Annual

Report

2021

Adyen Annual Report 2021

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01

Management

Report

Adyen Annual Report 2021

I’m writing this on the 4th of March, a Friday afternoon, in one of our Amsterdam offices with sunny skies behind me. However, a little over 2,000 kilometers away the world is on fire. It’s impossible for me not to make a note of the invasion in Ukraine. My heart goes out to everyone affected. More far-reaching than the evolving humanitarian crisis, the state of the world order — the relative stability we’ve enjoyed in the West since the Second World War — is seriously at risk. This is a note of reflection on the past year, as it is every year, and I hope sincerely that this invasion and its impact won’t be the subject the next time I’m writing this.

Onto 2021. In the annual exercise of re-reading last year’s annual report cover letter before writing this year’s, I was struck by the consistency in themes — in those that were addressed in the note I was reading, and those that I wanted to address here.

The theme of societies in lockdown and open societies existing side-by-side, the theme of focusing on wellbeing during a crisis without a set end date, the theme of Zoom and other video services acting as a great equalizer for the team. These were as relevant in 2021 as they were in 2020.

The pandemic and its impact turned out to be a real marathon — and in many ways we’re still running it.

With the luxury of hindsight, I’m happy to have not attached any finish lines to the shifting realities we were faced with during the year. This is something we stressed at length internally — to focus on making our days engaging and productive and on working side-by-side with our merchants, not potentially naively looking forward to a hopeful end date. Quickly adjusting the company toward predominantly working online helped us become more resilient. We benefited throughout the year from infrastructure we put in place immediately as the pandemic hit.

It’s premature to say we’ve emerged from the pandemic, as its long-term impact is still to be properly assessed. However, if it is the case that the worst of COVID-19 is now behind us, I can say with emphasis that we’ve emerged from the pandemic stronger than we entered it. The team has grown to over 2,000, we processed over half a trillion of our merchants’ volume, and we continue to execute decisively. I’m incredibly proud of the teams across the world that have worked to make this happen. To

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build a growing company, at scale, with a different reality on a weekly basis — that’s an incredible feat from the team.

It’s equally true that the environment we now find ourselves in is markedly different from when we entered the pandemic. The acceleration of longer-term trends due to the rapid digitalization during the pandemic has changed the landscape, permanently. And with it, our position in it too. We’ve talked at length in previous publications about the fact that unified commerce has moved from what was previously a nice value-add to being critical infrastructure for businesses to survive and thrive. We’ve been able to be one of the drivers here as businesses were looking to adapt.

That’s not all that changed during the pandemic. Platforms had been successfully democratizing access to global markets for SMEs and smaller sellers for years. This too has accelerated greatly due to the pandemic, as an increasingly digital reality provided another catalyst for platforms across verticals. With this trend now entrenched, they are looking to deepen the relationship with their customers — with turnkey or plug-and-play solutions increasingly becoming the norm. To us, this is reason to look beyond the natural fit of our unified commerce offering to other embedded products. With our proven single platform and our licensing footprint, there is an opportunity here for us to serve as the infrastructure for a significant shift towards platform business models in the market.

We now operate at a different scale, amid a changing environment in which we are well positioned. As we look to capitalize on this opportunity, we are seeing a great appetite for office attendance and in-person cooperation in our growing team. Therefore, we’ve made a deliberate investment in offices around the world. We realize that this goes against what is largely a full-remote trend within tech and feel that the key is to find the right balance. What has changed from the pre-pandemic environment is that we now approach the working environment with a more flexible mindset.

As we continue to evolve in our role of providing financial infrastructure to growing businesses, our approach to social and environmental responsibility topics has grown too. Throughout 2021, this became evident in the build out of our Impact product suite, the growth of our internal sustainability and Diversity, Equity & Inclusion efforts, and the maturation of our reporting frameworks. Our roots dictate that we do first, and tell stories later — having said that, this is an area in which I expect to be able to report significant progress going forward.

At over half a trillion processed in 2021, I want to end this note with an appreciation of the fact that what started as a moonshot goal in Adyen’s first years (one trillion in volume) is now well within reach. I remain firmly convinced that we will be able to again deliver on what now seems like new moonshot goals 5-10 years from now. We have the track record, we have the product, and we have the team to get us there.

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Processed volume

Net revenue *

EBITDA *

70% YOY

46% YOY

57% YOY

MARGIN 63% 

€516.0BN

€1.0BN

€630.0MN

* Comparative figures have been restated on account of our previously disclosed accounting adjustment. Refer to our annual consolidated financial statements of 2020 for details on the correction.

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“ Last year I transitioned from my former company to Adyen — it was a unique experience, leaving a job remotely, starting my new job remotely again. But that’s where the Adyen culture came in handy, everybody was genuinely excited to meet me, across all offices people jumped on Zoom, no matter the time. Connecting as a team majorly happened online and we had some crazy team events — including a fully digital magic show from an authentic Peruvian magician! ”

Leif — Product Manager, San Francisco

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Figure 1

The Adyen value chain

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Another segment worth highlighting is Unified Commerce. Shifting consumer behavior is increasingly driving a need for merchants to present a single brand across all sales channels (i.e. offline and online). In industries such as retail, hospitality, and food & beverage, merchants can no longer afford to present either single, or diffuse channels to their shoppers. We are confident on the opportunity in this space due to our capacity to offer the following:

1.Holistic view of payments: A unified, single platform to process all payments, irrespective of channel, is foundational to how we have built our technology since the start of our company. This approach allows the collection of data that can deliver unique shopper insights and simultaneously help to combat fraud. Our back-end infrastructure for processing and settling payments is the same across all channels, providing merchants with a single view of all shopper transactions.

2.Seamless shopper journeys across channels: The Adyen platform enables merchants to offer a uniform experience to shoppers across all sales channels. This allows merchants to significantly improve the quality of service to their shoppers — for example, through one-click payments online or on mobile for shoppers recognized from in-store visits, through improved offer targeting, and through facilitation of home delivery.

