Annual report 2018

Transparency
and Disclosure
Report 2018
Pillar III

page 1

Contents
Concise risk statement ................................................................................................................... 3
Introduction....................................................................................................................................... 4
Scope of consolidation.................................................................................................................................................................... 4
Risk management framework and strategy ............................................................................................................................... 8Three lines of defense................................................................................................................................................................. 8
Strategy and objective setting .................................................................................................................................................. 8
Risk appetite................................................................................................................................................................................. 8
Performance................................................................................................................................................................................. 8
Review and revision..................................................................................................................................................................... 9
Governance arrangements ............................................................................................................................................................ 9
Board composition and directorships ..................................................................................................................................... 9
Supervisory board ..................................................................................................................................................................... 10
Board recruitment and diversity policy.................................................................................................................................. 10
Risk management committees ............................................................................................................................................... 11

Disclosures on Pillar I ................................................................................................................... 12
Capital .............................................................................................................................................................................................. 12
Own funds................................................................................................................................................................................... 12
Capital requirements..................................................................................................................................................................... 13
Credit risk ................................................................................................................................................................................... 13
Market risk .................................................................................................................................................................................. 16
Operational risk ......................................................................................................................................................................... 16
Capital buffers ................................................................................................................................................................................ 18
Geographical distribution of credit risk ................................................................................................................................. 18
Leverage .......................................................................................................................................................................................... 18
Leverage ratio ............................................................................................................................................................................ 18

Disclosures on Pillar II .................................................................................................................. 19
Internal capital adequacy assessment process........................................................................................................................ 19
Interest rate risk in the banking book ......................................................................................................................................... 19

Remuneration policy .................................................................................................................... 20
Remuneration principles............................................................................................................................................................... 20
Remuneration package ............................................................................................................................................................ 20
Variable remuneration .............................................................................................................................................................. 20
Identified staff ............................................................................................................................................................................ 21
Total annual remuneration ...................................................................................................................................................... 21
Nomination and Remuneration Committee ......................................................................................................................... 21
Remuneration for the Management Board........................................................................................................................... 21

Annexes .......................................................................................................................................... 22
Annex I Own funds ......................................................................................................................................................................... 22
Annex II Countercyclical capital buffer ....................................................................................................................................... 22
Annex III Leverage .......................................................................................................................................................................... 222

Concise risk statement
The Adyen DNA
We are a technology company redefining payments. We work together with over 870 people spread across 17 offices
around the world. To us, “winning is more important than ego” – we value people for their skills and what they bring to
the company, not for their titles. We work with cross-functional teams and empower them to make their own decisions.
We call these workstreams. We think function beats form, and our effort toward our goal of helping our merchants
grow is singular.
Description of Business Activities
The Adyen platform integrates the full payments stack (gateway, risk management, processing and acquiring) with acommon back-end infrastructure for authorizing payments across its merchants' sales channels as well as offeringfeature-rich APIs. This integrated platform allows for the delivery of products and services on a global scale with local
capabilities, directly connecting merchants to Visa, Mastercard and many other payment methods, and across sales
channels, including its merchants' online, mobile and POS channels, while providing a high level of reliability, security,
performance and data insights.
IPO
In 2018 Adyen decided to pursue an Initial public offering to give our existing shareholders a path to liquidity whileproviding Adyen the opportunity to continue to grow as an independent company. During 2018 Adyen has offered andwas admitted to trading and listing of existing ordinary shares in the capital of Adyen on Euronext Amsterdam on June
13, 2018. To facilitate this listing on Euronext Amsterdam, Adyen changed its legal structure in the Netherlands from a
B.V. (Besloten Vennootschap – private company with limited liability) to an N.V. (Naamloze Vennootschap – public
limited company).
Risk management
Adyen recognizes that risks are associated with achieving its strategy and business objectives. Managing these risks1
is an essential part of doing business. Adyen has adopted a uniform and systematic company-wide approach for
managing risks. The essential elements of Adyen's integral risk management framework are governance and culture,
strategy and objective setting, performance, review and revision, information, communication and reporting.
CapitalThe capital requirements comprise credit risk, operational risk and market risk. Adyen uses the Standardized
Approach for each category of risk to determine its capital requirements. Resulting from Adyen’s business model,
operational risk is the largest risk category. Because of the day of settlement, cash on the balance sheet was higher
than average, resulting in higher risk weighted assets. The total risk exposure amount at 31 December 2018 was EUR
1.15 billion.

The capital requirements need to be covered by sufficient own funds. Adyen’s own funds consist fully of CET1 capital,
which was EUR 521 million at 31 December 2018. This resulted in a CET1 capital ratio of 45%.
Leverage
Adyen’s leverage ratio is 28%, which is above the non-binding requirement of 3%.
Liquidity coverage ratio
The liquidity coverage ratio of Adyen was 4,672% at the end of 2018, well above the regulated threshold of 100%.
Declaration Management Board
The Management Board of Adyen declares that the risk management arrangements of Adyen are adequate withregards to Adyen’s risk profile and strategy.

1 Art. 435(1)(e)(f) CRR.
Adyen Transparency and Disclosure Report 2018 | Page 3

Introduction
This document presents the consolidated Transparency and Disclosure Report 2018 (Pillar III report) of Adyen N.V.
(Adyen) as per 31 December 2018.2
As a less significant institution3 based in the European Union, Adyen operates under the Capital Requirements
Directive IV (CRD IV) and Capital Requirements Regulation (CRR). This framework is based on a three-pillars concept:•
Pillar I – Minimum capital requirements•
Pillar II – Supervisory review•
Pillar III – Market disclosures
In Pillar I, the capital requirements are calculated on the basis of three categories of risk that an institution faces: credit
risk, market risk and operational risk. These capital requirements need to be covered by sufficient own funds. Adyen
uses the standardized approach for each category of risk to determine its capital requirements.
In Pillar II, the supervisor reviews the viability of Adyen and its ability to meet the reporting requirements. This
Supervisory Review and Evaluation Process (SREP) comprises four components:•
Business Model Assessment (BMA)•
Internal Capital Adequacy Assessment Process (ICAAP)•
Internal Liquidity Adequacy Assessment Process (ILAAP)•
Internal governance and institution-wide control assessment
The Pillar III disclosure framework seeks to promote market discipline through regulatory disclosure requirements.
Pursuant to Part Eight of the CRR, Adyen is required to publicly disclose information regarding, amongst others, its
risk profile, risk management and capital adequacy. Adyen discloses this information by means of this Pillar III report.
The Pillar III disclosures are based on capital requirements in Pillar I with reference date 31 December 2018.
The content of this pillar III report meets all the requirements laid down in CRR and corresponding delegatedregulations and guidelines.
Unless stated otherwise, all amounts in the report are in thousands of euros.

