Adyen announces intention to launch an Offering and listing of its shares on Euronext Amsterdam

Amsterdam, the Netherlands – Adyen B.V. (or the “Company”) today announces its intention to proceed with an Offering (the “Offering”) and the listing of its shares on Euronext Amsterdam (the “Listing”). Adyen is an integrated global payments platform, which since its inception in 2006 has become a global leader in facilitating payments for large merchants across channels and geographies. The Offering is expected to consist of a sale of existing shares held by certain selling shareholders1 (the “Selling Shareholders”) on a pro rata basis.

Adyen Highlights

• Adyen is a technology company offering a single integrated platform that facilitates frictionless payments for merchants across channels and geographies.

• The Company’s unique end-to-end solution is redefining the global electronic payments market.

• The Company’s approach to connecting directly with card schemes capturing payments data across channels has enabled it to develop differentiated solutions for merchants, supporting an increase in payments conversion and a reduction in fraudulent transactions, while also yielding superior shopper insights.

• Adyen primarily targets large global companies as well as an increasing number of domestic/mid-market merchants and has become the trusted partner of many of the world's most recognizable brands.

• Adyen is uniquely positioned to benefit from secular market trends and has identified multiple avenues for growth, both from its existing industry-leading enterprise merchants as well as new enterprise and mid-market clients.

• The Company has an experienced founder-led management team and fosters a unique entrepreneurial culture.

• For the year ended 31 December 2017, Adyen generated Net Revenue of €218 million, representing 38% growth compared to 2016, and Adjusted EBITDA of €99 million, representing an Adjusted EBITDA margin

   of 45.5%.

• Processed volumes increased to €108 billion in 2017 compared to €66 billion in 2016, representing year-on-year growth of 63%.

Offering Highlights

• The intended Offering will consist of a private placement of existing shares held by the Selling Shareholders to institutional investors in various jurisdictions, including the Netherlands.

• The Selling Shareholders intend to sell approximately 15% of the Company’s shares in the IPO.

• Application expected to be made for a Listing of the Company's shares on Euronext Amsterdam

• The Company and the Selling Shareholders expect to enter into customary lock-up arrangements with the underwriters in connection with the Offering and Listing.

• The Company has appointed Morgan Stanley & Co. International plc and J.P. Morgan Securities plc as Joint Global Coordinators and Joint Bookrunners for the Offering. ABN AMRO Bank N.V., BofA Merrill Lynch and Citigroup Global Markets Limited are acting as Joint Bookrunners.

Pieter van der Does, Co-founder, President & CEO said:

“We feel that we are still in the early stages of a remarkable journey. Our focus remains on building new functionality and on helping our merchants grow. This offering provides us with the freedom to keep building the company, while offering our shareholders a path to liquidity. Adyen will remain a company that is driven by a long-term vision and strategy”.

Adyen Business Description

• Adyen offers an efficient single platform that enables the acceptance and processing of cards and local payments globally across its merchants' online, mobile and point-of-sale ("POS") channels.

• The Company’s global platform has integrated and simplified the payments value chain, enabling it to partner with large merchants to rapidly scale their businesses both locally and globally, without the inefficiencies of traditional payment platforms.

• Adyen’s data-centric platform increases conversion rates while reducing the risk of fraudulent transactions, reducing settlement times, and providing comprehensive data insights to merchants that are crucial for managing their interactions with shoppers.

• The Company’s ever-evolving platform encompasses the entire payments value chain as it relates to merchants, from checkout to payment settlement. This single integrated platform provides a merchant-friendly alternative to the multiple legacy providers that merchants previously had to rely on for payments processing.

• Adyen primarily targets large, global enterprise merchants as well as, increasingly, domestic and mid-market merchants, which the Company views as the next adjacent segment to enterprise merchants. In 2017, Adyen processed transactions for several thousand merchants around the world and across industries, including retail, travel, digital services, hospitality and platforms. The Company’s customer base includes Uber, Netflix, Facebook, Spotify, Etsy, Vodafone, Sephora, Tory Burch, L’Oréal and booking.com.

• As of 31 December 2017, the Company had 668 employees globally, with its headquarters in Amsterdam, the Netherlands, and 14 other offices in the United States (San Francisco, New York), Latin America (Mexico City, Sao Paulo), Asia-Pacific (Singapore, Sydney, Shanghai) and Europe (Paris, London, Manchester, Berlin, Stockholm, Brussels and Madrid).