3.Improvements in point-of-sale (POS) technology: Since the launch of our POS offering in 2015, we have seen growth mainly due to the increasingly obsolete infrastructure in the POS landscape still in place all over the globe. This technology is simply not built for the shoppers expectations described above. Due to this reality, merchants see vast improvements in performance when implementing our technology.

Historically, we built the Adyen platform focused on the needs of Enterprise merchants. We have since seen that a broader range of merchants is finding value in our offering. To meet this demand, we have invested in making our single platform more accessible to businesses in the next adjacent segment to enterprise, mid-market. Every merchant on our platform has access to the same performance and functionality as the world's largest businesses.

With 26 offices worldwide, our continuously expanding global footprint provides a local presence, local payment methods and local expertise in our key markets. This allows us to partner with ambitious businesses at a relatively early stage of their growth. By partnering with us, these businesses will be able to avoid being hampered by the complexity in business operations that so often comes with growth — such as adding additional payments channels, or expanding into new regions.

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The operational leverage inherent to our business model and platform is illustrated by the 63% EBITDA margin for 2021.

Full year EBITDA was €630.0 million for 2021, up 57% year-on-year.

Net income was €469.7 million in 2021, up 80% year-on-year.

CapEx were €54.3 million for the period, as we dealt with a significant one-off in the investment in new offices in Amsterdam. Consequently, CapEx was 5% of net revenues for the full year.

2021 free cash flow was €566.6 million, up 53% year-on-year. Free cash flow conversion ratio was 90%.

2020

2020

2020

2020

2021

2021

2021

2021

+41%YOY

+74% YOY

+48% YOY

24% YOY

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Financial objectives

We have set the following financial objectives1.

Net revenue growth: We aim to continue to grow net revenue and achieve a CAGR between the mid-twenties and low-thirties in the medium term by executing our sales strategy.

EBITDA margin: We aim to improve EBITDA margin, and expect this margin to benefit from our operational leverage going forward and increase to levels above 65% in the long-term.

Capital expenditure: We aim to maintain a sustainable capital expenditure level of up to 5% of our net revenue.

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Stakeholder engagement & materiality

Throughout 2021, we engaged with stakeholders on environmental-, social- and governance-related (ESG) topics to better understand their views and priorities in both formal and informal conversations and dialogues. Our stakeholders include, but are not limited to, employees, merchants, investors, governance bodies, suppliers, and peers. These initial conversations have provided us with a good understanding of what is material and valuable to our stakeholders in the context of ESG topics, and help us define material topics in preparation for the Corporate Sustainability Reporting Directive (CSRD). These topics, such as people and culture, training and education, diversity and equal opportunity, environmental sustainability, tax, anti-corruption and compliance have been addressed throughout this Annual Report, where our pillars describe in more detail how we currently focus on and manage our responsibilities that arise from ESG topics.

We see this informal assessment as a move forward with our ESG strategy. We are committed to dive deeper into the views of our stakeholders and what they deem important to better understand how we can implement, improve and report on these topics in the future, while simultaneously continuing to integrate ESG further into our business strategy.

In 2022, we plan to carry out a comprehensive, in-depth materiality assessment focused on identifying, prioritizing and benchmarking material topics. Implementing KPIs on our material topics will be our focus in 2022, as it will further develop our initiatives, activities, progress, metrics, performance and disclosures. This materiality assessment will include, but not be limited to, the set of stakeholders described above.

Oversight and responsibility of ESG matters

We consider building an ethical business and driving sustainable growth for our merchants the responsibility of the entire Adyen team. Activities related to ESG matters are managed across several functions and levels (strategic, functional and operational), and are all subject to Management Board and Supervisory Board oversight.

Recently, we have supported the creation of cross-functional working groups focused on diversity and sustainability. These working groups cooperate with our Communications and Reporting teams, and are, together with our Management Board and Supervisory Board, responsible for coordinating and reporting on our ESG strategy, initiatives and disclosures.

Solid governance practices are a critical success factor for driving long-term, sustainable growth. Our two-tier board structure allows for sound oversight, transparency and accountability. Governance of specific ESG topics is shared amongst various Management Board and Supervisory Board committees, and is overseen by the Supervisory Board as the highest governance body.

Supervisory Board committees

Nomination and Remuneration Committee

•Culture

•Executive compensation

•Remuneration

•Diversity and inclusion

•Succession planning

•Talent management and retention

•Learning & development

Audit and Risk Committee

•Risk Management

•Ethics, integrity and compliance

•IT (information security and data privacy)

•Tax

Please refer to the Report of the Supervisory Board for a complete overview of topics discussed by the Supervisory Board in 2021, and to adyen.com/investor-relations/governance for the Terms of Reference of the Supervisory Board committees.

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ESG reporting & regulations

Compliance with existing and future sustainability reporting standards allows for increased transparency and comparability, as well as visibility into our business activities for our stakeholders.

From January 1, 2022, we are required to report on our environmentally sustainable economic activities in line with EU taxonomy regulation (“the EU taxonomy”). The EU taxonomy was introduced to provide a common classification system for sustainable economic activities in support of the action plan on financial sustainable growth and EU’s climate and energy targets for 2030.

Starting from January 1, 2023, the EU Taxonomy requires credit institution, such as Adyen, to report their Green Asset Ratio (GAR) which illustrates the proportion of a credit institution’s assets financing and invested in taxonomy-aligned economic activities as a proportion of total covered assets.

In accordance with the EU directive, we have performed an initial assessment to identify total assets covered by the taxonomy, in addition to the numerator and denominator used in the calculation of the Green Asset Ratio. Please refer to the details below:

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We initiated our assessment using Adyen’s Q4 2021 FINREP report to identify total covered assets in addition to the components of the GAR numerator and denominator. The EBA FINREP report provides the classification of the gross carrying amount of Adyen’s assets.