Scope of consolidation
As an EU parent institution, Adyen N.V. is required to publish a consolidated Pillar III report. Adyen reports its
prudential requirements both on a consolidated as well as on a stand-alone basis. Its subsidiaries are only included inits consolidated reporting. Adyen’s prudential scope of consolidation does not deviate from its IFRS scope of
consolidation. Adyen N.V. is a licensed Credit Institution by De Nederlandsche Bank (the Dutch Central Bank) andregistered in the Netherlands under the company number 34259528. The Credit Institution license includes the ability
to provide cross-border services in the EEA. Adyen N.V. directly or indirectly owns 100% of the shares of, and therefore
controls all entities included in the consolidated financial statements.
Adyen has operations in the Netherlands, Brazil, Singapore, UK, Canada, Australia, South Korea, Hong Kong, Mexico,
China, New Zealand, Malaysia, India, Japan and the United States, with branches in Germany, France, Spain and
Sweden and representative offices in Belgium and Italy. The address of the Adyen N.V. registered office is Simon
Carmiggeltstraat 6 -50, 5th floor, 1011DJ Amsterdam, the Netherlands. Table 1 provides an overview of all branchesof Adyen N.V. and subsidiaries of Adyen International B.V.4

2 Art. 436(a) CRR.
3 Art. 441 CRR.
4 Art. 436(b) CRR.
Adyen Transparency and Disclosure Report 2018 | Page 4

Table 1: Overview of Adyen’s branches and subsidiaries
Adyen N.V. - Branches
NameAdyen N.V., Sucursal en España
Adyen N.V., German branch
Adyen France
Adyen Nordic Bank Fillial

Branch location
Madrid, Spain
Berlin, Germany
Paris, France
Stockholm, Sweden

Adyen N.V. – Representative offices
NameAdyen N.V., Belgian Representative Office
Adyen N.V., Italian Representative Office

Branch location
Brussels, Belgium
Rome, Italy

Adyen International B.V. - Subsidiaries

Name

Legal Seat

Adyen Inc.

San Francisco, CA, USA

Direct and indirectownership
percentage
100%

Adyen Services Inc.

Dover, DE, USA

100%

Adyen Nevada Inc.

Las Vegas, NV, 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%

Adyen Australia PTY Limited

Sydney, Australia

100%

Adyen Canada Ltd.

Saint John, Canada

100%

Adyen Korea Chusik Hoesa

Seoul, Republic of Korea

100%

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

Mexico City, Mexico

100%

Adyen Nordic AB

Stockholm, Sweden

100%

Adyen (China) Software Technology Co. Ltd.

Shanghai, China

Adyen New Zealand Ltd.

Auckland, New Zealand

100%
100%

Adyen Malaysia Sdn. Bhd

Kuala Lumpur, Malaysia

100%

Adyen Iberia SLU

Madrid, Spain

100%

Adyen GmbH

Berlin, Germany

100%

Adyen India Technology Services Private Limited

New Delhi, India

100%

Adyen Japan K.K.

Tokyo, Japan100%

Adyen Transparency and Disclosure Report 2018 | Page 5

In table 2, the disclosures within this Pillar III report are linked to the respective provisions of Part Eight CRR.
Table 2: Mapping table Articles to document

Article Subject

Reference

Page

Article 435

Risk
management
objectives andpolicies

Concise risk statement
Risk management framework andstrategy

p. 3
p. 8

Article 436

Scope ofapplication

Scope of consolidation

p. 4

Article 437

Own funds

Capitalp. 22

Article 438

Capitalrequirements

Capital requirements
Internal capital adequacy assessment
process

p. 13
p. 19

Article 439

Exposure tocounterparty
credit risk

Not applicable

Article 440

Capital buffers

Capital buffers

Article 441

Indicators ofglobal systemic
importanceNot applicable

Article 442

Credit risk
adjustments

Credit risk adjustment

Article 443

UnencumberedassetsNot applicable

Article 444

Use of ECAI’s

Use of External Credit Assessment
Institutions

p. 13

Article 445

Exposure tomarket risk

Market risk

p. 16

Article 446

Operational risk

Operational risk

p. 16

Article 447

Exposures inequities notincluded in the
trading book

Equities in the banking book

p. 14

p. 18

Annexes

Capital instruments
main features
template

Geographicaldistribution of credit
exposures relevant forthe calculation of thecountercyclical capital
bufferp. 13

Adyen Transparency and Disclosure Report 2018 | Page 6

Article 448

Exposure tointerest rate risk
on positions notincluded in the
trading bookInterest rate risk in the banking bookp. 19

Article 449

Exposure tosecuritization
positionsNot applicable

Article 450

Remuneration
policyRemuneration policyp. 20

Article 451

Leverage

Leverage

p. 18

Article 452

Use of the IRB
approach tocredit risk

Not applicable

Article 453

Use of credit risk
mitigation
techniques

Not applicable

Article 454

Use of theadvancedmeasurement
approaches tooperational risk

Not applicable

Article 455

Use of internalmarket risk
modelsNot applicable

CRR Leverage ratio Disclosure Template(Quantitative)
CRR Leverage ratio –Disclosure Template(Qualitative)

Adyen Transparency and Disclosure Report 2018 | Page 7

Risk management
framework and strategy
Adyen recognizes that risks are associated with achieving its strategy and business objectives. Managing these risks isan essential part of doing business. This chapter describes Adyen’s uniform and systematic company-wide approachfor managing risks. In addition, it lays down Adyen’s risk governance, which sets the tone, reinforces the importance of,and establishes oversight responsibilities for risk management.

Risk management objectives and policies
Adyen's integral risk management framework5 is based on the Enterprise Risk Management (ERM) model as issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2017. The integral risk
management framework structures the risk management activities within Adyen with a view of identifying, assessing,managing, monitoring and reporting risks in a uniform manner. The essential elements of Adyen's integral risk
management framework are governance and culture, strategy and objective setting, performance, review and revision,
information, communication and reporting.

Three lines of defense
In line with the European Banking Authority (EBA) Guidelines on Internal Governance, Adyen has adopted the threelines-of-defense model, which reflects the segregation between operations (first line management), the risk
management and compliance functions (second line), and the independent internal audit function (third line). The firstline management designs, implements, executes and monitors the control activities to manage performance and therisks taken to achieve Adyen's objectives. The second line risk and compliance functions provide guidance on risk
management requirements, and independently evaluate adherence to defined standards. The third line internal audit
function provides independent assurance on the effectiveness of risk management, including control activities, byperforming audits. The head of internal audit reports directly to the chairman of the Audit Committee and has a dottedline (for day-to-day operations) to the CEO.

Strategy and objective setting
Risk management, strategy and objective-setting work together in the strategic-planning process. Operational
objectives put strategy into practice while serving as a basis for identifying, assessing, and responding to risk. Adyen's
risk appetite is established and aligned with its strategy.

Risk appetite
Adyen’s risk appetite statement can be summarized as follows. Adyen accepts that in order to achieve its growthstrategy the company may consume some amounts of capital investing in assets, people and processes, and thatcompetition could increase as it seeks to increase market share, thereby potentially reducing growth opportunities.
Adyen wants to build an ethical and sustainable business and has therefore established policies, procedures andsystems that actively mitigate risks that could negatively affect the Adyen reputation or brand, lead to compliancebreaches of laws or regulations, or endanger the future existence of Adyen.
Adyen has a limited appetite to incur losses from financial risks. Adyen does not make use of derivatives to hedge its
financial risks.

Performance
Adyen performs a top-down company-wide risk assessment on an annual basis or in more frequent intervals, which
includes the identification of key risks that could potentially affect its strategy and business objectives. The purpose
hereof is to assess how big the risks are, both individually and collectively, in order to focus attention on the mostimportant threats and opportunities. Based on EBA guidelines, the key risks are categorized as follows:• Strategic and business risk
• Operational risk
• Financial risk (including credit risk, market risk, liquidity and funding risk)
5 Art. 435(1) CRR.
Adyen Transparency and Disclosure Report 2018 | Page 8

Reputational risk is not categorized separately as Adyen considers it a risk that can arise from all other risk categories.
For a more detailed description of the company-wide risks as identified and assessed by Adyen, refer to the Section"Risk Factors" within the Annual Report 2018.
Adyen continues to strive towards a strong commitment to integrity and risk management. Therefore, it hasestablished a control environment that provides an appropriate foundation for achieving the company’s objectives andeffectively mitigating risks. Control activities are the policies and procedures that help ensure risks are mitigated andAdyen's objectives are achieved. Adyen uses COSO’s internal control model a reference for its design, implementationand evaluation of control activities as part of a system of internal control. In 2018, Adyen implemented a systematic
assessment of the design and effectiveness of its control framework, including independent management testing, asbasis for the In-Control Statement in the Annual Report 2018.

