Q3 2020 and COVID-19 Trading Update

Q3 2020 and COVID-19Trading Update

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pagepage2 2Q3H1 20202019 andShareholder
COVID-19letter
Trading Update

Q3 2020
77.0

101.2

169.4

61.0

81.9

135.6

40.8

Q3 2018

56.2

95.1

Q3 2019

Q3 2018

Q3 2020

Q3 2019

Q3 2020

Q3 2018

Processed volume

Net revenue*

EBITDA* 26% yoy

 25% yoy

 24% yoy

77.0 bn

169.4 mn

Q3 2020101.2 mnebitda Margin 60%*H
 istorical figures have been adjusted since prior publications of results,
as explained on page 6.

“The Trading Update in Q1 of this year may have been alittle out of character for us, with our half-yearly reportingintervals lining up well with our long-term outlook.
However, the COVID-19 pandemic still dominates lives
and businesses across the globe. Therefore, we feel it’s
appropriate to also provide more color around the evolutionof volumes for Q3 — with some regions now back-tobusiness, and others still experiencing stricter measures.
Our focus continues to be on helping our merchantsnavigate this pandemic and its impact on society.”
Ingo UytdehaageCFOQ3 2019

Q3 2020 and COVID-19 Trading Update

Summary•	Processed volume for the period was €77 billion, up 26% YOY, as
the rebound in volumes following the initial dip when COVID-19 first
impacted economies in early March continued (see Figure 1).
•	The travel vertical (i.e. airlines, online travel agencies andaccommodation) saw a minor rebound during the northern hemispheresummer, primarily due to the easing of lockdown restrictions acrossEurope. Volumes stabilized following this initial spike and remained
significantly above early Q2 levels (see Figure 1).
•	In the retail vertical, in-store volumes rebounded to pre-COVID-19 levels
in Q3 and were stable over the period even though many merchants arestill not operating at full capacity. We saw the uptick in online volume that
followed initial brick-and-mortar store closures persist, with ecommerce
growing unabated despite recovering in-store volume. The ramp-up ofeBay volumes are included in this vertical (see Figure 2).
•	We continue to onboard merchants to the platform at our regularspeed, and have a similarly robust pipeline. With lockdown restrictions
being lifted in some geographies, we saw projects that previously
suffered from COVID-related delays being taken live in Q3.
•	Net revenue was up 25% year-on-year in Q3 2020. Q3 take rate
decreased slightly year-on-year to 22 bps. Take rate continues tonot be a driver for us, as we focus on onboarding volume at scale.
Historical figures have been adjusted since prior publications ofresults, please see page 6. This also applies to the EBITDA and free
cash flow conversion figures stated below, although cash balances areunaffected.
•	EBITDA margin was at 60% for the period. EBITDA margin wasimpacted by an increase in operating expenses relative to net revenue
as we continue to invest in building Adyen for the long-term — both inhiring and in marketing.
•	Free cash flow conversion ratio was 95% in the quarter, with CapEx
remaining below 5% of net revenue.

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Q3 2020 and COVID-19 Trading Update

page 4Figure 1
Weekly processed volume and weekly travel volume indexed to the first week of January.
40%
20%
0%
-20%
-40%
-60%
-80%-100%

1357911Q1

13151719212325Q2Total processed volume27293133353739Q341Q4TravelFigure 2
Weekly retail processed volumes indexed to the first week of January.

100%

50%

0%-50%-100%

1357911Q113151719Q2

Online retailIn-store retail*21232527
Q3Total retail* In-store retail volume is not a proxy for total point-of-sale volume.

29313335373941Q4

Q3 2020 and COVID-19 Trading Update

PeopleWe continue to build Adyen for the long term and have therefore not slowed
down hiring despite the current macroeconomic conditions. We grew theteam to 1,639 FTE in Q3 2020, adding 191 FTE during the period.
To ensure the absorption of new hires into the team and Adyen culture
in a work-from-home setting, we continue to focus on welcoming
new team members during our now online introduction sessions.
Senior management spends significant time on these online company
introductions by hosting Adyen Formula chats, and continues to meet
every new hire before they join our team.