As a first step, exposures to central banks, such as cash and cash equivalents, were identified as being outside of the scope of the GAR. Next, assets excluded from the numerator were identified. These included cash and cash related assets, exposures to undertakings not obliged to publish NFS under NFRD (SMEs and non-obliged NFC’s, non-EU counterparties) and other assets (i.e. tangible assets, other assets, etc.). Finally, an assessment was carried out to identify what exposures to financial and non-financial corporates are deemed eligible assets (assets exposed to activities included in the EU Taxonomy Delegate Act). This exercise was performed by referring to the NACE code of each counterparty. It was concluded that as at December 31, 2021, we do not have any assets financing or investing in taxonomy-eligible activities and as such have a negligible GAR. This is due to the nature of our business, which is currently not involved in investing in or financing any type of activities. We will continue to monitor the regulation and update our disclosures, business strategy and product design accordingly.

In light of the CSRD proposal and its upcoming regulatory requirements, we are taking the necessary steps to prepare for compliance with the regulation by full year 2023 (for publications after January 1, 2024).

In the meantime, we would like to disclose how we are taking steps to positively contribute and responsibly manage our impact on the environment and society through other available non-financial disclosure frameworks, such as the Global Reporting Initiative (GRI). GRI provides a standard to guide us in reporting and communicating our economic, environmental and social impacts.

Providing transparency and comparability by reporting in reference to GRI (evidenced by the GRI Index content table in the ‘Other information’ section of this Annual Report) allows us to inform our stakeholders of the activities that we perform to promote sustainable business practices in a broader financial and non-financial context. Please refer to the GRI Index table for further details of the disclosures included and their location.

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Formula

The way we work with our merchants, and as a team, is guided by the Adyen Formula. Consisting of eight guiding principles, the Formula describes our culture and touches upon every aspect of the business. The Formula fosters speed, which is the foundation of our company. We think fast. We work fast. We launch fast. The eight principles that make up this Formula are not permanent — but are constantly evolving to keep pace with our merchants, our business, and the growth of the team.

The Adyen Formula leads how we recruit, grow, and retain colleagues around the world. While building this business for the long term, we believe that maintaining our culture is critical to its continued success.

To ensure that the Formula is as familiar and top of mind for new joiners as it is for early-day employees, we’ve introduced the Formula Journey. The program comprises workshops, fireside chats and video materials that help introduce and explain the concepts and principles on which Adyen is built. The program expands on the Adyen Formula and other Adyen staples, including the No Blush policy, Normal Course of Life and our Own Your Career track.

The

Adyen Formula

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Talent development

We don’t do pre-set career paths at Adyen. You join, learn, and grow in the way that best fits you and the business. We look for the right learning opportunities on an individual level. At Adyen, everyone creates their own path.

Our rule of thumb is to promote internally. Our talent is key to our growth — and we want them to grow with us. The following initiatives help us to ensure we scale the Adyen culture as our company grows, while also sustaining our existing team:

The Adyen Way of Leading Teams is a program that provides team leads with board-led training sessions that teach the mechanics and philosophy of the Adyen leadership style.

•We provide a wide range of trainings for all employees, including career development trainings, professional skills, and an international exchange program that actively encourages people to work across Adyen offices in order to gain experience and train across teams, geographies, and cultures.

•We’ve built the Adyen Sales Academy, which aims to further train sales staff across the regions wherein we are active.

•We run a number of trainings that relate to running Adyen in a safe and secure way — including mandatory data privacy, security, and compliance trainings for all staff members. These trainings keep the team informed on the latest developments in these areas, and are centered around awareness and the mitigation of risks.

•Leadership-led Dilemma Chats help involve everyone in the company in strategic problem-solving, talking through the tough decisions the team makes every day.

•This year, we launched our Senior Leadership Training Program aiming to help grow leaders in Adyen in tandem with the growth of the company.

•Also new this year, we’ve built an internal Jobs Board to facilitate career mobility — to create visibility on the opportunities the team has at their hands at scale.

•The Adyen Academies are continually built out, this year saw the launch of the Tech Academy, Account Management Academy, and Operations Academy. Much like the Sales Academy, these programs help shorten onboarding timelines and improve individual and team performance.

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Total FTE

2,180

EMEA

Asia-Pacific

Amsterdam

London

Berlin

Brussels

Dubai

Milan

Warsaw

Madrid

Manchester

Stockholm

Munich

Tokyo

Melbourne

Mumbai

Hong Kong

Paris

Singapore

Sydney

Shanghai

San Francisco

Toronto

New York*

São Paulo

São José

Mexico City

North America

Latin America

1,262

98

48

32

9

19

12

10

33

17

10

8

10

6

2

101

51

28

25

199

88

10

72

15

14

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Growing the Adyen team

Following the move to working-from-home setting in March 2020, we continued to onboard and train new joiners virtually through introduction sessions and onboarding programs. Again, the team proved highly flexible — something that will remain invaluable for us in the future. We were able to host several social and team-building events during the year, ranging from team sessions to hikes and drinks.

Recently, we have launched two tech hubs in Chicago and Madrid. These tech hubs should provide us with increased global coverage and scale as we build out a technical organization that has historically operated primarily out of Amsterdam. We continue to pursue a hiring strategy of sustainable growth at scale, keeping our rate of absorption in mind.

In 2021, we added 433 FTE to the team, totaling 2,180 FTE at the end of December 2021.

Diversity, Equity, and Inclusion

Key to our long-term success is cultivating an inclusive environment — one designed with equity in mind. This philosophy is also reflected in the Adyen Formula, wherein we stress the importance of involving others to sharpen our ideas. The broader the set of philosophies the team encompasses, the better we can foster innovation and avoid groupthink. In 2020 we founded the Diversity, Equity, and Inclusion (DEI) working group — a team of global Adyen colleagues that help identify key areas to improve on from a DEI perspective.

We are aware that all aspects of diversity are vital to the business, enabling the Boards and the company to look at issues and opportunities from different angles and to respond to challenges in new ways. Diversity is a key driver for innovation and allows us to attract and retain our talented people.

Designing for inclusion: Building a fair and equitable Adyen

In line with the Adyen Formula to include different people to sharpen our ideas, we strive for diversity in all dimensions, including but not limited to race, ethnicity, gender, sexuality, age, culture, disabilities, religion, interest and upbringing. Our guiding principles are captured in our Diversity, Equity and Inclusion policy below, and apply throughout the organization, including for potential members of the Management Board and Supervisory Board.