Review and revision
By reviewing its performance, Adyen evaluates how well the risk management components are functioning over time.
The Risk Committee plays a key role in supporting the Management Board with overseeing the effectiveness ofAdyen’s risk management. It carries out this role by monitoring Adyen's risk profile against the risk appetite, which isan ongoing and iterative process. Any material risk limit breach that places Adyen at risk of exceeding its risk appetite
and, in particular, of putting at risk Adyen's financial health, is escalated promptly to the Management Board.
Combinations of ongoing and separate evaluations are used to determine if the components of internal control arepresent and functioning effectively. The ongoing evaluations are built into Adyen's business processes and provide
timely information. Evaluations, including independent management testing, are done separately for each risk
category. For each separate risk category, a risk owner is appointed. Evaluations are conducted periodically and mayvary in scope and frequency depending on the risks and effectiveness of the ongoing evaluations. Any identified
deficiencies are discussed within the Risk Committee and reported to the Management Board along with relevant
findings, recommendations and remediation plans.6

Governance arrangements
Adyen’s governance7 is reflected in certain internal rules and regulations, including the Articles of Association(statuten), the Management Board By-Laws, the Supervisory Board By-Laws and the Terms of reference of our
Supervisory Board committees.

Board composition and directorships
Adyen maintains a two-tier board structure consisting of a Management Board and a Supervisory Board. The
Management Board is responsible for the day-to-day management, which includes, among other things, formulating
Adyen’s strategy and policies and setting and achieving Adyen’s objectives. The Supervisory Board supervises andadvises the Management Board. Each board is accountable to the General Meeting for the performance of its duties.

Management Board
Adyen’s Management Board is composed of the following six members.
Pieter Willem van der Does is the CEO of Adyen and has been a member of the Management Board since 2007. Hespent over 15 years working in the payments industry. Before co-founding Adyen in 2006, Mr. van der Does was CCO
at Bibit (a pioneering international payment service provider, acquired by the Royal Bank of Scotland in 2004). Mr. Van
der Does also serves as a Supervisory Board member of Écart Invest B.V.
Arnout Diederik Schuijff is the CTO of Adyen and has been a member of the Management Board since 2007. He is
considered a leading expert in the architecture of advanced payment technology solutions. After co-founding andbeing responsible for creating the technology behind Bibit, Mr. Schuijff co-founded Adyen together with Mr. van derDoes.
Roelant Prins is the CCO of Adyen and has been a member of the Management Board since 2009. Mr. Prins is
responsible for the commercial activities of Adyen. After starting his career as a consultant, he moved to the online
payments industry early 2000. Throughout the years, Mr. Prins has held various international management roles insales and business development for companies providing payment solutions to international e-commerce businesses.

6 Art. 435(2)(e) CRR.
7 Art. 435(2) CRR.
Adyen Transparency and Disclosure Report 2018 | Page 9

Ingo Jeroen Uytdehaage is the CFO of Adyen and has been a member of the Management Board since 2011. He has
earned his MBA in accounting and finance from Maastricht University and studied supply chain management andorganizational behavior at the Aarhus Business School in Denmark. Additionally, Mr. Uytdehaage obtained his CPA at
the Vrije Universiteit in Amsterdam. Prior to joining Adyen, Mr. Uytdehaage was a Finance Director at KPN. Currently,
he also serves as chairman on the board of photography museum Foam in Amsterdam.
Samuel Graeme Halse is the COO of Adyen and has been a member of the Management Board since 2015. Mr. Halseis responsible for the operations to customers that make use of Adyen’s platform. After starting his career as acommercial lawyer in New Zealand, he moved to the online payment industry in 2010. Mr. Halse has built substantial
experience in payments and has worked with many leading global e-commerce companies, assisting them with theirinternational payments rollout and optimization of payment processes.
Joannes Gerardus Wijn is the CSRO of Adyen and has been member of the Management Board since 2017. Mr. Wijn
has vast experience in global financial services, supporting companies with their payment products, debt and equity
products, M&A activities and access to financial markets. Before joining Adyen, Mr. Wijn served as a member of theManagement Board of ABN AMRO. In addition, Mr. Wijn was State Secretary for Finance and Minister for Economic
Affairs within the Dutch government. Mr. Wijn also serves as a Supervisory Board member of Royal Schiphol Group.

Supervisory Board
The Supervisory Board supervises the conduct and policies of the Management Board and the general course of
affairs of Adyen and its business. The Supervisory Board also provides advice to the Management Board. In
performing their duties, the members of the Supervisory Board are required to be guided by the interests of Adyen
which includes the interests of the business connected with it. These interests are driven by Adyen’s focus on longterm value creation and the way in which this is implemented in Adyen’s strategy and culture.
Adyen’s Supervisory Board is composed of the following three members.
Mr. Overmars serves as a member of the Management Board of Randstad Beheer B.V., and as a member of theSupervisory Boards of AMC Academic Medical Center and Dura Vermeer Groep N.V. Previously, he served as
Chairman of the Supervisory Boards of Nutreco and SNS Reaal and as President of the Nyenrode Foundation,
following an extensive career at ABN Amro that culminated in a Board Member position. Mr. Overmars holds an MBAfrom Nyenrode Business University.
Mr. Rueda serves as CFO and member of the Executive Board and Management Board of NN Group. Previously, he
was CFO and member of the Management Board of ING Insurance, following an extensive career at Andersen
Consulting, UBS, JP Morgan and Atradius. Mr. Rueda holds a degree in Economic Analysis and Quantitative
Economics from the Complutense University of Madrid (Spain). He also holds an MBA from the Wharton School,
University of Pennsylvania (USA).
Mr. van Beurden is CEO and member of the Executive Board of Kendrion. Previously, he served as CEO of CSR Plc.
(UK) and NexWave Inc. (France), following a career at Royal Dutch Shell, McKinsey, Philips and Canesta Inc. Mr. van
Beurden holds a degree in Applied Physics from Twente University of Technology (Netherlands).

Board recruitment and diversity policy
The Articles of Association provide that the Management Board shall consist of two or more members and that theSupervisory Board determines the exact number (more than two) of Managing Directors after consultation with theManagement Board.
The General Meeting appoints Managing Directors upon a nomination by the Supervisory Board in accordance with
the Articles of Association. The Supervisory Board shall make one or more nominations to the General Meeting in casea Managing Director is to be appointed.
In the event that the Supervisory Board has made a nomination, the resolution of the General Meeting to appoint suchnominee shall be adopted by an absolute majority of the votes cast. A resolution of the General Meeting to appoint aManaging Director other than in accordance with a nomination of the Supervisory Board, but in accordance with theagenda for such General Meeting, shall require a majority of two thirds of the votes cast representing more than half of
the Company's issued share capital. 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.

Adyen Transparency and Disclosure Report 2018 | Page 10

Adyen is a licensed credit institution, which means that any appointment of a Managing Director must be approved by
DNB. In connection with its approval procedure, DNB will test the proposed new Managing Director on integrity(betrouwbaarheid) and suitability (geschiktheid).
Best practice provision 2.1.5 of the Dutch Corporate Governance Code, provides that the Supervisory Board shoulddraw up a diversity policy for the composition of the Management Board and Supervisory Board. The policy should
address the concrete targets relating to diversity. Adyen deviates from best practice provision 2.1.5 as no concretetargets were set on diversity.

