.4.3 of the 2022 Dutch Corporate Governance Code, theManagement Board of Adyen N.V. confirms that to the best of its
knowledge and belief:• This Annual Report provides sufficient insights into any failings in
the effectiveness of the internal risk management and control
systems with regard to the risks as referred to in Best Practice
Provision 1.2.1 (see section ‘Risk management’);• The aforementioned systems provide reasonable assurance thatthe financial reporting does not contain any material inaccuracies(see section ‘Risk management’);• Based on the current state of affairs, it is justified that the financial
reporting is prepared on a going concern basis (see ‘Consolidated
Financial Statements’); and• This Annual Report states the material risks, as referred to in Best
Practice Provision 1.2.1, and the uncertainties, to the extent thatthey are relevant to the expectation of the Company’s continuity forthe period of twelve months after the preparation of the report (seesection ‘Risk Factors’ and ‘Consolidated Financial Statements’).

However, the risk management and internal control systems
cannot provide absolute assurance that missing of objectives,
misstatements, fraud or non-compliance with laws and regulations
will not occur.
In accordance with Article 5:25c of the Financial Supervision Act, theManagement Board of Adyen N.V. confirms that to the best of its
knowledge and belief:• The financial statements of 2023 give a true and fair view of theassets, liabilities, financial position and profit or loss of theCompany; and• The Annual Report 2023 gives a true and fair view of the position as
at December 31, 2023, the development and performance during2023 of Adyen, together with a description of the principal risks
that Adyen faces.
Amsterdam, the Netherlands
March 1, 2024
P.W. van der Does

I.J. Uytdehaage

E.L. Tandowsky

Co-CEO

Co-CEO

CFO

R. Prins

M.B. Swart

B.A. Nayden

CCO

CRCO

CHRO

A. Matthey
CTO

03
GovernanceAnnual Report 2023

“Adyen has a clear vision and a long-term
focus — which is exactly what I think makes
the company successful. I love that one of our
Formula points is we make good decisions
and consider the long-term benefits for ourcustomers, Adyen, and the world at large. By
focusing on making the right choices every
day, we can be sure that we're building afuture to be proud of.”Stephanie — Head of Employer Brand

71

Annual Report 2023

72

Corporate GovernanceCorporate governance structure
A solid, transparent, and seamless corporate governance structure is key to Adyen. It is consistent with the
Adyen Formula and allows us to focus on growing our business. Our governance structure is guided by3
Dutch statutory requirements, the 2022 Dutch Corporate Governance Code (the Code) , the European
Banking Association (EBA) Guidelines on Internal Governance, and (inter)national best practices. As Adyen
is operating globally, international developments are closely monitored.
Adyen’s corporate governance is reflected in its Articles of Association, Management Board By-Laws,
Supervisory Board By-Laws, Terms of Reference of the two Supervisory Board committees (the Nomination
and Remuneration Committee, and Audit and Risk Committee) and certain other internal policies andprocedures. These documents are available on Adyen’s Investor Relations website under ‘Governance’.
Adyen maintains a two-tier board structure consisting of a Management Board and a Supervisory Board,
each of which has specific responsibilities. The Management Board is collectively responsible for the overallmanagement, which includes, among other things, developing and executing Adyen’s strategy and risk
management policy based on sustainable long-term value creation, and setting and achieving Adyen’s
objectives. The Supervisory Board oversees and advises the Management Board, and can give guidance toits general development. Each board is accountable to the General Meeting for the performance of its
duties.

Management Board
Each Managing Director is tasked with duties pertaining to their specific area of expertise and responsibilities.
In executing these duties, they are obligated to align their actions with the Company's best interests, as well as
those associated with the business. This mandate encompasses a mindful consideration of the Company's
stakeholders' interests. The Management Board By-Laws delineate regulations governing the composition,
responsibilities, and objectives of the Management Board.

3

The 2022 Dutch Corporate Governance Code is available via https://www.mccg.nl/.

Subject to certain statutory exceptions, the Management Board as a whole is authorized to represent theCompany. Two Managing Directors acting jointly are authorized to represent the Company. This reflects thefour-eyes principle that Adyen employs across the organization: (at least) two Adyen Managing Directors mustsign off on important business decisions.
Managing Directors will be appointed for a maximum term of four years, after which they may be reappointed
for another four years. The General Meeting appoints Managing Directors upon a nomination by theSupervisory Board in accordance with the Articles of Association. The Supervisory Board shall make one ormore nominations to the General Meeting in case a Managing Director is to be appointed. In the event that theSupervisory Board has made a nomination, the resolution of the General Meeting to appoint such nominee
shall be adopted by an absolute majority of the votes cast. However, the General Meeting may at its discretion
appoint a Managing Director other than upon the nomination of the Supervisory Board, provided that a
proposal to appoint such other person has been put on the agenda of the relevant General Meeting. A
resolution of the General Meeting to appoint a Managing Director other than in accordance with a nominationof the Supervisory Board, but in accordance with the agenda for such General Meeting, shall require a majorityof two thirds of the votes cast representing more than half of the company's issued share capital.
Adyen is a licensed credit institution, which means that any appointment of a Managing Director must be
approved by the Dutch Central Bank (the DNB). In connection with its approval procedure, DNB will test the
proposed new Managing Director on integrity and suitability.
The General Meeting may at any time, at the proposal of the Supervisory Board, suspend or remove aManaging Director with a resolution adopted by an absolute majority of votes cast. Should the General
Meeting wish to suspend or remove a Managing Director other than in accordance with a proposal of theSupervisory Board, such suspension or dismissal needs to be adopted by two thirds of the votes cast,representing more than half of the company's issued capital. The Supervisory Board may at all times suspend
but not dismiss a Managing Director.
A General Meeting must be held within three months after a suspension of a Managing Director has taken
effect, in which meeting a resolution must be adopted to either terminate or extend the suspension, provided
that in the case that such suspension is not terminated, the suspension does not last longer than three months

Annual Report 2023

in aggregate. The suspended Managing Director must be given the opportunity to account for his or her
actions at that meeting. If neither such resolution is adopted nor the General Meeting has resolved to dismiss
the Managing Director, the suspension will cease after the period of suspension has expired.

Management Board committees
The Management Board, as the primarily responsible body for risk management, aims to be risk aware inorder to successfully implement an ambitious long-term growth strategy. It therefore actively manages therisks to protect and grow Adyen in accordance with the Adyen Formula and the principle of creating
sustainable long-term value for its customers.
The Management Board is supported in its risk management oversight by four Management Board
Committees. The four Management Board Committees follow Adyen’s main risk categories under the
Integral Risk Management Framework. Whereas the Compliance Committee monitors Adyen’s integrity
risks, and the Merchant Risk Committee monitors the merchant risk exposures, the Risk Committee has an
overarching role and monitors all risk categories. The Disclosure Committee is responsible for reviewing
Adyen's financial information for compliance with legal and regulatory requirements prior to publication.
It is noted that final decision-making and approval resides with the Management Board and that theManagement Board Committees in principle have an advising role, though the Management Board may
give a decision-making mandate to one or more Management Board Committees for certain matters andcertain amounts.
Compliance Committee
The Compliance Committee oversees Adyen's compliance activities. Its duties include preparing andupdating Compliance Policies, managing product approval processes, reviewing Integrity Risk systems,
completing supervisory audits, assessing new processes, supporting the Management Board, andinvestigating reported wrongdoings or violations of laws, regulations, or internal policies. The Committee
also advises on compliance risk management and reports findings to the Management Board.
Merchant Risk Committee
The Merchant Risk Committee oversees customer operational and credit risk identification, assessment,
measurement and monitoring. It reviews Adyen's MPL and Credit Risk frameworks, ensuring complianceand effectiveness. The Committee assesses financial balances, eligibility for Adyen Capital, and provides
quality assurance for credit assessments.

73

Risk Committee
The Risk Committee advises the Management Board on Adyen's internal risk management systems,
maintains the Integral Risk Management Framework, monitors regulatory reporting, supports the use of theframework, and prepares quarterly reports. The Committee also monitors financial institution risks, andoversees market and capital/liquidity risks. The Committee's duties include advising on design andeffectiveness of the risk control framework, monitoring reporting process, and reporting findings to theManagement Board.
Disclosure Committee
The Disclosure Committee is responsible for overseeing Adyen's disclosure activities to ensure regulatorycompliance. Its duties include implementing effective disclosure controls, reviewing material developments,
discussing publication timelines, ensuring accurate and complete financial and regulatory reports, andadvising the Management Board on potentially price-sensitive information. The Committee also reviews
press releases for accuracy before release, and provides guidance on disclosure obligations.

Functioning of the Management Board in 2023
In 2023, the Management Board paid particular attention to scaling the Adyen team and culture acrossregions. It was a year in which Adyen deepened its relationship with customers and partners, and invested in
the continuous expansion of its regulatory licenses. The Management Board and its committees focused on
further embedding the regulatory and compliance framework in the organization, supported by various
internally-launched trainings on topics such as data privacy, security, conduct, integrity, insider trading, andincident management. This year saw extensive efforts into the Management Board’s approach to building adiverse and inclusive workforce, in which the gender diversity in the overall workforce, the Global Leadership
Team (GLT, also defined as ‘senior leadership’ or ‘subtop’), and the Management Board increased. The
Adyen Formula played a significant part in the global hiring and onboarding strategy, as well as the ongoinglearning and development efforts throughout the business.
The performance of the overall Management Board and individual members was assessed against theirmain activities and goals achieved in 2023. The Supervisory Board deems the performance of the individual
Managing Directors and the Management Board as a whole to be sufficient and well-performing.

Conflicts of interest
A Management Board Member, who thinks that he or she has or might have a conflict of interest, shall notify

Annual Report 2023

the chair of the Supervisory Board and the other Managing Directors thereof as soon as possible. In 2023,
there were no reports of conflicts of interest relating to the Managing Directors.

Supervisory Board
The Supervisory Board functions as a separate corporate body and is independent from the Management
Board. The composition of the Supervisory Board is such that members are able to act independently of one
another, the Management Board and any particular interest, and allows for properly carrying out all
Supervisory Board tasks, including staffing of committees. The Supervisory Board is capable of assessing
the broad outline of the overall policy of the Company and of the most important risks incurred. The
background, knowledge and expertise of each Supervisory Director adds to the Board’s effectiveness,enabling it to fulfil its duties in the Company’s best interest.
The Supervisory Board oversees the conduct and policies of the Management Board and the general courseof affairs of the Company and its business. The Supervisory Board also provides advice to the Management
Board. In performing their duties, the Supervisory Directors are required to be guided by the interests ofAdyen which includes the interests of the business connected with it, taking into consideration the interestsof the Company’s stakeholders. These interests are driven by Adyen’s focus on sustainable long-term value
creation and implementation thereof in Adyen’s strategy and culture. The Supervisory Board also has due
regard for environmental, social and governance (ESG) matters relevant to the Company. The Supervisory
Board By-Laws set out rules regarding the composition, responsibilities and objectives of the Supervisory
Board.
The Articles of Association provide that the Supervisory Board must consist of three or more individuals,
with a maximum of seven persons. The exact number of Supervisory Directors is to be determined by theSupervisory Board. Only natural persons may be appointed as Supervisory Director.
Supervisory Directors will be appointed for a maximum term of four years, after which they may bereappointed for another four years. Reappointment after eight years shall be motivated in the Supervisory
Board Report. After this term, a Supervisory Director may once again be reappointed for a term of two years,
which can be extended for another two years. Supervisory Directors are appointed by the General Meetingupon a nomination of the Supervisory Board in accordance with the Articles of Association. The Supervisory
Board shall make one or more nominations in case a Supervisory Director is to be appointed.
In the event that the Supervisory Board has made a nomination, the resolution of the General Meeting toappoint such nominee shall be adopted by an absolute majority of the votes cast. However, the General
Meeting may at its discretion appoint a Supervisory Director other than upon the nomination of the74

Supervisory Board, provided that a proposal to appoint such other person has been put on the agenda of therelevant General Meeting. A resolution of the General Meeting to appoint a Supervisory Director other thanin accordance with a nomination of the Supervisory Board, but in accordance with the agenda for such
General Meeting, shall require a majority of two thirds of the votes cast representing more than half of thecompany's issued share capital. The Supervisory Board shall appoint one of its members as chairman andshall appoint one of its members as vice-chairman.
Any appointment of a Supervisory Director must be approved by DNB. In connection with its approval
procedure, DNB will test the proposed new Supervisory Director on integrity and suitability.
The General Meeting may at any time, at the proposal of the Supervisory Board, suspend or remove a
Supervisory Director with a resolution adopted by an absolute majority of votes cast. Should the General
Meeting wish to suspend or remove a Supervisory Director other than in accordance with a proposal of theSupervisory Board, such suspension or dismissal needs to be adopted by two thirds of the votes cast,representing more than half of the Company's issued capital.

Supervisory Board committees
The Supervisory Board has appointed from among its members two permanent committees: A 'Nomination
and Remuneration Committee' and an 'Audit and Risk Committee' (the Committees). Each of theseCommittees has a preparatory and/or advisory role to the Supervisory Board. The Committees report theirfindings to the Supervisory Board, which is ultimately responsible for all decision making. Terms ofReference apply to each Committee, which can be found at our Governance webpage via
investors.adyen.com/governance. All Supervisory Directors have a standing invitation to attend meetings ofCommittees of which they are not a member and have accepted these invitations on a frequent basis in
2023.
Nomination and Remuneration Committee
The Supervisory Board has assigned certain tasks to the Nomination and Remuneration Committee. This
Committee drafts proposals for Adyen’s remuneration policy, and it proposes the remuneration of theindividual Managing Directors and Supervisory Directors. It analyses developments of the Code and otherapplicable laws and regulations, and prepares proposals for the Supervisory Board on these topics. It further
advises the Supervisory Board on its duties regarding the selection and appointment of Managing Directors
and Supervisory Directors. The Committee is also responsible for carrying out annual assessments on thefunctioning of the individual Managing Directors and Supervisory Directors and on the functioning of theManagement Board and Supervisory Board as a collective.

Annual Report 2023

The Nomination and Remuneration Committee prepares proposals for (re)appointments and drafts theselection criteria for the (re)appointment of Managing Directors and Supervisory Directors.
The Nomination and Remuneration Committee meets as often as required for a proper functioning of theCommittee. The meetings are scheduled three times a year. The Committee consists of at least three
Supervisory Directors. The Committee members are Caoimhe Keogan (Chair), Piero Overmars, and Joepvan Beurden.
The composition and number of members of the Committee provide for sufficient capacity to carry out thesupervisory functions. The members of the Committee have the specific skills and experience required toproperly carry out their duties.
Adyen’s co-CEOs, CHRO, CFO and CRCO have a standing invitation for each Committee meeting. The
Company’s SVP of HR and, periodically, the Head of Rewards, also attend the meetings of the Committee.
Audit and Risk Committee
The Supervisory Board has assigned certain tasks to the Audit and Risk Committee. This Committee
supervises the provision of the Company’s (non-)financial information and risk management. The
Committee issues preliminary advice to the Supervisory Board regarding the approval of Adyen’s interim
and annual accounts.
The Committee also advises the Supervisory Board on the nomination of the external auditor, who isappointed by the General Meeting. It is in regular contact with the internal audit function and the external
auditor, and monitors the auditor’s independence. On an annual basis, the members of the Audit and Risk
Committee discuss the internal audit plan and resources, the external audit plan, and the external auditor’sboard report. In addition to advising the Management Board on tax and finance matters, it is also
responsible for supervising compliance with relevant legislation and regulations.
The Audit and Risk Committee meets as often as required for a proper functioning of the Committee. The
meetings are held at least four times a year. The Committee consists of at least three Supervisory Directors.
The Committee members are Delfin Rueda Arroyo (Chair), Piero Overmars and Pamela Joseph. The
composition and number of members of the Committee provide for sufficient capacity to carry out thesupervisory functions. The members of the Audit and Risk Committee have the specific skills and experience
required to properly carry out their duties.
Adyen’s CFO and CRCO have a standing invitation for each Committee meeting. The Company’s internal
auditor and external auditor attend the meetings of the Committee and have regular interactions with theSupervisory Board.

75

Compliance with the Dutch Corporate Governance CodeAdyen acknowledges the importance of good corporate governance. The Company agrees with the generalapproach and with the provisions of the Code. In 2023, the Company performed a gap assessment of theBest Practice provisions of the 2016 Code with the current Best Practice provisions of the 2022 Code, andsubsequently reviewed and updated its policies, Terms of References and its Supervisory Board andManagement Board By-Laws to implement these changes. The updated Code was discussed with theManagement Board and Supervisory Board, and the key changes have been highlighted.
Adyen fully complies with the Code, with the exception of Best Practice provision 4.3.3 of the Code, which
provides that the general meeting of shareholders of a company not having statutory two-tier status may
pass a resolution to cancel the binding nature of a nomination for the appointment of a member of theManagement Board or of the Supervisory Board and/or a resolution to dismiss a member of theManagement Board or of the Supervisory Board by an absolute majority of the votes cast. It may be provided
that this majority should represent a given proportion of the issued capital, which proportion may not exceed
one-third. However, Adyen applies a higher proportion of one-half, which follows from a previous
arrangement with Adyen’s shareholders. Adyen is of the opinion that this arrangement contributes to thelong-term sustainable position of the Company.

General Meeting, shares and shareholders
General Meeting
Adyen holds a General Meeting of Shareholders (General Meeting) within six months of the end of thefinancial year.
General Meetings can be held as often as the Management Board or the Supervisory Board deem
necessary. A General Meeting is also convened in case of a decision entailing a significant change in theidentity or character of the Company or its business. One or more shareholders representing at least thestatutory threshold of 3% of the voting rights may request that the Management Board place items on theagenda of a General Meeting. Such a request must be honored by the Management Board provided that therequest is received in writing at least 60 days before the date of such a meeting.

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76

Voting rights• The reappointment of Pamela Joseph as Supervisory Board member for a four-year period

Each share reflects one vote in the General Meeting. Subject to certain exceptions provided by Dutch law or
the Articles of Association, resolutions of the General Meeting are passed by an absolute majority of votes
cast. Votes can be cast at the General Meeting either in person or by proxy.

• The reappointment of Joep van Beurden as Supervisory Board member for a two-year period

In 2023, as part of its rewards principles for employees, Adyen introduced Restricted Stock Units (RSUs).
These RSUs which will convert to ordinary shares after vesting, over a period of four years. Please refer toNote 4.3, ‘Share-based payments’ in the attached Consolidated Financial Statements for further insights.

• The amendments to the Articles of the Association of the Company• The authority to issue shares• The authority to restrict or exclude pre-emptive rights• The authority to acquire own shares

Report of the 2023 General Meeting• The reappointment of the Auditor

This year’s Annual General Meeting was held on May 11, 2023, and a total of 22,445,104 votes were legally
represented, a total of 72% of the total issued share capital.

For a full report of the Company’s General Meeting, please refer to the minutes of the General Meeting as
published on the Company’s Investor Relations website.

During the General Meeting of 2023, the following resolutions were approved:

The 2024 General Meeting will take place on 16 May 2024.

• The adoption of the Annual Accounts for the financial year 2022
• The determination of the Remuneration policy for the Management Board• The determination of the Remuneration policy for the Supervisory Board• The increased cap on variable remuneration outside the European Economic Area to 200% of fixed
remuneration• The discharge of the Management Board members for the financial year 2022
• The discharge of the Supervisory Board members for the financial year 2022
• The reappointment of Ingo Uytdehaage as Management Board member with the title Co-CEO for a fouryear period• The reappointment of Mariette Swart as Management Board member with the title CRCO for a four-year
period• The appointment of Brooke Nayden as Management Board member with the title CHRO for a four-year
period• The appointment of Ethan Tandowsky as Management Board member with the title CFO for a four-year
periodIssue of shares
Shares can only be issued pursuant to a resolution of the General Meeting, unless the General Meeting has
designated this authority to the Management Board. During the Annual General Meeting held on May 11,2023, the General Meeting granted the Management Board — subject to the Supervisory Board’s approval— the authority to issue ordinary shares or to grant rights to subscribe for ordinary shares for a term of 18
months as of May 11, 2023 for up to 10% of the total number of shares issued at the time of the General
Meeting for any purpose. Hence, within the aforementioned limit shares can be issued by a decision of theManagement Board, which allows the Management Board to react promptly when for example a business
opportunity arises which requires such issuance. This decision must be approved by the Supervisory Board.
Any issuance exceeding the aforementioned limit needs approval by the General Meeting.
In addition, the General Meeting granted the Management Board — subject to the Supervisory Board’s
approval — the authority to restrict or exclude applicable pre-emptive rights when issuing ordinary shares or
granting rights to subscribe for ordinary shares for a term of 18 months as of May 11, 2023. In 2023, 22,352
shares were issued following this approval. These shares were a result of exercises of options granted to
employees and share issuance relating to the depositary receipts award plan.

Annual Report 2023

Repurchase of shares
Shares can only be repurchased by Adyen pursuant to a resolution of the General Meeting and subject toany required regulatory approvals. The General Meeting may designate the authority to repurchase sharesto the Management Board. During the General Meeting held on May 11, 2023, the shareholders granted theManagement Board — subject to the Supervisory Board’s approval — the authority to acquire shares in thecapital of the Company, either through purchase on a stock exchange or otherwise. The authority applies fora term of 18 months as of May 11, 2023, under the following conditions: The repurchase (i) may constitute
up to 10% of the total number of shares issued at the time of the General Meeting; (ii) provided that theCompany will not hold more shares in stock than 10% of the issued share capital; and (iii) at a price(excluding expenses) not less than the nominal value of the shares and not higher than the opening price atEuronext Amsterdam on the date of repurchase or on the preceding day of stock market trading plus 10%.
Any repurchases exceeding these limits need approval by the General Meeting. In 2023, no repurchase ofshares were performed.

Issued capital and shareholdings
Adyen’s issued capital and voting rights are notified to the Dutch Authority for the Financial Markets (AFM)from time to time. This reporting can be found in the register issued capital on www.afm.nl. Shareholders
owning 3% or more of the issued capital and/or voting rights of a listed company must report this to the AFM
as soon as the threshold is reached or exceeded. This reporting by shareholders can be found in the‘Register of substantial holdings and gross short positions' at www.afm.nl.

Adyen Formula, culture and business conduct
The Management Board attaches high importance to its internal and external moral standing. It iscommitted to preventing, detecting and deterring acts or attempted acts of misconduct. The Management
Board encourages employees to act with integrity in accordance with the Adyen Formula (for more
information, see the ‘People & culture’ section in the Management Report). The Adyen Formula sets forth
Adyen’s commitment to conduct business pursuant to the highest ethical standards.
The Adyen Formula is a guide that can be used as a template to make ethical decisions and empower
employees. It reflects how Adyen has been built and how it should remain successful in the future. To create
an environment of ethical behavior both inside and outside of Adyen, employees at Adyen know that theyshare the responsibility to prevent any acts contrary to generally accepted social or business conduct
standards, or those which could seriously damage confidence in Adyen or in the financial industry (e.g.
breaches of applicable requirements, suspected wrongdoings).

77

The Management Board regularly communicates the importance of the Adyen Formula to guide the day-today decisions employees make. It is crucially important that the Management Board leads by example in thisrespect. The manner in which they fulfil their role largely determines the integrity culture of Adyen as awhole. The Adyen Formula is critical in hiring new team members and evaluating the performance of teammembers. It is of the highest importance that team members fit the transparent and ethical culture built
within Adyen.
With the oversight of the Management Board, the organizational structure, hiring and training policies,
Adyen provides an ethical work environment that is conducive to both individual and company success. The
Management Board has created an open and safe environment that allows employees to bring subjects
around integrity and other dilemmas up for discussion without repression.

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78

Management
Board
Changes to the Management Board
composition in 2023
During the Annual General Meeting of
Shareholders on May 11, 2023, Brooke Nayden’s
proposed appointment as Chief Human
Resources Officer (CHRO) was approved, as wellas Ethan Tandowsky’s proposed appointment as
Chief Financial Officer (CFO). Further, in thismeeting, Ingo Uytdehaage was reappointed in theposition of Co-Chief Executive Officer (Co-CEO)for a four-year term, and Mariette Swart was
reappointed as Chief Risk and Compliance Officer(CRCO) for a four-year term. Kamran Zaki
stepped down as Chief Operating Officer on May
11, 2023. As a result, the Company’s Product andOperations teams are now overseen by Ingo
Uytdehaage (Co-CEO), and the AccountManagement team by Roelant Prins (CCO).
Kamran continued to be involved in the
Company’s operations during the summer of2023 to ensure a proper handover.

For the full biographies of the Management Board, please referto the Adyen IR Governance webpage via investors.adyen.com/
governance.

Pieter van der Does

Ingo Uytdehaage

Roelant Prins

Co-Founder and Co-CEO

Co-CEO

Male - 1969 - DutchManaging Director since 2007
Current term: June 2022 - June 2026

Male - 1973 - DutchManaging Director since 2011
Current term: May 2023 - May 2027

Male - 1975 - DutchManaging Director since 2007
Current term: June 2022 - June 2026

With over 15 years experience in the payments
industry, Pieter van der Does, was CCO at
Bibit before co-founding Adyen in 2006. Since
then, Adyen has grown from a startup into a
globally operating business, averaging
double-digit annual growth since 2007. Pieter
built Adyen to transform the payments
landscape, and has since solved payment
complexity for many of the world’s leadingbusinesses. He has earned a degree in
Economics from the University of Amsterdam.

Ingo joined Adyen as the CFO in 2011. Before
joining Adyen, he gained extensive experiencein the field of finance at several large
enterprises. Having earned two business
degrees and held multiple managerial
positions, Ingo plays an essential role in
Adyen’s continued growth. He has earned
degrees in accounting and finance fromMaastricht University and followed the CPA
post-graduate program from the Vrije
Universiteit in Amsterdam.

As the CCO of Adyen, Roelant is responsible
for all commercial activities and development.
After starting his career as a consultant, hemoved on to the online payments industry inearly 2000. Throughout the years, Roelant has
held various international management roles
in sales and business development forcompanies providing payment solutions tointernational ecommerce businesses. He has
earned a degree in Economics from Erasmus
University Rotterdam.

Responsibilities
Management Board

Responsibilities
Product Solutions (Payments, Platform
Engineering, Data, Platforms & Financial
Services) and Operations

Responsibilities
Commercial Pillars, Regions, Sales, AccountManagement, Marketing and Revenue
Operations and Commercial Academy

CCO

Annual Report 2023

Mariette Swart

79

Alexander Matthey

Brooke Nayden

Ethan Tandowsky

CRCO

CTO

Female - 1980 - DutchManaging Director since 2020
Current term: May 2023 - May 2027

Male - 1981 - German
Managing Director since 2021
Current term: February 2021 - February 2025

Female - 1991 - American
Managing Director since 2023
Current term: May 2023 - May 2027

Male - 1990 - American
Managing Director since 2023
Current term: May 2023 - May 2027Mariëtte is the Chief Risk and Compliance Officer
of Adyen. Prior to this role, she was Adyen’s
General Counsel and built the legal team from theground up. Before joining Adyen, Mariëtte worked
at an international law firm where she gained vast
experience in global financial services, helping
companies with products in payments, debt andequity solutions, M&A and financial markets. She
has earned a degree in Regulated Markets andCorporate Law from Utrecht University.

Alexander is the Chief Technology Officer at
Adyen. Prior to his role, he was VP Integrations
and later EVP Technology in Adyen's Berlin office.
Before joining Adyen, Alex was the CTO and VicePresident of Rocket Internet-backed GlossyBox
where he gained experience in leading a fastgrowing company. He has earned degrees in IT
and History from Humboldt University of Berlin.

Brooke is the Chief Human Resources Officer at
Adyen. Brooke has spent her career helping techcompanies scale throughout high-growth phases,
and brings a comprehensive understanding of thetalent landscape to Adyen’s Management Board.
At Adyen, Brooke served as Global Head of HR aspart of the Global Leadership team, a role in which
she successfully led the company’s expansion.
Previously at Atlassian, she focused on Technicaland Leadership Recruitment. Brooke holds a
degree in History and Literature from Claremont
McKenna College.

Ethan is the Chief Financial Officer at Adyen. Overthe past decade, Ethan has helped several preIPO start-ups and publicly-listed companies
optimize their finance and accounting functions
while at EY. Ethan joined in 2017 and was mostrecently part of the Global Leadership Team as
Head of Group Finance. Ethan holds a degree inBusiness Economics with a focus on Accounting
from UC Santa Barbara. He is certified as a CPA
by the California Board of Accountancy.

Responsibilities
Compliance, Regulatory, Corporate Risk, Legal,
Security

Responsibilities
Engineering Solutions (Payments, Platform
Engineering, Data, Platforms and Financial
Services), Tech Hubs, Testing Enablement

CHRO

Responsibilities
Rewards, Recruitment, HR Innovations, People
Growth, Office & Facilities

CFO

Responsibilities
Group Finance, Merchant Finance & Treasury,
Communications, Strategy and Execution,
Sustainability

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80

Supervisory
Board

For the full biographies of the Supervisory Board, please refer tothe Adyen IR Governance webpage via investors.adyen.com/
governance.