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ERGs at Adyen

Employee resource groups (ERGs) are employee-led and employee-founded, and provide our diverse workforce with a space to come together, to promote representation and to use a resource for information. ERGs are crucial to the representation of underrepresented communities, and play a part in the building and retention of diverse workplaces. We are proud to see the number of Adyen’s ERGs grow, currently including the Adyen Pride community, Parents at Adyen, Women at Adyen, Latinx at Adyen, Black at Adyen, and Asians at Adyen.

1.Improving diversity is a top priority for us. We actively include a diverse group of people to sharpen our ideas, strengthening our team by considering all perspectives when making decisions.

2.We proactively look for ways to add diversity to our teams. During the hiring process, our diverse hiring team assesses individuals based on the same performance, skills and formula fit criteria.

3.When we hire, promote or reward, we question who else was considered, whether we were fair, and why we made this decision. We provide credit where credit is due, and explain the reasoning to all that were considered in the process.

4.We treat each other fairly and adapt our approach to individual needs. We support each other in navigating the normal course of life.

5.With an annual DEI survey, we measure progress and aim to improve upon our efforts with every cycle, to build a more inclusive Adyen.

6.We make a conscious effort to avoid making decisions based on unconscious bias.

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Initiatives

In support of our DEI Policy, we have launched a range of initiatives to help track, measure, and improve our efforts. The first and most foundational of these is our annual DEI survey, which anonymously polls every Adyen employee on a variety of DEI benchmarks, both qualitative and quantitative.

In order to bolster our efforts further, we continue to facilitate Unconscious Bias trainings, Building Diverse Teams chats for Team Leads, and Building and Leading Inclusive Teams sprints. We further invested in partnerships with external organizations to help bring in perspectives from underrepresented groups, and we ensured the implementation of diverse interview panels and gender-neutral job descriptions.

66%

22%

71%

63%

44%

64%

34%

76%

2%

29%

36%

54%

36%

1%

2%

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Commitments

We strongly believe in the benefits of a diverse workplace and strive for diverse teams at all levels. In 2021, we have committed to hire, promote and enable underrepresented groups across all levels of the organization, as well as include diverse candidates in our hiring process. As an organization, we will ensure that those from underrepresented groups can be themselves, are able to speak up and be heard, and excel at all levels. Furthermore, we have committed to increase the gender balance of our Management Board and senior management to consist of at least one-third female members.

In 2021, we saw that our efforts and initiatives as mentioned above have resulted in an increased percentage in gender diversity across new starters, our overall workforce, and team leads. We will continue to report on our progress in our Annual Reports.

Wellbeing

Due to the unrelenting impact of the COVID-19 pandemic and lockdown restrictions and their resulting working-from-home reality, we invested more deliberately in wellbeing initiatives in 2021. The aim of these initiatives is to improve the physical and mental wellbeing of the team. In order to achieve this, we’ve designed a range of programs:

•Recharge Week: A week where it's all about reconnecting and having fun by learning some healthy skills and habits both from our own colleagues and even from some of our merchants and external experts in the field. It helps us pause to consider where we are, what we’re doing and how we’re doing it. We launched Recharge Week to encourage a more holistic understanding of how work ties in and influences our physical and mental wellbeing.

•Company-wide one-year membership to the Calm meditation app, and increased support for mental health services.

•Built out our Normal Course of Life facilities, allowing employees to take time off more flexibly, and to work from different locations.

•Wellbeing trainings and workshops for all members of the Adyen team.

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“ Adyen’s solution has enabled us to seamlessly engage the Etsy community in supporting our Uplift Fund. It’s been amazing to see how a small change in checkout can have such a major impact in addressing the gap in resources available to many communities who are eager to use their entrepreneurial talents. ”

Kruti Patel Goyal — Chief Product Officer, Etsy

Giving

Giving is our first and most mature Impact product for merchants. Giving enables them to accept donations at checkout online, in-app and in-person. Today, over 35 of our merchants have adopted Giving, predominantly in digital and retail industries in Europe, North America, the United Kingdom and Australia. After building a solid foundation over the past years, the product is ready for scale.

At the core of the product, we ensure that there is no impact to our merchant’s business operations. We do so by creating a separate donation transaction which has no impact on our merchant’s reconciliation, reporting or existing financial operations. For our merchants, this benefit, paired with the ease of integration as the production is a natural extension of the payment flow, sets the solution apart to traditional donation options in the market.

Our merchants are in the driver’s seat to choose their preferred charity, either from their own network or via Adyen’s pre-approved charity library (charities we have performed extensive due diligence on) that support the UN Sustainable Development Goals. Giving is flexible and built to cater to merchant’s local sustainability and social impact fundraising campaigns. We absorb the full transaction costs of each donation to ensure that 100% of the donated amount goes to the good cause.

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Results in 2021

Illustrative to how Giving is scaling is how processed donation volume developed year-on-year. In 2021, we processed €3,423,280 in donation volume – ten times the amount processed in 2020. The funds processed have created additional revenue streams for over 50 charities ranging from global organizations like UNICEF, The Red Cross, UNHCR and Charity: Water, to more localized charities such as Les Restos du Coeur in France, Surfers Against Sewage in the UK and the Prinses Maxima Centrum in the Netherlands.

While Giving supports merchant’s local charity campaign needs, we also see the product helping to foster long-term partnerships between our merchants and charities, as inviting their shoppers to give back while they shop creates additional exposure and funding to the charities. In some cases, we even see new partnerships emerge between our merchants and charities in our pre-approved charity library. Considering this, we are solidifying our position to facilitate partnerships for the SDGs, and are able to create long-term value for our merchants, their shoppers, and society.