Risk management committees
The Management Board has instituted three committees to support with its risk management oversight: theCompliance Committee, the Merchant Risk Committee, and the Risk Committee. The Compliance Committeemonitors Adyen’s integrity and compliance risks, the Merchant Risk Committee monitors the merchants’ potential
liability (MPL) risk and the Risk Committee monitors the overall risk profile.
The Risk Committee and the Compliance Committee report to the Management Board at least quarterly theirobservations, recommendations and deliberations on findings regarding compliance, risk management and internal
control. Next to the quarterly meetings, the Risk Committee has held three additional meetings in 2018. The
Management Board reviews reports from control assessments made on the operating effectiveness of systems andcontrols, acts on recommendations from the Risk and Compliance Committees and decides on corrective actions. The
Management Board reports to the Audit Committee on the effectiveness of Adyen's risk management and internal
control systems during quarterly Audit Committee meetings.

Adyen Transparency and Disclosure Report 2018 | Page 11

Disclosures on Pillar I
Within the CRR and CRD IV framework, Pillar I lays down the absolute minimum capital requirements in order to cover
the financial risks institutions face. These risks are credit, market and operational risk. This chapter describes thecapital requirements of Adyen, based on these three major risk categories.

CapitalFor regulatory purposes, capital8 is defined as own funds, which can be subdivided in Common Equity Tier 1,
Additional Tier 1 and Tier 2. Adyen solely has Common Equity Tier 1 capital.

Own funds
Common Equity Tier 1 capital comprises IFRS equity after taking into account prudential filters and deductions. Table
3 provides a reconciliation of own funds with IFRS capital.9 Annex I, describes the main features of this Common Equity
Tier 1 capital.
Table 3 Reconciliation between IFRS equity and own funds (in EUR ‘000)

31-Dec-18
IFRS equity

582,404

Of which: common shares

160,209

Of which: paid up capital296

Of which: retained earnings

357,231

Of which: direct holdings of CET1

(4,804)

Of which: accumulated Other Comprehensive Income371

Of which: other reserves

69,100Adjustments due to prudential filters and deductions(61,227)

Intangible assets
DTA that rely on future profitability and do not arise from temporary
differences(5,059)(1,895)Warrant reserve(54,219)

Prudent valuation(54)

Total Common Equity Tier 1 Capital

521,177

10

Prudential filters and deductions
Prudential filters and deductions remove or reduce certain elements from Adyen’s own funds that are considered not
to be eligible to absorb losses. The amounts related to these prudential filters and deductions are shown in Table 3.

Adyen applies the following prudential filter to its Common Equity Tier 1 capital:
Additional value adjustments due to the requirements for prudent valuation
Institutions are required to calculate an additional value adjustment in order to adjust the fair value to a prudent value
for all assets measured at fair value.11 The additional value adjustment must be deducted from Common Equity Tier 1
capital. Adyen has two financial instruments on the balance sheet that are measured at fair value, and subject to an
additional value adjustment, which are VISA shares and a derivative financial liability. In the first six months of 2018,
part of the derivative financial liability is prospectively de-recognized and the new equity instruments are recognized at

8 Art. 437(1) CRR.
9 Annex I comprises the relevant rows of the ‘Own funds disclosure template’ as laid down in ITS (EU) 1423/2013.
10 No restrictions ex. art. 437(e) CRR were applied to the calculation of own funds.
11 Art. 34 and 105 CRR.
Adyen Transparency and Disclosure Report 2018 | Page 12

fair value in equity as warrant reserve. The first two tranches of the derivative liability resulting from a merchantcontract are reclassified from derivative liability to warrant reserve in equity for the amount of EUR 54,219.
In addition, Adyen applies the following deductions to its Common Equity Tier 1 capital:
Intangible assets other than goodwill
Deferred tax assets that rely on future profitability and do not are from temporary differences
Warrant reserve

Capital requirements
Adyen uses standardized approaches to determine how much capital it is required to have for credit, market andoperational risk. Resulting from Adyen’s business model, capital requirements for operational risk are the highest.

Credit risk
Credit risk can origin from the risk that a counterparty will not settle the full value of an obligation — neither when it
becomes due, nor thereafter. Adyen is and will continue to be subject to the risk of actual or perceived deterioration of
the commercial and financial soundness, or perceived soundness, of merchants and other financial institutions, inparticular in relation to receivables from financial institutions regarding settled payment transactions, and cash andcash- equivalents held at financial institutions. In addition, Adyen has credit risk on certain contract assets and fromoffering merchants a pre-financing service, which it refers to as Sales Day Payout.
Adyen has no derivatives or securities financing transactions, nor positions in securitizations. Adyen does not apply
credit risk mitigation techniques.
In order to calculate its own funds requirement for credit risk, Adyen applies the standardized approach. Adyen’s total
risk-weighted exposure amount is EUR 481,040 resulting in an own funds requirement for credit risk of EUR 38,483.12
Credit risk adjustments
Adyen considers an exposure to be past due if it has been due for more than one day and considers an exposure indefault and impaired when either or both of the following have taken place:13
The counterparty is past due more than 90 days
The counterparty is considered unlikely to pay, for example due to bankruptcy or other factors

From 1 January 2018, Adyen assesses on a forward-looking basis the expected credit loss associated with its debt
instruments carried at amortized cost. The impairment methodology applied depends on whether there has been asignificant increase in credit risk. For trade receivables and contract assets, Adyen applies the simplified approach,which requires expected lifetime losses to be recognized from initial recognition of the assets.14
At reference date, Adyen has no exposures in default. This is for the majority driven by a combination of low credit risk,
resulting from high credit quality ratings, and the short-term nature of financial instruments in scope. Therefore, Adyen
does not make use of specific credit risk adjustments.
Use of External Credit Assessment Institutions
Adyen applies ratings from External Credit Assessment Institutions15 (ECAIs) to determine the risk weight of an
exposure. With respect to its rated exposures, Adyen by default uses Moody’s whenever it has a rating available. Onlyin the case that no rating of Moody’s is available, Adyen uses a rating provided by Fitch. Adyen therefore does notcherry-pick its ratings. In order to determine the risk weight of an exposure, a rating is converted into thecorresponding credit quality step based on the standard association as published by the EBA.16 To unrated exposures,
Adyen by default applies a 100% risk weight.

12 Art. 438(c) CRR.
13 Art. 442(a) CRR.
14 Art. 442(b) CRR.
15 Art. 444 CRR.
16 ITS (EU) 2018/634.
Adyen Transparency and Disclosure Report 2018 | Page 13

Adyen uses ECAIs in order to determine the risk-weight of exposures belonging to the following three exposure
classes:
Central governments or central banks
Institutions
Corporates
Equities in the banking bookAdyen’s exposure to equities in the banking book17 arises from a holding of convertible preferred Visa shares. Adyen
obtained these shares as the result of its previous holding in Visa Europe, which subsequently was acquired by Visa
Inc., and resulted, amongst others, in Adyen being issued shares of Visa Inc. as consideration for the acquisition.