Piero Overmars

Delfin Rueda Arroyo

Caoimhe Keogan

Chair of the Supervisory Board

Chair of the Audit and Risk Committee

Male - 1964 - Dutch
Appointed in January 2017. Second four-year
term
Current term: January 2021 - January 2025

Male - 1964 - Spanish
Appointed in January 2017. Second four-year
term
Current term: January 2022 - January 2026

Chair of the Nomination and Remuneration
Committee

Piero Overmars serves as a member of theSupervisory Boards of Dura Vermeer Group N.V.,
TLN Holdings B.V. and Dutch Organic
International Trade B.V., and as a member of theManagement Board of Stichting Continuïteit
PostNL. Previously, he was a member of theManagement Board of Randstad Beheer B.V. andwas Chairman of the Supervisory Boards of
Nutreco and SNS Reaal, and member of theSupervisory Board of Amsterdam UMC. He also
served as President of the Nyenrode Foundation,
following an extensive career at ABN Amro. Piero
Overmars holds an MBA from Nyenrode Business
University.

Delfin Rueda Arroyo is the Finance Managing
Director at Squircle Capital and Venture Partner
for Mundi Ventures. He also serves as a nonexecutive director at FlowTraders, Allfunds Bank,
and Allfunds Group. Previously, Delfin held roles
as CFO and Vice-Chair of the Executive Board at
NN Group and ING Insurance. His career spans
pivotal roles at Atradius, JP Morgan, and UBS.
Delfin holds a Master's in Economic Analysis from
Complutense University of Madrid (Spain) and an
MBA from the Wharton School, University ofPennsylvania (USA). Delfin is the Chair of the
Audit and Risk Committee.

Female - 1978 - Irish
Appointed in February 2021. First four-year
term
Current term: February 2021 - February 2025
Caoimhe Keogan serves as CPO (Chief People
Officer) for Aveva Group. Previously, she served as
Chief People Officer for Moneysupermarket
Group plc, and as SVP People, Places &Community at SoundCloud. Prior to these roles,
she was Senior HR Business Partner at Google.
Her early career experience included
management consulting roles with Deloitte and
KPMG. Caoimhe Keogan holds a Master’s degreein Occupational Psychology from Queen’s
University Belfast (UK).

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81

Joep van Beurden

Pamela Joseph

Member of the Supervisory Board

Member of the Supervisory Board

Male - 1960 - Dutch
Appointed in January 2017. First two-year term
Current term: January 2024 - January 2026

Female - 1959 - American
Appointed in May 2019. Second four-year term
Current term: May 2023 - May 2027

Joep van Beurden is CEO and member of the
Executive Board of Kendrion N.V. Previously, heserved as member of the Supervisory Board of
Twente University of Technology, and as CEO of CSR
Plc. and NexWave Inc., following a career at RoyalDutch Shell, McKinsey, Philips and Canesta Inc. Joepvan Beurden holds a degree in Applied Physics from
Twente University of Technology (the Netherlands).

Pamela Joseph is CEO and member of theManagement Board of Xplor Technologies, holds a
position as Chair of the Board of Directors ofTransUnion and is a non-executive member in the
Board of Directors of Paychex. In addition to these
positions, Pamela serves as Operating Partner at
Advent International. Previously, she served U.S. Bank
corp. Payment Services as a Vice-Chairman, and prior
to that Elavon as President and COO. She started hercareer at Wells Fargo Bank and VISA International.
She holds a degree in Business Administration fromthe University of Illinois (USA).

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82

Report of the Supervisory Board
Introduction

Composition

The Supervisory Board is pleased to present its report for 2023: a year of continued expansion for bothAdyen’s global team and customer relationships. With 864 FTEs onboarded, several strategic customers
added to our portfolio, continued product innovation, and a deepened presence in key regions, this year
marks a pivotal step in the Company’s journey. Demonstrating once again the importance of building for the
long-term and the value that Adyen delivers to its customers, we are in the fortunate position to record aperiod of sustained, profitable growth.

The Supervisory Board currently comprises of five members: Piero Overmars (Chair), Delfin Rueda Arroyo,
Caoimhe Keogan, Joep van Beurden and Pamela Joseph. The members have a diverse set of knowledge,
skills, capabilities and expertise, in line with the required profile as included in the Supervisory Board ByLaws. The Supervisory Board values and promotes diversity, not only within the Management Board andSupervisory Board, but also in the GLT and in the Company as a whole. For more information on theexpertise of the Supervisory Directors and the diversity elements, such as nationalities, tenure, age, andgender, please refer to ‘Supervisory Board diversity, competencies and knowledge fields’.

The Supervisory Board is responsible for supervising the Management Board's strategy for sustainablelong-term value creation. The Supervisory Board should regularly discusses the strategy, its
implementation, and the principal risks associated with it. Sustainability matters (Environmental, Social andGovernance) are discussed as an integral element of the Company’s business strategy, and its
implementation is supervised by Supervisory Board as a whole.
In 2023, Supervisory Board actively engaged in discussions on strategy with the Management Board, inwhich the Company’s strategic priorities, key markets and products, and people strategy was discussed.
The meetings held and the informal dialogues taking place in the office and online were highly valued by theSupervisory Board. Several Supervisory Directors have visited the Adyen New York, Chicago, San Francisco
and Tokyo offices throughout the year, in which they engaged with members of the Global Leadership Team
(GLT).
For a detailed overview of the topics discussed by the Supervisory Board and its committees, please see‘Supervisory Board activities in 2023’ below.

Retirement and reappointment
In the General Meeting of 2023, Joep van Beurden and Pamela Joseph have been reappointed as
Supervisory Directors. Pamela Joseph was appointed as Supervisory Director for a second four-year term.
Joep van Beurden has been reappointed as Supervisory Director for a two-year term after two four-year
terms. In line with Best Practice Provision 2.2.2, reasons for appointment after an eight-year period should
be given in the report of the Supervisory Board. The Supervisory Board proposed Joep’s reappointment to
the General Meeting in light of his vast experience in the technology sector, his innovative mindset and hisbalanced decision-making capabilities. The Supervisory Board highly values Joep’s contribution to theSupervisory Board composition and his involvement over the past eight years.
Per the date of the General Meeting, Caoimhe Keogan has become Chair of the Nomination andRemuneration Committee. The Supervisory Board and Management Board are happy to continue to workwith Joep in his capacity as Supervisory Director for the upcoming two years.

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83

Supervisory Board diversity, competencies and knowledge fields
Piero
Overmars

Joep vanBeurdenDelfin Rueda
ArroyoPamelaJosephCaoimhe
KeoganGeneral expertise
Management experience within listed, international
company
Finance strategy and planning

58
Average tenure

5 years

Risk and auditing
Legal, compliance, and regulatory
People and culture management
Financial markets, disclosure, and communication
ESG & sustainability

Ratio female / male

40/60

Industry expertiseIT, digital, and innovation
Banking

Supervisory Board retirement and reappointment schedule
Name

Average age

Initialappointment dateCurrent
appointment date

Term ends

Chair

January 2017

January 2021

January 2025

MemberJanuary 2017

January 2022

January 2026

MemberJanuary 2017

January 2024

January 2026

FemaleMemberMay 2019

May 2023

May 2027

FemaleMemberFebruary 2021

February 2021

February 2025

Year of birth

Nationality

Gender Position

Piero Overmars

1964

NL

Male

Delfin Rueda Arroyo

1964

SP

Male

Joep van Beurden

1960

NL

Male

Pamela Joseph

1959

US

Caoimhe Keogan

1978

IE

Nationalities

4Annual Report 2023

Independence
Throughout the year, four Supervisory Directors — Piero Overmars (Chair), Delfin Rueda, Pamela Joseph,and Caoimhe Keogan — were independent from the Company within the meaning of Best Practice
Provisions 2.1.7, 2.1.8 and 2.1.9 of the Code. One Supervisory Board Director, Joep van Beurden, has acted
as an advisor to the Company in the years preceding his appointment in 2017, and is therefore considered
not to be independent within the meaning of Best Practice Provision 2.1.8 (iii) of the Code. The Supervisory
Board is, as a body, independent as defined in the Code.

84

The Supervisory Board reflected on several events in 2023, and discussed observations and lessons
learned. Particular attention was paid to culture, the Adyen Formula, dynamics and composition, risk &control, and conduct. The Supervisory Directors note an atmosphere of openness and transparency in the
Supervisory Board and committee meetings and in their interactions, and positive engagement and energy
levels are observed in the meetings. Governance processes are conducted thoroughly and effectively.
Further, the following was observed:•

The functioning of the Supervisory Board, the Supervisory Board committees and the Supervisory
Directors complies with the relevant corporate governance requirements and best practices as set
out in the Code;•The functioning and the role of the Chair is highly valued and considered to be positive by theSupervisory Directors;•

The desired profile, composition, competencies and expertise of the Supervisory Board is as suchthat is can fulfil its supervisory function;•

The Supervisory Board is able to critically discuss (disruptive) trends and challenges, and assess theneed for action;•

The role of the Supervisory Board continuously evolves alongside with the maturity and complexity ofthe business, but also takes into account the informal ‘Adyen way of working’;•

The current and future governance processes should support Adyen’s entrepreneurial approach,while considering the formal governance requirements; and•The quality of the agenda, committees and information provided to the Supervisory Board issufficient.

Conflicts of interest
In 2023, there were no reports of conflicts of interest relating to members of the Supervisory Board.
Supervisory Directors shall notify the Chair of the Supervisory Board as soon as possible in case of a(potential) conflict of interest. A member of the Supervisory Board who has a conflict of interest may notparticipate in the consultation and decision-making of the Supervisory Board regarding the proposedsolution.

Performance assessment
In line with the Code, the Supervisory Board assesses its performance periodically by an external firm. In
2023, the Supervisory Board has engaged with Phyleon, an expert advisor on leadership and governance, toperform its external performance assessment. The assessment took place in the second half of 2023, via
videoconference and in-person meetings. Phyleon conducted interviews and utilized a board survey with theSupervisory Directors, Managing Directors, the Company Secretary and the Deputy Company Secretary.
The survey provided information on how the Supervisory Board deals with the various requirements
imposed or suggested by the governance system or company law, securities regulation, and codes.
In addition, the survey highlights the dynamics of the group interactions in the Supervisory Board andManagement Board, using examples of behaviors, social interactions and actions.
The interviews were structured around a set of topics and themes relevant to Adyen’s Supervisory Board
and Management Board meetings and interactions. The initial outcome of the assessment was shared with
the Chair of the Supervisory Board, the Company Secretary and the Deputy Company Secretary with theaim to validate the first findings and overall direction of the outcomes. Next, the Supervisory Directors andPhyleon met for an in-person session, in which the process, findings and recommendations were sharedand discussed.

Areas of focus
The Supervisory Board should pay attention to the succession planning of both the Supervisory Board (asmultiple Supervisory Directors approach the final years of their second terms) and Management Board, andtake into account the dynamics of such changes in the composition of the Boards. Further, the need tocontinuously professionalize and structure the Company’s corporate governance processes in line with thebusiness complexity and growth, while scaling the unique company culture and encourage innovation, isstated as an area of focus. The importance of engaging informally with Management Board members,outside of formal Supervisory Board meetings, continues to be a priority for the Supervisory Board.

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Supervisory Board activities in 2023
Meetings and attendanceSupervisory Board committees

The Supervisory Board convened for eight meetings, which were held at the offices of Adyen and online. The
meetings were held in the months of February, March, May, August, October, November, and December.

Nomination and Remuneration Committee

The Supervisory Board meets at a minimum each six months, or prior to the publication of the half-yearly
results, and discusses these results with the Management Board, as well as the draft press release andauditor’s report on the procedures performed. These documents are first discussed in the Audit and Risk
Committee meeting prior to the Supervisory Board meeting. In 2023, due to the Investor Day that took place
on 8 November 2023, the Supervisory Board met for an additional session to discuss the preparations andthe publication ahead of the event.

Topics discussed with the Supervisory Board
In addition to the regular agenda for the Supervisory Board meeting — which includes topics such as risk
management, business performance, strategic updates and the development of the financials — theSupervisory Board discussed topics related to customer relations, price sensitive information, regulatory
affairs, ESG, culture, diversity, and the preparation and evaluation of the Annual General Meeting of
Shareholders. Furthermore, deep dives and educational sessions on topics relevant to Adyen’s businesswere held, such as cyber security, operations and reputational risks. The Supervisory Board also discussed
Adyen’s (long-term) strategy including its Solutions, Commercial Pillars, focus areas and associated risks,and reviewed proposed annual and other financial reporting. The Company Secretary attended all
Supervisory Board meetings and Committee meetings but one, and acted as the secretary of theSupervisory Board and its Committees. The Chair of the Supervisory Board met regularly during the yearwith the co-CEOs and other Managing Directors to discuss the performance of the Company and projects
as part of executing the strategy. The Supervisory Directors also interacted individually and collectively withManaging Directors, the Internal Auditor and the External Auditor outside the formal Supervisory Board
meetings, and informally with other members of the team, including Adyen’s Global Leadership Team.

Supervisory Board meetings and committee meetings attendance in 2023
In 2023, the attendance rate of Piero Overmars, Delfin Rueda Arroyo, Joep van Beurden and Pamela Joseph
was 100% for the Supervisory Board meetings and the Committee meetings of which they are a member.
Caoimhe Keogan did not attend one Supervisory Board meeting, which results in an attendance rate of 86%.

• Culture• Executive compensation• Remuneration• Diversity, equity and inclusion• Succession planning• Talent management and retention• Learning & development

Audit and Risk Committee• Risk management and internal control• Financial and non-financial reporting• Ethics, conduct, integrity and compliance• IT, information security and data privacy• Tax
Please refer to our Governance page for the Terms of Reference of the Supervisory Board committees.

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Report of the Nomination and Remuneration Committee

Report of the Audit and Risk Committee

The Nomination and Remuneration Committee convened for three meetings of minimum two hours in 2023.
All committee members attended all meetings. In 2023, the Nomination and Remuneration Committee
discussed and paid particular attention to the Company’s culture, talent management and leadership, hiring
strategies, compensation and Diversity, Equity & Inclusion (DEI).

In 2023, the Audit and Risk Committee convened for four meetings of minimum two hours. All committee
members, the internal auditor and the external auditor attended all meetings held in 2023.

In the meetings, the Committee members received updates on the Company’s HR general data, such as
new hires per organizational function and region, employee costs, and performance review data.
Prior to the publication of the Annual Report in 2023, the Committee discussed the draft Remuneration
Report, the remuneration for the Management, Supervisory Board and the Internal Control functions.
Furthermore, the Committee had discussions on the appointments of Brooke Nayden and Ethan
Tandowsky, and formally recommended the Supervisory Board to propose their appointment to the General
Meeting of Shareholders. The reappointment of Joep van Beurden and Pamela Joseph was also discussed
and recommended to the General Meeting of Shareholders.
The Company heavily invested in its workforce in 2023 by adding 864 FTE to the team. Onboarding andtalent management, therefore, was a key topic of focus for the Committee. Adyen invested in scaling its
onboarding programs and trainings. The Committee discussed the overall approach with regards tolearning and development. Further, it reviewed Adyen’s succession planning for the GLT, the Management
Board and the Supervisory Board.
An important aspect of scaling the team is the Adyen Formula. On culture and on diversity, equity andinclusion (DEI), the Supervisory Board discussed the results of the Company’s Culture and Inclusion Survey,
and the proposed updates to the Diversity, Equity and Inclusion Policy. The Nomination and Remuneration
Committee reviewed the updates and met with key stakeholders in the process to oversee the approval of
the new policy. For more information on the Adyen’s updated DE&I Policy, see the “Adyen’s Diversity, Equity
and Inclusion Policy” on the next page.
A deep dive on productivity in the Company’s Operations function was discussed, which will be used as an
example for productivity presentations for other functions in 2024.

The Company’s key risks, risk exposure, risk appetite statements, and the design, operation andeffectiveness of the risk management and internal control systems of the Company were discussed in detail.
On financial results, the Committee discussed the half-yearly financial results and the financial statements,
as well as the financial results disclosed during our Investor Day in November. The Committee was closely
involved in the review and disclosure process of these publications, including its corresponding press
releases.
The Committee discussed the reports from internal and external auditors. Further, the external auditor’sreport and opinion, including the Key Audit Matters (KAMs), were discussed within the Committee. These
KAMs (i. the design and effectiveness of IT general controls and ii. the risk of overstatement of revenue), andthe audit procedures performed by the external auditor, were discussed in detail. The Committee discussed
the risk of fraud and non-compliance with laws and regulations, including the assessment of fraud risk
factors such as bribery and corruption, insider trading, chargebacks, and payroll processes. The broader
going concern assessments were discussed in the meetings, and presented by the external auditor. In
addition, the Committee reviewed the external audit plan and evaluated the performance and remunerationof the external auditor.
Other topics on the agenda in 2023 included compliance, governance, ICLAAP, SREP, Pillar III reporting, tax
risks, legal, incident and business continuity management, ESG and investor relations.
The members of the Committee met with the internal and external auditors outside the Committee meetings
without the Managing Directors present. The Audit and Risk Committee supervises the Management Board
in regards to the sustainability reporting. For this reason, in 2023 the Committee has also focused on
Adyen’s Double Materiality Assessment and sustainability-related KPIs.

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Diversity, equity and inclusion at Adyen
The Supervisory Board aims for a balance in its composition with respect to gender, nationality, age,experience and affinity with the nature and culture of the business of Adyen in all countries in which it isactive. The Supervisory Board values and promotes diversity, both within the Supervisory Board and theManagement Board, as within Adyen in general. Differences in amongst others educational background,nationality, age, race, gender, experiences and beliefs are vital to the business, enabling the Boards and theCompany to look at issues and opportunities differently and to respond to challenges in new ways. Diversity
is a key driver for innovation and allows Adyen to attract and retain the most talented and smart people.

The Adyen Diversity, Equity and Inclusion Policy
At Adyen, people and culture is of top priority. In line with the Adyen Formula, the Company seeks out
different perspectives to sharpen ideas and to build a fair and inclusive Adyen. This means striving fordiversity across all dimensions, including but not limited to race, ethnicity, gender identity, sexual
orientation, age, cultural background, disability, neurodivergence, and religion. We view diversity andinclusion as the responsibility of the entire Adyen team, including the Supervisory Board. The Supervisory
Board is aware that all aspects of diversity are vital to Adyen’s business, enabling the Boards to look at issues
and opportunities from different angles and to respond to challenges in new ways. Diversity is a key driverfor innovation and allows Adyen to attract and retain talent.
The Supervisory Board has drawn up the Diversity, Equity, and Inclusion Policy, which has been establishedin accordance with Best Practice Provision 2.1.5. of the Dutch Corporate Governance Code. In 2023, Adyen
has updated its Diversity, Equity and Inclusion Policy. The recent updates are in line with the requirements of
the Dutch Civil Code and Dutch Corporate Governance Code. The Adyen Diversity, Equity and Inclusion
Policy can be found at our Governance webpage via investors.adyen.com/governance..

Policy goals and commitments
The Adyen Diversity, Equity and Inclusion Policy includes several specific, appropriate and ambitious targets
in order to achieve a good balance in all aspects of diversity.

The Adyen Diversity, Equity and Inclusion Policy
Adyen believes in the benefits of a diverse workplace and strives for diverse teams at alllevels. Therefore, Adyen commits to:• Hiring, promoting, and enabling growth of underrepresented groups across all levels
and geographies of the organization.
• Include underrepresented candidates in our hiring process, meaning that wemeasure the diversity of our candidate pipelines when possible and strive for aminimum of 30% of candidates to come from an underrepresented group considering
relevant local demographic context and regional/functional objectives.
• Ensure that individuals from underrepresented groups can be themselves, are able tospeak up and be heard, and thrive at all levels of the organization.
• Ensuring the leadership team (Global Leadership Team, Management Board, andSupervisory Board) is a fair representation of the Company.
• Having a Global Leadership Team (“subtop”) with no more than two thirds of its
members identifying as a single gender identity (66%) by 2028.
• Having a Management Board with no more than two thirds of its members identifying
as a single gender identity (66%) by 2030. The size and current composition of theManagement Board requires Adyen to set a longer time horizon to achieve thiscommitment.
• Having a Supervisory Board with no more than two thirds of its members identifying
as a single gender identity (66%) by 2028. This is in line with Dutch statutory diversity
targets.

Annual Report 2023

Ongoing initiatives•

Diversity focused events and partnerships•

Actively reach out to minority groups•

Unconscious bias training•

Gender neutral job description•

Diverse interview panels•

Structured interview process•

Educating the business•Training diverse tech candidates•

DEI section on Adyen career website•

Employee Resource Groups (ERGs)

Results in 2023
Female representation in Adyen’s total workforce increased by 1% from 38% to 39%. Additionally, theCompany has updated the definition of Adyen’s ‘senior leadership’, which now includes the members of the
Global Leadership Team (GLT). Adyen’s GLT consists of 52% women and 48% men at the end of 2023.
Several in-house and externally-hired leaders have been added to GLT, of which the majority is basedoutside of Amsterdam. Adyen believes that its leadership team should be a reflection of the regions in which
it operates, and applies a broader view on diversity than gender.
With the addition of Brooke Nayden and Ethan Tandowsky to the Management Board, the gender ratio of
the Management Board now consists of 29% women and 71% men.
In 2023, no changes have been made to the composition of the Supervisory Board, which consists of 40%
women and 60% men.
We are committed to ensure that our GLT, Management Board, and Supervisory Board are a fair
representation of the Company.

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89

Financial statements
The financial statements for the year ended December 31, 2023, were prepared by the Management Boardand approved by the Supervisory Board. The Report of the Independent Auditor, PricewaterhouseCoopers
Accountants N.V. (PwC) is included in the Independent Auditor’s Report in the ‘Other Information’ section ofthis Annual Report. The Supervisory Board recommends that the General Meeting adopts thesefinancial statements.

Relevant documents on our Governance page• Articles of Association• By-Laws Management Board• By-Laws Supervisory Board

Appreciation
Looking back at 2023, the Supervisory Board would like to thank all Adyen employees for their contribution
during the past year. The Supervisory Board is proud to see the team was able to continue to serve theinterests of customers, shareholders and other stakeholders of the Company with the highest standards.

• Disclosure and Bilateral Dialogue Policy• Diversity, Equity and Inclusion Policy• Dividend Policy• General Remuneration Policy

March 1, 2024

• Remuneration Policy Management Board

Amsterdam• Remuneration Policy Supervisory Board

Piero Overmars

Delfin Rueda Arroyo

Chair of the Supervisory Board

Supervisory Director

Caoimhe Keogan

Joep van Beurden

Supervisory Director

Supervisory Director

Pamela Joseph
Supervisory Director• Reporting and Whistleblower Policy• Stakeholder Dialogue Policy• Terms of Reference Audit and Risk Committee• Terms of Reference Nomination and Remuneration Committee• The Adyen Way of Building an Ethical BusinessAnnual Report 2023

90

Remuneration report
This remuneration report explains how the remuneration policies for the Management Board andSupervisory Board were put into practice in 2023. These remuneration policies have received strong
shareholder support, with an 99.86% approval rate for the Management Board and Supervisory Board
remuneration policy in the Annual General Meeting on May 26, 2020.
The remuneration report has been prepared in accordance with article 2:135 of the Dutch Civil Code, theDutch Corporate Governance Code and, where possible, inspired by the updated draft EC guidelines on thestandardized presentation of the remuneration report. It will be submitted for an advisory vote to theshareholders at the 2024 AGM. In addition, the last section of this report includes information on
remuneration-related matters for other staff. This section of the report is prepared with a view to article
1:120 of the Dutch Financial Supervisory Act and is for information purposes only. It is not subject to theadvisory vote applicable for our Management Board and Supervisory Board section.

2023 AGM
During the Annual General Meeting (AGM) on 11 May 2023, our updated Remuneration policies (effective as
per January 1, 2024) for our Management Board and Supervisory Board were approved by a large majority.
In addition, we were pleased to receive 97.4% of the votes in favor of our 2022 Remuneration Report.

Our philosophy
When it comes to our remuneration policies, Adyen operates with the same objectives and goals for all our
employees, including our Management Board and Supervisory Board. Our primary objective is to recruit andretain the best global talent by offering competitive payment structures that account for our strategy offocusing on our customers’ growth, changing the payments landscape, and having fun while doing so. We
believe it is key that every remuneration decision aligns with the Adyen Formula and company strategy. As
such, we have defined guiding principles that ensure that our remuneration policies and approach toremuneration sufficiently reflect these objectives.

Equal pay
We are committed to ensuring equal pay. We value all perspectives equally and do not weigh one greaterthan another. At its core, this means: same role, same pay. Our annual equal pay audit is designed tosafeguard and uphold this standard.

Internal remuneration ratios
On a yearly basis we assess our internal remuneration ratios to ensure the Management Board andSupervisory Board remuneration develops in line with the rest of the organization. We therefore track
possible changes to pay ratios when reviewing the remuneration of our Management Board. In the section‘Pay ratio’ of the Management Board remuneration, we report on this internal ratio and its development in
2023.

Level of support in society
Since our founding in 2006, Adyen has remained focused on building for the long-term. This means
continuously advancing our people, platform and partnerships to meet the needs of today, while relentlessly
innovating to fulfil those of tomorrow. As articulated in the Adyen Formula, we strive to make good choices
to build an ethical and sustainable business and drive sustainable growth for our customers.
As part of our commitment to building an ethical business, we observe the law and applicable regulations toensure our remuneration policies and practices are compliant with relevant requirements. This framework
includes the Dutch Remuneration Policy for Financial Institutions Act (Wet beloningsbeleid financiele
ondernemingen), the Rules on Sound Remuneration Policies (Regeling beheerst beloningsbeleid Wft) andthe EBA Guidelines on Sound Remuneration Policies (EBA Guidelines). We closely monitor regulatory
developments to ensure we remain fully compliant.
Our remuneration policies and practices consistently promote sound and effective risk management. They
are always aligned with our strategy and the Adyen Formula to create long-term value for our company andour customers. As such, we do not provide any incentives that exclusively benefit individual staff members or
encourage improper risk-taking.

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Our Management Board remuneration policy
Our 2020 and 2024 remuneration policy at a glance
The overview below provides insight into the main elements of our 2020 and 2024 Management Board remuneration policy. The new policy, effective as per January 1, 2024 (adopted at the 2023 AGM) is intended to remainin place for 4 years. The new remuneration policy can be found on our Governance webpage via investors.adyen.com/governance.
Element

2020 policy

2024 policy

Rationale

Peer group

Comparison against AEX constituents.

The use of a tailored peer group reflecting our level of maturity and based on predefined and objective
selection criteria such as size and industry.

The use of a tailored peer group will better reflect our executive talent market, which is broader than only
AEX constituents.

Remuneration is positioned below the medianof the benchmark against the AEX.

We aim for total remuneration of Management Board members to not be positioned above the median of the The market positioning reflects our pay philosophy and acknowledges that the peer group includes
peer group. In exceptional circumstances, we allow deviation from this market positioning and allow forinternational companies from markets where pay is generally higher than in the Netherlands. The possibility
positioning up to the 75th percentile of the peer group.
to deviate from the market positioning provides us with the flexibility to recruit and retain the best talentavailable in our global talent market.

Fixed remuneration

Fixed remuneration can be paid in a
combination of cash and equity(-linked)
instruments.

Fixed remuneration can be paid in a combination of cash and equity(-linked) instruments. Any pay-out in
equity(-linked) instruments will be subject to a holding period of five years.

Increase the alignment between Management Board members’ interest and Adyen’s stakeholders tocontribute to Adyen’s long-term value creation.

Variable remuneration

A minimum of 50% of the variable
remuneration will be awarded in equity or
equity(-linked) instruments.

Variable remuneration will be awarded in equity(-linked) instruments.

Awards in equity will increase the alignment between Management Board members’ interests and Adyen’s
stakeholders and contribute to Adyen’s long-term value creation.

Share ownership

Currently not in place.

Stimulate the Management Board members to retain (a proportion of) the equity(-linked instruments)
awarded under the various remuneration components during employment until the value of ownership is atleast 50% of fixed remuneration.

Share ownership guidelines will further strengthen our focus on building for long-term success, independentof the Management Board member’s tenure or history within Adyen.

New hire policy

Currently not in place.

Possibility of granting a sign-on award in cash and/or equity(-linked) instruments to external hires.

The new hire policy enables Adyen to recruit the best talent available in our global talent market.

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Our approach to variable remuneration

Category

Description

Rationale

Adyen has a uniquely entrepreneurial and performance-driven culture. This has been one of our primary
drivers for historical growth and will remain a key driver for future growth. To incentivize this culture andreward merit, we have the option to incorporate variable remuneration. At this moment, we do not believe
variable remuneration is required to maintain this performance-focused culture. This does not necessarilymean we will never consider the use of variable remuneration for (future) Management Board members, but
it is not the case at present.

Payment
platforms

Combination of our direct (business) competitorsand (FinTech) companies active in the payment,
cryptocurrency and banking platform sector.