“ We’ve been blown away by the volume of donations. It’s so hard to generate that scale of income any other way. ”

Catherine Hutchinson — Partnership and Fundraising, The Prince's Trust UK

“ Giving helps us to make it easy and secure for our merchants to donate to charities in our stores with just one tap. In addition, it ensures the transparency we are looking for since our shoppers can contact the NGO directly for any information they need about their donation. For us, Adyen is the perfect partner to continue supporting social causes and facilitate merchants to do good. ”

Nuria Ramirez — Chief Sustainability Officer, H&M Spain

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“We choose to partner with businesses that maintain a forward-thinking approach to sustainability, as we are a frontrunner in sustainable consumerism. Innovating over shared beliefs, like we did when integrating Restore, is illustrative of how we like to work"

Olivier Vangest — Head of Technology, Kazidomi

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Local initiatives

Through our local initiatives program we enable our teams to organize grassroots initiatives for the issues their communities face. Our local teams know their communities best and that’s why we foster employee-lead, grassroots activities across the globe.

The majority of our offices have created dedicated working groups to assist and implement local initiatives and have the autonomy to set their own goals for their activities, as long as these contribute to at least one of the SDGs. Key themes we see across all offices are fostering long-term partnerships with largely hyper-localized charities, making sustainable choices when it comes to office practices, providing volunteering opportunities for Adyen employees and ensuring team building is incorporated. Here are some highlights from the local initiatives we’ve seen across the globe this year, selected per region where we are active:

North America San Francisco

Our San Francisco team partnered with the Children’s Book Project and collected over 60 books for local Bay Area children in-need. The team had over 40 donors from our west-coast office and plans to continue to foster a relationship with the organization through future book drives and in-person volunteering. The San Francisco office also actively partners with and supports Surf-Rider Foundation and Hamilton Families.

North America New York

The New York team hosted a virtual Career Day in the spring of 2021 for 40 local college students in partnership with America Needs You (ANY). ANY helps first-generation college students find success through mentorship, career development curriculum and extensive networking. A new initiative in the New York office in the fall was launched with Sharebite, a catering company that prioritizes social impact. Through Sharebite, our New York team was able to work with a local food bank to give back to the community. Furthermore, the New York office supports the Hudson River Park and Room to Grow.

LATAM São Paulo

Our Sao Paulo office supports three education-focused NGO’s through ongoing partnerships and funding — Generation Brasil, Instituto Semear and Recode. Generation Brasil offers minorities across 14 countries the possibility to go through one of 26 training programmes focused on developing skills for employability. Instituto Semear was established with the objective of providing quality education to young people from low-income backgrounds through preparing teenagers to attend university and continue throughout their studies by providing financial assistance as well as mentoring. Recode prepares vulnerable youths for a career in tech by providing training in technical and soft skills through its Recode Pro programme. Up until now, more than 30 colleagues volunteered in these initiatives, and more than 120 students were funded.

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EMEA Amsterdam 

Our Amsterdam team revamped the cooperation with Hack Your Future, a non-profit which trains refugees in coding skills. We have currently more than 100 colleagues from the Amsterdam team participating — and received positive feedback with many of the participants landing jobs in the tech industry since. Another education-focused initiative is how colleagues from our Amsterdam office volunteered at JINC, a charity which coaches and trains primary and pre-vocational secondary education students from socio-economically disadvantaged neighborhoods. Close to a hundred children were included in our volunteering contributions and Adyen donated over 80 laptops. The Amsterdam office also supports New Tech Kids, Manara, and IMC Weekendschool.

EMEA Paris

L’Un Est l’Autre is a charity which cooks and serves around 1600 meals per week for homeless and immigrants. In 2021, our French team helped to distribute more than 5500 meals over the year. Adyen financially contributed to the recent upgrade of L’Un Est l’Autre’s kitchen equipment in order to improve efficiency for the organization. Furthermore, our French office supports Café Joyeux — a non-for-profit coffee shop with the purpose of training and employing people with cognitive disabilities, such as Down syndrome or autism.

APAC Sydney

Colleagues from our Sydney office participated in Fred’s Big Run supporting the The Fred Hollows Foundation, a non-for-profit which aims to restore sight in third-world countries.

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Environmental sustainability

At Adyen, we constantly strive to ingrain sustainability in the way we work as a business. The decisions we make — from selecting service providers to opening new office locations to business travel and beyond — need to consider our commitment to the planet.

We believe that limiting our environmental impact is part of our license to operate in today’s society and recognize that our impact on the planet is a concern for us and our stakeholders. While Adyen’s exposure to physical and transitional climate risk is limited (as detailed further under ‘Environmental, Social and Governance risk’ in the Risk Management section), we are committed to reducing our carbon emissions. For those emissions that cannot yet be reduced, we offset them in order to maintain our status as a carbon neutral company. We are currently assessing how best to invest our resources to make a positive impact on our environment.

In 2021, we established a global Sustainability working group to further implement sustainability across the company. The Sustainability working group raises awareness, identifies strategic sustainable initiatives and focuses its efforts on reducing Adyen’s carbon footprint. Furthermore, the team seeks out ways to minimize Adyen’s environmental impact, both within local communities and worldwide. Our Chief Financial Officer oversees the Sustainability working group, and upholds the responsibility of its decisions to the chairman of the Supervisory Board.

The below sections illustrate the outcomes of some of the initiatives we are working on and details the progress we are making as we further embark on our sustainability journey.

Reduction

Four significant emitters Adyen intends to target, include, but are not limited to, the supply chain of terminals, the energy used by our data centers, the expansion and building of new offices and business travel. The following case studies illustrate some of the work that we have undertaken in 2021 in each of these areas:

Terminal recycling

In 2013, Adyen expanded its product offering to include POS. Starting from 2016, we have been refurbishing and recycling our terminals, and we began to record our recycling practices in 2019.

To date, we refurbished and reused 66% of the terminals returned to us. The remaining 34% were recycled with our certified partners. While our preference would be to refurbish as many terminals as possible, recycling is considered when terminals are reaching their end-of-life and must be replaced by newer models.

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Data centers

One of our key reduction efforts has been the optimization of our data centers’ energy usage. In 2021, 88% of the energy we used in our data centers was covered by renewable energy.

As we continue to expand globally — and sourcing renewable energy is not yet equally accessible across countries — it will be a challenge to maintain and improve on the high level of renewable energy coverage we currently maintain. Notwithstanding, we will strive for solutions to keep this coverage as high as possible, improving our efficiency on a global scale.