Under IAS 39, the Visa shares were classified as available-for-sale. Resulting from the implementation of IFRS 9,
Adyen classifies these shares at fair value through profit and loss. Related fair value gains of EUR 20,061 weretransferred from the other comprehensive income reserve to retained earnings on 1 January 2018.
The Visa shares are stated at fair value for EUR 30.3 million, which is based on the fair value of Visa Inc. common stock
multiplied by an initial conversion rate of preferred stock into common stock. These shares have no stated maturity
and carry the right to receive discretionary dividend payments. Over 2018, Adyen gained EUR 5.3 million on nontrading financial assets mandatorily at fair value through profit or loss, which were recognized in the income statement.
Due to a restriction on transfer, the Visa shares cannot be freely traded.
As per 31 December 2018, the total exposure value of equities in the banking book amounted to EUR 30.3 million,
resulting in an own funds requirement of EUR 2.4 million.
Credit portfolio
As per 31 December 2019, Adyen’s total exposures amounted to EUR 1,855,358 resulting in total risk-weighted
exposures of EUR 481,040. The majority of Adyen’s exposures have a short-term duration, with residual maturities ofdays. Exposures relating to equities are perpetual.18

The following tables provide an overview of Adyen’s exposures.
Table 4 Exposures by exposure class (in EUR ‘000)
Exposure Class
Standardized Approach- Central governments or central
banks- Corporates- Institutions- Equities

Average exposures

Total exposures

Total risk-weighted
exposures

508,373

741,3930228,451
684,807
30,032

237,096
747,134
30,378

195,687
155,619
30,378- Other

79,19799,35699,356

Total

1,530,860

1,855,358

481,040

Table 4 shows the average amount of exposures over 2018, the total amount of exposures as per 31 December 2018
and the total amount of risk-weighted exposures broken down by exposure class.19
Table 5 Exposures by risk weight (in EUR ‘000)
Risk weight0%
20%
Exposure value
741,393 739,393

50%
82,819100%
291,752

150%
0

1250%
0

In Table 5, the distribution of exposures across different risk weights is shown.

17 Art. 447 CRR.
18 Art. 442(f) CRR.
19 Art. 442(c) CRR.
Adyen Transparency and Disclosure Report 2018 | Page 14

Table 6 Exposure by country (in EUR ‘000)

NL

GB

DE

BE

ES

FR

US

BR

OthersTotal%- Central governments or central
banks

730,318

2,846

0

0

0

0

6,997

0

1,233

741,393

39,96%- Corporates

73,397

21,051

331

11,53600125,797

0

4,984

237,096

12,78%- Institutions

101,084

140,82140,89920,94057,61545,056228,087

83,30929,323

747,134

40,27%

0

0

0

0

0

0

30,3780030,3781,64%

99,357

0

0

0

0

0

0

0

0

99,3575,35%

1,004,156

164,718

41,23032,476

57,61545,056391,259

83,30935,5401,855,358

100%

54,12%

8,88%

2,22%

1,75%

3,11%

2,43%

21,09%

4,49%

1,91%

100%

Exposure Class
Standardised Approach- Equities- Other
Total exposure value
Total %

Additionally, Table 6 provides a geographical breakdown of Adyen’s total exposures to credit risk separately for each exposure class.20

20 Art. 442(c-e) CRR.
15

Market risk
Market risk21 comprises equity risk, interest rate risk, foreign-exchange risk and commodities risk. Adyen does nothold trading book items and has no commodity positions, therefore it is solely exposed to foreign-exchange risk
resulting from its international operations.
Adyen applies the standardized approach in order to calculate its own funds requirements for market risk. Adyen’s
total risk exposure amount for market risk is EUR 180,852 resulting in an own funds requirement of EUR 14,468.22
Foreign-exchange risk
The strengthening or weakening of the euro impacts the translation of Adyen's net revenues generated from its
international operations that are denominated in foreign currencies, into the euro. Additionally, in connection with
providing its services in multiple currencies, Adyen generally sets its foreign-exchange rates once per day. Adyen may
face financial exposure as a result of fluctuations in foreign-exchange rates between the times that Adyen sets them.
Given that Adyen also holds some merchants' and own funds in non-euro currencies, its financial results are affectedby the translation of these non-euro currencies into euro. While Adyen has measures in place intended to manage its
foreign-exchange risk, namely natural hedges and spot trades for any net open positions, no assurance can be giventhat fluctuations in foreign-exchange rates will nevertheless have a significant impact on Adyen's results of operations.
Adyen is exposed to foreign-exchange risk on its assets and liabilities denominated in currencies other than thefunctional currency, including certain contract assets, its holding of Visa shares and the assets and liabilities of its
subsidiaries. The majority of these assets through which Adyen is exposed to foreign currency risk are denominated in
US dollar.

Operational risk
Adyen recognizes that operational risks23 are associated with achieving its business objectives. Operational risk
concerns the risk of losses resulting from inadequate or failed internal processes, people and systems or from external
events, including legal risk. Adyen has therefore implemented an internal control framework that is designed to
manage the risks effectively and efficiently and to provide reasonable assurance that objectives can be met.
Merchants’ potential liability for shopper chargebacks
When shoppers claim that a merchant has not performed, the issuing banks can file chargebacks. Adyen seeks tooffset such chargebacks with the payouts to the merchants, but may not be able to succeed in full. While Adyen has
implemented risk mitigation, including holding reserve funds from its merchants, based on assumptions andestimates that Adyen believes are reasonable to cover such eventualities, the measures, including the reserve funds,
may not be sufficient.
Availability of products and services
Frequent or persistent interruptions in Adyen's services could cause current or potential merchants to believe that its
systems are unreliable, leading them to switch to a competitor or to avoid Adyen's products and services, and could
permanently harm Adyen's reputation and brand. Moreover, to the extent that any system failure or similar event
results in damages to Adyen's merchants or their business partners, these merchants or partners could seek
significant compensation or contractual penalties from Adyen for their losses, which, even if unsuccessful, could likely
be time-consuming and costly for Adyen to address and divert management attention. Furthermore, frequent or
persistent interruptions could lead to regulatory scrutiny, significant fines and penalties, and/or mandatory and costly
changes to its business practices, and could ultimately cause Adyen to lose existing regulatory licenses or prevent ordelay Adyen from obtaining additional regulatory licenses that Adyen needs to expand its business.
Information security
Adyen's and its partners' IT systems may be vulnerable to physical and electronic breaches, computer viruses andother attacks by cyber-criminals, internet fraudsters, employees or others, which could lead to, amongst other things,
a leakage of merchants' data, damage related to incursions, destruction of documents, inability or delays in processing
transactions and unauthorized transactions. Any real or perceived privacy breaches or improper use of, disclosure of,or access to such data could harm Adyen's reputation as a trusted brand in the handling and protection of this data.
Although Adyen carries cyber liability insurance that Adyen believes to be reasonable to cover such eventualities, suchinsurance may not be sufficient to cover all potential losses.