Comparison against companies operating in similar industry
dynamics as Adyen.

Financial sector

Selection of relevant banks.

Comparison against companies acting in similar governanceenvironment and where remuneration is subject to (broadly) similar
regulation as for Adyen.

High-Tech

Companies active in software, platform or (digital) Comparison against companies active in innovation-driven an fastservices related sectors.
moving industries, like the payment industry.

Listing index

AEX listed companies.

Determination of the remuneration package
The level of the Management Board member’s remuneration is based on various factors, including thescope of responsibilities and experience of each individual Management Board member. If a member of theManagement Board has a principal place outside the Netherlands, the remuneration package may take local
market practice or requirements into account.

Comparison with the external landscape
One of the factors is the comparison with the external landscape. Under the scope of our current
remuneration policy, the Management Board’s remuneration is compared to AEX companies. The
remuneration of all Management Board members is below the median of the benchmark.
As per January 1, 2024, we make use of a tailored peer group which reflects our relevant market for
executive talent. We have defined four categories that we believe form the foundation of our talent market
and thus should be represented in our peer group (see table).
We determine the composition of the peer group on an annual basis, balancing the weight of the different
categories appropriately. Individual peer companies are selected objectively, with quantitative and industry
criteria used to ensure comparability in terms of size and structure. We aim to position ourselves around the
median of the peer group in terms of size, with the spread between the smallest and largest companies is
kept within reasonable boundaries. The proportion of North American peers will be limited to a maximum of
40% of the peer group composition.
We will disclose on retrospective basis the peer group composition in our annual remuneration report, forthe first time in our 2024 remuneration report.

Comparison against companies that are operating within similar
Dutch stakeholder environment.

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93

Management Board remuneration in 2023

Variable remuneration

In this section, we outline the implementation of our Management Board remuneration policy in 2023. This
implementation was done in accordance with our remuneration policy and principles. There has been no
deviation from the remuneration policy, principles or procedures for its implementation in 2023.

No variable remuneration was awarded to our Management Board members in the financial year 2023. No
variable remuneration to our Management Board members was adjusted or clawed back over 2023 orprevious years.

Similar to previous years, we did not award variable remuneration to our Management Board members in
2023. Therefore, their remuneration consists of base salary only. In line with the Dutch Corporate
Governance Code, we performed a scenario analysis and back-test on the remuneration. However, due tothis absence of variable remuneration, all scenarios resulted in the same outcome.

Pension & Benefits

We believe the remuneration approach for our Management Board mitigates short-term orientation andcontribute to the long-term performance of our company. This is achieved by awarding Management Board
members with share-related remuneration, while other members still have significant shareholdings in ourcompany. The purpose hereof is to ensure a financial ownership-like position where shares are concernedand for them to obtain an economic interest in the pursuit of Adyen’s long-term objectives such assustainable growth, development, profitability, and the financial success of Adyen.

Base salary
In 2023, the base salaries of our Management Board members were increased by 15%, with the exception
being one of our co-CEO’s (8% increase). These increases were made to reflect the increased scope of theroles and responsibilities.
Currently, our Co-CEO’s and Chief Commercial Officer receive only cash base salary as part of fixedcompensation. Our Chief Legal & Compliance Officer, Chief Technology Officer, Chief Financial Officer andChief Human Resources Officer, additionally receive 50% (46% for Chief Technology Officer) of cash basesalary in shares as part of fixed compensation. The shares are subject to a holding period of five years.
Other than the information above, when setting base salaries, we take various internal and external factors
into consideration. Our Management Board members provide the Nomination and Remuneration
Committee with their individual views with regard to the amount and structure of their remuneration.
Furthermore, a comparison against the Management Board peer group was made, whereby our
remuneration levels are below the median of the benchmark.

We deeply believe in treating our Management Board members the same as other employees. Therefore, weoffer them pension and benefits arrangements in line with typical market practice and in accordance withwhat we offer our wider workforce.
Pension
As from January 2017, all Dutch Management Board members participate in the Collective DefinedContribution (CDC) pension plan, with respect to their salary up to EUR 128,810 gross per year for 2023
(2022: EUR 114,866). On behalf of each Management Board member, Adyen pays a contribution of 4% of
the pensionable salary — being 12 times the monthly fixed salary plus holiday pay up to the fiscally allowed
maximum minus a deductible — for the accrual of old age pension benefits as well as the administration
costs. If and as far as fiscally allowed, each Management Board member has the possibility to makeadditional contributions in order to accrue additional pension capital.
Kamran Zaki participated in a 401k retirement plan in the US, for which Adyen provided an employer matchof up to 3% of base salary in 2023.
Benefits
All Management Board members are insured under an insurance policy taken out by Adyen against
damages resulting from their conduct when acting in their capacities as directors. All Dutch Management
Board members are insured for the risk of death and disability, for which Adyen pays the insurance
premiums.

Pay ratio
On an annual basis, we determine the internal ratio of the Management Board members’ remuneration
versus all other Adyen staff. For this ratio, Adyen included all remuneration components of the CEOcompared to the average total remuneration of all Adyen employees worldwide.

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94

For the CEO, a ratio of [7:1] applies (2022: [7:1]). The CEO pay ratio has remained unchanged since thecompany’s IPO in 2018. For the other Management Board members, a ratio of [7:1] applies (2022: [7:1]).

Management Board
MemberReported
year

This calculation methodology is in accordance with the guidance as provided in the Dutch Corporate
Governance Code. Our pay ratio is observed to be amongst the lowest compared with other AEX companies
and reflects our vision of not treating the Management Board materially different than the other staff.

Pieter van der Does

2023

725,000

30,186——755,186

2022

671,530

20,044——

691,5742023

725,000

30,186——755,186

2022

632,028

20,044——652,0722023

626,892

30,186——

657,0782022

545,124

20,044——565,1682023

575,000

30,186

287,500—

892,6862022

500,000

20,044250,000—

770,0442023

472,650

110,853

217,350—

800,8532022

411,000

104,186

189,000—

704,1862023

450,000

30,186225,000—

705,186

2022

—

—

—

—

—

2023

450,000

30,186225,000—

705,186

2022

—

—

—

—

—

2023

382,818

26,254——

409,072

Overview of the Management Board remuneration in 2023
The table below provides an overview of the Management Board remuneration in 2023 and 2022. In
accordance with the information shared under the ‘Base salary’ section of this remuneration report, sharebased compensation refers to share-based fixed remuneration awarded in Adyen shares. As explained inprevious sections of this remuneration report, total remuneration consists of fixed remuneration only.

Ingo Uytdehaage

Roelant Prins

Mariëtte Swart

Alexander Matthey*

Brooke Nayden

Ethan Tandowsky

Kamran Zaki**

Total

Base salaryPension andbenefits

Share-based
compensation

Variablecompensation

Total
compensation

2022

830,328

24,465——

854,7932023

4,407,360

318,223

954,850—

5,680,433

2022

3,590,010

208,827

439,000—

4,237,837

All amounts are in EUR.
* The amounts for Alexander Matthey’s pension and benefits includes housing and schooling allowances.
** Kamran Zaki stepped down as Management Board member after the Annual General Meeting in May 2023.

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95

Stock options awarded in previous years

Loans

No new stock option grants were granted in 2023 nor options were held by any of the Management Board
members at December 31, 2023.

No loans, advance payments and guarantees have been granted to or on behalf of the Management Board
members.

Share and Depositary Receipt holdings
The table below reflects the equity position directly or indirectly held by the current Management Board
members as per December 31, 2023 and 2022:
Shareholdings (aggregate number of Shares and/or Depositary Receipts)
2023

2022

Pieter van der Does

922,539

947,542

Roelant Prins

287,309287,309

Ingo Uytdehaage

195,182

195,182Mariëtte Swart

1,953

158

Alexander Matthey

959

164

Brooke Nayden

658—

Ethan Tandowsky

293—Service and Severance Agreements
All Management Board members have entered into a service agreement (overeenkomst van opdracht) with
Adyen N.V. effective as of the date of the listing of Adyen, whereby Kamran Zaki was assigned to Adyen N.V.
San Francisco Branch. The terms and conditions of these service agreements have been aligned with theDutch Corporate Governance Code. The service agreements will be entered into for a term of 4 years. The
service agreements provide for a severance of one annual base salary if the Management Board member is
not re-appointed or otherwise terminated by Adyen (for any reason other than urgent cause within themeaning of article 7:678 of the Dutch Civil Code (dringende reden)), in accordance with the Dutch Corporate
Governance Code. In the financial year 2023, no severance payment has been paid to any Management
Board member.

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96

Remuneration and Company Performance Development
The below table shows the difference in Management Board remuneration compared to the previous years
and company performance over the last five reported financial years:
Annual change

2023 vs 2022

2022 vs 2021

2021 vs 2020

2020 vs 20192019 vs 2018

63,61262,88915,921

42,987(34,954)

Roelant Prins

91,91051,817

12,56140,395(26,023)

Ingo Uytdehaage

103,11459,42914,871

34,693(32,107)Mariëtte Swart

122,642

290,581

11,583467,880—

Alexander Matthey

Management Board members’ remuneration (in EUR)
Pieter van der Does

96,667

188,211515,975——

Brooke Nayden

—

—

—

—

—

Ethan Tandowsky

—

—

—

—

—

Net revenues

295,895

328,649

317,317

149,900

160,855

EBITDA

14,747

98,296

227,51282,245

110,464

24,042

7,185

4,663

1,703

1,689

Company Performance (in EUR ‘000)

Average remuneration comparative on FTE basis (in EUR)
Wages and Salaries / FTE

Annual Report 2023

97

Our Supervisory Board remuneration policy

Determination of the remuneration package

Our policy at a glance
The overview below provides insight into the main elements of our 2020 and 2024 Supervisory Board
remuneration policy. The new policy, effective as per January 1, 2024 (adopted at the 2023 AGM) is
intended to remain in place for 4 years. The new remuneration policy can be found on our Governancewebpage via investors.adyen.com/governance.
Element

2024 policy

Rationale

Comparison against
remuneration observed within
AEX constituents.

The use of a tailored peer group,reflecting our transformation andbased on predefined andobjective selection criteria suchas size and industry.

The use of a tailored peer groupwill better reflect our NonExecutive Director talent market,
which is broader than only AEX
constituents.

Adyen’s Supervisory Board
remuneration is positioned below
the median of the benchmark
against the AEX.

We aim that the Base andCommittee fees for our
Supervisory Board members are
not positioned above the medianof the peer group.

The market positioning reflects
our pay philosophy.

Base Fee

Fixed fee for Chair and Member

Any future adjustments of thebase fees will be separately
brought to the AGM forshareholder approval.

Committee Fee

Fixed fee for the Chair andMember of the Audit & Risk
Committee and the Nomination &Remuneration Committee

We will closely monitor thecurrent levels against thedevelopments of our Board’s role,time commitment,
responsibilities and the externalmarket during the term of the newpolicy.

Peer group2020 policy

The level of Supervisory Board remuneration is based on various factors, including their role, associatedtime commitment and responsibilities within the Supervisory Board and committees.
Comparison with the external landscape
One of the factors is the comparison with the external landscape. Under the scope of our 2020 remuneration
policy, the Supervisory Board’s remuneration is compared to AEX companies. The remuneration of theSupervisory Board is below the median of the benchmark.
Similar to the peer group approach as applied for our Management Board, we make use of a tailored peergroup as per January 1, 2024, which reflects our relevant market for non-executive director talent. As there
is significant overlap in our talent market for Supervisory Board and Management Board members, we aim
to operate a consistent peer group for both boards.
Furthermore, pay practices within North American boards are different compared with European boards,
amongst others due to the prevalence of equity awards. Therefore, we will exclude any US peers andEuropean peers with one-tier boards from the Management Board peer group in our Supervisory Board
peer group.
We will disclose on retrospective basis the peer group composition in our annual remuneration report, forthe first time in our 2024 remuneration report.

Annual Report 2023

98

Supervisory Board remuneration in 2023

Total remuneration*
2023

2022

In this section, we outline the implementation of our Supervisory Board remuneration policy in 2023. This
implementation was done in accordance with our remuneration policy and principles. There has been no
deviation from the remuneration policy, principles or procedures for its implementation in 2023.

Piero Overmars

97,00097,000Delfin Rueda Arroyo

75,00075,000Overview of the Supervisory Board remuneration in 2023

Pamela Joseph

70,00077,000

Caoimhe Keogan

70,00067,000

Joep van Beurden

67,00070,000

Total

379,000

386,000

The table below provides an overview of the Supervisory Board remuneration in 2023 and 2022. No
increases have been made in Supervisory Board remuneration in the financial year 2023. In addition to thebase and committee fees, expenses incurred by the members of the Supervisory Board in the performanceof their duties are reimbursed in full. Supervisory Board members do not receive variable remuneration ofshare-based remuneration.

All amounts are in EUR
Role2023 (in EUR)

Chair

80,000Member

60,000Chair Audit and Risk Committee

15,000Member Audit and Risk Committee

10,000Chair Nomination & Remuneration Committee

10,000Member Nomination & Remuneration Committee

7,000*The Supervisory Board members’ remuneration only comprises fixed remuneration, paid in cash

Share-based compensation
The table below provides an overview of the aggregate number of Shares and/or Depositary Receipts per
December 31, 2023 that have been granted prior to the Company’s IPO in 2018 to Supervisory Directors aspart of their share-based compensation.
Shareholdings (aggregate number of Shares and/or Depositary Receipts)

Piero Overmars

2023

2022

1,094

1,094

Delfin Rueda Arroyo——

Joep van Beurden

1,719

1,719

Pamela Joseph——

Caoimhe Keogan——

Piero Overmars and Joep van Beurden committed not to sell any Shares and/or Depositary Receipt during
the term of their appointment.

Annual Report 2023

99

Insurance

Other staff disclosures for 2023

The Supervisory Board members of Adyen are insured under an insurance policy taken out by Adyen against
damages resulting from their conduct when acting in their capacities as Supervisory Board members.

Variable remuneration

Loans

We award variable remuneration, if any, in accordance with our remuneration principles, applicablelegislation and our general remuneration policy.

No loans, advance payments and guarantees have been granted to or on behalf of the Supervisory Board
members.

Our remuneration policy for other staff
This section is for information purposes only and is not subject to an advisory vote on our 2023 AGM.
Furthermore, our remuneration policy for other staff (General remuneration policy) is not subject to abinding shareholder vote, unless explicitly prescribed by applicable regulation for specific elements (e.g.,shareholder mandate to exceed 100% variable remuneration cap).

Our policy at a glance
The overview below provides insight into the main elements of our General remuneration policy applicablefor our employees, excluding our Management Board or Supervisory Board. The full remuneration policy,
including applicable governance and review procedures, is published on our website.

Determination of the individual remuneration packages
We set the remuneration package of our employees in accordance with the scope of responsibilities andexperience of the individual. This might include a comparison against relevant market practice and levels. If
an employee has its principal place of business outside the Netherlands, it may take account of local
practice or requirements.

In 2023, our total global company-wide amount of variable remuneration awarded to employees, not being
our Management Board or Supervisory Board, was EUR 37,276,215 (2022: EUR 22,219,633) compared to a
total staff expense of EUR 594,034,000 (2022: EUR 380,587,488).

Identified Staff
In 2023, there were 52 employees (2022: 33) identified as “Identified Staff”.

Total annual remuneration
In 2023, there were 8 employees (2022: 7) to whom total annual remuneration (including employer pension
contributions and any severance payments made) of EUR 1,000,000 or more was awarded.

Annual Report 2023

04
Financial Statements 2023

100

Annual Report 2023

101

Consolidated Financial Statements

Company Financial Statements

Consolidated Statement of Comprehensive Income

103

Company Statement of Comprehensive Income

149

Consolidated Balance Sheet

104

Company Balance Sheet

150

Consolidated Statement of Changes in Equity

105

Company Statement of Changes in Equity

151

Consolidated Statement of Cash Flows107

Company Statement of Cash Flows

153

Notes to the Consolidated Financial Statements

108

Notes to the Company financial statements

154

General information

108

25. Basis of preparation

154

1. Basis of preparation

108

26. Company - Revenue

154

Key Disclosures

110

27. Company - Employee benefits154

2. Revenue and segment reporting110

28. Company - Other operating expenses

154

3. Inventories

116

29. Company - Other financial results

155

4. Employee benefit expense

116

30. Company - Plant and equipment

155

5. Other operating expenses

121

31. Company – Leases

156

6. Other financial results

122

32. Company - Investments in consolidated subsidiaries on equity method

157

7. Income tax

123

33. Company – Trade, other receivables, and receivables from merchants and financial institutions

159

8. Capital management126

9. CRR/CRD IV Regulatory Capital

127

34. Shareholders’ equity

159

10. Cash and cash equivalents

128

35. Dividends paid

159

11. Financial instruments

129

36. Company – Trade, other payables, and payables to merchants and financial institutions

159

12. Financial risk management

132

37. Directors’ remuneration

159

Other disclosures

135

38. Audit fees

159

13. Intangible assets

135

39. Contingencies and commitments

160

14. Plant and equipment

136

15. Trade, other receivables, and receivables from merchants and financial institutions

137

40. Proposed profit appropriation

160

16. Trade, other payables, and payables to merchants and financial institutions

138

41. Events after balance sheet date160

17. Leases

139

18. Other contingent assets, liabilities and commitments

140

19. Related party transactions

140

20. New and amended standards adopted

140

21. Audit fees141

22. Compensation of key management142

23. Share information

143

24. Tax reporting144

Annual Report 2023

Consolidated Financial
Statements

102

Annual Report 2023

103

Consolidated Statement of Comprehensive Income
For the years ended December 31, 2023 and 2022
(all amounts are in EUR thousands unless otherwise stated)
Note

2023

2022

Note

Revenue2

1,863,406

8,935,611

Income before income taxes

Costs incurred from financial institutions

2(147,811)(7,550,960)

Income taxes

Costs of goods sold

2, 3

Net revenue(89,534)(54,485)

1,626,061

1,330,166

Wages and salaries

4(514,330)(328,316)

Social securities and pension costs

4(79,704)(52,271)

13,14,17(85,453)(63,613)

Other operating expenses

5(264,737)(221,237)

Other expenses

3(24,255)(54)

657,582

664,675

Amortization and depreciation

Income before net finance income and income taxes

2023

2022

942,609719,939(244,287)(155,800)

Net income for the year

698,322564,139

Net income attributable to owners of Adyen N.V.

698,322564,139

7

Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Currency translation adjustments foreign operations

790(1,326)

Other comprehensive income/(expense) for the year790

(1,326)699,112562,813

Total comprehensive income for the year
(attributable to owners of Adyen N.V.)
Earnings per share (in EUR)

Finance income

10

246,401

29,323–

Net profit per share - Basic

23

22.52

18.21

Finance expense

17,10(4,783)(11,963)–

Net profit per share - Diluted

23

22.41

18.17

Other financial results
Net finance income

643,40937,904

285,027

55,264

The accompanying notes are an integral part of these Consolidated Financial Statements.

Annual Report 2023

104

Consolidated Balance Sheet
As at December 31, 2023, and 2022
(all amounts are in EUR thousands unless otherwise stated)
Note

December 31, 2023

December 31, 2022

Intangible assets

13

8,757

8,140

Share capital

Plant and equipment

14

165,136

140,796

Share premium

Right-of-use assets

17

199,663

181,676

Other reserves

Other financial assets at FVPL

11

14,821

12,264Retained earnings*

2,601,282

1,906,795

Contract assets

2.2

24,195

48,612

Total equity attributable to owners of Adyen N.V.

3,150,867

2,416,056

Deferred tax assets*

7

Total non-current assets

112,679

147,665

525,251

539,153

Note

December 31, 2023

December 31, 2022

8

310

310

8

390,043352,399

159,232

156,552

Derivative liabilities

11

1,400

35,000

Deferred tax liabilities

7

6,455

11,345Inventories

3

104,50287,891

Lease liability

17172,397

169,873

Receivables from merchants and financial institutions

15

490,052

369,104

Cash-settled share-based payment plan

4.3

1,563

6,742

Trade and other receivables

15

134,274

89,350Total non-current liabilities

181,815

222,960

Current income tax receivables

7

7,310

12,445

Cash and cash equivalents

108,306,982

6,522,345

Payables to merchants and financial institutions

16

5,953,563

4,795,804

9,043,120

7,081,135

Trade and other payables

16

168,397

147,827

7,620,288

Lease liability

17

50,66633,200Current income tax payables

7

63,063

4,441

Total current liabilities

6,235,689

4,981,272

Total liabilities and equity

9,568,371

7,620,288

Total current assets
Total assets

9,568,371

The accompanying notes are an integral part of these Consolidated Financial Statements.
*The comparative retained earnings balance is restated as a result of the application of IAS 12 amendment(refer to Note 7.2).

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105

Consolidated Statement of Changes in Equity
For the years ended December 31, 2023 and 2022
(all amounts are in EUR thousands unless otherwise stated)
Other reserves
Note
Balance - January 1, 2022 (as previously reported)
Adjustment for IAS 12 amendment

Share capital

Share premium

Legalreserves

Share-based payment
reserve

Warrant reserve

310

335,725

9,740

102,142

25,575

7.2

Balance - January 1, 2022 (restated)

310

335,725

9,740

102,142

25,575

Net income for the year
Currency translation adjustments

Retained earnings*

Total equity

1,336,922

1,810,414

3,938

3,938

1,340,860

1,814,352

564,139564,139564,139562,813(1,326)

Total comprehensive income for the year——

(1,326)(1,326)——

Adjustments:
Intangible assets(2,160)

Other adjustments

161
—

—

(2,160)

161

—

2,160

—

(364)

(203)

1,796

(203)

Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation

7.2

Options exercised
Proceeds on issuing shares

8

Share-based payments

4.3

Balance - December 31, 2022

6,180

22,979568(568)

29,159
—

—

9,926

9,926

—

16,674—22,420——39,094

310

352,399

6,254

124,723

25,575

1,906,795

2,416,056

9*The comparative retained earnings balance is restated as a result of the application of IAS 12 amendment (refer to Note 7.2).

9Annual Report 2023

106

Other reserves
Note
Balance - January 1, 2023

Share capital

Share premium

310

352,399

Legal reserves

Share-based payment
reserve

Warrant reserve

6,254

124,723

25,575

Net income for the year
Currency translation adjustments

Retained earnings*

Total equity

1,906,795

2,416,056

698,322698,322698,322

699,112790

Total comprehensive income for the year

—

—

790

790
—

—

Adjustments:
Intangible assets

717

Other adjustments

744
—

—

717

744

—

(717)

—

(3,118)(2,374)(3,835)(2,374)

Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation

7.2

Options exercised

11,196(31,398)

634

(634)

Proceeds on issuing shares

8—

13,201

Share-based payments

4.3—

12,613

Reclassification of share-based payment plan

4.3

Balance - December 31, 2023

(20,202)—
13,201

12,037

24,65020,424

20,424—37,644

—

429

—

—

38,073310

390,043

7,761

125,896

25,5752,601,282

3,150,867

The accompanying notes are an integral part of these Consolidated Financial Statements.
*The comparative retained earnings balance is restated as a result of the application of IAS 12 amendment (refer to Note 7.2).

Annual Report 2023

107

Consolidated Statement of Cash Flows
For the years ended December 31, 2023 and 2022
(all amounts are in EUR thousands unless otherwise stated)
Note
Income before income taxes

2023

2022

942,609719,939

Adjustments for:

Interest received
Interest paid

Note

2023

2022

10

246,401

29,32317, 10(4,783)(11,963)–

Finance income

10(246,401)(29,323)

Income taxes paid

(155,166)(149,573)–

Finance expenses

17, 10

4,783

11,963

Net cash flows from operating activities

1,870,040

2,021,158–

Other financial results

6(43,409)(37,904)

Redemption of financial assets at FVPL

11—

11,407–

Other expenses

1,097

—

Purchases of plant and equipment

14(65,605)(95,575)–

Depreciation of plant and equipment

1445,95528,354

Capitalization of intangible assets

13(4,138)(3,523)–

Amortization of intangible fixed assets

13

3,521

5,224

Net cash used in investing activities(69,743)(87,691)–

Depreciation of right-of-use assets

17

35,97730,035

Proceeds from issues of shares

8

13,2019,926–

Equity-settled share-based compensation

4.3

24,650

9

Lease payments

17–

Cash-settled share-based payment plan

3,399

1,141

Changes in working capital:

Net cash flows used in financing activities(33,811)(22,144)(20,610)(12,218)

Net increase in cash, cash equivalents and bank overdrafts

1,779,687

1,921,249–

Inventories

3(22,880)(65,753)

Cash, cash equivalents and bank overdrafts at beginning of the year

6,522,345

4,616,094–

Trade and other receivables

15(45,096)(32,650)

Exchange gains/(losses) on cash, cash equivalents and bank overdrafts

4,950(14,998)–

Receivables from merchants and financial institutions

15(120,948)

264,145

Cash, cash equivalents and bank overdrafts at end of the year

8,306,982

6,522,345–

Payables to merchants and financial institutions

16

1,156,420

1,187,273–

Trade and other payables

16

19,56240,155–

Amortization and additions of contract assets

2.2

Cash generated from operations

24,34930,763

1,783,588

2,153,371

10

The accompanying notes are an integral part of these Consolidated Financial Statements.

Annual Report 2023

108

Notes to the Consolidated Financial Statements
General Information

1.1

Consolidation

Adyen N.V. (hereinafter ‘Adyen’, ‘the Company’, or ‘the Group’) is a licensed Credit Institution by De
Nederlandsche Bank (the Dutch Central Bank) and registered in the Netherlands under the company
number 34259528. The Credit Institution license includes the ability to provide cross-border services in theEuropean Economic Area. Adyen shares are traded on Euronext Amsterdam, where the Company is part of
the AEX Index and has a credit rating of A- per S&P rating agency. In 2021, Adyen was granted a license tooperate as a US Federal Foreign Branch in San Francisco, California by the Office of the Comptroller of thecurrency and the Federal Reserve.

Accounting policy – Consolidation

During the year, Adyen was granted a license to operate as a third country branch, by the Prudential
Regulatory Authority (PRA) and Financial Conduct Authority (FCA). The London branch was registered as at
1 November 2023. As a result, Adyen UK Limited was put into liquidation, and all the assets/ liabilities havebeen transferred to the newly set-up branch of Adyen N.V in London effective December 31,2023.

Inter-company transactions, balances and unrealized gains on transactions between groupcompanies are eliminated.

1.

The Group controls an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which Adyen acquires control and they are deconsolidated from the date that control ceases.

Basis of preparation

The Consolidated Financial Statements have been prepared on a going concern basis in accordance with
International Financial Reporting Standards and IFRS IC interpretations as endorsed by the European Union(EU-IFRS) and in accordance with sub articles 8 and 9 of article 362, Book 2 of the Dutch Civil Code. Allamounts in the notes to the Consolidated Financial Statements are stated in thousands of EUR, unlessotherwise stated.
The impact of the Russia-Ukraine conflict
The continued Russian invasion of Ukraine in 2023, alongside the imposition of international sanctions, hasa pervasive economic impact. Adyen has assessed that there is no significant impact on the businessenvironment and the recognition and measurement of assets, liabilities and presentation and disclosure.

Adyen N.V. directly or indirectly owns 100% of the shares of, and therefore controls, all entities included inthese Consolidated Financial Statements (refer to Note 32 ‘Company - Investments in consolidated
subsidiaries on equity method’ for a full list of entities included in scope of consolidation of these financial
statements).
Adyen has offices in the Netherlands, Brazil, Singapore, Canada, Australia, Hong Kong, Mexico, China, India,
Japan, Malaysia, New Zealand and United Arab Emirates, with branches in Germany, France, Sweden,
United Kingdom and the United States, and representative offices in Belgium, Italy, Poland, Czech Republicand Spain. The address of Adyen’s N.V. registered office is Simon Carmiggeltstraat 6-50, 1011 DJ
Amsterdam, the Netherlands.

Annual Report 2023

1.2.

Significant accounting policies, estimates and judgements and new andamended standards Adopted by the Group

The table below provides an overview of the significant and new accounting policies and where they areincluded in these financial statements. It further provides an overview of how accounting policies, together
with significant accounting estimates and judgements, are connected throughout the notes to thesefinancial statements.
In the 2023 financial statements, Adyen adopted amendments issued and made effective from January 1,
2023. Adyen has not early adopted any standard, interpretation or amendment that has been issued but is
not yet effective. A number of new or amended standards became applicable for the current reporting
period, as detailed in Note 20.1 ‘New standards adopted by Adyen’. Adyen made a retrospective adjustment
as a result of new amendments to the IAS 12 accounting standard made applicable on January 1, 2023, as
disclosed in Note 7.2 Deferred income taxes .

109

Accounting Policies

Significant Accounting Estimates or Judgments

What it is

Accounting policies considered relevant forunderstanding the financial statements, or required tobe disclosed by law or IFRS

These accounting policies involve a higher degree of judgement
or complexity. The estimates applied are more likely to have amaterial impact when revised or refined.