New office buildings

We continue to open new offices and up-sizing existing locations at scale and particularly focus on sustainability and social impact while doing so. For example, with expanding and leasing new offices in Amsterdam we utilized local, sustainable materials and worked with local companies during the construction process to support the Amsterdam communities. In London, we worked together with a local design team to use locally-sourced products throughout the build. This commitment to local products contributed to keeping unnecessary delivery emissions to a minimum. We used a variety of different refurbished and recycled materials across the fitting of the office.

Travel

Adyen was built on the foundation of working together as a team and creating meaningful relationships with our merchants. As a result, we are aware that business travel is one of our largest emitters — one that we must act upon. This is why we introduced the Adyen ‘Travel Formula’ this year. The Travel Formula is aimed at making us travel smarter than we did pre-pandemic, with key points around the necessity of travel, sustainable alternatives, and efficiently planning international meetings. With local lockdowns lifting and travel restrictions relaxing, we look to the future and a slow return to travel where we will use this Formula as a guidance towards making more sustainable choices and limiting our emissions.

In addition to our Travel Formula, we invested in carbon removal credits to match the volume of CO2 emitted from our business travel. For 2021, we purchased 1,668tCO2 of the CarbonCure project in the US.

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Next steps

Now we have a clear view of what our material emission sources are, we are focusing on how to design our reduction efforts. In 2022, we will be formalizing these reduction targets. We recognize the need to further monitor and report on reducing our footprint. Targets are not a goal in and of itself, but help us hold ourselves accountable. This will be our priority, alongside the continued expansion of our reduction efforts and the strategic sustainability investments that we have begun.

Carbon neutrality

We annually calculate our carbon footprint through a greenhouse gas (GHG) audit, which measures the amount of CO2e emissions for which we are accountable. Through our partnership with South Pole, we are able to offset these emissions by supporting environmental sustainability projects. As outlined above, we recognize that carbon reduction tops carbon compensation and remain committed to offsetting the remainder of our emissions.

We follow the scopes of the Greenhouse Gas Protocol: Accounting and Reporting Standard to measure Adyen’s GHG emissions. Scope 1 and 2 emissions are calculated using data from our offices across the world, reflecting how we heat and cool our offices along with the electricity we use. Scope 3 emissions stem from mileage (air travel and ground transportation), data center energy use, hotel stay duration, spend on purchased goods, and outsourced activities.

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Adyen’s 2021 operational GHG emissions, measured in tCO2e3

For the second year running, we have decided to take our responsibility one step further and include the energy usage of our products in our footprint calculations. That means that we calculate the emissions generated by each individual transaction on our platform — on POS terminals, online and through mobile payments — and include it in the emissions that we offset.

The effect of working from home was considered in our calculations for the second year in a row too. Normally, our emissions are mainly derived from the operations within our offices and business travel. As a natural result of the COVID-19 pandemic, many of our employees continued to work from home across 2021, meaning lower office emissions, but higher personal emissions within each employee’s homes. For this reason, we included an estimation of increased CO2e emissions from homes, so that we could still consider all of our business activities in our annual offsetting calculations.

Overall, we saw an increase in Scope 3 emissions when compared to 2020. This is primarily due to the expansion of the business both in terms of our team and offices. The purchase of new servers for our data centers and the increase in the number of transactions on the Adyen platform in 2021 led to significant increases in the overall scope emissions. The new leases and office expansions that we took on worldwide also played a significant role in the elevated numbers.

Environmental sustainability projects

This year, the environmental sustainability projects we supported were focused on the SDGs of climate action and quality education. We have chosen to continue our support for the projects in which we invested in in 2020 — TIST (Uganda) and Kariba (Zimbabwe), as we firmly believe in the long-term goals of these ongoing projects.

We also added a new project to our portfolio, focusing on metro travel improvements in India, as we have expanded our business in the country. Each of the projects are helping to bring lasting solutions to these Sustainable Development Goals.

3 The measure for our greenhouse gas emissions is tonnes of Carbon Dioxide Equivalents (tCO2e) — covering the six greenhouse gases defined in the Kyoto Protocol by the United Nations Framework Convention on Climate Change. These six gases are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perufluorocarbons (PFCs) and sulphur hexafluoride (SF6).

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Delhi Metro Rail Corporation — Metro energy efficiency, India

This project reduces energy consumption levels of the Delhi Metro Rail Corporation (DMRC), creating greener transport infrastructure and supporting a range of programs that contribute to the sustainable development, setting a standard for implementation across India. The project activity reduces electricity consumption through various energy efficiency systems in lifts, escalators, lighting and air conditioning.

TIST Program Empowering subsistence farmers in Uganda

Farming for the survival of an individual or family, also known as subsistence farming, is commonplace throughout the majority of rural communities in Uganda. Via education-focused projects, the International Small Group and Tree Planting Program (TIST) aims to break the cycle of deforestation, drought, famine, and poverty by empowering populations reliant on subsistence farming via education-focused projects. These projects empower and train local farmers in their reforestation and agricultural efforts — for example, by educating on how to plant trees for maximum protection from runoff and erosion, and simultaneously conserve water and stabilize soil to increase crop yields. In terms of building sustainable livelihoods, participants in the TIST Program receive stipends from the sale of carbon credits based on the GHG benefits created by their efforts.

Kariba Reforestation and wildlife protection on the shores of Lake Kariba, Zimbabwe

In recent decades, more than a third of forests have been cleared in Zimbabwe to make space for subsistence farming and fuelwood, as the rocky political and economic climate has left many communities with no other option. The Kariba project protects around 785,000 hectares on the shores of Lake Kariba from deforestation and land degradation. This large biodiversity corridor is home to many vulnerable and endangered species, and prevents 3.5 million tonnes of CO2 from being released into the atmosphere annually. The project also supports regional sustainable development and promotes the independence of local communities by providing healthcare, clean drinking water and education on project-related activities such as agricultural practice, beekeeping and borehole maintenance.

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Risk management

Adyen recognizes that risks are associated with achieving its strategy and business objectives. Adyen aims to be risk aware without being unduly risk averse. Adyen therefore actively manages its risks to protect and grow the company, it has adopted a uniform and systematic approach for managing risks. 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) in 2017.