21 Art. 445 CRR.
22 Art. 438(e) CRR.
23 Art. 446 CRR.

16

Entrepreneurial culture
As Adyen grows, it may not be able to maintain its entrepreneurial company culture, which fosters innovation andtalent. If Adyen does not successfully manage its growth, and is not able to differentiate its business from those of its
competitors, drive value for and retain merchants, or effectively align its resources with its goals and objectives, Adyen
may not be able to compete effectively against its competitors, leading to declining growth and revenues.
TalentAdyen's future performance depends substantially on the continued services of key talent and its ability to attract,
retain, and motivate such talent. The loss of the services of any of Adyen's key talent or Adyen's inability to attract
highly qualified key talent may adversely affect its operations.
Regulatory compliance
Adyen and its local businesses do not only need to comply with the local laws and regulations, but also with certain
laws and regulations with worldwide application, including the EU's Payment Services Directive (PSD2) and directive
on data protection (GDPR). The laws, regulations and standards are subject to varying interpretations, in many cases
due to their lack of specificity or unclear application to the business of non-traditional market participants such as
Adyen. As a result, their application in practice may evolve over time as new guidance is provided by supervisory
authorities and the interpretation of requirements by supervisory authorities and courts may be further clarified overtime. If Adyen's efforts to comply with laws, regulations and standards differ from the activities intended by regulatory
bodies or supervisory authorities due to ambiguities related to their interpretation, application and practice,supervisory authorities may initiate legal and regulatory proceedings against Adyen.
Although Adyen has policies and procedures that it believes are sufficient to comply with currently applicable antimoney laundering, anti-corruption and sanctions rules and regulations, it cannot guarantee that such policies andprocedures completely prevent situations of money laundering or corruption, including actions by Adyen's employees,
agents, merchants, third-party suppliers or other related persons for which Adyen might be held responsible. Such
events may have severe consequences, including litigation, sanctions, administrative measures, fines, criminal
penalties and reputational consequences.
Intellectual property rights
Adyen seeks to protect its intellectual property rights by relying on applicable laws and regulations, as well as a varietyof administrative procedures. Adyen's intellectual property rights may be contested, circumvented, or foundunenforceable 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 theseproducts further overlaps, Adyen may become increasingly subject to intellectual property infringement and otherclaims. The ultimate outcome of any allegation is often uncertain and, regardless of the outcome, any such claim, withor without merit, may be time-consuming, result in costly litigation, divert management's time and attention, andrequire Adyen to, among other things, stop providing transaction processing and other payment-related services orredesign, stop selling its products or services, pay substantial amounts to satisfy judgments or settle claims orlawsuits, pay substantial royalty or licensing fees, or satisfy indemnification obligations that Adyen has with certain
parties with whom Adyen has commercial relationships.
Tax
The determination of Adyen's worldwide provision for income taxes, value-added taxes and other tax liabilities requires
estimation and significant judgment, and there are many transactions and calculations where the ultimate tax
determination is uncertain. Adyen's determination of its tax liability is always subject to audit and review by applicable
domestic and foreign tax authorities. Any adverse outcome of any such audit or review could have a negative effect on
Adyen's business and the ultimate tax outcome may differ from the amounts recorded in its financial statements.
Basic indicator approach
Adyen applies the basic indicator approach in order to calculate its own funds requirements for operational risk. Under
the basic indicator approach, the own funds requirement for operational risk is equal to 15% of the average over three
years of the relevant indicator. Where the relevant indicator refers to the sum of several elements within the profit andloss statement of the institution.

Adyen’s total risk exposure amount for operational risk is EUR 487,668 resulting in an own funds requirement of EUR
39,014.24

24 Art. 438(f) CRR.

Adyen Transparency and Disclosure Report 2018 | Page 17

Table 7 shows the build-up of the relevant indicator over the last three years.
Table 7: relevant indicator (in EUR ‘000)
Build-up relevant indicator

31-12-16

31-12-17

31-12-18

214,412

218,043

347,814

Relevant
indicator
260,090

Own funds
requirement
39,014

Capital buffers
In addition to a Pillar I and Pillar II requirement, Adyen is subject to the countercyclical buffer25 requirement.

Geographical distribution of credit risk
Resulting from its international operations, Adyen has exposures to counterparties in several countries. The
geographical distribution of Adyen’s credit exposures relevant for the calculation of the countercyclical capital buffer
are shown in Annex II.
As can be concluded from Table 8 below, the institution-specific countercyclical capital buffer for Adyen is 0.05%.
Table 8: Countercyclical buffer (in EUR ‘000)
Row
Institution-specific countercyclical capital buffer

31-Dec-18

010

Total risk exposure amount

1,149,560

020

Institution specific countercyclical capital buffer rate

030

Institution specific countercyclical capital buffer requirement

0.05%
520

Leverage
Leverage means the relative size of an institution’s assets and off-balance sheet obligations as compared to theinstitution’s own funds.

Leverage ratio
The leverage ratio26 is a monitoring tool used to assess the risk of excessive leverage within institutions. It is defined asTier 1 capital divided by a non-risk-based measure of the on- and off-balance sheet items. By restricting the build-up
of leverage, the leverage ratio aims to avoid destabilizing deleveraging processes that can damage the broader
financial system and the economy.
Currently, only a reporting requirement with respect to the leverage ratio applies. Within the amendments to the CRR,
a binding 3% leverage ratio is proposed. It is expected these amendments will come into force mid-2019, whereas thebinding 3% leverage ratio will apply two years after entry into force.
As per 31 December 2018, Adyen had a leverage ratio of 28%. Annex III provides detailed information on both thereconciliation between total assets as published in the financial statements and the total exposure measure, andprocesses used to manage the risk of excessive leverage.

25 Art. 440 CRR.
26 Art. 451 CRR.

Adyen Transparency and Disclosure Report 2018 | Page 18

Disclosures on Pillar II
Pillar II sets out mandatory processes for institutions and supervisors to fulfill capital adequacy and liquidity adequacy
requirements. Adyen combines the assessment of these requirements within its ICLAAP. This chapter describes
Adyen’s ICLAAP and specifically addresses interest rate risk in the banking book.

Internal capital adequacy assessment process
Adyen has designed, implemented, maintains and monitors internal risk management and control systems to identify
and manage risks associated with its strategy and activities.
Adyen uses stress testing to understand the impact of stress events on its overall risk profile. It is based on exceptional
but plausible events with an adequate degree of severity. Stress testing is performed in accordance with EBA
guidelines on stress testing. The results from stress tests are also used as an input for fine-tuning Adyen's risk
appetite, risk capacity and risk limits as a feedback mechanism. In 2018, Adyen performed its first Internal Capital and
Liquidity Adequacy Assessment Process (ICLAAP27) including stress testing. The assessment results showed that
Adyen has a high financial shock absorption capacity and adequate levels of capital and liquidity.

Interest rate risk in the banking bookInterest rate risk on financial instruments included in the banking book28 could arise from adverse movements inunderlying interest rates. Although significant liabilities towards the merchants are present, these liabilities are noninterest bearing and are settled at short notice.
Adyen is exposed to interest rate risk in the banking book in relation to its High-Quality Liquid Assets (HQLA): cash
held at central banks and government bonds. However, cash balances of Adyen are not significantly exposed tointerest rate risk due to the fact that cash is used to settle the current liabilities towards the merchants at short notice.
The nominal values of the bonds held-to-maturity are minimal as compared to the overall financial instruments
balance, are short-term in nature and are held-to-maturity leading to minimal interest rate risk. As a result of the natureof the products on the Adyen balance sheet the remaining interest rate risk is considered to be minimal.

27 Art. 438(a) CRR.
28 Art. 448 CRR.

Adyen Transparency and Disclosure Report 2018 | Page 19

Remuneration policy
Adyen has a global remuneration policy29 which applies to all staff worldwide, including board members. The objectiveof Adyen’s remuneration policy is to ensure recruiting and retaining the best talent in the world. Adyen’s remuneration
policy is rooted in the Adyen formula and is in full compliance with all relevant international and local legislation andregulations.
The remuneration policy is consistent with, and promotes, sound and effective risk management and has always beenaligned with Adyen’s strategy to create long-term value for customers. As such, the remuneration policy does notcontain incentives that exclusively benefit staff members themselves. This chapter further describes Adyen’s
remuneration policy and principles.