• In 2017, Adyen obtained a banking license in Europe, enabling the Company to offer payment processing services with direct settlement of funds to merchants from an Adyen account instead of having to rely on external banking partners, the aim of which is to provide enhanced performance and reliability.

Investment Highlights

Strengths

One single platform built for growth

The typical payments landscape has been characterized by a fragmented patchwork of providers and legacy systems, which Adyen believes has led to an inferior shopper experience, including both explained and unexplained declined authorizations resulting in low conversion rates and a high number of fraudulent transactions leading to considerable administrative costs for merchants. In this context, the Adyen team sets out to fundamentally change the payments industry by building a single, fully-integrated global platform, aimed at providing a high-quality level of service to merchants. The Company’s state-of-the-art platform has been built in-house and is designed to replace several blocks of the traditional payments value chain (gateway, risk management, processing and acquiring) through a single, integrated platform, thereby providing the Company with better intelligence into the payments flow and allowing it to provide high-quality service levels and transparency to merchants.

A large global market opportunity

Adyen is tapping into the vast global payments market. For 2017, Nilson estimated global card purchases to be $23 trillion5. This fast-growing market is fueled by the long-term shift from cash to non-cash payment methods and the increase of e-commerce globally.

Delivering significant benefits for merchants

Adyen's proprietary payments platform enables the Company to deliver high-quality service levels to its merchants resulting in a number of key benefits:

• A global platform with local depth able to offer merchants access to a large number of global card schemes (e.g. Visa, Mastercard) and local payment methods (e.g. Alipay in Asia) tailored for shopper payment preference in each market.

• Unified commerce across all channels (online, mobile and POS) allowing merchants to rapidly expand in existing markets and enter new markets, while retaining a centralized payments platform and holistic view of their shoppers and offering them a personalized, improved shopping experience, regardless of what channel they choose to shop through.

• Data-centric solutions to increase revenue while reducing risk and bolstering fraud protection.

• Membership to ongoing innovation, with Adyen continuously improving its products for all merchants and innovating at a fast pace.

Trusted partner of many of the world's most recognizable companies

Adyen has consistently sought to provide its merchants with best-in-class service globally and transparent pricing, and as a result, has been able to assemble a strong merchant base consisting of several thousand merchants. The Company’s merchant portfolio comprises many of the world’s leading companies and brands including Uber, Netflix, Facebook, Spotify, Etsy, Vodafone, Sephora, Tory Burch, L’Oréal, and booking.com.

An experienced founder-led management team fostering an entrepreneurial culture

Since the Company’s inception in 2006, Adyen’s management team has focused on fostering an entrepreneurial culture, at the heart of which rests a commitment to superior service for merchants and to creating benefits for all stakeholders, as represented by the "Adyen Formula". The principles embodied in the Adyen Formula include working in teams to build solutions to benefit all merchants (not just one), launching new products and solutions fast, and iterating and making good choices in order to build an ethical business and drive sustainable growth for the Company's merchants.

A business that is difficult to replicate

Adyen’s business is difficult to replicate as a result of numerous characteristics, including its single, globally integrated platform enabling a seamless and high-quality transaction experience, the Company’s tech DNA and payments expertise, the strong relationships it fosters with some of the world's largest and most globally connected merchants, the Company’s global presence that is reinforced by local expertise, partnerships with key constituencies and a suite of licenses and regulatory know-how, Adyen’s powerful culture attracting some of the best people in the payments industry, and its pricing transparency.

Strategy

Adyen aims to be at the forefront when it comes to developing new functionality as business models evolve and believes that it is well positioned to significantly grow its business and increase scale over the coming years, with growth opportunities mostly centered on the following three strategic pillars:

• Continued focus on enterprise merchants: Adyen sees significant potential for upside through deepening relationships with its existing merchant base, acquiring new enterprise merchants across different verticals and geographies, and by capitalizing on these merchants’ changing business models.

• Increasing Adyen’s unified commerce footprint, enabling merchants to offer a uniform experience across channels and through increased focus on it's point-of-sale offering which it believes will continue to grow in the coming years.

• Additional focus on mid-market merchants, seen as an adjacent segment to enterprise merchants, and where Adyen believes it is well-positioned to grow.