Where

Provided per note to the financial statements.
The notes are organized into the following sections:
Key disclosures:provide a breakdown of
individual line items in
the financial
statements that usersof the financial
statements consider
most relevant;

2. Revenue and segment
reporting
3. Inventories
4. Employee benefit
expense (including sharebased payments)
5. Other operating expenses
6. Other financial results
7. Income taxes

For the assessment whether a disclosure is relevant to users of these financial statements the following wasconsidered: the amount in question is significant in size and/or nature, importance for understanding theresults of Adyen or explaining the impact of significant changes in Adyen’s business and whether judgement
is involved.

2. Revenue - Principal versus agent for revenue out of settlement
fees
During 2023, Adyen amended its terms and conditions applicable
to merchant agreements in order to specify the responsibilities ofthe services provided by financial institutions and network
scheme providers involved in the payment processing andacquiring services. As a result, Adyen reassessed its key
accounting judgment in relation to pass-through settlement fees(namely; interchange and payment network fees), and concluded
it acts as agent in this arrangement. This change in terms andconditions resulted in a prospective accounting change, effectivefrom January 1, 2023 whereby pass-through settlement fees arerecognized on a net (agent) basis (i.e. no longer recognized grossin revenue and costs incurred from financial institutions).
This change impacts the 'Revenue' and 'Costs incurred fromfinancial institutions' lines in the statements of comprehensive
income, with no change to net revenue. This change does not
impact the 2022 comparative results, the non-IFRS financial
measures or objectives.
7. Income taxes – Recognition of deferred taxes related to sharebased compensation

Capital, investment
and financial risk
management: key
information relating toAdyen’s capitalmanagement,
explanations regarding
financial instruments
and financial risk
management;

8. Capital management
9. CRR/CRD IV Regulatory
Capital
10. Cash and cash
equivalents
11. Financial instruments
12. Financial risk
management

Other: information on
items required to bedisclosed to becompliant with EUIFRS and other legal
requirements.

Notes 13 – 41

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110

Key Disclosures
In relation to our strategy, as outlined in the Management report, Adyen’s management considers thefollowing disclosures as key in understanding its financial performance or position.

2. Revenue and segment reporting
The Adyen platform integrates the full payments stack (gateway, risk management, processing, acquiringand settlement) with a common back-end infrastructure for authorizing. The company derives revenue fromsettling and processing payments, sales of goods such as the sale of point of sale (POS) terminals, and otherpayment specific services. Adyen incurs fees charged by third parties that provide services to enable
Adyen’s payment processing and acquiring services to merchants, that do not form part of the pass-throughsettlement fees, which are presented as ‘costs incurred from financial institutions’.

Accounting policy – Revenue from contracts with customers
Adyen has the following sources of revenue from contracts with customers:(I) Settlement fees: Fees paid by merchants, usually as a percentage of the transaction value,
where Adyen offers acquiring services. These fees are recognized as revenue when apayment transaction has been completed by means of settlement with a merchant.
Settlement fees include interchange and payment network fees and other costs incurredfrom financial institutions. Adyen adopts a transparent pricing model and charges fees tomerchants based on its own incurred costs plus a mark-up for its acquiring services, as
contractually agreed between each merchant and Adyen.
(II) Processing fees: Fixed fee per transaction paid by merchants for the use of Adyen’s
platform and recognized as revenue when a transaction is initiated via the Adyen payment
platform.
(III) Sales of goods: Adyen satisfies the performance obligations to deliver the ownership of
the POS terminals and related accessories upon transfer of control of the terminal to themerchant. Adyen considers this performance obligation to be distinct from its payment
services. As a result, the revenues for the sale of POS terminals and related accessories arerecognized at that point in time(IV) Other services: Includes foreign exchange service fees, third party commission andissuing services which are deemed other services - recognized at point in time. Services
transferred over time relate to the amortization of deferred revenue for services provided aspart of the merchant contract (note 2.1) and terminal services fees as part of the unified
commerce offering.

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111

The breakdown of revenue from contracts with customers per type of goods or service is as follows:
Types of goods or service

2023

2022

Settlement fees

1,081,791

8,270,626

Processing fees

460,853

387,541

Sales of goods

84,13355,710

Other services

236,629

221,734

Total revenue from contracts with customers

1,863,406

8,935,611

Costs incurred from financial institutions(147,811)(7,550,960)

Costs of goods sold(89,534)(54,485)

1,626,061

1,330,166

Net revenue

Net revenue
The Management Board monitors net revenue as a performance indicator. Adyen considers net revenue toprovide additional insight to its users to evaluate the nature and financial effects of the business activities inwhich it engages and the economic environments in which it operates. Net revenue is a non-IFRS measure –refer to Note 2.4 for further explanation on the non-IFRS measures reported by Adyen.

Key Judgement – Principal versus agent for revenue out of settlement fees
Adyen contracts with third parties (financial institutions and network scheme providers) thatprovide services to enable Adyen’s payment processing and acquiring services tomerchants, for which interchange and payment network fees are charged to Adyen ("passthrough settlement fees"). Adyen adopts a transparent pricing model and charges fees tomerchants based on its own incurred costs (including interchange and payment network
fees charged to merchants in a pass-through arrangement), plus a mark-up which isdisclosed as "Settlement fees".
Adyen applies its judgment in determining whether it has control of the full payment service
inputs before the service is transferred to its merchants, and, in consequence, whether it isacting as agent or principal in relation to the settlement fees charged to merchants. Where
Adyen is principal, it will present its acquiring mark-up and interchange and payment
network fees passed on to merchants on a gross (principal) basis within revenue. Where
Adyen is agent, it will present its acquiring mark-up on a gross (principal) basis, while thepass-through settlement fees will be presented within revenue on a net basis (i.e. notrecognized gross in revenue and costs incurred from financial institutions).

Based on facts and circumstances up to December 31, 2022, Adyen was considered primarily responsible
for fulfilling the promise to provide payment transaction services, and therefore had control over the fullsettlement service before the service is transferred to merchants. As such, Adyen retained the exposure tofinancial institutions and payment networks for the interchange and payment network fees, other costs
incurred from financial institutions, and therefore acted as Principal for the aforementioned fees.
In 2023, Adyen amended its terms and conditions applicable to merchant agreements in order to specify the
responsibilities of the services provided by financial institutions and network scheme providers involved in
the payment processing and acquiring services. The change in terms and conditions specifies the distinct
services provided in the payment flow, clarifying that Adyen does not provide a significant service ofintegrating the services from third parties into one combined output for the merchant, nor does it control the
inputs from third parties before services are provided to the merchant. As such, Adyen acts as agent for the
pass-through settlement fees prospectively from January 1, 2023.

Annual Report 2023

112

Element

Accounting treatment

Note reference

Contract assets

Contract assets are initially recognized at cost on the balance sheet, and subsequently
amortized against revenue (settlement fees) in profit or loss on a pro rata basis in linewith the fulfilment of the expected payment services performance obligation. The
contract assets are separated into a monetary and non-monetary component and areassessed for impairment annually with reference to the remaining (net) benefits fromthe long-term merchant contract.

2.2.Contract assets

Accounting policy – Revenue recognized at a point in time and over time
All processing and settlement fees, together with the sales of goods are recognized asrevenue when the services are rendered or the ownership of the goods is transferred (‘goods
and services transferred at a point in time’). In addition to the aforementioned revenue
streams, Adyen provides terminal replacement services included in ‘other services’, for whichrevenue is recognized over a period of time. Adyen recognizes revenue for these services ona straight-line basis over the contract term.

The USD "monetary item" is translated at each balance sheet date at the EUR/USD
spot rate and is assessed for impairment under the expected credit loss model.
Exchange movements on the "monetary item" is recognized in profit or loss (otherfinancial results). The monetary component has been fully repaid and amortized in
2022.
Settled by:

The breakdown of revenue from contracts with customers based on timing is as follows:
Timing of revenue recognition
Goods and services transferred at a point in time
Services transferred over time
Total revenue from contracts with customers

2.1.

2023

2022

1,848,323

8,923,199

15,083

12,412

1,863,406

8,935,611

Long-term contract

In 2018 Adyen entered into a long-term contract with eBay for the provision of payment services that
resulted in the initial recognition of contract assets settled with a cash advance and issue of warrants over
Adyen’s shares. The following accounting elements were recognized as a result of the contractual
agreements.

1. Cash advanceCash consideration is treated as part of incremental costs of obtaining the merchantcontract ('contract assets').

2.2. Contract assets

2. Warrants

Derivative liabilities relating to the warrants are recognized initially at fair value and aresubsequently stated on the balance sheet at fair value, with movements recognized in
profit or loss (other financial results). The warrants vest in four tranches, each linked toa milestone of processed payments volume. Each milestone is deemed achieved at
the moment that the processed merchant volume exceeds the milestone amount in asingle calendar year following the issue date (January 31, 2018). Only two warrant
tranches may vest in a single calendar year, and upon vesting, each entitles thewarrant holder to acquire 1.25% of Adyen's issue-date diluted share volume at any
time prior to the warrant expiration date (January 31, 2025).

2.2. Contract assets
6.2 Derivative liabilities
8. Capital management
11. Financial instruments
23. Share information

After the IPO (on June 13, 2018), the derivative liabilities relating to tranches 1 and 2
were reclassified as a warrant reserve in equity in the amount of EUR 68.2 million.
During 2021, the first tranche milestone was met, vested, and the related warrant was
subsequently exercised by eBay. A total of 403,724 shares were issued to eBay at€240 per share. The gross equity balance relating to tranche 1 and related deferred
tax were transferred from ‘warrant reserve’ to ‘share premium’ and ‘retained earnings’,
respectively. The dilutive effect of the exercised warrant in 2021 (tranche 1) wasreflected in the shares outstanding at 2021 year-end. There were no further tranche
milestones met during 2023. As per December 31, 2023, the ‘warrant reserve’ wascarried at historic cost (EUR 34.1 million (net of deferred tax)) while the derivative
liabilities relating to tranches 3 and 4 were carried at fair value at EUR 1,400 on
Adyen's balance sheet.

Annual Report 2023

2.2.

Contract assets

Accounting policy – Contract assets
Recognition and measurement
If an incurred fee or commission is not paid in connection with any distinct goods or services,it should be considered as a reduction of the total transaction price of a contract with acustomer. As a result, this incurred fee or commission should be deducted from revenue
when revenue is recognized for providing the services to the customer. The unamortized
portion of these considerations are recognized as contract assets in the balance sheet.
Amortization and Impairment
The contract assets are assessed for impairment annually with reference to the remaining(net) benefits from the long-term merchant contract. An impairment loss is recognized if thecarrying amount of the contract assets are higher than the estimated remaining benefits inthe merchant contract, net of directly attributable costs to fulfil the remaining payment
service obligations. The contract assets are amortized and booked to revenue (settlementfees) on a pro rata basis in line with the fulfilment of the expected payment services
performance obligation.
For the monetary component of the contract asset, Adyen applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables, other financial assets measured at amortized cost and the contract
asset.

113

Management derived its best estimate of the future (net) revenue from expected payments volumes and fees
determined in the merchant contract, net of directly attributable costs to fulfil the remaining payment service
obligations. The contract assets were not impaired at December 31, 2023 and 2022 as the remaining
estimated (net) benefits from the merchant contract exceeded the contract assets balance at year-end.
Contract asset costs mainly relate to integration and development fees that are directly incremental toobtain the multi-year contracts and do not represent separate performance obligations. Adyen will amortizethese costs (i.e. non-monetary component) against revenue (settlement fees) on a pro rata basis as therelated revenue is recognized. The monetary and non-monetary components relate to the long-term
contract with eBay (Note 2.1). During 2023, Adyen did not enter into multi-year service contracts with its
merchants and thus did not capitalize any contract costs (‘other contract assets’).
The following table summarizes the movement in the contract assets balance:
Contract assets
Balance - 1 January, 2022

Monetary
component

Non-monetarycomponent

Other contract
assetsTotal contract
assets

8,971

62,061

8,309

79,341

1,791

1,791

(3,063)(32,554)(89)

34

Movements:
Additions
Amortization for the year

(9,094)

Exchange differences

123(20,397)

Balance - December 31, 2022—

41,664

6,948

48,612

Amortization for the year—

(21,935)(2,414)(24,349)

Exchange differences (Note 6)

—

—

(68)

(68)

—

19,7294,466

24,195

Movements:
Additions

Balance - December 31, 2023

Annual Report 2023

2.3.

Segment reporting

114

Revenue - Geographical breakdown
Europe, the Middle East, and Africa (EMEA)

2023

2022

1,041,039

3,430,434

North America

492,460

4,289,241

Accounting policy – Segment Reporting

Asia-Pacific208,820

784,189

An operating segment is a component of an entity that engages in business activities fromwhich it earns revenues and incurs expenses. The operating results of each segment are
regularly reviewed by the entity’s Chief Operating Decision Maker (“CODM”) in order tomake decisions about resources to be allocated to the segment and assess its performanceand for which discrete financial information is available.

Latin America

121,087431,747

1,863,406

8,935,611

Adyen has identified the Management Board as the CODM who is responsible for theassessment of the allocation of resources and performance of the operating segments
identified. Based on Adyen’s business and operating model, Adyen has identified a single
operating and reporting segment: ‘Payment services’.
Payment services
The total revenue earned from Adyen’s only operating and reporting segment contains
settlement fees, processing fees, other services and sales of goods. The Management Board
monitors net revenue as a performance indicator. As a result, Adyen considers net revenue toprovide insight to its users to evaluate the nature and financial effects of the businessactivities in which it engages and the economic environments in which it operates. Net
revenue is a non-IFRS measure – refer to Note 2.4 for further explanation on the non-IFRS
measures reported by Adyen.

As a result of the entity wide disclosure requirements of IFRS 8, a geographical breakdown is provided.
The following table summarizes Adyen’s geographical breakdown of its revenue based on the billing location
as requested by the merchant for the periods indicated.

Total revenue from contracts with customers

Large customers
For the year ended December 31, 2023, as measured by revenue, Adyen's top 10 merchants represent 16%
of revenue (2022: 33%). The decrease in merchant concentration is mainly driven by the prospective
accounting change, refer to Note 2. As measured by net revenue, Adyen’s top 10 merchants represent 15%of net revenue (2022: 18%). In 2023 and 2022 there were no single customers that on an individual levelaccounted for more than 10% of the total revenue or net revenue.
Non-current assets
At December 31, 2023 EUR 311 million of the non-current assets were carried by Adyen N.V. (2022: EUR
312 million). Based on the location of the Adyen offices the following geographical breakdown of noncurrent assets is prepared.
Non-current assets - Geographical breakdown

2023

2022

Netherlands*

311,002311,849

Rest of the World214,249

227,304

Non-current assets

525,251

539,153*The comparative balance is restated as a result of the application of IAS 12 amendment (refer to Note 7.2).

Annual Report 2023

2.4.

115

Non-IFRS financial measures

Selected non-IFRS financial measures

Non-IFRS financial measures are disclosed in addition to the statement of comprehensive income, in orderto provide relevant information to better understand underlying business performance of the Company.
Furthermore, Adyen has provided objectives on several of these non-IFRS measures, as described in the'Financial objectives' section of the Management Report. Adyen reports on the following additional financial
measures that are directly derived from the consolidated statement of comprehensive income or statementof cash flows:– Net revenue: “Revenue” less “Costs incurred from financial institutions” and “Costs of goods sold”;

Net revenue - Geographical breakdown and year-on-year growth2022

Income before net finance income and income taxes

657,582

664,675

Amortization and depreciation

85,45363,613

EBITDA

743,035

728,288

1,626,061

1,330,166

Net revenue
EBITDA margin (%)

The following table summarizes Adyen’s geographical breakdown and the year-on-year growth of its net
revenue, based on the billing location as requested by the merchant for the periods indicated.

2023

Purchases of plant and equipment

46%
65,60555%
95,575

Capitalization of intangible assets

4,138

3,523

CapEx

69,74399,09848%

EBITDA

743,035

728,288

48%

CapEx

(69,743)(99,098)

2023

YoY%

2022

YoY%

Europe, the Middle East, and Africa (EMEA)

908,233

22%

746,823

25%

North America

429,49725%

343,158

Asia-Pacific

182,28528%

142,346

106,0468%

97,83931%

Lease payments(33,811)(22,144)

1,626,061

22%

1,330,166

33%

Free cash flow

639,481

607,046– EBITDA: “Income before net finance income and income taxes” less “Amortization and depreciation” on
the consolidated statement of comprehensive income;Free cash flow

639,481

607,046

EBITDA

743,035

728,288

Latin America
Total net revenue from contracts with customers– EBITDA margin: EBITDA as a percentage of net revenue on the consolidated statement ofcomprehensive income;– CapEx: Capital expenditures consisting of the line items "Purchases of plant and equipment" and"Capitalization of intangible assets" on the consolidated statement of cash flows;– Free cash flow: EBITDA less CapEx and “Lease payments” on the consolidated statement of cash flows;– Free cash flow conversion ratio: free cash flow as a percentage of EBITDA.

Free cash flow conversion ratio (%)

86%

83%

Annual Report 2023

3.

116

Inventories

Adyen recognised inventory price variances of EUR 2,704 in ‘Other operating expenses’ (2022: EUR 655)
related to purchases of POS terminals from resellers at higher than standard price.

Inventories relate to the point of sale (POS) terminals in connection with the roll out of the Unified
Commerce strategy.

4.

The average number of full-time equivalents (FTE) during the year was approximately 3,764 FTE (2022:
2,756 FTE) with main expansions of our operations in the EU and US. From those hired during 2023, 67%
were in tech roles, 27% in commercial roles and 6% in staff or supporting functions.

Accounting policy – Inventories

At the end of the reporting period the regional breakdown of FTE per office is as follows:

Inventories are measured at the lower of cost or net realizable value. The cost of inventories isbased on the first-in, first-out method (FIFO) and includes expenditure incurred in acquiring
the inventories and other costs incurred in bringing them to their existing location andcondition. Net realizable value is defined by Adyen as the estimated re-sell price in theordinary course of business.

FTE per office

2023

2022

Amsterdam

2,326

1,941

San Francisco

299

270

New York

186

139

São Paulo

170

146

Singapore

165

127

Chicago

155

53

2022

Madrid

133

64

133

123

The carrying amount of inventories is recognized as an expense when the inventories are
sold or written off, unless they form part of the cost of another asset.

Inventories

Employee benefit expense

2023

Balance - January 1

87,891

22,138LondonPurchases during the year (products for resale)

138,479

120,893

Paris

96

75

91

67

Costs of goods sold(89,534)(54,485)

BerlinTransfer to plant and equipment (Note 14)(6,269)

—

Other

442

327

Total

4,196

3,332

Expense recognized in other expenses(26,065)(655)

Balance - December 31

104,50287,891

During 2023, inventory of EUR 6,269 in Brazil was reclassified to plant and equipment (Note 14) as the POS
terminals are being held for rental to merchants instead of being sold in the ordinary course of business.
As a result of the net realizable value assessment, Adyen recognized inventory write-offs of EUR 23,361(2022: EUR 380), included in 'Other expenses', driven by overstock purchases made during supply chain
disruptions.

For representation of the FTE per subsidiary, refer to Note 24.2.

Annual Report 2023

4.1.

117

Employee benefits

4.2.

Post-employment benefit obligations

Accounting policy – Employee benefits

Accounting policy – Post-employment benefit obligations

Employee benefits are all forms of consideration given by an entity in exchange for services
rendered by employees or for the termination of employment, except when they are related
to share-based payments (refer to Note 4.3).

Post-employment benefits are employee benefits (other than termination benefits and shortterm employee benefits) that are payable after the completion of employment.
The Adyen group companies operate various pension schemes. The entitlement of theemployees under the company’s pension plans are all classified as defined contributionplans.
For defined contribution plans, the Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The
Group has no further payment obligations once the contributions have been paid. The
contributions are recognized as employee benefit expense when they are due.

The employee benefit expense can be specified as follows:
Employee benefits

2023

2022

Salaries and wages

475,721317,817

Share-based compensation (Note 4.3)

38,60910,499Total wages and salaries

514,330

328,316

Social securities

66,09043,811

Pension costs - defined contribution plans

13,6148,460

Total social securities and pension costs

79,70452,271

Reference is made to Note 22 ‘Compensation of key management’ for the remuneration of the Management
Board and Supervisory Board.

The expected contributions to the pension benefit plans for 2024 are EUR 15,649 (2023: EUR 11,283).

4.3.

Share-based payments

The share-based compensation consists of both equity- and cash-settled compensation expenses. A
specification of the expenses is presented in the following table:
Share-based compensation

2023

2022

Equity-settled

24,6509

Cash-settled

13,95910,490Total share-based compensation

38,60910,499Annual Report 2023

Adyen considers its employees and culture as core to its growth. As part of the total remuneration package,
Adyen has four types of compensation plans:

118

I.

Equity-settled option plan

I.

Equity-settled option plan (granted until 2018);

II.

Cash-settled share-based payment plan (granted from 2018 to May 2023);

Accounting policy – Equity-settled options

III.

Depositary receipts awards plan for directors and employees (granted from 2018 to December 2023)
and the Fixed Salary shares plan (granted from December 2023 onwards) - presented in salaries andwages; andIV.

Restricted Stock Unit (“RSU”) awards plan (granted from 2023 onwards).

Adyen has an option plan for directors and employees. Exercisable options provide
participants the opportunity to obtain Depositary Receipts at an exercise price. The exercise
price of the granted options is equal to the market price of the shares at grant date. Subject
to the employees’ and directors’ continued employment with Adyen, options will vest over a
period of four years. The vesting period starts on the grant date. Subject to the employees’
and directors’ continued employment with Adyen N.V., 25% of the options will vest on thefirst anniversary of the grant date. The remaining 75% of the options will then vest monthly, inequal proportions at the end of each month, over the following 36 months. Options can be
exercised at any time from the vesting date until the 8th anniversary of the grant date. Adyen
has no legal or constructive obligation to repurchase or settle the options in cash.

The increase in equity-settled share-based compensation expense is a result of the introduction of the
Restricted Stock Unit Awards Plan during the year. The Depositary receipts awards plan and the Fixed
Salary Shares Plan is presented as part of the ‘Salaries and wages’ line in Note 4.1 Employee benefits.
These plans are described in more detail alongside:

The maximum aggregate number of Depository Receipts in respect to which options shall be granted is
4
1,312,500 . All of the outstanding options are exercisable as at year end 2023 and 2022. The exercise priceof share options outstanding at year end ranges from EUR 11 to EUR 106 (2022: EUR 11 to EUR 106). No
options were granted during the year ended December 31, 2023 and 2022. The fair value of options granted
was determined using the Black-Scholes valuation model as at each respective grant date. At December 31,
2023, the weighted average grant date fair value is equal to EUR 65.42 (2022: EUR 65.42) and the weighted
average remaining expected option life is 1.62 years (2022: 1.43 years).

4

Amounts in this paragraph are not rounded to the nearest thousand.

Annual Report 2023

119

Movements in the number of share options outstanding and their related weighted average exercise prices
are as follows:
2023

Cash-settled share-based payment plan

2022

Weighted average
exercise price (in EUR)
per share option

Number of options(thousands)

Weighted average
exercise price (in EUR)
per share option

Number of options(thousands)

Balance - January 1

47.51

107

53.63

147

Forfeited

66.71

(17)

72.46

(24)

Exercised

65.53

(28)

66.71

(16)

Balance - December 31

34.55

62

47.51

107

Share options
outstanding

II.

Accounting policy – Cash-settled share-based payment plan
Adyen established a cash-settled share-based payment plan (phantom shares) for newly
hired directors and employees as well as for certain current employees until May 2023. The
phantom shares are granted at the underlying market price of Adyen shares at grant date.
Subject to the employees’ continued employment with Adyen N.V., the phantom shares willvest over a period of four years from the grant date. 25% of the phantom shares will vest on
each anniversary of the grant date, until all are vested after four years.
Adyen recognizes a cost over the vesting period and a corresponding liability based on themarket price of Adyen’s shares. The liability is measured at fair value through profit or loss
using the market price of Adyen’s shares at balance sheet date with remeasurements oneach reporting date. Changes in the fair value are recognized as “share-based compensation
expense”.
The expense reflecting the recognition of the grant date fair value and changes in fair value ofthe phantom share plan is presented in wages and salaries in the statement ofcomprehensive income.

5

In 2023 a total of 1,459 phantom shares (2022: 41,206) were granted. The share price at December 31,
2023 is EUR 1,167 per phantom share (December 31, 2022: EUR 1,288). The fair value of the liability
recognized resulting from the phantom shares is EUR 3,526 (2022: EUR 15,908).

5

Amounts in this paragraph are not rounded to the nearest thousand.

Annual Report 2023

III.

Depositary receipts award plan

Adyen has granted the possibility to purchase Depositary Receipts at fair market value to directors and to
employees as part of their remuneration from 2018 until December 2023. The underlying shares of Adyen
are held by an administration foundation that in turn issues the Depositary Receipts to the employees. Each
Depositary Receipt issued represents the economic interest of one underlying STAK (“Stichting
Administratie Kantoor Adyen N.V.“) share.
From December 2023 Adyen has introduced the Fixed Salary shares plan which replaces and supersedes
the Depositary receipts awards plan, and grants the possibility to purchase Adyen N.V. ordinary shares at fairmarket value to directors and to employees as part of their remuneration.
The related employee benefits expense for 2023 amounted to EUR 13,329 (2022: EUR 9,973) and ispresented in wages and salaries. The fair value of the liability recognized resulting from the plan is EUR 507(2022: EUR 484), and the plan resulted in a total increase of EUR 11,342 (2022: EUR 8,186) recognized inshare capital and share premium during the year. There is a lock-up period but no vesting conditionattached to the Depositary Receipts awards plan and Fixed Salary shares plans. There was no revised
estimate of the number of Adyen N.V. ordinary shares expected to vest or relating income statement impact
in 2023.

120

IV.

Restricted Stock Unit (“RSU”) Awards Plan (granted from 2023 onwards).

Accounting policy – Equity-settled Restricted Stock Unit (“RSU”) Awards Plan
Adyen has established a Restricted Stock Unit (“RSU”) equity-settled share-based payment
plan for newly hired directors and employees as well as for certain current employees. The
RSUs are granted at the market price of Adyen shares at grant date. Subject to theemployees’ continued employment with Adyen N.V., the RSUs will vest over a period of four
years from the grant date. 25% of the RSUs will vest on each anniversary of the grant date.
Adyen recognizes an expense over the vesting period and a corresponding increase inequity. The measurement of the RSUs is based on the market price of Adyen’s shares at
grant date, and subsequent adjustments to the number of RSUs expected to vest are madeat each reporting date.
The expense reflecting the grant date fair value, recognition of service and adjustments tothe expected number of instruments to vest, is presented as ‘share-based compensation
expense’ under wages and salaries in the statement of comprehensive income.

During H1 2023, Adyen introduced the equity-settled RSU Awards Plan for newly hired directors andemployees as well as certain current employees. The RSU plan replaced the cash-settled share-based
payment plan for new joiners and provided existing plan participants an opportunity to convert to the RSU
plan. The number of RSUs granted is determined by dividing the award value against the closing Adyen
share price on the first business day of the relevant calendar month. A participant has no voting rights,
meeting rights, dividend rights or any other rights before the RSUs have vested. RSUs are converted into
ordinary Adyen shares when they vest. Shares granted under this plan are not subject to any performance
conditions, the only applicable vesting condition is continued employment (i.e service condition) throughout
the vesting period.
The RSU plan resulted in a reclassification of EUR 20,424 from cash-settled share-based payment plan
liability to share-based payment reserve, and an expense of EUR 24,650 recognized in wages and salaries
during the period.

Annual Report 2023

121

Movements in the number of RSU awards are as follow

The other operating expenses can be specified as follows:

2023

2022

RSUs outstanding

Number of RSUs
(thousands)

Weighted-average
grant-date fair value (inEUR)

Number of RSUs

Weighted-average
grant-date fair value (inEUR)

Balance - January 1

—

—

—

—

Reclassified from cashsettled share-based
payment plan

53

1,452

—

—

Granted

39

1,082

—

—

Vested

(9)

1,459

—

—

Forfeited

(2)

1,335

—

—

Balance - December 31

81

1,277

5. Other operating expenses

Accounting policy – Operating expenses
Operating expenses are recognized in the period when they occur.

——

Other operating expenses

2023

2022

Travel and other staff expenses

57,26344,086

Sales and marketing costs

52,99055,630IT costs

41,84733,086Advisory costs

24,39827,722

Housing costs

16,631

10,914

1% for the UN SDGs

16,261

13,302Contractor costs

15,29813,489

Office costs

10,2208,186

Miscellaneous operating expenses

29,82914,822

Total other operating expenses

264,737

221,237

Travel and other expenses increased during 2023, as a result of the ability to host events to meet our teams
and customers in-person. As part of Adyen's sustainability efforts during 2023, EUR 16,261 represented the
1% of net revenue pledge toward UN Sustainable Development Goals (SDG's). These contributions are in
the process of going toward charitable partnerships including UNICEF, Plan International, UNHCR and theWWF.
Sales and marketing costs decreased as a result of optimizing our preferred targeted marketing activities,
reducing costs along the way. In addition, miscellaneous operating costs increased due to higher accounts
receivable loss allowance provisions (Note 15) and inventory price variances (Note 3).