Remuneration principles
The size of a remuneration package is based on the scope of responsibilities, the employee’s experience andperformance, and the local market circumstances, which may differ from country to country.

Remuneration package
A remuneration package may consist of a base salary and share-linked instruments. For certain employees aremuneration package may also include variable income. Table 9 provides an overview of remuneration awarded to
identified staff over 2018, split into fixed and variable remuneration.
Table 9: quantitative information on remuneration (in EUR ‘000)
Senior management

All other

Total

9

9

18

Cash based

1,226

2,687

3,913

Instrument based

-

-

-

Cash

-

-

-

Shares---Share-linked instruments

-

-

-

Other types

-

-

-

Ratio (variable to fixed)

-

-

-

Number of beneficiaries
Fixed remuneration

Variable remuneration

Variable remuneration
Adyen’s Remuneration Policy is in line with the (i) WBFO (Wet beloningsbeleid financiële ondernemingen), and (ii) the
EBA Guidelines on sound remuneration policies. The Dutch Law WBFO sets various requirements, especially withrespect to variable remuneration. These requirements include requirements for mandatory holdback and claw backprovisions, variable remuneration caps, specials conditions linked to sign-on, severance payments and therequirement that variable remuneration must be based for at least 50% on non-financial performance criteria. Adyen
applies all these criteria.
In principle, Adyen will restrict variable income to 20% of the base pay. In respect of certain key employees’ exceptions
may apply. Variable income will however never exceed 100% of fixed remuneration. Moreover, the total of variable pay
to staff will not exceed 20% of the total base salary of this group.

29 Art. 450 CRR.

Adyen Transparency and Disclosure Report 2018 | Page 20

Identified staff
In 2018 there were 18 employees identified as identified staff (staff that is considered to have a material impact on therisk profile of Adyen). None of these employees was entitled to a performance related bonus in 2018.

Total annual remuneration
In 2018 there were no employees to whom total annual remuneration (Including employer pension contributions andany severance payments made) of EUR 1 million or more was awarded.

Nomination and Remuneration Committee
The Nomination and Remuneration Committee consist of three (3) Supervisory Board members as determined by theSupervisory Board. The current remuneration policy and remuneration of the individual board members was adopted
at the shareholder meeting on April 13, 2018. The Nomination and Remuneration Committee has met once in 2018.

Remuneration for the Management Board
The Management Board’s remuneration policy is in line with the remuneration policy that applies to all staff. The
remuneration of the members of the Management Board is determined by the Supervisory Board with due observanceof the remuneration policy as adopted by the General Meeting.
The individual Management Board members do provide the Nomination and Remuneration Committee with theirviews with regard to the amount and structure of their own remuneration. The Management Board’s remuneration iscompared to AEX, AMX and AScX companies. The Management Board remuneration is below the median of thebenchmark. This discrepancy is accepted for the current Managing Directors. To attract future Managing Directors the
remuneration package for new Managing Directors may be adjusted to the market.
In line with the revised Dutch Corporate Governance Code, the internal ratio of the Management Board members’
remuneration and that of a representative reference group was determined. For this ratio, Adyen deems most relevant
the total direct compensation of the CEO compared to the average total direct compensation of all Adyen employees
worldwide. For the CEO a ratio of 7:1 applies. For the other board members, a ratio of 6:1 applies.

Adyen Transparency and Disclosure Report 2018 | Page 21

Annexes
Annex I Own funds
Capital instruments main features template as derived from ITS (EU) 1423/2013.30
See: Attachment 18 Adyen Pillar III Templates 19-3-2019.xls (Tab: Shares)

Annex II Countercyclical capital buffer
Geographical distribution of credit exposures relevant for the calculation of the countercyclical capital buffer template
as derived from RTS (EU) 2015/1555.31
See: Attachment 18 Adyen Pillar III Templates 19-3-2019.xls (Tab: CCyB1 (2))

Annex III Leverage
CRR leverage ratio – Disclosure template (quantitative) as derived from ITS (EU) 2016/200.32
See: Attachment 18 Adyen Pillar III Templates 19-3-2019.xls (Tab: Leverage1)
CRR leverage ratio – Disclosure template (qualitative) as derived from ITS (EU) 2016/200.33
See: Attachment 18 Adyen Pillar III Templates 19-3-2019.xls (Tab: Leverage2)

30 Art. 437(1)(b) CRR.
31 Art. 440(1)(a) CRR.
32 Art. 451(1)(a-c) CRR.
33 Art. 451(1)(d&e) CRR.

Adyen Transparency and Disclosure Report 2018 | Page 22

Annexes
Annex I Own funds
Capital instruments main features template as derived from ITS (EU) 1423/2013.31
Ordinary shares

1

IssuerAdyen N.V.

2

Unique identifier

3

Governing law(s) of the instrument

NL0012969182
The shares are governed by thelaws of the Netherlands

Regulatory treatment
4

Transitional CRR rules

Common Equity Tier 1

5

Post-transitional CRR rules

Common Equity Tier 1

6

Eligible at solo / (sub-)consolidated / solo & (sub-)consolidated

7

Instrument type

Consolidated
CET1 as published in the EBA
list (art. 26(3))

8Amount recognised in regulatory capital

80,000,000

9Nominal amount of instrument

0.01

9a

Issue price

240

9b

Redemption priceNot applicable

10

Accounting classification

Shareholders' equity

11

Original date of issuance

13 June 201812

Perpetual or dated

Perpetual13

Original maturity dateNo maturity

14

Issuer call subject to prior supervisory approval

No

15

Optional call date, contingent call dates and redemption amountNot applicable

16

Subseqeuent call dates, if applicableNot applicable

Coupons / dividends
17

Fixed or floating dividend/coupon

Floating

18

Coupon rate and any related index

Not applicable

19

Existence of a dividend stopper

20a

Fully discretionary, partially discretionary or mandatory (in terms of timing)

No
Fully discretionary - no dividend
pushers, dividend stoppers or
ACSM

20b

Fully discretionary, partially discretionary or mandatory (in terms of amount)

Fully discretionary

21

Existence of step up or other incentive to redeemNo22

Non-cumulative or cumulative

Non-cumulative

23

Convertible or non-convertible

Non-convertible

24

If convertible, conversion trigger(s)Not applicable25

If convertible, fully or partially

Not applicable

31 Art. 437(1)(b) CRR.

Adyen Transparency and Disclosure Report 2018 | Page 22

26

If convertible, conversion rates

Not applicable27

If convertible, mandatory or optional conversion

Not applicable28

If convertible, specify instrument type convertible into

Not applicable29

If convertible, specify issuer of instrument it converts into

Not applicable30

Write-down features

No31

If write-down, write-down trigger(s)Not applicable32

If write-down, full or partial

Not applicable33

If write-dowm, permanent or temporary

Not applicable34

If temporary write-down, description of write-up mechanism

Not applicable

35

Position in subordination hierarchy in liquidation

Subordinated to all claims

36

Non-compliant transitioned features

No37

If yes, specify non-compliant feature

Not applicable

Adyen Transparency and Disclosure Report 2018 | Page 23

Annex II Countercyclical capital buffer
Geographical distribution of credit exposures relevant for the calculation of the countercyclical capital buffer template as derived from RTS (EU) 2015/1555.32
General Credit exposures
Exposure value for SA
010(AT) Republic of Austria(AU) Australia(BE) Kingdom of Belgium(CN) People's Republic of China(DE) Federal Republic of Germany(FI) Republic of Finland(GB) Great Britain and Northern Ireland(HK) Hong Kong
(ID) Republic of Indonesia(JP) Japan(MX) United Mexican States(MY) Malaysia(NL) Kingdom of Netherlands(PH) Republic of the Phillipines(PL) Republic of Poland(PT) Portuguese Republic(RU) Russian Federation(SE) Kingdom of Sweden(SK) Slovak Repuplik(US) United States of America