Risk governance

Adyen has established a risk governance that is consistent with the size and complexity of the organization and the risk profile of the company. Adyen's governance identifies, establishes and reinforces the importance of oversight responsibilities for risk management. The Supervisory Board supervises and advises the Management Board. The Audit and Risk Committee is charged with supervising, monitoring, and advising the Management Board in relation to the functioning of the internal risk management and control systems.

The Management Board is responsible for maintaining an adequate system for risk management and internal control. The Management Board has instituted a Risk Committee to support them with risk management oversight. The CFO, CLCO, and CTO represent the Management Board in the Risk Committee. The Corporate Risk and Internal Control team reports its findings from monitoring Adyen’s risk profile to the Risk Committee. The Risk Committee keeps the Management Board informed of the observations, recommendations, and deliberations on findings regarding risk management and internal control. The Risk Committee reports any material risk limit breach that would place Adyen at risk of exceeding its risk appetite promptly to the Management Board.

Three-lines-model

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

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Risk culture

Culture is a key aspect of risk management at Adyen. Our people establish the mission, strategy, and business objectives, and put risk management practices in place. Adyen believes that a strong culture serves as a safety net to guide people in making good decisions. Therefore, Adyen promotes and safeguards the key elements of culture through the Adyen Formula and the Adyen Way of Being In Control.

Strategy, objective setting, and risk appetite

At Adyen, risk management, strategy, and objective-setting work together. Operational objectives put strategy into practice while serving as a basis for identifying, assessing, and responding to risk.

Risk appetite defines the amounts and types of risk Adyen is willing to accept in pursuit of its objectives. A low risk appetite implies a low acceptable residual risk and therefore requires a stronger risk response and stricter internal controls. A higher risk appetite may allow for additional activity and less strong internal controls. Adyen's risk appetite is aligned with its strategy. Changes in strategy and willingness to assume risks or external developments may result in an updated risk appetite, which is ultimately bound by Adyen’s risk capacity.

Adyen has translated its view on risk appetite into risk appetite statements, which set the overall tone for Adyen's approach to risk taking. In 2021, the Management Board performed its annual review and updated Adyen’s risk appetite statements and risk limits, which were discussed in the Audit and Risk Committee, and approved by the Supervisory Board.

The Adyen

Way of Being In Control

We always ask why and are critical,

we don’t just tick the box

We all make mistakes, we seek help 

and share as soon as we find out

Your work impacts others, involve them

Always look for improvement, automate processes continually & challenge the status quo

We evidence our work at the source, we don’t replicate it

If you see a problem, act on it

The formula guides our behavior,

policies support it

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Event identification and risk assessment

Adyen performs a top-down, company-wide risk assessment at least annually. The purpose is to assess principal and emerging risks in order to focus attention on the most significant threats and opportunities. The Management Board has updated its company-wide risk assessment in 2021. For a more detailed description of the principal risks, see the Risk Factors section. The top-down, company-wide risk assessment is complemented by a multitude of bottom-up risk assessments. These can be conducted at process level or can be aimed at specific risk categories. A notable example of the latter category is the Systemic Integrity Risk Analysis (‘SIRA’) which focusses on integrity risks.

Adyen has continued in 2021 with expanding the use of its GRC tooling to support the evaluation of the effectiveness of its control framework. One of the additions allows us to map our risks and controls to various industry and regulatory compliance frameworks simultaneously. This creates significant efficiency gains for both first and second line functions.

Control activities

Adyen uses COSO's Internal Control — Integrated Framework (2013) as a reference for its design, implementation, and evaluation of control activities as part of a system of internal control. Adyen has implemented internal risk management and control systems to manage the risks effectively and efficiently and to provide reasonable assurance that objectives can be met. Policies and procedures ensure that employees understand their role in Adyen's risk and control systems. Fraud risk prevention, for example, starts with the identification of potential internal and external fraud risk scenarios. This identification is a process that continues throughout the year, with a notable detailed analysis during the yearly SIRA exercise. As a first step the identification, analysis and determination of the internal and external fraud risks relevant to Adyen takes place, followed by the nature and inherent size of these risk. Subsequently, the relevant controls that are in place are mapped to the risks. Finally, Adyen concludes on the overall residual risk and an assessment is made to what extent the remaining residual risk is within Adyen’s risk appetite. Adyen’s key internal fraud risk scenarios include the manipulation of financial results, the misuse of confidential information, and the misappropriation of assets. Relevant mitigating controls mapped to these internal fraud risk scenarios vary in origin. There are governance measures, such as oversight by the Management Board, Internal Audit, Compliance and the Audit Committee. Adyen also applies measures aimed at people, conduct and culture, such as an anti-fraud policy, employee background screening, a whistleblower policy and a targeted training program. Furthermore a broad range of detective controls at process level are present, such as system monitoring, reconciliation and auditing. These are complemented by preventive measures that include review and approval flows and segregation of duties. Whenever fraud is

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suspected or reported, an internal investigation is conducted and corrective actions are taken. Adyen’s key external fraud risk scenarios include merchants providing Adyen with fraudulent documents, circumvention of Adyen’s fraud prevention system through brute force or fraud rings, and merchants initiating fraudulent transactions. Relevant mitigating controls mapped to these external fraud risk scenarios include both preventative and detective controls, such as customer due diligence, customer screening, security monitoring, vulnerability management, access controls, and transaction monitoring. Adyen by ways of it’s management assessed that the relevant controls and mitigating measures in place sufficiently mitigate the identified internal and external fraud risk scenarios. There were not any internal fraud cases or suspects thereof identified. During the year, no significant external fraud cases were identified. However, with regards to any minor cases identified, Adyen undertook timely corrective actions.