Annual Report 2023

6.

122

Other financial results

The other financial results can be broken down in the following categories:
Other financial results

2023

2022

Exchange gains/(losses) (Note 6.1)

6,599

(8,643)33,60046,700Fair value re-measurement of financial instruments:
Derivative liabilities (Note 6.2)
Other financial assets at FVPL (Note 6.3)
Total other financial results

6.1.

3,210

(153)

43,40937,904

Exchange gains/(losses)

The exchange gains/(losses) recognized during the year relate to realized and unrealized translationdifferences on monetary assets and liabilities. The exchange gains during 2023 mainly relate to Adyen’s
foreign-denominated cash balances.

Accounting policy – Functional currency and foreign currency translation
The functional currency of Adyen N.V. is the Euro as the Euro area is the primary economic
environment in which Adyen operates. The financial statements of entities that have afunctional currency different from Adyen N.V. (“foreign operations”) are translated into Euros
as follows:• Assets, equity and liabilities – at the closing rate at the date of the statement of financial
position;• Income and expenses – at the average rate of the period (as this is considered areasonable approximation of the actual rates prevailing at the transaction dates).
Foreign currency differences are recognized in other comprehensive income and arepresented within equity in the legal reserves.
Monetary items
Monetary items are units of currency held and assets and liabilities to be received or paid in a
fixed or determinable number of units of currency. Monetary assets and liabilities
denominated in foreign currencies are retranslated into Adyen’s functional currency at therates prevailing on the balance sheet date. Exchange rate differences resulting from thesettlement of such transactions and from the translation at year-end exchange rates ofmonetary assets and liabilities denominated in foreign currencies are recognized in thestatement of comprehensive income within “other financial results”.
Non-monetary items
Non-monetary items that are measured in terms of historical cost in a foreign currency aretranslated using the exchange rate at the date of the transaction. Non-monetary assets andliabilities that are measured at fair value through profit or loss are retranslated at the datethat the fair value is determined.

Annual Report 2023

6.2.

Derivative liabilities

As part of the merchant contract referred to in Note 2.1, Adyen recognized derivative liabilities measured atfair value through profit or loss. The nature of the derivative liabilities is described in more detail in Note 11‘Financial instruments’. For 2023, a EUR 33,600 gain (2022: EUR 46,700 gain) is recognized in ‘otherfinancial results’ due to the re-measurement of the fair value of the derivative liabilities. The change in fairvalue of the derivative liabilities during 2023, was mainly driven by the revision of the valuation inputs related
to time to maturity and the likelihood of vesting as well as Adyen’s share price decrease over the period.

6.3.

Other financial assets at fair value through profit or loss (‘FVPL’) (Visa Inc.
preferred shares)

Adyen has classified the convertible preferred Visa Inc. shares as a financial instrument at fair value throughprofit or loss. For 2023, the effect on other financial results is a net gain of EUR 2,558 (2022: EUR 2,030)
relating to an exchange loss of EUR (652) (2022: EUR 2,183) and fair value gain of EUR 3,210 (2022: EUR(153)). Refer to Note 11 ‘Financial instruments’ for more detail on the other financial assets at FVPL.

123

7.

Income taxes

7.1.

Income tax expense

Accounting policy – Current income tax expense
Current income tax expense is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted, at the end of the reporting period, and any
adjustment to tax payable in respect of previous years.

The tax on Adyen’s income before income taxes differs from the amount that would arise using the statutory
tax rate in the Netherlands. The effective tax rate (“ETR”) of Adyen for the year ended December 31, 2023 is
25.92% (2022: 21.64%) which differs from the statutory headline corporate tax rate in the Netherlands of
25.8% (2022: 25.8%). This is due to other adjustments (such as prior year and non-deductible expenses),
which was partially offset by the application of the innovation box and tax rate differences on foreign
operations. The increase in finance income, which does not benefit from the innovation box regime, is a
substantial driver of the increased effective tax rate during 2023. The innovation box is a Dutch tax incentive
whereby a portion of qualifying profits derived from innovative activities are taxed at a lower rate than theheadline corporate tax rate in the Netherlands.
Further detail on Adyen’s total tax contribution and country-by country reporting are included in Note 24.

Annual Report 2023

Effective tax calculation
Income before income taxes
Statutory tax rate in the Netherlands (%)
Income taxes based on statutory tax rate in the Netherlands

124

2023
942,60925.8%
243,1932022(25,312)(37,306)

Tax rate differences on foreign operations(2,327)

5,688

Other adjustments (such as prior period and non-deductible amounts)

28,733

1,674

Effective tax amount244,287

155,800

The breakdown between current and deferred income taxes for the year ended December 31, 2023 and2022 is disclosed below:
Income taxes

2023

2022

Current income tax expense

244,141

153,656

Deferred income tax expense

146

2,144

244,287

155,800

Total income taxes

The breakdown between current income tax receivables and payables as at December 31, 2023 and 2022 isdisclosed below:
Current income tax receivables/(payables)

Deferred income taxes

25.8%
185,744

Tax effects of:Innovation box

7.2.

719,939

2023

2022

Current income tax receivables

7,310

12,445Current income tax payables(63,063)(4,441)

Accounting policy – Deferred income taxes
Deferred income taxes arise, in general, as a result of temporary differences between tax andcommercial accounting treatment. Deferred income tax assets and liabilities are measured at
the tax rates that are expected to apply in the year when the asset is realized or the liability issettled. The applied rates are based on tax rates and tax laws that have been enacted or
substantively enacted at the balance sheet date.
In some tax jurisdictions, Adyen is granted a tax deduction (i.e. an amount that is deductible
in determining taxable profit) that relates to remuneration settled by options over Adyen’s
shares. The amount of that tax deduction may differ from the related cumulative
remuneration expense, and may arise in a later accounting period. In the event where tax
deductions exceed the remuneration expense, Adyen recognizes a deferred tax position with
the impact presented directly in equity.
Deferred tax assets are recognized by Adyen to the extent that it is probable that futuretaxable profits will be available against which they can be utilized.
In connection with the long-term contracts (refer to Note 2.1 ‘Long-term merchantcontract’), Adyen has recognized derivative liabilities and contract assets. The deferred tax
positions on these items are in-substance linked to the merchant contract, and arepresented on a gross basis in the balance sheet.

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125

Change in accounting standard
In accordance with the amendments to 'IAS 12 - Deferred tax related to assets and liabilities arising from asingle transaction', Adyen has recognized EUR 3,938 of deferred tax assets related to right-of-use assets
and lease liabilities. The cumulative effect is recognized as an adjustment to the retained earnings opening
balance and the deferred tax asset balance as at December 31, 2021.
The below movement schedule includes the changes in deferred taxes with the respective impact in equity
and profit or loss:
Balance January
1, 2022

Recognized in
Profit or Loss

Derivative liabilities

21,079(12,049)

Windfall tax benefit

12,808Tax losses carried forward

86,472

Recognized in Effects of foreign
equityexchange

Balance
December 31,
2022

Balance January
1, 2023

Recognized in
Profit or Loss

9,030

(8,669)

Recognized in Effects of foreign
equityexchange

Balance
December 31,
2023

Deferred tax assets:
Derivative liabilities
Windfall tax benefit
Tax losses carried forward

5,325
118,837(3,227)

Temporary differences

14,473

6,860

Total deferred tax assets

147,665(5,036)(10,749)

5,659

361
(2,855)

49

2,519(28,543)

1,399

88,466(31,398)

1,448

112,679

21,333

Deferred tax assets:

1,737

9,030
(4,990)(2,493)

5,325

34,149(3,521)

118,837

Temporary differences*

11,361

3,112

Total deferred tax assets

131,720(7,200)14,473(16,010)

5,261(10,749)

(391)

(205)

(596)

Total deferred tax liabilities(16,401)

5,056

—

—

(11,345)

Net deferred tax assets

115,319(2,144)29,159(6,014)

136,320

29,159(6,014)

147,665

Temporary differences

Contract assets
Temporary differences*The temporary differences balance as at 1 January 2022 has been restated as a result of the application of
IAS 12 amendment.

(5,090)

(596)

(769)

Total deferred tax liabilities(11,345)

4,890

—

—

(6,455)Net deferred tax assets

136,320(146)(31,398)

1,448

106,224

I.

Deferred tax liabilities:
Contract assets

Deferred tax liabilities:(1,365)

Deferred tax assets

The deferred tax assets include an amount of EUR 88,466 (2022: EUR 118,837) relating to net operating
losses carried forward. The decrease in this balance relates to the utilization of the net operating loss during
the year in the United States, with a further decrease of EUR 14,042 relating to an update of the (historic)
apportionment of taxable profit on a State level due to legislative changes causing a change in estimate,resulting in a revaluation of the tax losses at a State level, recognised directly in equity.
Further, EUR 361 (2022: EUR 9,030) of the deferred tax assets relates to the recognized derivative liabilities.
The decrease in the related deferred tax asset is caused by the decrease in fair value of the derivative liability(refer to Note 11 for further details).
The deferred tax liabilities consist mainly of the deferred tax on the non-monetary part of the contract assets(December 31, 2023: EUR 5,090; December 31, 2022: EUR 10,749).
The deferred tax assets and liabilities are presented as non-current on the Adyen balance sheet.

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126

8.
Significant accounting estimate: Deferred tax assets linked to windfall benefits
Deferred tax assets include tax losses carried forward relating to options exercised in the
United States at a Federal and State level (December 31, 2023: EUR 85,910; December 31,
2022: EUR 115,121) and windfall benefits relating to options granted and vested, however
not yet exercised (December 31, 2023: EUR 2,519; December 31, 2022: 5,325). The balance
as at December 31, 2022 included tax losses carried forward in the United Kingdom which
was fully utilized in the current year. An amount of EUR 11,196 of the tax losses carriedforward was utilised during the period and recognised in the share premium reserve (2022:
EUR 6,180).
During 2023, Adyen has reassessed the recoverability of deferred tax assets on windfall
benefits linked to the share-based compensation plan in the United States. Adyen continues
to recognize deferred tax assets that will be realized against future profits, on a going
concern basis.
The United States Federal Tax windfall benefit continues to be recognized, as these carryforward losses on a Federal level have no expiration date. The State net operating losses
continues to be recognized as these carry forward losses are expected to be utilized against
future taxable income before its expiration date.
This windfall benefit has been recognized assuming all options granted to date will be
exercised within the 8th anniversary of the grant date (grant date + 7 years).

Capital management

Adyen’s objective when managing capital is to safeguard its ability to continue as a going concern.
Furthermore, Adyen ensures that it meets regulatory capital requirements at all times.

Accounting policy – Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue ofequity instruments are shown in equity as a deduction, net of tax, from the proceeds.

6

In 2023, 46,799 (2022: 29,213) additional shares were issued. The additional issued shares were a result of
exercises of options granted to employees, share issuance relating to the Depositary receipts award planand vesting of shares granted to employees relating to the RSU plan (refer to Note 4.3 for further
information). The paid up and called share capital increased to EUR 310,331 (2022: EUR 309,863) resulting
in a total of 31,033,098 (2022: 30,986,299) ordinary shares (nominal value EUR 0.01 per share). In 2023, thetotal number of authorized shares was 80,000,000 (2022: 80,000,000).
The following reserves are considered to be non-distributable: legal reserves (in accordance with Dutch
Law), share-based payment reserve, warrant reserve, and total comprehensive income for the current period(in accordance with regulatory capital requirements). The total of distributable reserves amounts to EUR
2,293,313 (2022: EUR 1,691,427). The legal reserves restricted for distribution in accordance with Dutch
Law amounts to EUR 22,582 (2022: EUR 18,518), refer to company statement of changes in equity.
Net income is added to retained earnings reserve. The current dividend policy is not to pay dividends, as
retained earnings are used to support and finance the growth strategy of the Company.

6

Amounts in this paragraph are not rounded to the nearest thousand, unless indicated in EUR.

Annual Report 2023

Derivative liabilities and Warrant reserve
In relation to the warrants granted to eBay (refer to Note 2.1 ‘Long-term merchant contract’), as per
December 31, 2023, Adyen has classified the first two tranches as an equity instrument, with the grossequity balance relating to tranche 1 (vested and exercised in 2021) presented within ‘share premium’, andtranche 2 (unvested) presented within ‘warrant reserve’. The derivative liabilities relating to the first two
tranches were measured at fair value through profit or loss before being de-recognized and reclassified toequity. Equity instruments are not subsequently remeasured to fair value.
The remaining derivative liabilities relating to tranches 3 and 4 are measured at fair value with a closingbalance of EUR 1,400 as per end of December 2023 (2022: EUR 35,000). Fair value movements arepresented within ‘other financial results’ in profit or loss. Reference is made to Note 11 ‘Financial
Instruments’ for further details on the accounting treatment of the derivative liabilities.

127

9.

CRR/CRD IV Regulatory Capital

The following table displays the composition of regulatory capital as at December 31, 2023. The regulatory
capital is based on the CRR/CRD IV scope of consolidation, which is the same as the IFRS scope of
consolidation.
Own funds

2023

2022

EU-IFRS equity as reported in consolidated balance sheet*

3,150,867

2,416,056

Net profit not included in CET1 capital (H2 2023 not yet eligible)(416,149)(282,002)

Warrant reserve(25,575)(25,575)

Intangible assets(8,757)(8,140)

Deferred tax assets that rely on future profitability(90,985)(124,162)

(16)

(47)

2,609,385

1,976,130

Regulatory adjustments:

Prudent valuation
Total own funds

The increase in total own funds in 2023 mainly relates to the additions of consolidated net profit (full year
2022 and H1 2023).
*The comparative retained earnings balance is restated as a result of the application of IAS 12 amendment(refer to Note 7.2).

Annual Report 2023

10.

128

Cash and cash equivalents
Cash and cash equivalents

Accounting policy – Cash and cash equivalents
Adyen’s cash and cash equivalents are measured at amortized cost and are included incurrent assets due to their short-term nature.
In the consolidated statement of cash flows, cash and cash equivalents includes cash in
hand, deposits held at call with banks, other short-term highly liquid investments withoriginal maturities of three months or less and bank overdrafts. Adyen presents interest paid/
received and dividends received as operating cash flows. Due to the short duration of the
cash and cash equivalents (less than 3 months), the fair value approximates the
carrying value.

2023

2022

Cash held at central banks

5,863,231

4,407,540

Cash held at banks, other than central banks

2,443,751

2,114,805

Total

8,306,982

6,522,345

The "Cash held at central banks" and "Cash held at banks, other than central banks" earned interest in theamount of EUR 191,387 and EUR 54,499 (2022: EUR 11,564 and EUR 17,461), respectively during theperiod, due to the rising interest rates in a positive interest rate environment, which was recognized infinance income. Had the interest rate at central banks been 10 basis points higher/(lower), the interest
earned on cash held at central banks would increase/(decrease) by EUR 5,863 (2022: EUR 4,408 increase/(decrease) on interest earned).
Of the "Cash held at banks, other than central banks", EUR 88,860 (2022: EUR 68,564) are restricted andare therefore not available for general use by the Company. The restricted cash mainly relates to deposits
required under the US Federal Foreign Branch license, Brazilian acquiring license, as well as deposits held
as guarantee for leased offices. The restricted cash is readily convertible and therefore classified as cash
and cash equivalents.
Adyen’s cash held at banks, other than central banks is exposed to credit risk with financial institution
counterparties. Adyen actively manages concentration risk and it is Adyen’s policy that all commercial banks
where cash and cash equivalents are held have a credit rating in the A categories of Moody’s/S&P. In
situations (i.e. countries) where a partner with this credit quality cannot be found, approval must be obtained
from the Risk Committee. No defaults occurred during the year and management does not expect any
losses from non-performance by these counterparties.

Annual Report 2023

11.

129

Financial instruments

Accounting policy – Financial instruments

Measurement

Adyen classifies its financial assets in the following measurement categories, those to bemeasured:

At initial recognition, Adyen measures a financial asset at its fair value plus, in the case of afinancial asset not at FVPL, transaction costs that are directly attributable to the acquisitionof the financial asset.Transaction costs of financial assets carried at FVPL are expensed in
profit or loss. Financial assets with embedded derivatives are considered in their entirety
when determining whether their cash flows are solely payment of principal and interest.

• subsequently at fair value through profit or loss (‘FVPL’), andDebt instruments• at amortized cost.

Subsequent measurement of debt instruments depends on Adyen’s business model for
managing the asset and the cash flow characteristics of the asset. Adyen measures its debt
instruments as follows:

Classification

The classification depends on Adyen’s business model for managing the financial assets andthe contractual terms of the cash flows. For assets measured at FVPL, gains and losses arerecorded in profit or loss.

Financial liabilities
Adyen initially classifies financial instruments as a liability or equity instrument based on theterms of the contractual arrangement, and subsequently reassesses the accounting
treatment on changes in circumstances. The derivative liabilities are classified as financial
liabilities measured at fair value through profit or loss (refer to Note 2.1 'Long-term merchantcontract'). The derivative liabilities may be derecognized or classified as equity instruments
contingent on uncertain future events linked to milestones of processed payments volume
with eBay.

• Amortized cost: Held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows, where those cash flows represent solely payments
of principal and interest. Interest income from these financial assets is included in financeincome using the effective interest rate method.
Financial assets and liabilities at fair value through profit or loss
• Assets that do not meet the criteria for amortized cost or fair value through othercomprehensive income (‘FVOCI’) are measured at FVPL. A gain or loss is subsequently
measured at FVPL and gains or losses are recognized in profit or loss and presented net
within other financial results for the period in which it arises.

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130

Impairment

Fair value measurement

Adyen assesses on a forward-looking basis the expected credit losses associated with its
debt instruments carried at amortized cost. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. For trade receivables andcontract assets, the group applies the simplified approach, which requires expected lifetime
losses to be recognized from initial recognition of the assets.

For financial instruments measured at fair value, Adyen categorizes the fair value
measurement in its entirety in the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement. Adyen categorizes fair valuation inputs on
the following basis:

Instruments in scope on the balance sheet of Adyen include: cash and cash equivalents,
receivables from merchants and financial institutions, trade receivables, other receivables
and contract asset classified as monetary item. The expected credit loss model is designed
to measure the pattern of improvement or deterioration in the credit quality of the debt
instruments. The measurement basis consists of two categories:• Category 1: Expected credit losses (12 months)• Category 2: Lifetime expected credit losses
The Adyen Treasury policy only allows exposures to financial institutions with sound credit
quality rating and limits the exposure to a maximum amount. As a result, Adyen applies the
low credit risk simplification; hence all assets are considered to be in stage 1 and a 12-month
expected credit loss is applied.
Lifetime expected credit losses are applied for trade and other receivables. For these
instruments operational simplifications can be applied; hence it eliminates the need to
calculate a 12-month expected credit losses or to measure increases in credit risk for the
instrument. The loss allowance for trade receivables are measured at initial recognition, andthroughout the total duration, equal to lifetime expected credit losses.
As the average duration of the instruments in scope for impairment calculation is below 10
days, no forward-looking elements are included in the expected credit loss assessment.
In the event of no reasonable expectation of recovering the financial asset, the Adyen Credit
Committee decides on whether a write-off should take place for the entirety or portion of theoutstanding amount.

• Level 1: The fair value of financial instruments traded in active markets is based on quoted
market prices at the end of the reporting period.
• Level 2: The fair value of financial instruments that are not traded in an active market isdetermined using valuation techniques which maximise the use of observable market
data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.
• Level 3: If one or more of the significant inputs is not based on observable market data,
the instrument is included in level 3.

The financial instruments as at each balance sheet date are summarized in the table below. For thosemeasured at fair value, to provide an indication about the reliability of the inputs used in determining fairvalue, Adyen has classified its financial instruments into the levels described in the accounting policies
above. All other financial instruments on the balance sheet meet the requirements of the contractual cash
flow and characteristics test to be measured at amortized cost. Furthermore, the classification is based on
the business model test. As a result, the classification is consistent with how the business is managed and isin line with risk management strategies and how this is reported to key management. Adyen’s exposure tovarious risks associated with the financial instruments is discussed in Note 12.

Annual Report 2023

Financial instruments

131

Note

Measurement
policy2023

FVPL – level 2

14,821

12,2642022

Financial assets:
Other financial assets at FVPL
Receivables from merchants and financial institutions

15

Amortized cost

490,052

369,104

Trade and other receivables

15

Amortized cost

134,274

89,350Cash and cash equivalents

10

Amortized cost

Total

8,306,982

6,522,345

8,946,129

6,993,063

1,400

35,000Financial liabilities:
Derivative liabilities

FVPL – level 2

Lease liability

17

Amortized cost

223,063

203,073

Payable to merchants and financial institutions

16

Amortized cost

5,953,563

4,795,804

Trade and other payables

16

Amortized cost

168,397

147,827

6,346,423

5,181,704

Total

Other financial assets at FVPL (Visa Inc. preferred shares)
Adyen has recognized and classified the convertible (‘Series C’) preferred Visa Inc. shares within the FVPL
category. The fair value of the level 2 preferred shares in Visa Inc. is based on the quoted price of Visa Inc.
common shares, adjusted for lack of marketability, multiplied by an initial conversion rate of preferredshares into common shares. The conversion rate may be updated in the future. The adjustment for lack ofmarketability is determined using an option pricing model technique which relies on observable market dataof the underlying Visa Inc. common shares, as well as a presumed length of holding period restriction on thepreferred shares.
A partial conversion of the Series C preferred stock into Series A preferred stock took place during 2022,with no further conversions during 2023.The remaining Visa Inc. preferred shares carry the right to receive
discretionary dividend payments presented as ‘other income’ in the statement of comprehensive income(2023: EUR 172; 2022: EUR 44).

Derivative liabilities (warrants)
As part of the long-term contract previously mentioned (refer to Note 2.1 ‘Long-term merchant contract’),Adyen recognized derivative liabilities measured at fair value through profit or loss, classified as a level 2 fairvalue instrument.
The derivative liabilities are valued using a Black-Scholes option pricing model (“OPM”) technique. The
OPM takes into consideration various observable market and contractual data as well as management
estimates, including the probability of vesting based on achievement of milestones in line with the fulfilmentof the payment services to be provided to the merchant. A sensitivity analysis to Adyen’s share price isprovided in Note 12 ‘Financial risk management’.
The change in fair value of the derivative liabilities is mainly driven by the revision of valuation inputs related
to time to maturity and likelihood of vesting as well as Adyen's share price decrease over the period. Refer toNote 6 ‘Other financial results’ for the recognition of the movement of the derivative liabilities.

Annual Report 2023

12.

132

Financial risk management

Adyen’s activities bring exposure to a variety of financial risks. Risk management is the responsibility ofAdyen’s management. Adyen applies a risk-aware but not unduly risk-averse approach toward risk
management. Adyen’s Integral Risk Management Framework (IRMF), which is based on COSO’s Enterprise
Risk Management (ERM) model, defines a uniform and systematic approach for managing risks across
Adyen. The main sources of financial risk to Adyen are considered in the table below:

Source of risk and risk
description

Risk mitigation

Liquidity risk

Liquidity risk is the risk that Adyen
is not able to meet its short- to
medium-term payment andcollateral obligations.

At Adyen the majority of the balance sheet has a maturity of less than
three months, both on the asset and on the liability side. Merchantrelated balance sheet positions have an even shorter maturity. Longerdated positions are typically immaterial, such as lease liabilities (refer toNote 17).
The balance sheet positions related to merchant fund flows are
considered to be neutral from a liquidity perspective as these cash
balances and related payables are interrelated from a liquidity
perspective. This is due to the fact that Adyen only settles merchantpayables after the cash is collected from the card schemes. Accelerated
pay-out schedules for individual merchants are more than balanced byliquidity buffers that primarily consist of existing cash and cash
equivalents as well as incoming cash flows.
Adyen monitors and manages both its Liquidity Coverage Ratio (LCR)
and a survival period metric to mitigate the residual risk. Starting from2022, De Nederlandsche Bank and Adyen agreed on a new calculation
method for the Liquidity Coverage Ratio on the basis of the applicationof Article 26 LCR DA. Adyen reports its LCR on the basis of this revised
calculation from July 2022 onwards.
The survival period is determined by dividing the sum of cash and cash
equivalents, receivables from and payables to merchants and financial
institutions, by the total operating expenses for the period. The survival
period is set at a minimum of six months. Adyen's survival period as ofDecember 31, 2023 is 35 months (2022: 38 months). For short term
liquidity needs Adyen holds additional buffers in a variety of currencies.
Given the maturity of the assets and liabilities on-balance, themagnitude and quality of the liquidity buffer and the longitude of thesurvival period, Adyen considers the remaining liquidity risk low.

Remaining risk

Source of risk and risk
description

MinimalMarket risks

Adyen’s balance sheet
is by nature short-term
and in general, cash isreceived prior to
payout to merchants.
The remaining liquidity
risk continues to be low
and well within risk
appetite limits asevidenced by a high
LCR.

Foreign exchange risk

Adyen operates internationallyand is exposed to foreignexchange risk through its
merchant payment services indifferent currencies as well asbalance sheet positions
denominated in currencies otherthan the functional currency.

Risk mitigation

Remaining risk
MinimalAdyen actively manages the foreign exchange risk position resulting inlimited remaining risk. As in previous years, USD remains the mostsignificant non-functional currency exposure as of December 31, 2023.
The following table highlights the net exposure to this currency
stemming from the Visa Inc. shares on profit or loss resulting from a
10% shock (positive or negative) of the respective significant currency
against EUR. Please note that all merchant-related short-term financial
instruments have been excluded in this impact assessment given the
short period to settle, and hence, limited foreign exchange risk on these
instruments. The slight increase in net exposure is due to the increaseof Visa Inc.’s share price over the period which resulted in a revaluationof the asset (refer to Note 11 for further details).

CurrencyNet
exposure

10% shock

EUR 12
millionEUR 1.2
millionEUR 15
millionEUR 1.5
million31/12/2022
USD
31/12/2023
USD

The merchant funds have a natural match in currencies between
receivables and payables or a very short duration. This significantly
reduces the foreign exchange risk.
Adyen holds liquidity buffers in various currencies to ensure that it will
be able to meet payment obligations to merchants, thereby mitigating
potential liquidity risk arising from failed FX transactions.

Adyen has limits on its
open FX position per
individual currency andfor Adyen as a whole.
The open positions
including the impact ofan immediate 10%
shock remain within
Adyen’s risk appetite.

Annual Report 2023

Source of risk and risk
description

133

Risk mitigation

Remaining risk

Adyen’s business model is primarily fee-based and interest income
does not constitute a key revenue component of the client-facing
product offering. Despite the fee-based business model, Adyen’sbalance sheet has various characteristics that are relevant from aninterest rate risk perspective. 1) Adyen’s assets mainly consist ofinterest-bearing cash, 2) Adyen is fully equity financed; 3) Adyen’sbalance sheet has a distinct short-term nature.

Adyen accepts theinterest rate risk
stemming from its cash
position as part of
doing business. The
cash position is innate
to Adyen’s businessmodel as it is held in
relation to merchantpayables and as aliquidity buffer.

Interest rate risk

Interest rate risk is defined as therisk that changes in interest rates
lead to an adverse impact on
Adyen’s income or value.

Source of risk and risk
description

wasRemaining risk

Adyen’s exposure to equity securities price risk arises from investment
in Visa Inc. preferred shares, which are classified in the consolidatedbalance sheet as other financial assets at FVPL. The exposure consistsof potential financial losses due to movements in the share price of VisaInc.
Two tranches of the long-term merchant contract with eBay areclassified in the balance sheet as derivative liabilities. The exposure isaffected by share price movements of Adyen shares.
Adyen carried out a sensitivity analysis on the Visa Inc. preferred sharesand derivative liabilities, respectively. A 5% increase (decrease) in theunderlying Visa Inc. and Adyen share price would result in the following
increase (decrease) in the balance sheet item and income before
income taxes, all other circumstances considered equal:

The remaining equity
price risk is consideredlimited as Adyen has
no other equity
instruments on its
balance sheet. The risk
appetite on equity pricerisk is low andtherefore the residual
risk is within risk
appetite.

Equity price risk

As a result of this profile:•

There is net interest income sensitivity to interest rate
movements: changes in interest rates translate into the price ofassets but not into the price of liabilities. The aggregated net
interest income sensitivity for material currencies in the mostpenalizing ramped shock scenario (-200bps) amounts to EUR-73 million. Adyen calculates this sensitivity on a constant balance
sheet assumption and a 1Y projection horizon.

•

There is only limited value sensitivity to interest rate movements
due to the fact that both assets and liabilities are on average
short-dated. The aggregated economic value sensitivity formaterial currencies to the most penalizing instantaneous interest
rate shock scenario (-200bps) amounts EUR -9 million. The
economic value sensitivity is calculated on a run-off balance sheet
assumption.