Key Financials

Financial Objectives

Adyen has set the following financial objectives, which it aims to achieve by executing its strategy:

• Net revenue growth:

   Adyen aims to continue the growth of net revenues and achieve a CAGR (compound annual growth rate) between mid-twenties and low thirties in the medium term by executing its sales strategy. For 2018, the Company expects net revenue to grow at least 40%.

• EBITDA margin:

   Adyen aims to improve its annual EBITDA margin, and expects such margin to benefit from its operational leverage and increase to levels above 55% in the long term.

• Capital expenditure:

   Adyen aims to maintain a sustainable capital expenditure level of up to 5% of its net revenue. 

Dividend Policy

Adyen intends to retain any profits to expand the growth and development of the Company’s business and, therefore, does not anticipate paying dividends to its shareholders in the foreseeable future.

Offering Details

The Offering will consist of solely of a private placement to institutional investors in various jurisdictions outside the United States, including the Netherlands, and, in the United States, only to qualified institutional buyers in reliance on Rule 144A or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Offering will consist of a sale of existing shares held by current shareholders. The Selling Shareholders intend to sell approximately 15% of the Company’s shares in the Offering.The Company and the Selling Shareholders expect to enter into customary lock-up arrangements with the underwriters.The Company has appointed Morgan Stanley & Co. International plc and J.P. Morgan Securities plc as Joint Global Coordinators and Joint Bookrunners for the Offering. ABN AMRO Bank N.V., BofA Merrill Lynch and Citigroup Global Markets Limited have been appointed as Joint Bookrunners.If and when the expected IPO is launched, full information about the Offering and Listing will be included in the prospectus relating to the IPO and Listing. If and when the Offering is launched, the prospectus will be published after it has been approved by the Netherlands Authority for the Financial Markets (AFM). This approval process is ongoing. Once approved by the AFM, the prospectus will be published and made available at the start of the offer period, subject to securities law restrictions in certain jurisdictions. The approval of the prospectus by the AFM shall not constitute an approval of the soundness of the transaction proposed to investors.Further details of the intended Offering and Listing will be announced in due course.

Contact details

General inquiries: ir@adyen.com  Media: press@adyen.com

1. Contentis B.V., Sintentis B.V., Spreng B.V., Ark B Holding B.V., Partners in Equity III B.V., Mabel van Oranje, KDP Projects B.V., DIA Holding B.V., Adinvest AG, Pentavest S.à r.l., Felicis Ventures III, L.P., General Atlantic Everest B.V., Bridford Music LLC and Stichting Administratiekantoor Adyen.

2. Adjusted for the impact of a €56 MM one-off non-operational gain in 2016 related to a consideration received for the purchase of Visa Europe by Visa Inc. in exchange for the membership in Visa Europe that Adyen previously obtained to facilitate core operations.

3. Adjusted EBITDA Margin defined as the ratio of Adjusted EBITDA to Net Revenue.

4. Defined as the value of all transactions processed by Adyen.

5. Nilson Report as of April 2018.

6. Unified commerce: more generally defined as the elimination of distinctions between the channels through which a shopper interacts with a merchant and, in the case of Adyen’s current product offering, combining POS, online and mobile and standardizing across channels for merchants.

7. For the years ended 31 December 2015 to 2017.

8. Adjusted for impact of non-operational gain in 2016 (€56 MM) related to consideration received for the purchase of Visa Europe by Visa Inc.

9. Adjusted EBITDA Margin defined as the ratio of Adjusted EBITDA and Net Revenue.

10. Free cash flow refers to Adjusted EBITDA net of capital expenditure, with capital expenditure consisting of the line items "Purchases of plant and equipment" and "Capitalization of intangible assets" on the consolidated statement of cash flows.

11. Adyen has not defined, and does not intend to define, ‘‘medium term’’ or "long-term". Adyen's medium- term and long-term financial objectives should not be read as forecasts, projections or expected results and should not be read as indicating that Adyen is targeting such metrics for any particular year but are merely objectives that result from Adyen’s pursuit of its strategy. Adyen's ability to meet its 2018, medium term and long-term objectives is based upon the assumption that Adyen will be successful in executing its strategy and, furthermore, depends on the accuracy of a number of assumptions involving factors that are significantly or entirely beyond Adyen's control and are subject to known and unknown risks, uncertainties and other factors that may result in Adyen being unable to achieve these objectives.