Figure 3
Adyen’s Q3 2020 FTE growth

We are aware that the current situation is likely to persist for a longer time,and are comfortable growing the company in this environment going
forward with all the online efforts that safeguard our culture we have inplace. We view this working-from-home period as a marathon, and not asprint. To adapt to this situation, we have an additional version of the Adyen
Formula to reflect this philosophy in place.

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Q3 2020 and COVID-19 Trading Update

Accounting adjustment
We have identified an accounting error that has resulted in anunderstatement of our net revenue, EBITDA, and EBITDA margin figures
and the related impact on tax and net income since 2018. On page 7
you will find an adjusted representation of these figures. These adjusted
figures will be included as part of our audited 2020 Financial Statements,
in accordance with IAS 1 and IAS 8.
Most of the costs related to our acquiring business (interchange andscheme fees) are charged for transactions which are settled to Adyen andthen to our merchants. There is a proportionally minor part of these costs
relating to transactions that are either refused or initially authorized andlater canceled which are charged separately. For these transactions, weerroneously recorded the scheme fees as costs in our books twice.
These duplicate bookings were solely accounting related and did notaffect any cash positions, payouts from financial institutions, or payouts
and reporting to our merchants. As business processes were notaffected, the above-mentioned bookings were not identified right away.
All parties were charged and paid the correct amounts. Once identified,
we resolved the accounting treatment of these costs.
As the above did not impact the fundamentals of the business, nor theassociated trends we have previously explained, we still have the same
long-term view of the business.
You will find the preliminary expected accounting impact on previously
reported periods on page 7 — these amounts have not been audited.
Processed volumes are unchanged.

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Q3 2020 and COVID-19 Trading Update

page 7

Figure 4
Accounting adjustment — For the half-yearly reported statements of 2020, 2019 and 2018 (all amounts in EUR '000 unlessotherwise stated). For further details, including quarterly, annual and cumulative figures since 2018, go here.

2020
Reported
H1 2020

AdjustmentRestated
H1 2020

Processed volume (EUR bn)

129.1-129.1

Net revenues

279,942

24,865

304,807

EBITDA

140,857

24,865

165,722

EBITDA margin

50.3%

Net income*

78,35554.4%
19,544

97,8992019
Reported
H1 2019

Adjustment

Restated
H1 2019

Reported
H2 2019

Adjustment

Restated
H2 2019

Processed volume (EUR bn)

104.6

-

104.6

135.0

-

135.0

Net revenues

221,096

16,571

237,667

275,585

21,048296,633

EBITDA

125,828

16,571

142,399

153,495

21,048

174,543

EBITDA margin

56.9%

59.9%

55.7%

Net income*

92,514

105,837

111,525

16,922

128,447

13,32358.8%

2018
Reported
H1 2018

Adjustment

Restated
H1 2018

Reported
H2 2018

Adjustment

Restated
H2 2018

Processed volume (EUR bn)

70.0

-

70.0

89.0

-89.0

Net revenues

156,431

9,273

165,704

192,482

15,260207,742EBITDA

70,2509,273

79,523

111,696

15,260126,956

EBITDA margin

44.9%

48.0%

58.0%

Net income*48,162

55,63582,984

7,473* The lower impact of the adjustment in net income is due to the tax effect of the adjustment.

61.1%
12,295

95,279

Q3 2020 and COVID-19 Trading Update

Financial Objectives
As our fundamental view of the business has not changed, we maintainthe same financial objectives.
Net revenue growth: We aim to grow net revenue and achieve a CAGR
between the mid-twenties and low-thirties in the medium term byexecuting our sales strategy.
EBITDA margin: We expect EBITDA margin to benefit from our operational
leverage going forward and remain at levels above 55% in the long-term.
Capital expenditure: We aim to maintain a sustainable capital
expenditure level of up to 5% of our net revenue.

Contact
ir@adyen.com
press@adyen.com
Please subscribe to our news feed on adyen.com/ir.

This trading update contains information that qualifies, or may qualify, as inside
information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

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