For the volatility analysis performed on the interest rate risk exposure
on cash and cash equivalent balances as per year-end refer to note 10.
During 2022, negative interest rates applied for the period up to 31
October 2022 on the DNB Target 2 account, after which positive
interest was earned. Throughout 2023, the interest earned on the cash
position was positive.

The risk of financial losses due tochanges in the market price offinancial instruments (stock
prices) that are recognized at fairvalue.

Balancesheet item

Carrying
amount5%underlying
share pricemovement

Visa Inc.
preferredsharesEUR 12
millionEUR 1
millionDerivative
liabilities

EUR 35
millionEUR 2
million (5%)

Visa Inc.
preferredsharesEUR 15
millionEUR 1
millionDerivative
liabilities

EUR 1
millionEUR 0
million (5%)

31/12/2022

31/12/2023

In addition, Adyen’s Treasury policy does not allow
purchasing additional equity positions (excluding treasury
shares).

Annual Report 2023

134

Credit risks

MinimalCounterparty default risk

The counterparty default (credit)risk relates to the risk that acounterparty of Adyen will fail tomeet its financial obligations
when these are due, later or inaccordance with agreed terms causing a loss to Adyen.

Financial assets subject to credit risk:
Adyen is exposed to credit risk primarily through receivables fromfinancial institutions regarding settled payment transactions, cash heldat partner banks as well as pre-financing services to merchants.
Cash and cash equivalents:
As per December 31, 2023, EUR 5,863,231 (2022: EUR 4,407,540)
represents cash held at central banks, representing 71% (2022: 68%) of
the cash and cash equivalents balance.
Excluding the cash held at central banks, Adyen’s top 10 cash
exposures, which also include balances held at credit institutions withcredit rating of A or higher, represent 88% of the balance of cash andcash equivalents excluding cash at central banks.
Receivables from financial institutions:
Receivables from financial institutions include balances due fromschemes and other financial institutions regarding transactions
processed which will be settled within a short-term, as well as bankaccounts which are controlled by Adyen but do not meet the definitionof cash and cash equivalents and are therefore classified as receivablesfrom financial institutions. As at December 31, 2023, EUR 292,091(2022: EUR 279,106) represents receivable from financial institutions.
Due to regulatory requirements, in order to mitigate the counterparty
exposure to one of its partners in Brazil, Adyen has setup a collateralaccount in which Brazilian Government bonds were deposited by apartner financial institution. As per December 31, 2023 the totalcollateral was EUR 14,955 (BRL 80,101) (2022: EUR 31,086 (BRL
175,828). Adyen has no other collateral accounts to meet its otherregulatory requirements.
Adyen carefully chooses its financial counterparties and continuously
monitors their credit quality and changes thereof in the form of rating
downgrades.
Receivables from merchants:
As part of the accelerated Sales Day Payout product, Adyen settles afull sales day of transactions to merchants before the funds fromfinancial institutions are fully received. The receivable is effectively
secured through the authorization and capture of a transaction, leading
to a commitment to pay by the card schemes. When Adyen receives thefunds from card schemes, the receivable from the merchant is settled
and there is no outstanding exposure anymore. As a result of the natureof the payment transactions the duration of the Sales Day Payout
balances is relatively short (average duration between 2-3 days). Adyen
assesses, on a forward-looking basis, the expected credit losses andconcluded the impact of expected credit losses on receivables frommerchants is not significant.
During 2023, Adyen did not incur material losses related to nonperformance of its counterparties.
Other financial assets:
The remaining financial asset credit risk exposure (such as trade andother receivables) is considered to be limited.

The remaining
counterparty credit risk
is low as is Adyen’s risk
appetite. Therefore,
Adyen residual risk on
counterparty default
risk remains within risk
appetite.

Concentration risk

Risk of losses stemming from onand off-balance sheet positions
arising from concentrations in
exposures to a counterparty or agroup of connected
counterparties.

Concentration risk at Adyen originates primarily at banking partners inlocations where there are no own direct acquiring licenses. The credit
risk exposure per financial institution is capped at 25% of Adyen’s
eligible capital, provided that the financial institution has a credit ratingin the A categories of Moody’s/S&P’s or, if not available, its equivalentfrom other rating agencies. Adyen has conservatively translated thisamount into an internal limit of EUR 550 million. For financial
institutions with lower credit ratings, the credit risk per financial
institution is capped at EUR 200 million under business-as-usual
conditions. Neither limit was breached during the year ended
December 31, 2023.
Furthermore, Adyen has reduced its concentration risk in exposures
held at financial institutions evident by the lower proportion of top 10
exposures within Adyen’s total financial assets. The residual credit risk
is mitigated by the short-term maturity of these balances of less than 7
days.
Adyen actively manages this concentration risk by distributing its cash
over bank accounts at multiple banks. If needed, excess cash can beheld at accounts with central banks. Adyen continues to monitor its
merchant funds flows at partner banks that are not settled throughaccounts held at the central bank, to ensure compliance with the large
exposure limit.

Adyen’s risk appetite
for concentration risk ismoderate. The residual
risk after risk mitigationis considered low sothat current credit
concentration risk
remains within risk
appetite.

Annual Report 2023

135

Other disclosures
13.

Intangible assets

Adyen’s intangible assets relate to expenses capitalized on the internal development of the Adyen payment
platform.

Intangible assets

2023

2022

Cost

23,02922,776

Accumulated amortization

Internally generated software(14,889)(12,935)

Balance - January 1

8,140

9,841

Accounting policy – Intangible assets

Additions

4,138

3,523

The intangible assets include internally generated software with finite useful lives, which arestated at cost less accumulated amortization and impairment.These assets are capitalized
and subsequently amortized on a straight-line basis in the statement of comprehensive
income over the period with an estimated useful life of 5 years. Intangible assets are tested
for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. The useful life is assessed on an annual basis.

Amortization for the year

(3,521)(5,224)

Balance - December 31

8,757

8,140

Cost

27,16723,029

Accumulated amortization(18,410)(14,889)

Balance - December 31

8,757

8,140

Annual Report 2023

14.

Plant and equipment

136

Plant and equipment

ComputerHardware andSoftwareLeasehold
Improvements

Other

Total

18,738

4,002

121,1192022

Accounting policy – Plant and equipment

Cost

98,379Plant and equipment are stated at cost less accumulated depreciation and impairment.
Repairs and maintenance costs are charged to the statement of comprehensive income
during the period in which they are incurred. The major categories of plant and equipment(namely hardware equipment and leasehold improvements) are assessed to have a useful lifeof 5 years. Plant and equipment are depreciated on a straight-line basis and are tested for
impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. The useful life is assessed on an annual basis.

Accumulated depreciation(40,439)(5,980)(1,719)(48,138)

Balance - January 1

57,94012,7582,283

72,981

Additions

81,84812,555

1,172

95,575

Disposals

(100)

—

—

(100)

(23,176)(4,464)(714)(28,354)

Depreciation for the year
Other changes (e.g. exchange differences)
Balance - December 31

255

379

60

694

116,767

21,2282,801

140,796

178,707

31,774

5,244

215,725

Computer Hardware and Software additions during the year mainly relate to servers for data centers andequipment such as laptops for employees.

2023

During 2023, inventory (Note 3) of EUR 6,269 in Brazil was reclassified to plant and equipment as the POS
terminals are being held for rental to merchants instead of being sold in the ordinary course of business.

Accumulated depreciation(61,940)(10,546)(2,443)(74,929)

Balance - January 1

116,767

21,2282,801

140,796

Additions

59,708

4,568

1,329

65,605Adyen did not recognize an impairment loss or reversal of impairment loss of plant and equipment during
the year ended December 31, 2023 and 2022.

Cost

Disposals(1,093)

(32)

(28)

(1,153)

Depreciation for the year

(39,083)(5,957)(915)(45,955)

Transfer from inventory

—

—

6,269

6,269

(500)

48

26

(426)

Balance - December 31

135,799

19,855

9,482

165,136

Cost

216,51336,064

12,745

265,322

Accumulated depreciation(80,714)(16,209)(3,263)(100,186)

Balance - December 31

135,799

19,855

9,482

165,136

Other changes (e.g. exchange differences)

Annual Report 2023

15.

137

Trade, other receivables, and receivables from merchants
and financial institutions

Trade and other receivables
These receivables are held with merchants that have not been subtracted from settlement.
Receivables from merchants and financial institutions
Receivables from financial institutions

2023

2022

292,091

279,106

Accounting policy – Trade and other receivables

Receivables from merchants

197,961

89,998Trade receivables are amounts due from merchants for payment services performed. Ifcollection is expected in less than one year they are classified as current assets. Trade andother receivables are classified at amortized cost, initially recognized at fair value andsubsequently measured at amortized cost less impairments for expected credit losses. The
average duration of the receivables varies depending of their nature (Trade and otherreceivables: less than 3 months; receivables from financial institutions: 1-2 days; receivablesfrom merchants: 30 days). Due to the short duration of all the receivables (overall average ofless than 3 months) the fair value approximates the carrying value.

Balance - December 31

490,052

369,104

Receivables from financial institutions
Receivables from financial institutions include balances due from schemes and other financial institutions
regarding transactions processed which will be settled within a short-term, as well as bank accounts which
are controlled by Adyen but do not meet the definition of cash and cash equivalents and are therefore
classified as receivables from financial institutions.
Receivables from merchants

15.1.

Trade, other receivables, and receivables from merchants and financial
institutions

Trade and other receivables
Trade and other receivables
Less: Allowance for expected credit losses
Balance - Trade receivables - Net

2023

2022

143,864

93,399(9,590)(4,049)134,274

89,350Receivables from merchants and financial institutions

490,052

369,104

Total

624,326

458,454

As part of the accelerated Sales Day Payout product, Adyen settles a full sales day of transactions tomerchants before the funds from financial institutions are fully received. Therefore, Adyen is entitled to areceivable from all merchants which have opted to use this form of settlement. The receivable relates tobalances of merchants to be settled by schemes, with an average duration of less than 10 days. As at
December 31, 2023, the receivables from accelerated Sales Day Payout have a balance of EUR 197,961(2022: 89,998).
Adyen assesses, on a forward-looking basis, the expected credit losses and concluded the impact of
expected credit losses on receivables from merchants is not significant.

Annual Report 2023

15.2.

Impairments of financial assets at amortized cost

138

2023

2022

Adyen uses a provision matrix when calculating the loss allowance on trade receivables. During the year
Adyen increased EUR 5,541 (2022: deducted EUR 393) its trade receivable loss allowance based on thecalculations from its IFRS 9 expected credit loss model for trade receivables. The expected credit loss model
was updated at year-end, to reflect reasonable and supportable information available on credit risk of the
trade receivables balance. Adyen wrote off trade receivables balances for an amount of EUR 2,890 (2022:
1,684). Adyen did not reverse any impairment losses in 2022 and 2023.

Trade payables

14,11019,922

Taxes and social security

70,31955,593

Accrued employee benefits

35,95730,041

Accrued liabilities and other debts

46,04833,105Cash-settled share-based payment plan - current portion

1,963

9,166

No financial assets are past due except for trade receivables. As at December 31, 2023, trade receivables of
EUR 35,984 (2022: EUR 60,621) were not past due, EUR 71,484 were past due ( 2022: EUR 32,778) of which
EUR 13,815 is less than 3 months (2022: EUR 9,771) and EUR 2,890 impaired (2022: 1,684). The average
duration of the overdue trade receivables is 3 months (2022: 3 months).

Trade and other payables

16.

Trade, other payables, and payables to merchants andfinancial institutions

Accounting policy – Trade and other payables
Payables are obligations initially recognized at fair value and subsequently measured atamortized cost to pay for goods or services that have been acquired in the ordinary course ofbusiness from suppliers. Payables are classified as current liabilities if payment is due within
one year or less. Due to the very short duration of the payables (average less than 3 months)
the fair value approximates the carrying value.

Trade and other payables

168,397

147,827

Payables to merchants and financial institutions

5,953,563

4,795,804

Total

6,121,960

4,943,631

The payables to merchants and financial institutions relate to interchange and scheme fees payable and do
not constitute borrowings. The payables to merchants include the Merchant Potential Liability (‘MPL’)
reserve as part of Adyen’s MPL risk mitigation. When Adyen acts as an acquirer, it is liable to settle eligible
chargebacks with card networks. To cover for this inherent risk, Adyen withholds funds from the payouts tomerchants, estimated as the amount of transaction volume for which issuers could potentially submit achargeback and Adyen has to take financial responsibility. These MPL reserves amounted to EUR 733,677
as per December 31, 2023 (2022: EUR 575,030).
Taxes and social security mainly relate to VAT payables, and wage taxes relating to Adyen employees.
Adyen has recognized liabilities measured at fair value through profit or loss that are related to the cashsettled share-based payment plan (refer to Note 4.3 ‘Share-based payments’).

Annual Report 2023

17.

LeasesAdyen’s leases relate to offices and data centers across locations where it operates.

Accounting policy – Leases
Adyen assesses if a lease exists or a contract contains a lease at the contract inception date,concluding whether an asset is identifiable and Adyen has control to direct its use and all
related economic benefits. A right-of-use asset and a lease liability are recognized at thelease commencement date, which can differ from contract inception date.
The lease liability is initially measured by bringing to present value all future lease payments,
discounted by an incremental borrowing rate, in case no interest rate is available for thecontract.
At initial recognition, the right-of-use-asset amounts to the initial lease liability. Right-of-useassets are depreciated on a straight-line basis over the lease term and tested for impairment
whenever events or changes in circumstances indicates that the carrying amount may not berecoverable. Interest on lease liability is recognized as an expense in the statement ofcomprehensive income.
Short-term (less than 12 months) and small value lease contracts are expensed in thestatement of comprehensive income on a straight-line basis over the lease term.

139

Right-of-use assets

2023

2022

Cost

249,760

168,630

Accumulated depreciation(68,084)(40,567)

Balance - January 1

181,676

128,063

Additions55,17381,060Depreciation for the period(35,977)(30,035)

Other movements (e.g. exchange differences)(1,209)2,588

Balance - December 31

199,663

181,676

Recognized right-of-use asset

299,080249,760

Offices and data centers

Accumulated depreciation(99,417)(68,084)

Balance - December 31

199,663

181,676

Lease liability
Balance - January 1

2023

2022

203,073

142,964

Additions55,17381,060

Lease installments(38,343)(25,516)

Interest expense

4,532

3,372

Other movements (e.g. exchange differences)(1,372)

1,193

223,063

203,073

Balance - December 31
Current portion

50,66633,200Non-current portion

172,397

169,873

Additions during the year mainly relate to new lease contracts for data centers in the United States and new
office leases.

Annual Report 2023

140

During the year, short-term and small value leases expensed in other operating expenses amounted to EUR
7,190 (2022: EUR 4,255).
As of December 31, the future minimum lease payments are as follows:
Minimum future lease payments

2023

2022

Within 1 year

45,734

34,460Between 1 and 2 years

45,35235,103

Between 2 and 3 years

40,54733,135

Between 3 and 4 years

32,32627,890Between 4 and 5 years

19,677

21,748Later than 5 years

56,43349,870Total

240,069

202,206

18.

Other contingent assets, liabilities and commitments

Adyen N.V. and Adyen International B.V. are a fiscal unity for corporate income tax purposes. This meansthat the members of the fiscal unity are jointly and severally liable for any taxes payable by the fiscal unity.
Adyen has EUR 50,678 of outstanding bank guarantees and letters of credit as at December 31, 2023 (2022:
EUR 51,299).
Adyen has setup a collateral account in which Brazilian Government bonds were deposited by a partner
financial institution, in order to decrease its exposure to this counterparty in Brazil. As at December 31, 2023
the total collateral was EUR 14,955 (BRL 80,101) (2022: EUR 31,086 (BRL 175,828).

19.

Related party transactions

During 2023, Adyen identified related party transactions that took place with Stichting Administratiekantoor
Adyen (STAK), employees and Supervisory Directors. The transactions with employees and STAK are
related to options exercised, and the transactions with Supervisory Board are related to remuneration forservices rendered throughout the year (refer to Note 22.2 ‘Remuneration Supervisory Board’). The
outstanding balances as per December 31, 2023 and 2022 are:
Related party assets/ (liabilities)

2023

2022

Supervisory Board

(19)

(115)

Employees (STAK)

16,562

3,627

The Management Board and Supervisory Board remuneration is disclosed in Note 22 ‘Compensation of key
management’.
There were no other transactions with related parties in period ended December, 2023 and 2022.

20.

New and amended standards adopted

20.1.

New standards adopted by Adyen

The following accounting standards, interpretations and amendments applicable to Adyen (collectively,“amendments”) were issued and made effective for the annual reporting period beginning on January 1,
2023:• Amendments to IAS 1, Practice Statement 2 and IAS 8 - accounting policy disclosures;• Amendments to IAS 12 - Deferred tax related to assets and liabilities arising from a single
transaction;• Amendments to IFRS 16 - Leases on sale and leaseback;• Amendments to IAS 1 - Non-current liabilities with covenants.
Adyen has taken into consideration the changes of each one of the above-mentioned amendments, refer toNote 7.2 'Deferred income taxes ', and concluded that the amendments do not have a material impact on thefinancial statements.

Annual Report 2023

20.2.

141

Amendments to existing standards that are applicable to the Company but
not yet effective

Certain amendments have been published that are not mandatory for December 31, 2023 reporting period
and have not been early adopted by the Company. The Company has assessed the amendments to become
effective in 2024, and onwards, to have no material impact on its financial statements.

21.
21.1.

Audit fees
Fees to the auditor

Other services than the Audit of the financial statements refer to services rendered outside of the European
Union.
2023

2022

1,952

1,555

Audit of the regulatory returns to be submitted to the Dutch Central Bank

48

45

Assurance engagement DGS report

62

56

Other audit services required by law or regulatory requirement
Audit of financial statements

Other audit services

The audit fees were expensed in the statement of comprehensive income during the reporting period.

Assurance engagement ISAE 3402 report

127

101

The fees listed below relate to the procedures applied to Adyen and its consolidated group entities byaccounting firms and external independent auditors as referred to in section 1(1) of the Audit Firms
Supervision Act (“Wet toezicht accountantsorganisaties-Wta”) as well as by the Dutch and foreign-based
accounting firms, including their tax services and advisory groups. These fees relate to the audit of the 2023
financial statements, regardless of whether the work was performed during the financial year.

Assurance engagement SOC 2 report

158

131

21.2.

Summary of services rendered by the independent auditor, in addition to
the audit of the financial statements

Our independent auditor, PricewaterhouseCoopers Accountants N.V., has rendered the following services
to Adyen and its controlled entities during 2023 and 2022:
2023

2022

PwC
Accountants
N.V.

Other PwC
firms*

Total

PwC
Accountants

Other PwC
firms*

Total

1,206

746

1,952

842

713

1,555

Other audit services

494

—

494

333

—

333

Other non-audit services

218

—

218

—

—

—

—

—

—

—

—

—

1,918

746

2,664

1,175

713

1,888

Audit of financial statements

Tax services
Total* Other PwC firms refer to PwC member firms outside of the Netherlands.

Assurance engagement ESG
Other non-audit services
Total for the year

99

—

218

—

2,664

1,888

Annual Report 2023

22.

142

Compensation of key management

Kamran Zaki participated in a 401k retirement plan in the US, for which Adyen provided an employer matchof up to 3% of base salary in 2023.

22.1 Remuneration Management Board

Insurance

Adyen identifies the Management Board as the only key management personnel. The total remuneration
received by the Management Board in 2023 amounted to EUR 5,680 (2022: EUR 4,238).
2023

2022

4,407

3,590

Share-based payments

955

439

Post-employment benefits

318

209

5,680

4,238

Salaries and short-term employee benefits

Total

Variable remuneration
As of 2018 and in line with (i) the Act on Remuneration Policies in Financial Enterprises (Wet beloningsbeleid
financiële ondernemingen), and (ii) the Guidelines on Remuneration Policies and Practices as formally
adopted on December 10, 2010 by the Committee of European Banking Supervisors, Adyen does not award
variable remuneration to the Management Board members. As the application of such rules and principles
may include an assessment and interpretation of the remuneration restrictions, it cannot be excluded that acompetent supervisory authority takes a different view on the correct application thereof in specific cases(although there is currently no indication that a competent supervisory authority will take such position).
7

Pension

As from January 2017, all Dutch Management Board members participate in the Collective DefinedContribution (CDC) pension plan, with respect to their salary up to EUR 128,810 gross per year for 2023
(2022: EUR 114,866). On behalf of each Management Board member, Adyen pays a contribution of 4% of
the pensionable salary — being 12 times the monthly fixed salary plus holiday pay up to the fiscally allowed
maximum minus a deductible — for the accrual of old age pension benefits as well as the administration
costs. If and as far as fiscally allowed, each Management Board member has the possibility to makeadditional contributions in order to accrue additional pension capital.
7

Amounts in this paragraph are not rounded to the nearest EUR thousand.

All Management Board members are insured under an insurance policy taken out by Adyen against
damages resulting from their conduct when acting in their capacities as directors. All Dutch Management
Board members are insured for the risk of death and disability, for which Adyen pays the insurance
premiums.

Service and Severance Agreements
All Management Board members have entered into a service agreement (overeenkomst van opdracht) with
Adyen N.V. effective as of the date of the listing of Adyen, whereby Kamran Zaki was assigned to Adyen N.V.
San Francisco Branch. The terms and conditions of these service agreements have been aligned with theDutch Corporate Governance Code. The service agreements will be entered into for a term of 4 years. The
service agreements provide for a severance of one annual base salary if the Management Board member is
not re-appointed or otherwise terminated by Adyen (for any reason other than urgent cause within themeaning of article 7:678 of the Dutch Civil Code (dringende reden)), in accordance with the Dutch Corporate
Governance Code. In the financial year 2023, no severance payment has been paid to any Management
Board member.

Loans
No loans, advance payments and guarantees have been granted to or on behalf of the Management Board
members.

Annual Report 2023

22.2.

143

Remuneration Supervisory Board

23.

The total remuneration received by the Supervisory Board in 2023 amounted to EUR 379 (2022: EUR 386).
The table below provides an overview of the remuneration of Supervisory Board Members for the financial
year 2023. In addition to the remuneration, expenses incurred by the Supervisory Board Members in theperformance of their duties are reimbursed in full:

Share information

Accounting policy – Earnings per share
Adyen presents basic and diluted earnings per share (EPS) data for its ordinary shares. The
calculation of EPS is as follows:

2023

2022

Salaries and short-term employee benefits

379

386

Total

379

386

1) Basic EPS: dividing the net income attributable to owners of Adyen N.V. by the weighted
average number of ordinary shares outstanding during the period. As at December 31,
2023, only the warrant related to tranche 1 vested (and exercised), while no warrants
vested in the current year. Therefore, the issued shares relating to tranche 1 is reflected in
the calculation of ordinary shares.

The Supervisory Board members of Adyen are insured under an insurance policy taken out by Adyen against
damages resulting from their conduct when acting in their capacities as Supervisory Board members.

2) Diluted EPS: determined by adjusting the basic EPS for the effects of all dilutive potential
ordinary shares which in the case of Adyen relates to share options and RSUs granted to
employees (refer to Note 4.3).

Insurance

Loans
No loans, advance payments and guarantees have been granted to or on behalf of the Supervisory Board
members.
Share information

2023

2022

Net income attributable to owners of Adyen N.V. (in EUR '000)

698,322564,139

Weighted average number of ordinary shares for the period

31,012,122

30,975,325

144,868

70,704

31,156,990

31,046,029

Net profit per share – basic

22.52

18.21

Net profit per share - diluted

22.41

18.17

Dilutive effect of share plans
Weighted average number of ordinary shares for diluted net profit for the period

Annual Report 2023

24.

Tax reporting
24.1.

Total tax contribution

Adyen is liable to pay corporate income tax in the countries in which it has taxable presence. Since Adyen’s
first global expansion outside the Netherlands, Adyen has been characterized as a centralized organization
for corporate income tax purposes. Key business activities are performed in the Netherlands, while local
offices provide sales and other support services. In response to this centralized organization, transfer pricing
agreements have been established based on the applicable OECD principles.
Adyen is responsible for the collection and payment of taxes connected with its services and products sold,on behalf of employees, or service providers. Corporate income tax, indirect tax and payroll tax are main
sources of government income. Considering the importance of these taxes for local governments andcommunities, Adyen bears a responsibility to maintain a compliant global tax framework. Adyen’s tax teamclosely monitors local regulations and Adyen’s product offerings to remain compliant.

24.2.

Country-by-country reporting

The following table provides a country-by-country overview to support that taxes are paid in the country
wherein Adyen has an economic nexus. To serve this purpose, the table is split into two parts: the first part
covers per country where Adyen has a liability to pay income tax, the main activity, number of FTE’s per yearend, and consolidated IFRS data on an accrual basis about operating expenses, income before tax and theincome tax expense. The second part of the table is prepared on a cash basis and covers the income tax paid
by Adyen, indirect tax and payroll tax withheld and paid to authorities by Adyen and grants or incentives
received by Adyen. The table is prepared on the basis of the consolidated accounts. As a result, local
statutory financials and actual tax contributions may deviate from the amount disclosed. The full list ofparticipating interests as referred to in Article 414, Book 2 of the Dutch Civil Code can be found in Note 32‘Investments in consolidated subsidiaries on equity method’ of the company financial statements.

144

Annual Report 2023

145
Amounts accrued on IFRS Consolidated basis

Country

Main activity

The Netherlands

Head office - Payment service provider

United Kingdom

Sales officeFranceGermany
SwedenSpain

Ending FTE

Total Operating
Income Before Tax(Expense)/ Income

Taxes received/ (paid) on cash basis

Income Tax
ExpenseETR%

Income Tax

Indirect Tax

Payroll Tax Grants / Incentives

Total tax
contribution

2,326(511,797)

748,803(211,606)

28 %(140,679)(121,622)(116,060)

496(377,865)

147(32,788)

11,276(1,978)18 %—(1,540)(12,308)—(13,848)

Sales office

96(21,757)

3,063

(633)

21 %

(898)

(47,139)(6,673)—(54,710)

Sales and support office

112(18,475)

6,001(1,836)31 %(2,236)—(8,745)—(10,981)

Sales office

76(12,304)

2,976

(759)

26 %

(418)

—

(4,994)—(5,412)

Sales and support office133(14,111)

3,853

(891)

23 %

(1,117)(3,090)(4,182)—(8,389)Belgium

Sales office15(3,007)

436

(133)

31 %

—

—

(1,801)—(1,801)

Italy

Sales office32(5,319)

947

(77)

8%

(353)

(9)

(1,442)—(1,804)

United Arab Emirates

Support office

27(5,920)

1

—

—

—

(1,555)——(1,555)

PolandSales office18(2,706)

532

(170)

32 %

(118)

—

(829)

—

(947)

NorwayNo office

—

—

—

—

—%

United States

Sales and support office

640(203,534)

122,907(13,553)

11 %(2,994)(2,540)(46,377)—(51,911)

BrazilSales and support office

209(36,598)

10,015(4,215)42 %(1,447)(4,871)(8,887)—(15,205)

MexicoSales office

27(5,274)

793

(540)

68 %

(862)

(3,972)(1,140)—(5,974)

CanadaSales office26(5,856)

4,026

(944)

23 %

(778)

(25,783)(1,366)—(27,927)

Singapore

Sales and support office

165(29,167)

11,478(2,495)

22 %

(659)

(21,600)(2,019)—(24,278)

Australia

Sales and support office54(10,611)

5,738(1,781)

31 %

(607)

(15,927)(2,212)—(18,746)

China

Sales office36(8,148)5,801(1,423)25 %(1,095)(687)(2,641)—(4,423)

Japan

Sales and support office

33(6,728)

1,409

(379)

27 %

(682)

(12,779)(1,233)—(14,694)

Hong Kong

Sales office

9(1,968)

1,655

(185)

11 %

(181)

—

—

—

(181)

India

Sales office

12(7,169)

202

(515)

255 %

—

(404)

(497)

—

(901)

New Zealand

Sales office

—

(425)

389

(105)

27 %

—

(3,132)(120)—(3,252)

Malaysia

Sales office

3

(604)

256

(69)

27 %

(42)

—

(35)

—

(77)

Korea

Liquidated during the year

—

42

52

—

—

—

—

—

—

Switzerland

No office

—

Total

4,196

(316)

—
(944,224)

942,609(244,287)

26 %(155,166)

(316)

(652)

—

—

(652)

(267,618)(223,561)

496(645,849)

Annual Report 2023

24.3.

146

General findings Country by-country reporting

The below simplified table provides an overview of general findings and exceptions regarding items coveredin the country-by-country table. This overview is based on the static analysis and explains the overall
dynamics of our global tax position.

TTC Item

General findings

Exceptions

Income before tax

NL owns the majority of income before tax given the key entrepreneurial functions performed,
risks managed and intangible assets owned.