336,207.98
80,491.64
11,535,540.56
150,859.66
331,019.10
20,635.42
21,051,062.05
107,260.95
1,224,734.88
43,418.97
26,561.32
397,880.54
172,753,481.51
49,014.24
97,530.51
41,324.93
38,446.28
1,400,605.20
969,462.21
156,175,060.47
366,830,598.42

Own funds requirementsof which: Generalcredit exposures
070
26,896.64
6,439.33
463,168.47
12,068.77
26,481.53
1,650.83
851,811.34
8,580.88
97,978.79
3,473.52
2,124.91
31,830.44
13,820,278.52
3,921.14
7,802.44
3,305.99
3,075.70
112,048.42
77,556.98
10,473,182.38
26,033,677.00

Total
100
26,896.64
6,439.33
463,168.47
12,068.77
26,481.53
1,650.83
851,811.34
8,580.88
97,978.79
3,473.52
2,124.91
31,830.44
13,820,278.52
3,921.14
7,802.44
3,305.99
3,075.70
112,048.42
77,556.98
10,473,182.38
26,033,677.00

Own funds
requirements
weights

Countercyclicalcapital buffer rate

110

120
0.00
0.00
0.02
0.00
0.00
0.00
0.03
0.00
0.00
0.00
0.00
0.00
0.53
0.00
0.00
0.00
0.00
0.00
0.00
0.40
1.00

0.01
0.0063

0.020
0.013

32 Art. 440(1)(a) CRR.

24

Annex III Leverage
CRR leverage ratio – Disclosure template (quantitative) as derived from ITS (EU) 2016/200.33

CRR Leverage Ratio - Disclosure
Template
Reference date

12/31/18

Entity nameAdyen N.V.

Level of application

Consolidated

Table LRSum: Summary reconciliation of accounting assets and leverage ratio
exposures
Applicable Amounts
1

Total assets as per published financial statements

4

Adjustment for entities which are consolidated for accounting purposes but areoutside the scope of regulatory consolidation(Adjustment for fiduciary assets recognised on the balance sheet pursuant to theapplicable accounting framework but excluded from the leverage ratio exposure
measure in accordance with Article 429(13) of Regulation (EU) No 575/2013"CRR")
Adjustments for derivative financial instruments

5

Adjustments for securities financing transactions "SFTs"

6

Adjustment for off-balance sheet items (ie conversion to credit equivalentamounts of off-balance sheet exposures)

EU6a(Adjustment for intragroup exposures excluded from the leverage ratio exposure
measure in accordance with Article 429 (7) of Regulation (EU) No 575/2013)

EU6b(Adjustment for exposures excluded from the leverage ratio exposure measure inaccordance with Article 429 (14) of Regulation (EU) No 575/2013)

7

Other adjustments

8

Total leverage ratio exposure

23

1,855,358-6,954
1,848,403

Table LRCom: Leverage ratio common disclosure
CRR leverage ratio
exposuresOn-balance sheet exposures (excluding derivatives and SFTs)
1
2

On-balance sheet items (excluding derivatives, SFTs and fiduciary assets, but
including collateral)(Asset amounts deducted in determining Tier 1 capital)

1,855,358-6,95433 Art. 451(1)(a-c) CRR.

25

3

Total on-balance sheet exposures (excluding derivatives, SFTs andfiduciary assets) (sum of lines 1 and 2)

1,848,403

Derivative exposures
4
5
EU-5a
6
7
8
9
10
11

12
13
14
EU14a
15
EU15a
16
17
18
19

Replacement cost associated with all derivatives transactions (ie net of eligible
cash variation margin)
Add-on amounts for PFE associated with all derivatives transactions (mark-tomarket method)
Exposure determined under Original Exposure Method
Gross-up for derivatives collateral provided where deducted from the balance
sheet assets pursuant to the applicable accounting framework(Deductions of receivables assets for cash variation margin provided inderivatives transactions)(Exempted CCP leg of client-cleared trade exposures)
Adjusted effective notional amount of written credit derivatives(Adjusted effective notional offsets and add-on deductions for written credit
derivatives)
Total derivative exposures (sum of lines 4 to 10)
Securities financing transaction exposures
Gross SFT assets (with no recognition of netting), after adjusting for sales
accounting transactions(Netted amounts of cash payables and cash receivables of gross SFT assets)
Counterparty credit risk exposure for SFT assets
Derogation for SFTs: Counterparty credit risk exposure in accordance with Article
429b (4) and 222 of Regulation (EU) No 575/2013
Agent transaction exposures(Exempted CCP leg of client-cleared SFT exposure)

Total securities financing transaction exposures (sum of lines 12 to
15a)Other off-balance sheet exposures
Off-balance sheet exposures at gross notional amount(Adjustments for conversion to credit equivalent amounts)

Other off-balance sheet exposures (sum of lines 17 to 18)

Exempted exposures in accordance with CRR Article 429 (7) and (14) (on and off balance sheet)

EU19a
EU19b

(Exemption of intragroup exposures (solo basis) in accordance with Article 429(7)of Regulation (EU) No 575/2013 (on and off balance sheet))(Exposures exempted in accordance with Article 429 (14) of Regulation (EU) No
575/2013 (on and off balance sheet))

Capital and total exposures

20

Tier 1 capital

521,177

21

Total leverage ratio exposures (sum of lines 3, 11, 16, 19, EU-19aand EU-19b)

1,848,403

Leverage ratio

22

Leverage ratio

28.20%

Choice on transitional arrangements and amount of derecognised fiduciary items
EU-23

Choice on transitional arrangements for the definition of the capital measure

EU24

Amount of derecognised fiduciary items in accordance with Article 429(11) ofRegulation (EU) NO 575/2013

Adyen Transparency and Disclosure Report 2018 | Page 26

CRR leverage ratio – Disclosure template (qualitative) as derived from ITS (EU) 2016/200.34

CRR Leverage Ratio - Disclosure Template
Table LRQua: Free format text boxes for disclosure on qualitative items

ColumnFree format

Row

1

Description of theprocesses used to
manage the risk ofexcessive leverage

Adyen has adopted a uniform and systematic company-wide approach for managing
risks, including the risk of excessive leverage. Adyen's integral risk management
framework is based on the Enterprise Risk Management (ERM) model as issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The integral risk management framework structures the risk management activities
within Adyen with a view of identifying, assessing, managing, monitoring andreporting risks in a uniform manner. The essential elements of Adyen's integral risk
management framework are governance and culture, strategy and objective setting,performance, review and revision, information, communication and reporting.

2

Description of thefactors that had an
impact on theleverage Ratio
during the period
to which thedisclosed leverage
Ratio refers

Adyen currently anticipates a 3% minimum regulatory level. The exposure measurecomprises receivables from financial institutions, cash and cash equivalents, thedeferred cash receivable from Visa and accounts receivables. The majority of the
exposures have a short term duration, with residual maturities of days. Therefore, thevolume of transactions determine the balance sheet size on a given reference date.
This business model is not strongly leveraged and the growth of transactions ismonitored closely. As a result, the leverage ratio is stable and well above the minimum
regulatory level.

34 Art. 451(1)(d&e) CRR.

Adyen Transparency and Disclosure Report 2018 | Page 27