Income tax expense

Income tax expense should be close to the statutory tax rate multiplied by the income before tax. Adyen NV incurs non-deductible amounts in the Netherlands, has prior year adjustments and is
Typically the income tax expense is a bit higher than the statutory rate, due to many countries
taxed on income booked for accounting purposes in the United States.
limiting deductibility of certain costs - such as meals, entertainment and stock based
Most outliers can be explained as reversal of (too high) accruals of previous years or because ofcompensation.
an accounting difference (IFRS vs. statutory).
The United States ETR is lower than the statutory rate in the United States due to stock based
compensation and because income is booked in the United States branch its books foraccounting purposes which is taxable only in the Netherlands. The latter does not impact theconsolidated ETR as that income is taxed against the Dutch statutory tax rate.

Income tax paid

Income tax paid should be close to the income tax expense

Differences in the income tax expense and the income tax paid are caused by impact of deferredtaxes and deviations between profits assessed in preliminary assessments and profits realized.

Incentives

We are reluctant to apply grants and incentives.

The only incentive applied is WBSO, a Dutch R&D tax credit scheme.

Annual Report 2023

24.4.

Innovation box

Adyen builds a payment platform capable of meeting the rapidly evolving needs of fast-growing global
businesses. Continuous innovation and technology are critical to meet the changing payment industry
dynamics and the needs of our merchants. Governments worldwide facilitate innovative research anddevelopment (R&D) activities through grants and tax incentives. One of the facilities offered by the Dutch
government is the Dutch innovation box. Following the application of the innovation box, profits attributable
to qualifying innovations are taxed at a Dutch corporate income tax rate of 9%, opposed to the corporate
income tax rate of 25.8%. As Adyen strives to continuously innovate its payment platform, Adyen applies theinnovation box to reinvest those benefits in the further development of the platform and growth of thecompany.
Adyen concluded an agreement with the Dutch tax authorities to obtain upfront certainty on the percentage
of taxable profit that qualifies for the innovation box. Based on this agreement the percentage of taxable
profit of Adyen N.V. qualifying for the innovation box is directly linked with the number of hours spent by
developers on R&D projects.

24.5.

Global Minimum Taxation - Pillar Two

Adyen N.V. is in scope of the Pillar Two rules. Pillar Two legislation was enacted in the Netherlands, thejurisdiction in which Adyen N.V. is incorporated, and will come into effect from 1 January 2025. Since thePillar Two legislation was not effective at the reporting date, the group has no related current tax exposure.
The group applies the exception to recognising and disclosing information about deferred tax assets andliabilities related to Pillar Two, as provided in the amendments to IAS 12 issued in May 2023.
Under the legislation, the group is liable to pay a top-up tax for the difference between their so-called GloBE
effective tax rate per jurisdiction and the 15% minimum rate.
Based on a review, we do not expect any material top-up tax to be due of Adyen N.V. or its affiliates.

147

Annual Report 2023

Company Financial Statements

148

Annual Report 2023

149

Company Statement of Comprehensive Income
For the years ended December 31, 2023 and 2022
(all amounts in EUR thousands unless otherwise stated)
Note

2023

Revenue26

1,734,476

7,575,105

Share of the profit of investments in subsidiaries

39,234

21,351

Costs incurred from financial institutions

26(242,491)(6,340,102)

Income before income taxes

927,766

713,829

Costs of goods sold26

Income taxes(229,444)(149,690)

Net income for the year

698,322564,139

Net income attributable to owners of Adyen N.V.

698,322564,139

Net revenue

2022(73,811)(46,564)

1,418,174

1,188,439

NoteWages and salaries

27(432,160)(269,641)

Social securities and pension costs

27(64,083)(39,700)

Other comprehensive income/ (expense)

Amortization and depreciation

32

2023

2022

13,30,31(64,614)(46,720)

Items that may be reclassified to profit or loss

Other operating expenses

28(219,729)(182,750)

Currency translation adjustments foreign operations

790(1,326)

Other expenses

3(23,237)(54)

Other comprehensive income/ (expense) for the year790

(1,326)699,112562,813

Income before net finance income and income taxes

614,351

Finance income

232,668

27,048Finance expense(3,834)(11,251)

45,347

27,107274,181

42,904

Other financial results
Net finance income

29

649,574

Total comprehensive income for the year
(attributable to owners of Adyen N.V.)

The accompanying Notes are an integral part of these company financial statements.

Annual Report 2023

150

Company Balance Sheet
As at December 31, 2023 and 2022
(all amounts in EUR thousands unless otherwise stated; and before profit appropriation)
Note

December 31, 2023

December 31, 2022

Intangible assets

13

8,757

8,140

Share capital

Plant and equipment

30

127,045

113,596

Share premium

Right-of-use assets

31

167,847

153,329

Legal reserves

Other financial assets at FVPL

11

14,821

12,264

Other reserves

Contract assets

2.2

24,02047,916

Retained earnings*

104,056

138,705

Net income for the year

159,493

115,030

Total equity attributable to owners of Adyen N.V.

Total non-current assets

606,039

588,980

Inventories

93,01978,788Deferred tax liabilities

Deferred tax assets*
Investments in consolidated subsidiaries on equity method

32

Note

Derivative liabilities

Receivables from merchants and financial institutions

33

361,834

222,009

Lease liability

Trade and other receivables

33

420,298

241,630

Total non-current liabilities

1,861

5,640

7,454,251

5,964,798

Payables to merchants and financial institutions

Current income tax receivables
Cash and cash equivalents
Total current assets

8,331,263

6,512,865

Trade and other payables

Total assets

8,937,302

7,101,845

Lease liability
Current income tax payables

December 31, 2023

December 31, 2022

8

310

310

8

390,043352,399

22,582

18,51811

31

151,471

150,298

1,888,139

1,330,392

698,322564,1393,150,867

2,416,056

1,400

35,0005,090

10,749150,472

150,278

156,962

196,02736

5,405,278

4,336,872

36

127,357

126,274

31

38,71723,442

58,121

3,174

Total current liabilities

5,629,473

4,489,762

Total liabilities and equity

8,937,302

7,101,845

The accompanying notes are an integral part of these company financial statements.
*The comparative retained earnings balance is restated as a result of the application of IAS 12 amendment(refer to Note 7.2).

Annual Report 2023

151

Company Statement of Changes in Equity
For the years ended December 31, 2023 and 2022
(all amounts are in EUR thousands unless otherwise stated)
Other reserves
Note
Balance - January 1, 2022
Adjustment for change in accounting standard

Share capital

Share premium

Legal reserves

Share-based payment
reserve

310

335,725

32,244102,142

25,575

1,314,418
3,938

3,938

310

335,725

32,244102,142

25,575

1,318,356

1,814,352

564,139564,139

Warrant reserve

Retained earnings*

Total equity
1,810,414

7.2

Balance - January 1, 2022 (restated)
Net income for the year
Currency translation adjustments(1,326)

Total comprehensive income for the year——

(1,326)(1,326)——564,139562,813

Adjustments:
Other financial assets at FVPL movement (net of deferred tax)

(10,240)

10,240—Intangible assets(2,160)

2,160

—

(364)

(203)

12,036(203)

Other adjustments

161
—

—

(12,400)

161—

Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation

7

Options exercised
Proceeds on issuing shares

8

Share-based payments

4.3

Balance - December 31, 2022

6,180

22,97929,159

568

(568)

—

9,926

9,926
9

9

—

16,674—22,420——39,094

310

352,399

18,518

124,723

25,575

1,894,531

2,416,056*The comparative retained earnings balance is restated as a result of the application of IAS 12 amendment (refer to Note 7.2).

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152

Other reserves
Note
Balance - January 1, 2023

Share capital

Share premium

Legal reserves

Share-based payment
reserve

Warrant reserve

Retained earnings*

Total equity

310

352,399

18,518

124,723

25,575

1,894,531

2,416,056

698,322698,322

Net income for the year
Currency translation adjustments

790

Total comprehensive income for the year

—

—

790

790
—

—

698,322

699,1122,557(2,557)

—

717

(717)

—

(3,118)(2,374)(6,392)(2,374)—(20,202)

Adjustments:
Other financial assets at FVPL movement (net of deferred tax)
Intangible assets
Other adjustments

744
—

—

3,274

744

—

Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation

7.2

Options exercised
Proceeds on issuing shares

8

Share-based payments

4.3

Reclassification of share-based payment plan

4.3

Balance - December 31, 2023—

11,196(31,398)

634

(634)

—

13,201

13,201

12,613

12,037

24,65020,424

20,424—37,644

—

429

—

—

38,073310

390,043

22,582

125,896

25,5752,586,461

3,150,867

The accompanying notes are an integral part of these company financial statements.
*The comparative retained earnings balance is restated as a result of the application of IAS 12 amendment (refer to Note 7.2).

Annual Report 2023

153

Company Statement of Cash Flows
For the years ended December 31, 2023 and 2022
(all amounts in EUR thousands unless otherwise stated)
Note
Income before income taxes

2023

2022

927,766

713,829

Finance income–

Finance expenses–

Other financial results–

Other expenses

Interest received

2023

27,048(3,834)(11,251)(27,048)

Income taxes paid

(148,776)(140,910)

3,834

11,251

Net cash flows from operating activities

1,550,748

1,904,266(45,347)(27,107)

Redemption of other financial assets at FVPL

11—

11,407

1,035

Investments in consolidated subsidiaries on equity method

32

—

(106)

32

—

6,643

(232,668)

29

2022

232,668

Interest paid

Adjustments for:
–

Note

–

Depreciation of plant and equipment

30

36,183

21,725

Net cash from liquidation of Adyen Inc.

–

Amortization of intangible fixed assets

13

3,521

5,224

Purchases of plant and equipment30(51,689)(83,099)

13.0(4,138)(3,523)–

Depreciation of right-of-use assets

31

24,91019,771

Capitalization of intangible assets–

Share of the profit of investments in subsidiaries

32(39,234)(21,351)

Net cash used in investing activities–

Share-based payments

21,902

7

Changes in working capital:–

Inventories(14,231)(55,827)(68,678)

Proceeds from issues of shares

8

13,2019,926

Lease payments

31(24,330)(12,907)(60,016)

Net cash flows used in financing activities(11,129)(2,981)

1,483,792

1,832,607

5,964,798

4,150,440

5,661(18,249)7,454,251

5,964,798–

Trade and other receivables

33(178,668)(120,662)

Net increase in cash, cash equivalents and bank overdrafts–

Receivables from merchants and financial institutions

33(139,825)

281,638

Cash, cash equivalents and bank overdrafts at beginning of the year–

Payables to merchants and financial institutions–

Trade and other payables–

Amortization and additions of contract assets

Cash generated from operations

36

2.2

1,067,067

1,150,418

Exchange gains/(losses) on cash, cash equivalents and bank overdrafts

10,54951,490Cash, cash equivalents and bank overdrafts at end of the period

23,89630,2101,470,690

2,029,379

The accompanying notes are an integral part of these company financial statements.

Annual Report 2023

154

Notes to the Company financial
statements

27.

Company - Employee benefits

Employee benefits

2023

2022

Salaries and wages

397,992

260,246

Share-based compensation

34,168

9,395

The company financial statements have been prepared on a going concern basis in accordance with
International Financial Reporting Standards and IFRS IC interpretations as endorsed by the European Union(EU-IFRS) and in accordance with sub articles 8 and 9 of article 362, Book 2 of the Dutch Civil Code.

Total wages and salaries

432,160

269,641

Social securities

52,551

32,743The principles in the company financial statements are the same as those stated for the Consolidated
Financial Statements unless stated otherwise.

Pension costs - defined contribution plans

11,532

6,957

Total social securities and pension costs

64,08339,700

Other operating expenses

2023

2022

25.

26.

Basis of preparation

Company - Revenue

Types of goods or service

28.

Company - Other operating expenses

2023

2022

Settlement fees

833,798

7,042,045

Processing fees

360,802

302,052

Travel and other staff expenses

44,58535,458

Sales of goods

74,15850,958

Sales and marketing costs

43,44843,263

Other services

465,718

180,050

IT costs

34,21827,163

21,31424,271

Total revenue from contracts with customers

1,734,476

7,575,105

Advisory costs

Costs incurred from financial institutions(242,491)(6,340,102)

1% for the UN SDGs

16,22913,302Contractor costs

14,865

12,828

Housing costs

11,596

8,483

Office costs

7,937

6,974

Miscellaneous operating expenses

25,537

11,008

Total other operating expenses

219,729

182,750

Costs of goods soldNet revenue(73,811)(46,564)

1,418,174

1,188,439

During 2023, the key judgement relating to “Principal versus agent for revenue out of settlement fees”
changed prospectively - refer to Note 2 for further detail.

Annual Report 2023

29.

155

Company - Other financial results

30.

Other financial results

2023

2022

Exchange gains/(losses) (Note 6.1)

8,537

(19,440)

Derivative liabilities (Note 6.2)

33,60046,700

Other financial assets at FVPL (Note 6.3)

3,210

(153)

29.1.

ComputerHardware andSoftwareLeasehold
Improvements

Other

Total

Cost

75,138

10,916

2,633

88,687

Accumulated depreciation(32,435)(3,088)(1,094)(36,617)

Balance - January 1

42,703

7,828

1,539

52,070Additions

68,994

12,901

1,204

83,099Plant and equipment
2022

Fair value re-measurement of financial instruments:

Total other financial results

Company - Plant and equipment

45,347

27,107

Exchange gains/(losses)

The exchange gains (losses) recognized during the year relates to realized and unrealized translation losses
on monetary assets and liabilities. The exchange gains during 2023 mainly relate to Adyen’s foreigndenominated cash balances. The change in fair value of the derivative liabilities 2023, was mainly driven by
the revision of the valuation inputs related to time to maturity and likelihood of vesting as well as Adyen’s
share price decrease over the period. More information on the valuation of the derivative liabilities isdisclosed in Note 11 ‘Financial instruments’ of the Consolidated Financial Statements.

Disposals
Depreciation for the year
Other changes (e.g. exchange differences)

(100)

—

—

(100)

(17,666)(3,464)(595)(21,725)

80

89

83

252

94,011

17,354

2,231

113,596

Cost

142,791

25,0304,314

172,135

Accumulated depreciation(48,780)(7,676)(2,083)(58,539)

Balance - January 1

94,011

17,354

2,231

113,596

Additions

46,008

4,100

1,581

51,689

Disposals(1,094)——(1,094)

Depreciation for the year

(30,924)(4,534)(725)(36,183)

Balance - December 31
2023

Other changes (e.g. exchange differences)

(116)

(648)

(199)

(963)

Balance - December 31

107,885

16,272

2,888

127,045

Cost

167,828

29,017

5,850

202,695

Accumulated depreciation(59,943)(12,745)(2,962)(75,650)

Balance - December 31

107,885

16,272

2,888

127,045

Annual Report 2023

31.

Company – Leases

Adyen’s leases relate to offices and data centers across locations where it operates.

Accounting policy – Leases
Adyen assesses if a lease exists or a contract contains a lease at the contract inception date,concluding whether an asset is identifiable, and Adyen has control to direct its use and all
related economic benefits. A right-of-use asset and a lease liability are recognized at thelease commencement date, which can differ from contract inception date.
The lease liability is initially measured by bringing to present value all future lease payments,
discounted by an incremental borrowing rate, in case no interest rate is available for thecontract.
At initial recognition, the right of use asset amounts to the initial lease liability. Right of use
assets are tested for impairment whenever events or changes in circumstances indicatesthat the carrying amount may not be recoverable.
Short-term (less than 12 months) and small value lease contracts are expensed in statementof comprehensive income on a straight-line basis over the lease term.

156

Right-of-use assets

2023

2022

Cost

203,727

133,908

Accumulated depreciation(50,398)(23,304)

Balance - January 1

153,329

110,604

Additions40,60162,745

Depreciation for the period(24,910)(19,771)

Other movements(1,173)(249)

Balance - December 31

167,847

153,329

Recognized right-of-use asset

240,831203,727

Offices and data centers

Accumulated depreciation(72,984)(50,398)

Balance - December 31

167,847

153,329

Lease liability
Balance - January 1

2023

2022

173,720

123,882

Additions40,60162,745

Lease instalments(28,063)(15,672)

Interest expense

3,733

2,765

Other movements (e.g. exchange differences)

(802)

—

189,189

173,720

Balance - December 31
Current portion

38,71723,442

Non-current portion

150,472

150,278

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157

32.

As of December 31, the future minimum lease payments are as follows:
Minimum future lease payments

2023

2022

Within 1 year

34,572

24,107

Between 1 and 2 years

35,48625,981

Between 2 and 3 years

32,631

26,122

Between 3 and 4 years

27,17822,987

Between 4 and 5 years

18,265

20,247

Later than 5 years

56,43345,750

Total

204,565

165,194

Company - Investments in consolidated subsidiaries on
equity method

Accounting policy – Investments in consolidated subsidiaries
Adyen’s investment in consolidated subsidiaries is initially recorded at cost and subsequently
accounted for using the equity method. Dividends received from the investees arerecognized as a reduction in the carrying amount of the investment. Goodwill is currently notapplicable.
Adyen’s share of the results of the investees is reported in the company statement ofcomprehensive income and its share of movements in other comprehensive income isrecognized in other comprehensive income.
Investments are reviewed for impairment at least annually or whenever events orcircumstances indicate that the carrying amount may not be recoverable.

Investments in consolidated subsidiaries on equity method
Balance - January 1
Investments in consolidated subsidiaries
Liquidation of Adyen Inc.

2023

2022

115,030

212,318

4,794

27,174—(141,658)

39,234

21,351

Currency translation adjustments foreign operations

790(1,326)

Share of changes in equity of investments in subsidiaries(355)(2,829)159,493

115,030

Share of the profit of investments in subsidiaries

Balance - December 31

During 2023, the main driver of the changes in investments balance related to Adyen’s share of profit ofinvestments in subsidiaries.

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158

As a result of Adyen N.V. obtaining the UK branch license, the net assets of Adyen UK Limited weretransferred at their carrying amounts to the newly set-up branch of Adyen N.V. in United Kingdom effective
31 December, 2023.

Adyen International B.V. – Subsidiaries
Name

Legal Seat

Adyen N.V. – Subsidiaries

Adyen Services Inc.

Dover, DE, USA

100%

Adyen do Brazil Ltda

São Paulo, Brazil

100%

Adyen Singapore PTE. LTD.

Singapore, Singapore

100%

Adyen UK Limited

London, United Kingdom

100%

Adyen Hong Kong Limited

Hong Kong, Hong Kong SAR

100%

Name

Legal Seat

Adyen International B.V.

Amsterdam, The Netherlands

Adyen N.V. – Branches

Ownership percentage
100%

Direct and indirect ownership
percentage

Adyen Australia PTY Limited

Sydney, Australia

100%

Name

Branch location

Adyen Canada Ltd.

Saint John, Canada

100%

Adyen N.V., German branch

Berlin, Germany

Adyen Mexico, S.A. de C.V.

Mexico City, Mexico

100%

Adyen, France

Paris, France

Adyen (China) Software Technology Co. Ltd.

Shanghai, China

100%

Adyen Nordic Filial

Stockholm, Sweden

Adyen New Zealand Ltd.

Auckland, New Zealand

100%

Adyen, San Francisco branch

San Francisco, CA, USA

Adyen Malaysia Sdn. Bhd

Kuala Lumpur, Malaysia

100%

Adyen, London branch

London, United Kingdom

Adyen India Technology Services Private Limited

Mumbai, India

100%

Adyen India Tech Hub Pvt. Ltd.

Mumbai, India

100%

Adyen Japan K.K.

Tokyo, Japan100%

Adyen MEA FZ-LLC

Dubai, United Arab Emirates

100%

Adyen Middle East Limited

Dubai, United Arab Emirates

100%

Adyen N.V. – Representative offices
Name

Branch location

Adyen N.V., Belgian Rep Office

Brussels, Belgium

Adyen N.V., Italian Rep Office

Rome, Italy

Adyen N.V., Spanish Rep Office

Madrid, Spain

Adyen N.V., Polish Rep Office

Warsaw, Poland

Adyen, Czech Representative Office

Prague, Czech RepublicAnnual Report 2023

33.

159

Company – Trade, other receivables, and receivables frommerchants and financial institutions

Receivables fall due in less than one year except for deposits transferred to financial institutions.
Trade and other receivables
Trade and other receivables
Less: Allowance for expected credit losses

2023

36.

Company – Trade, other payables, and payables tomerchants and financial institutions

Trade and other payables
2022

2023

2022

Trade payables

10,19017,08041,972

43,777

428,628

245,025

Taxes and social security(8,330)(3,395)

Accrued employee benefits

32,65022,56539,772

29,660Trade receivables - Net

420,298

241,630

Accrued liabilities and other debts

Receivables from Merchants and Financial Institutions

361,834

222,009

Cash-settled share-based payment plan463,639

Trade and other payables

Total

782,132

2,773

13,192

127,357

126,274

Payables to merchants and financial institutions

5,405,278

4,336,872

Total

5,532,635

4,463,146

In 2023, EUR 323,859 (2022: EUR 166,447) related to receivables from group companies. Intercompany
receivables and payables fall within the scope of IFRS 9 ‘Financial Instruments’. The outstanding amounts as
per December 31, 2023 and 2022 relate to transactions linked to the usage of Adyen platform which took
place throughout the year at arm’s length conditions. Considering the maturity of the intercompany
balances and the financial position of the Adyen group, the credit risk is considered not significant. As aresult, the impact of expected credit losses on intercompany balances is not significant.

All current liabilities fall due in less than one year. The fair value of the current liabilities approximates thebook value due to its short-term character.

34.

37.

Shareholders’ equity

Refer to the company statement of changes in equity for the movements in shareholders’ equity.
The total of distributable reserves amounts to EUR 2,278,492 (2022: EUR 1,683,101). The other reserves are
restricted for distribution, which includes the legal reserves, in amount of EUR 22,582 (2022: 18,517),
consisting of all exchange rate differences arising from the translation of the net investment in foreign
entities and legally non-distributable in accordance with Dutch Law relating to the revaluation of balance
sheet positions that require revaluation reserves.

35.

Dividends paid

No dividend has been paid in the years presented.

In 2023, EUR 48,718 (2022: EUR 38,766) related to payables to group companies.

Directors’ remuneration

For an overview of the directors’ remuneration, reference is made to Note 22 ‘Compensation of key
management’ of the Consolidated Financial Statements.

38.

Audit fees

For an overview of the audit fees, reference is made to Note 21 ‘Audit fees’ of the Consolidated Financial
Statements.

Annual Report 2023

39.

Contingencies and commitments

Adyen has no contingent liabilities in respect to legal claims.
Adyen has EUR 50,678 of outstanding bank guarantees and letters of credit as at December 31, 2023 (2022:
EUR 51,299).
Adyen N.V. and Adyen International B.V. are a fiscal unity for income tax purposes. The members of the fiscal
unity are jointly and severally liable for any taxes payable by the fiscal unity.

40.

Proposed profit appropriation

Awaiting the decision by the shareholders, management proposes the income for the year to be added toretained earnings in shareholder’s equity.

160

41.

Events after balance sheet date

There were no events after the reporting period that impact the 2023 consolidated and company financial
statements.

Amsterdam, March 1, 2024
P.S. Overmars

D. Rueda Arroyo

Chairman Supervisory Board

Supervisory Director

J.A.J. van Beurden

P.A. Joseph

Supervisory Director

Supervisory Director

P.W. van der Does

I.J. Uytdehaage

E.L. Tandowsky

Co-CEO

Co-CEO

CFO

R. Prins

M.B. Swart

A. Matthey

CCO

CRCO

CTO

B. A. Nayden
CHRO

C.T. Keogan
Supervisory Director

Annual Report 2023

05
Other Information

161

Annual Report 2023

Other information
Provisions in the Articles of Association relating to profit
appropriation
The Articles of Association of Adyen provide that the appropriation of the net income for the year is decided
upon at the Annual General Meeting of Shareholders.
For the preferred dividends the Annual General Meeting of Shareholders can elect to pay out the annual
dividend on these shares or to add the dividend to the class reserve.

Independent auditor’s report
Please refer to the next page.

Contact
Please contact ir@adyen.com in case of any questions regarding this Annual Report.

162

Annual Report 2023

Disclaimer: This document is only a "printed version" and is not the official annual financial report,
including the audited financial statements thereto pursuant to article 361 of Book 2 of the Dutch Civil
Code. The official annual financial report, including the audited financial statements and the
independent auditor's report thereto, are included in the single report package which can be foundvia investors.adyen.com/financials.
In case of any discrepancies between the printed version and the annual financial reporting package,
the aforementioned financial reporting package prevails. Note that the auditor's opinion included in
the printed version does not relate to the printed version but only to the official annual financial
reporting. No rights can be derived from using the printed version, including the unofficial copy of theauditor's report. Our auditors did not determine (nor do they need to) that the printed version is
identical to the official version.

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Annual Report 2023

Glossary
Adyen Giving
Adyen Giving (also referred to as ‘Giving’) is Adyen’s initiative to help drive consumer donations fornonprofits by enabling those nonprofits to incorporate donation technology into our customers’ payment
flows. By absorbing fees that would otherwise dilute the donation along the way, we ensure that 100% of
contributions reach the intended nonprofits.
Contingent workers
Workers hired on a temporary or fixed-term contract basis, including consultants, contractors, students(NextGens and temporary workers), and interns.
Global Leadership Team (GLT)
A group of senior individuals, reporting into the Management Board, responsible for managing and driving aparticular area of the business. By developing and executing the strategy across our commercial pillars,solutions, functions, and regions, they ensure that their respective departments contribute to achieving
Adyen’s business objectives. This group is also referenced as ‘senior leadership’ or ‘subtop’ throughout thisreport.
Job Family GroupA categorization system used to classify employees based on their functional roles, covering Tech,
Commercial and Staff positions. The allocation of each category is predetermined by Adyen’s Human
Resource team and the distribution is decided by the Management Board.
Nonprofits
The term nonprofits is used to refer to all charities, nonprofit organizations and non-governmentalorganizations (NGOs) that Adyen works with. These are organizations that operate for purposes other thanprofit, focusing instead on serving the public through activities such as humanitarian aid, education,
healthcare, and advocacy. They primarily rely on donations, grants, and membership fees for funding.

182

Number of nonprofits available in the platform
This metric refers to the number of nonprofits onboarded to the platform by the end of the reporting year. Its
breadth reflects the wide range of causes supported through Giving.
Number of merchants processing through Giving
This metric refers to the total number of (active) customers that have processed donations through Adyen
Giving during the reporting year. The more customers that activate Giving, the more consumers can opt tomake a donation with their purchase.
Participation rate of Compliance refresher training
The metric refers to the total of employees that completed our Compliance training. The training highlights
the importance of various compliance topics, as well as the (financially) material risks associated with them,for information processing companies or financial institutions. All new joiners are mandated to complete thistraining upon their starting date. A refresher training was launched to the workforce in November 2023.
Participation rate of Culture & Inclusion survey
This metric refers to the total numbers of employees that completed our annual Culture & Inclusion survey.
Participation rate of Data Privacy & Security refresher training
The metric refers to the total number of employees that completed our Data Privacy & Security training,which covers the (financially) material risks of data privacy and information security for information
processing companies or financial institutions. The refresher training was launched to the workforce in
October 2023.
Participation rate of Life at a Public Company training
The metric refers to the total number of employees that completed our Life at a Public Company training,which details what it means to work for a publicly traded company and highlights insider trading as having amaterial financial impact on people and the financial system. The training was launched to the workforce in
2022.
Team Leads
Individuals with one or more employees directly reporting to them.

Annual Report 2023

183

GRI Index

GovernanceIn the following table, we make reference to where in this report we disclose our environmental, social andgovernance (ESG) programs, policies and metrics. These disclosures are reported in reference to thevoluntary reporting framework: The Global Reporting Initiative (GRI) standards. As per GRI 1 Foundation
2021, the Adyen 2023 Annual Report references the below disclosures either in part or in full. For the
management of material topics as per Disclosure 3-3 of the GRI 1 Foundation 2021, please refer to the‘Steering our business responsibly’ section on page 15. Reference to page numbers and additional notes,
where necessary, have also been included in the table below. As we prepare to become compliant with
CSRD, we will continue to evaluate opportunities for future reporting enhancement.
The organization and its reporting practices
Disclosure

Description

Location in report

Section page Ref.

2-1-a

Legal name of the organization

Notes to the consolidated Financial Statements

108

2-1-b

Nature of ownership and legal form

Notes to the consolidated Financial Statements

108

2-1-c

Location of headquarters

Notes to the consolidated Financial Statements

108

2-1-d

Countries of operations

Notes to the consolidated Financial Statements

108

2-2-a

Entities included in the organization's
sustainability reporting

Notes to the consolidated Financial Statements

2-3Reporting period, frequency and contact
point

Other information (ir@adyen.com)

2-5

External assurance

Independent Auditor's report

Disclosure

Description

Location in report

2-7-aTotal number of employees, breakdownby gender and region

108

Description

Location in report

Section page Ref.

2-9

Governance structure and composition

Corporate governance2-10-aNomination and selection of the highest
governance body

Corporate governance

2-11-aChair of the highest governance body

Corporate governance2-12-aRole of the highest governance body inoverseeing the management of impacts

ESG governance & oversight

2-13

Delegation of responsibility of managing
impacts

ESG governance & oversight

2-14-aRole of the highest governance body insustainability reporting

ESG governance & oversight

2-15-b

Conflict of interest

Corporate governance

72

2-19

Remuneration policies

Remuneration report

90

2-20

Process to determine remuneration

Remuneration report

90

2-21

Annual total compensation ratio

Remuneration report

90

72
72
72
17
17
17

Strategy, policies, and practices
Disclosure

Description

Location in report

2-22Statement on sustainable development
strategy

Section page Ref.

Committed to driving positive change

18

2-23-a-iv

Policy commitments

Responsible conduct

41

161

2-24

Embedding policy commitments

Responsible conduct

41

163

Stakeholder engagement

Activities and workers

People & Culture

Disclosure

Section page Ref.
29

Disclosure

Description

Location in report

2-29

Approach to stakeholder engagement

Corporate governance

Section page Ref.
72

2-29

Approach to stakeholder engagement

ESG governance & oversight17

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184

Anti-corruption

Diversity and equal opportunity

Disclosure

Description

205-2-b to e

Communication and training about anticorruption policies and procedures

Location in report

Section page Ref.

Information security & data privacy

49

Tax
Disclosure

Description

Location in report

Section page Ref.

207-1

Approach to tax

Tax

207-2

Tax governance, control, and risk
management

Tax

207-3

Stakeholder engagement andmanagement of concerns related to tax

Tax

207-4-aCountry-by-country reporting

Tax

Disclosure

Description

Location in report

302-3

Energy intensity

Environmental sustainability

42

305-1

Direct (Scope 1) GHG emissions

Environmental sustainability

42

305-2

Energy indirect (Scope 2) GHG emissions

Environmental sustainability

42

305-3

Other indirect (Scope 3) GHG emissions

Environmental sustainability

42

Disclosure

Description

Location in report

401-2

Benefits provided to full-time employeesthat are not provided to temporary or
part-time employees

Employment & benefits

53

53
53

Section page Ref.

Employment
Section page Ref.

40

Training and education
Description

Location in report404-2-aType and scope of programs
implemented and assistance provided to
upgrade employee skills

People & culture

Description

Location in report

405-1

Diversity of governance bodies andemployees

Corporate governance405-1

Diversity of governance bodies andemployees

People & culture

Disclosure

Description

Location in report418-1-c

Substantiated complaints concerning
breaches of customer privacy and lossesof customer data

Information security & data privacy

Section page Ref.

29

Section page Ref.
72
29

Customer privacy

53

EmissionsDisclosure

Disclosure

Section page Ref.

49

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185

EU Taxonomy Report
Adyen is required to report on its environmentally sustainable economic activities in line with EU taxonomy
regulation (the “EU taxonomy” or “Taxonomy”) (Regulation (EU) 2020/852). The EU taxonomy was
introduced to provide a common classification system for sustainable economic activities in support of theaction plan on financial sustainable growth and EU’s climate and energy targets for 2030.
As a credit institution, from January 1, 2023 to December 31, 2023, Adyen is required to report on certain
KPIs, including the following:•

The proportion of total assets of exposures to Taxonomy non-eligible and Taxonomy-eligible
economic activities;•

Green Asset Ratio (GAR) which is a key measure of the proportion of Adyen’s exposures that arealigned with the EU Taxonomy.

•

Exposure to companies that do not fall under the scope of the Non-Financial Reporting Directive(Directive 2014/95/EU).

•

Additional information on how Adyen assesses and classifies the economic activities under theTaxonomy of its exposures, including any methodologies used and any forward-looking informationon the strategy for aligning with the Taxonomy's objectives.

As at 31 December 2023, Adyen is required to disclose on the Taxonomy eligibility and alignment of its
exposures. Eligibility is determined by identifying whether an activity falls within the scope of the Taxonomy
regulation for screening. Alignment is determined by testing eligible activities against the Technical
Screening Criteria set by the EU Taxonomy to determine their compliance with environmental objectives,
ensuring the activity does not do significant harm to any other environmental objective (while safeguarding
minimum standards). The methodology for the computation of the Key Performance Indicators (KPIs),
including the Green Asset Ratio (GAR), is driven by the Regulation (EU) 2021/451 Financial Reporting(FinRep) framework to ensure coherence between the financial information presented in the annual report
and the Taxonomy KPIs. Exposures are expressed in terms of the carrying amount, with the reference date
being 31 December 2023.
Adyen performed the initial step of identifying taxonomy-eligible exposures across all six environmental
objectives, following the availability of the Technical Screening Criteria for each objective. The areas ofassessment in the prior year focussed solely on climate change mitigation and adaptation, as these were theareas for which the Technical Screening Criteria were available at the time. Eligible activities from 2023 also
include the remaining environmental objectives set by the EU. This process involves Adyen identifying inscope counterparty exposures (i.e. loans and advances (trade receivables and receivables from merchants
and financial institutions) and equity holdings with financial and non-financial undertakings that fall within
the scope of the Non-Financial Reporting Directive (NFRD)) as at 31 December 2023, and assessing theeligibility using the NACE industry codes as stated in the Climate and Environmental Delegated Acts as
published by the European Commission, which provides guidance on the industries/ activities within thescope of the Taxonomy’s eligibility. For counterparties already in scope of mandatory reporting, we will use
EU Taxonomy data provided by them for mandatory reporting when available.
Upon determining the eligibility of these exposures, Adyen performs the alignment analysis by using publicly
available information from non-financial NFRD corporations, to identify the turnover and CapEx KPIs ofunderlying assets (where use of proceeds related to the exposure is unknown), which is applied to the
exposure of the counterparty to determine the numerator of the Green Asset Ratio (GAR). In relation to thealignment exercise, given that the publicly available information of the corporations can only include
objectives 1 and 2, Adyen has assessed alignment this year for objectives 1 and 2. Alignment for objectives
3 to 6 will be assessed in the 2024 financial year when information becomes publicly available.
Following this alignment analysis, Adyen calculates its Green Asset Ratio (GAR), a measure indicating the
proportion of taxonomy-aligned exposures within the company’s total exposure (Total GAR assets). This
calculation provides a quantifiable insight into how Adyen's financial activities align with the EU's objectives.
Refer to the summary table in the following page.

Quantitative information
Based on the Disclosures Delegated Act Article 10, Adyen initiated its 2023 assessment using data from its
Q4 2023 Financial Reporting (FinRep) as the basis to identify the necessary Key Performance Indicators(KPIs). The metrics for the EU Taxonomy report have been derived using a best-effort approach, utilizing themost relevant and available data. To comply with the requirements set forth in the Delegated Act Article 10,
Adyen used the templates that are included in the Annexes of the Delegated Act for the KPI disclosure ofcredit institutions. The percentage of coverage represents the proportion of each KPI in relation to the total
GAR-covered assets.

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186

Sections 1.2.3 and 1.2.4 of Annex V of the Delegated Act, which relate to KPI on fees and commissions
income and KPI Trading book portfolio templates respectively shall apply to Adyen from 1 January 2026.

0. Summary of KPIs
Total environmentally
sustainable assets
Main KPI

Green asset ratio (GAR) stock

KPI
— —%

Total environmentally
sustainable assets
Additional KPIs

GAR (flow)
Trading book

KPI
— —%

4

—

Financial guarantees—

Assets under management
Fees and commissions income

1—4

1. Based on the Turnover KPI of the counterparty
2. Based on the CapEx KPI of the counterparty
3. % of assets covered by the KPI over banks’ total assets
4. Fees and Commissions and Trading Book KPIs shall only apply starting 2026

—

KPI

2

—%

1

KPI
—%

2

% coverage (over3total assets)% of assets excluded from the numerator of% of assets excluded from the denominator of
the GAR (Article 7.2 and 7.3 and Section 1.1.2. the GAR (Article 7.1) and Section 1.2.4 ofof Annex V)
Annex V)

2.58%

97.42%% coverage (over3total assets)% of assets excluded from the numerator of% of assets excluded from the denominator of
the GAR (Article 7.2 and 7.3 and Section 1.1.2. the GAR (Article 7.1) and Section 1.2.4 ofof Annex V)
Annex V)—%—%61.28%—%

Annual Report 2023

Qualitative information
As per Annex XI of the EU Taxonomy delegated Act, a number of qualitative disclosures to support thequantitative disclosure are included. Below is a breakdown of what is included in the covered KPIs. The
definitions are aligned to the requirements of the delegated Acts and defined further below.
Scope of the assets covered by the KPIs
• GAR-covered assets: include Adyen’s loans and advances (trade receivables and receivables frommerchants and financial institutions) and equity holdings with financial and non-financial undertakingsthat fall within the scope of the Non-Financial Reporting Directive (NFRD) as at 31 December 2023
excluding exposures to central governments and central banks.
• Total exposures to non-NFRD Companies: exposures toward companies that do not fall within the scopeof NFRD such as SMEs, non-EU country counterparties, and other non-financial companies that fall outof scope of the NFRD.
• Other assets: include cash held at commercial banks, plant and equipment, intangible assets, right-ofuse assets and all other assets included in ‘GAR-covered assets’ excluding loans and advances, equity
holdings and exposures toward central banks and governments.
• Total exposures to central governments, central banks and supranational issuers: includes exposures
toward central banks. For Adyen, this includes cash held at central banks in the various jurisdictions inwhich the Company operates in.
• Total assets as per Balance Sheet: Total loans and advances, debt securities, equity holdings andrepossessed collaterals and all other on-balance sheet assets as at 31 December 2023.
There are certain balance sheet items which Adyen does not have exposure to, which includes derivatives,
trading portfolio and on demand inter-bank loans, which have been reported as nil values in the KPI
templates.
As at December 31, 2023, based on the data available, Adyen only holds exposures of EUR 2.7 million
toward taxonomy-eligible activities, and no exposure toward aligned activities. This results in a nil % for total
GAR for 2023. Adyen generates revenue primarily through processing and settlement fees for its gateway
and acquiring services (respectively). Due to the nature of Adyen’s business strategy, Adyen is currently not
involved in investing or financing specific activities, as well as a large portion of exposures falling out of
scope of the EU Taxonomy based on the location of exposure (due to Adyen’s global operations).
Furthermore, the majority of Adyen’s balance sheet has a maturity of less than three months, both on the187

asset and on the liability side. Merchant-related balance sheet positions have an even shorter maturity.
Longer-dated positions are typically immaterial, such as lease liabilities. A more thorough breakdown ofAdyen’s loans and advances and their maturity is included in the Transparency and Disclosure Report - Pillar
3. Adyen continues to monitor the regulation and update disclosures, business strategy and product.
Data sources and limitation
The total assets that should be assessed for eligibility and alignment include exposures to financial and nonfinancial corporations which fall under the scope of NFRD. In order to identify which companies fall within
the scope of NFRD, an indicator at the level of the counterparty should be identified. While a regional
identifier exists helping to scope out all non-EU exposures, Adyen currently does not have a single indicator
to identify all counterparties subjected to the NFRD regulation, making it a challenge to distinguish between
the type of undertakings.
Adyen is reliant on counterparty information and disclosures made available. Limitations on publicly
available disclosures makes it difficult to determine eligibility and alignment of its exposures. Furthermore,
the use of NACE codes may limit the eligibility and alignment assessment where the activities of thecounterparties extend further than the indicated NACE code. This may lead to underestimating oroverestimating the activities for eligibility and alignment.
Adyen will continue its focus on improvements to its data quality and availability on its exposures.

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188

1. Assets for the calculation of GAR - 2023
(all amounts are in EUR thousands unless otherwise stated)
Biodiversity and Ecosystems (BIO)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which towards taxonomy relevant sectors (Taxonomyeligible)
Of which environmentally sustainable(Taxonomy-aligned)

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Of whichenabling

Pollution (PPC)

Of whichtransitional

Circular Economy (CE)Of which
Use ofProceeds

Water and marine resources (WTR)

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which environmentally sustainable(Taxonomy-aligned)
Of whichtransitional

Total
gross
carrying
amountOf which towards taxonomy relevant sectors (Taxonomyeligible)

Of which
Use ofProceeds

in EUR Millions

Climate Change Adaptation (CCA)

Of which
Use ofProceeds

Climate Change Mitigation (CCM)

GAR-covered assets (in both numerator anddenominator)
Loans and advances, debt securities and equity instruments
not HfT eligible for GAR calculation

246.83

0.14

—

—

—

—

0.14

—

—

—

—

—

—

—

2.43

—

—

—

—

—

—

—

—

—

—

—

2.70

—

—

—

—

232.54

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

33.02

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

18.20

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

14.82

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Other financial corporations

199.52

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which investment firms

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Loans and advances

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Loans and advances

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Loans and advances

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Non-financial undertakings

14.29

0.14

—

—

—

—

0.14

—

—

—

—

—

—

—

2.43

—

—

—

—

—

—

—

—

—

—

—

2.70

—

—

—

—

Loans and advances

14.29

0.14

—

—

—

—

0.14

—

—

—

—

—

—

—

2.43

—

—

—

—

—

—

—

—

—

—

—

2.70

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instrumentsof which management companiesof which insurance undertakings

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which loans collateralised by residential immovable
property

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which building renovation loans

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which motor vehicle loans

—

—

—

—

—

—

—

—

—

—

—

Local governments financing

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Housing financing

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Other local government financing

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Households

Collateral obtained by taking possession: residential
and commercial immovable properties

Annual Report 2023

189

Biodiversity and Ecosystems (BIO)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (Taxonomyeligible)
Of which environmentally sustainable(Taxonomy-aligned)

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of which environmentally
sustainable (Taxonomy-aligned)

Of which
Use ofProceeds

Of which environmentally
sustainable (Taxonomy-aligned)

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of whichenabling

Pollution (PPC)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of whichtransitional

Circular Economy (CE)Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Water and marine resources (WTR)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which environmentally sustainable(Taxonomy-aligned)
Of whichtransitional

Total
gross
carrying
amountOf which
Use ofProceeds

in EUR Millions

Climate Change Adaptation (CCA)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Climate Change Mitigation (CCM)
Of which towards taxonomy relevant sectors (Taxonomyeligible)

Assets excluded from the numerator for GAR calculation(covered in the denominator)
Financial and Non-financial undertakings
SMEs and NFCs (other than SMEs) not subject to NFRD
disclosure obligations

392.06344.76344.76Loans and advancesof which loans collateralised by commercial
immovable property—of which building renovation loans—

Debt securities—

Equity instruments—

Non-EU country counterparties not subject to NFRD
disclosure obligations

47.31
47.31

Loans and advances
Debt securities—

Equity instruments—

Derivatives—

On demand interbank loans—
2,443.75

Cash and cash-related assets
Other categories of assets (e.g. Goodwill,commodities etc.)

622.503,705.14

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

9,568.37

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

50.68

22.06

—

—

—

—

22.06

—

—

—

—

—

—

—

4.86

—

—

—

—

—

—

—

—

—

—

—

48.98

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Of which debt securities

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Of which equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total GAR assets
Assets not covered for GAR calculation
Central governments and Supranational issuers—
5,863.23

Central banks exposure—

Trading bookTotal assets

Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
Financial guarantees
Assets under management

Annual Report 2023

190

1. Assets for the calculation of GAR - 2022
Biodiversity and Ecosystems (BIO)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which towards taxonomy relevant sectors (Taxonomyeligible)
Of which environmentally sustainable(Taxonomy-aligned)

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Of whichenabling

Pollution (PPC)

Of whichtransitional

Circular Economy (CE)Of which
Use ofProceeds

Water and marine resources (WTR)

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which environmentally sustainable(Taxonomy-aligned)
Of whichtransitional

Total
gross
carrying
amountOf which towards taxonomy relevant sectors (Taxonomyeligible)

Of which
Use ofProceeds

in EUR Millions

Climate Change Adaptation (CCA)

Of which
Use ofProceeds

Climate Change Mitigation (CCM)

GAR-covered assets (in both numerator anddenominator)
Loans and advances, debt securities and equity instruments
not HfT eligible for GAR calculation

290.04

—

—

—

—

—

0.14

—

—

—

—

—

—

—

2.43

—

—

—

—

—

—

—

—

—

—

—

2.70

—

—

—

—

254.75

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

130.36

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

118.09

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

12.26

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Other financial corporations

124.39

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which investment firms

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Loans and advances

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Loans and advances

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Loans and advances

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instrumentsof which management companiesof which insurance undertakings

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Non-financial undertakings

35.29

0.14

—

—

—

—

0.14

—

—

—

—

—

—

—

2.43

—

—

—

—

—

—

—

—

—

—

—

2.70

—

—

—

—

Loans and advances

35.29

0.14

—

—

—

—

0.14

—

—

—

—

—

—

—

2.43

—

—

—

—

—

—

—

—

—

—

—

2.70

—

—

—

—

Debt securities, including UoP

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which loans collateralised by residential immovable
property

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which building renovation loans

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

of which motor vehicle loans

—

—

—

—

—

—

—

—

—

—

—

Local governments financing

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Housing financing

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Other local government financing

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Equity instruments

Households

Collateral obtained by taking possession: residential
and commercial immovable properties—

Annual Report 2023

191

Biodiversity and Ecosystems (BIO)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

Of which environmentally
sustainable (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (Taxonomyeligible)
Of which environmentally sustainable(Taxonomy-aligned)

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of which environmentally
sustainable (Taxonomy-aligned)

Of which
Use ofProceeds

Of which environmentally
sustainable (Taxonomy-aligned)

Of which
Use ofProceeds

Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of whichenabling

Pollution (PPC)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of whichtransitional

Circular Economy (CE)Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Water and marine resources (WTR)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which environmentally sustainable(Taxonomy-aligned)
Of whichtransitional

Total
gross
carrying
amountOf which
Use ofProceeds

in EUR Millions

Climate Change Adaptation (CCA)
Of which towards taxonomy relevant sectors(Taxonomy-eligible)

Of which
Use ofProceeds

Climate Change Mitigation (CCM)
Of which towards taxonomy relevant sectors (Taxonomyeligible)

Assets excluded from the numerator for GAR calculation(covered in the denominator)
Financial and Non-financial undertakings
SMEs and NFCs (other than SMEs) not subject to NFRD
disclosure obligations
Loans and advancesof which loans collateralised by commercial
immovable propertyof which building renovation loans
Debt securities
Equity instruments
Non-EU country counterparties not subject to NFRD
disclosure obligations
Loans and advances
Debt securities
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other categories of assets (e.g. Goodwill,commodities etc.)
3,208.81

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

7,616.35

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

51.30

—

—

—

—

—

10.22

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

10.22

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Of which debt securities

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Of which equity instruments

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Total GAR assets
Assets not covered for GAR calculation
Central governments and Supranational issuers
Central banks exposure
Trading bookTotal assets

Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
Financial guarantees
Assets under management

Annual Report 2023

192

2. GAR - Sector Information
Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)TR

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)TOTAL (CCM + CCA + WMR + CE + P + BE)

Non-Financial
corporates (Subject to
NFRD)

SMEs and other NFC
not subject to NFRD

Non-Financial
corporates (Subject to
NFRD)

SMEs and other NFC
not subject to NFRD

Non-Financial
corporates (Subject to
NFRD)

SMEs and other NFC
not subject to NFRD

Non-Financial
corporates (Subject to
NFRD)

SMEs and other NFC
not subject to NFRD

Non-Financial
corporates (Subject to
NFRD)

SMEs and other NFC
not subject to NFRD

Non-Financial corporates(Subject to NFRD)

SMEs and other NFC not
subject to NFRD

Gross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amountGross carrying amount

Mn EUROf whichenvironmentally
sustainable CCM +CCA + WTR + CE + PPC+ BIO)

0.05

—

0.05

—

0.31

—

0.31

—

0.31

—

0.31

—

0.31

—

0.31

—

0.31

—

47.71 - Retail sale of clothing in specialised stores

0.07

—

0.07

—

0.07

—

0.07

—

0.07

—

0.07

—

0.07

—

47.99 - Other retail sale not in stores, stalls ormarkets

1.99

—

1.99

—

1.99

—

1.99

—

1.99

—

1.99

—

1.99

—

49.31 - Urban and suburban passenger landtransport

0.14

—

0.14

—

0.14

—

0.14

—

0.14

—

0.14

—

0.14

—

55.90 - Other accommodation

0.16

—

0.16

0.16

—

0.16

—

0.16

—

0.16

—

0.16

—

63.99 - Other information service activities n.e.c.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

64.19 - Other monetary intermediation

1.05

—

1.05

—

1.05

—

1.05

—

1.05

—

1.05

—

1.05

—

64.92 - Other credit granting

30.29

—

30.29

—

30.29

—

30.29

—

30.29

—

30.29

—

30.29

—

79.11 - Travel agency activities

11.54

—

11.54

—

11.54

—

11.54

—

11.54

—

11.54

—

11.54

—

85.20 - Primary education

—

—

—

—

—

—

—

—

—

—

—

—

—

93.29 - Other amusement and recreation activities

0.01

—

0.01

—

0.01

—

0.01

—

0.01

—

0.01

—

0.01

—

96.09 - Other personal service activities n.e.c.

0.01

—

0.01

—

0.01

—

0.01

—

0.01

—

0.01

—

0.01

—

1. Exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail), using the relevant NACE Codes on the basis of the principal activity of the counterparty

Of whichenvironmentally
sustainable (BIO)

Of whichenvironmentally
sustainable (BIO)—

Mn EUR

Mn EUR

0.05

Of whichenvironmentally
sustainable (CE)Of whichenvironmentally
sustainable (PPC)—

Mn EUR

Mn EUR

0.05

Of whichenvironmentally
sustainable (CE)Of whichenvironmentally
sustainable (CE)—Mn EUR

Mn EUR

0.05

Of whichenvironmentally
sustainable (WTR)

Of whichenvironmentally
sustainable (WTR)—

Mn EUR

Mn EUR

0.05

Of whichenvironmentally
sustainable (CCA)

Of whichenvironmentally
sustainable (CCA)—

Mn EUR

Mn EUR

0.05

47.64 - Retail sale of sporting equipment inspecialised stores

Of whichenvironmentally
sustainable (CCM)

Of whichenvironmentally
sustainable (CCM)

32.99 - Other manufacturing n.e.c.

Mn EUR

Mn EUR

Breakdown by sector - NACE 4 digits level (codeand label)

Of whichenvironmentally
sustainable CCM +CCA + WTR + CE + PPC+ BIO)

SMEs and other NFC
not subject to NFRD

Mn EUR

Non-Financial
corporates (Subject to
NFRD)Annual Report 2023

193

3. GAR Stock (%) - CapEx based - 2023
2023 (T)Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportionof total
assetscoveredOf whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of whichtransitional% (compared to total covered assets in the denominator)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

2.58%

GAR - Covered assets in both numerator anddenominator
Loans and advances, debt securities and equity instruments—%
not HfT eligible for GAR calculation
Financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

2.43%

Credit institutions

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.35%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.19%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.15%

Other financial corporations

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

2.09%

of which investment firms

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which management companiesof which insurance undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Non-financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

0.15%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

0.15%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which loans collateralised by residential immovable
property

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which building renovation loans

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which motor vehicle loans

—%

—%

—%

—%

—%

Local governments financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Housing financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Other local government financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

38.72%

Households

Collateral obtained by taking possession: residential
and commercial immovable properties
Total GAR assets

Annual Report 2023

194

3. GAR Stock (%) - CapEx based - 2022
2022 (T-1)

Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportionof total
assetscoveredOf whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of whichtransitional% (compared to total covered assets in the denominator)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

3.81%

GAR - Covered assets in both numerator anddenominator
Loans and advances, debt securities and equity instruments—%
not HfT eligible for GAR calculation
Financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

3.34%

Credit institutions

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.71%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.55%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.16%

Other financial corporations

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.63%

of which investment firms

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which management companies

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which insurance undertakings

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Non-financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.46%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.46%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Households

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which loans collateralised by residential immovable
property

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which building renovation loans

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which motor vehicle loans

—%

—%

—%

—%

—%

Local governments financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Housing financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Other local government financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

42.13%

Collateral obtained by taking possession: residential
and commercial immovable properties
Total GAR assets

Annual Report 2023

195

3. GAR Stock (%) - Turnover based - 2023
2023 (T)Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportionof total
assetscoveredOf whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of whichtransitional% (compared to total covered assets in the denominator)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

2.58%

GAR - Covered assets in both numerator anddenominator
Loans and advances, debt securities and equity instruments—%
not HfT eligible for GAR calculation
Financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

2.43%

Credit institutions

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.35%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.19%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.15%

Other financial corporations

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

2.09%

of which investment firms

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which management companies

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which insurance undertakings

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Non-financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

0.15%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

0.15%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Households

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which loans collateralised by residential immovable
property

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which building renovation loans

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which motor vehicle loans

—%

—%

—%

—%

—%

Local governments financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Housing financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Other local government financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

38.72%

Collateral obtained by taking possession: residential
and commercial immovable properties
Total GAR assets

Annual Report 2023

196

3. GAR Stock (%) - Turnover based - 2022
2023 (T)Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportionof total
assetscoveredOf whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of whichtransitional% (compared to total covered assets in the denominator)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

3.81%

GAR - Covered assets in both numerator anddenominator
Loans and advances, debt securities and equity instruments—%
not HfT eligible for GAR calculation
Financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

3.34%

Credit institutions

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.71%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.55%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.16%

Other financial corporations

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.63%

of which investment firms

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which management companiesof which insurance undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Non-financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.46%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.46%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which loans collateralised by residential immovable
property

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which building renovation loans

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which motor vehicle loans

—%

—%

—%

—%

—%

Local governments financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Housing financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Other local government financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

42.13%

Households

Collateral obtained by taking possession: residential
and commercial immovable properties
Total GAR assets—%

Annual Report 2023

197

4. GAR Flow (%) - CapEx based2023 (T)Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportionof total
assetscoveredOf whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of whichtransitional% (compared to total covered assets in the denominator)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

GAR - Covered assets in both numerator anddenominator
Loans and advances, debt securities and equity instruments—%
not HfT eligible for GAR calculation
Financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Credit institutions

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.13%

Other financial corporations

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

3.85%

of which investment firms

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which management companiesof which insurance undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

Non-financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which loans collateralised by residential immovable
property

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which building renovation loans

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which motor vehicle loans

—%

—%

—%

—%

—%

Local governments financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Housing financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Other local government financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

25.43%

Households

Collateral obtained by taking possession: residential
and commercial immovable properties
Total GAR assets—%

Annual Report 2023

198

4. GAR Flow (%) - Turnover based2023 (T)Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportionof total
assetscoveredOf whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of whichtransitional% (compared to total covered assets in the denominator)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

GAR - Covered assets in both numerator anddenominator
Loans and advances, debt securities and equity instruments—%
not HfT eligible for GAR calculation
Financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Credit institutions

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.13%

Other financial corporations

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

3.85%

of which investment firms

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which management companiesof which insurance undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

Non-financial undertakings

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

Loans and advances

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.07%

—%

—%

—%

—%

—%

Debt securities, including UoP

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Equity instruments

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which loans collateralised by residential immovable
property

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which building renovation loans

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

of which motor vehicle loans

—%

—%

—%

—%

—%

Local governments financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Housing financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Other local government financing

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

25.43%

Households

Collateral obtained by taking possession: residential
and commercial immovable properties
Total GAR assets—%

Annual Report 2023

199

5. Stock and flow KPI for off-balance sheet exposures
Stock 2023

Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of whichtransitional

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Financial guarantees (FinGuar KPI)

0.60%

—%

—%

—%

—%

0.60%

—%

—%

—%

—%
—%

—%

—%

—%

0.13%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.32%

—%

—%

—%

—%

Assets under management (AuM KPI)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%
—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

% (compared to total eligible off-balance sheet
assets)Stock 2022

Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of whichtransitional

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Of which
Use ofProceeds

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)

Financial guarantees (FinGuar KPI)

—%

—%

—%

—%

—%

0.32%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

0.32%

—%

—%

—%

—%

Assets under management (AuM KPI)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

% (compared to total eligible off-balance sheet
assets)Flow
Climate Change Mitigation (CCM)

Climate Change Adaptation (CCA)

Water and marine resources (WTR)

Circular economy (CE)

Pollution (PPC)

Biodiversity and Ecosystems (BIO)TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)

Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Proportion of total covered assets
funding taxonomy relevant sectors(Taxonomy-aligned)

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Of which
Use ofProceeds

Of whichenabling

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)% (compared to total eligible off-balance sheet
assets)Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

X

Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use ofProceeds

Of whichtransitional

Of whichenabling

Financial guarantees (FinGuar KPI)

0.60%

—%

—%

—%

—%

0.28%

—%

—%

—%

—%

—%

—%

—%

0.13%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

1.00%

—%

—%

—%

—%

Assets under management (AuM KPI)

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

—%

Annual Report 2023

200

6. Nuclear and fossil gas related activities
Row

Nuclear energy related activities

1

The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear
processes with minimal waste from the fuel cycle.

No

2

The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating
or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.

No

3

The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial
No
processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
Fossil gas related activities

4

The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuelsNo

5

The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.

No

6

The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.

No