Stress testing

Adyen uses stress testing to understand the potential impact of adverse events on its business model, capital, and liquidity ratios. The stress scenarios are based on exceptional but plausible events with an adequate degree of severity. Adyen also performs stress testing to evaluate the reliability of capital and liquidity plans under stressed conditions using scenarios and risk factors prescribed by the regulator. Adyen performs these tests in accordance with EBA guidelines on stress testing. In 2021, Adyen’s Internal Capital and Liquidity Adequacy Assessment Process (ICLAAP) confirmed its high financial shock absorption capacity and high capital and liquidity ratios. More information on Adyen’s capital and liquidity ratios can be found in the 2021 Transparency and Disclosure Report (Pillar 3) at www.adyen.com/ir.

Effectiveness of risk management and internal control systems

In compliance with principle 1.2 of the Dutch Corporate Governance Code, the Management Board is responsible for establishing and maintaining an adequate system for risk management and internal control. Adyen has implemented internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with financial reporting standards. In compliance with principle 1.4 of the Dutch Corporate Governance Code, the Management Board annually evaluates the effectiveness of the design and operating of its risk management and control systems. Per December 31, 2021, no major failings in the effectiveness of the internal risk management and control systems were observed, nor were significant changes to these systems made or major improvements planned. The Management Board has discussed the evaluation of its risk management and control systems with the Audit and Risk Committee and Supervisory Board.

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Risk factors

In compliance with principle 1.4 of the Dutch Corporate Governance Code, the Management Board has updated its company-wide risk assessment in 2021. This section describes the principal risks that could potentially affect Adyen, with further detail on financial risks provided in note 12 of the financial statements. While Adyen believes that the risks described below are the material risks concerning Adyen's business, they are not the only risks relevant to Adyen. Other risks, facts, or circumstances not presently known to Adyen or that Adyen currently deems to be immaterial, could individually or cumulatively prove to be significant and could have a material adverse effect on Adyen's business, results of operations, financial condition, and prospects.

Strategic and business risk

Adyen accepts strategic and business risk knowing that in order to achieve its strategic objectives it will consume capital when investing in new assets, people, and processes. In pursuance of its strategic objectives Adyen values a solid financial and capital outlook.

Reputational risk

Adyen has low appetite for reputational risk and aims to avoid actions that trigger negative international media attention and/or significant reputational damage. Any negative publicity about Adyen, the quality and reliability of its products and services, changes to its products and services, its ability to effectively manage and resolve complaints, its privacy and security practices, litigation, regulatory activity, and the experience of merchants and shoppers with its products or services, could adversely affect its reputation and the confidence in and use of its products and services. Harm to Adyen's brand can arise from many sources, including failure by Adyen or its partners to satisfy expectations of service and quality, inadequate protection of sensitive information, compliance failures and claims, litigation and other claims, employee misconduct, rumors or false stories, and misconduct by its partners, service providers, or other counterparties. Adyen wants to build an ethical and sustainable business and therefore actively mitigates risks that could negatively affect the Adyen reputation or brand. Failure to meet carbon-reducing policy goals, for example, could cause reputational damage and result in low ratings in sustainable investment indexes, affecting the share price. Adyen prides its commitment to goals that improve the business, social and environmental footprint. Refer to the ‘Social Responsibility’ section for an overview of Adyen’s sustainability efforts.

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Competition

Adyen competes against a wide range of businesses. These competitors might have a dominant position, or offer other products and services to shoppers and merchants that Adyen does not offer. Some competitors have greater merchant bases, volume, scale, resources, and market share compared to Adyen, which may provide significant competitive advantages. Furthermore, Adyen is facing competitive pressure from non-traditional payments processors and other parties entering the digital payments industry, which may compete in one or more of the functions performed in processing merchant transactions. Adyen has a moderate risk appetite for competition as it is accepted that it will experience competition as it seeks to increase market share, thereby potentially reducing profit margins. But not at all cost — if pricing is not sustainable, then Adyen will not pursue a deal. In general, Adyen is able to react quickly to market developments due to how its technology and solutions are structured.

Disruptive innovation

Adyen expects that rapid and significant advancements in technology will continue. These changes may be more superior, cheaper, and impair or render obsolete the products and services Adyen offers. If Adyen is unable to provide enhancements and new features that achieve market acceptance or keep pace with rapid technological developments and evolving industry standards, its business could be materially and adversely affected. Adyen accepts disruption and innovation as standard market practices. As such, Adyen continues to build and actively invest in its single platform solution. Adyen has established solutions and workstreams that continuously work on improving its service offering based on merchants’ needs. Through the setup of the solutions and workstreams with product, technical, and commercial staff, Adyen can work closely with its merchants and quickly address their evolving needs.

Access to card networks

The majority of transactions processed on the Adyen platform go through international credit and debit card networks. In order to access these card scheme networks to provide acquiring, processing, and issuing services, Adyen must have the relevant geographically based operating licenses or memberships. In some markets where it is not feasible or possible for Adyen to have a direct license with a card network, Adyen has a relationship with a local financial institution to act as a local sponsor for the license. Adyen has low appetite for failure to comply with card network rules or for any other deterioration in its relationships with the card networks, which could result in the restriction, suspension, or termination of Adyen's own licenses, or the use of sponsoring banks’ licenses.

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Concentration of merchants

Some of Adyen's largest merchants provide significant contributions to its net revenue. Large merchants typically have arrangements with multiple payment service providers (primarily in order to mitigate their single-point-of-failure risk). These merchants could terminate their contracts or shift business away, leading to lower processed volumes and net revenues. Adyen has low risk appetite for commercial dependency and therefore continues to execute its growth strategy to board new merchants from different verticals on its platform. Adyen believes that its merchant portfolio is well diversified, as was evidenced during the pandemic.

Macroeconomic conditions

Adyen accepts that entering and operating in markets with some macroeconomic volatility could lead to financial losses. Uncertainty about global and regional economic events and conditions, may result in shoppers and merchants postponing spending, which could have a material adverse impact on the demand for Adyen's products and services. Adyen therefore monitors relevant indicators and has for example observed inflation rates going up in several key markets during 2021, to which it was able to formulate risk responses during the year.

In December 2020, Adyen formally applied for providing regulated services through a UK Branch. Currently awaiting formal authorization, Adyen makes use of the Temporary Permission Regime to continue servicing UK merchants on a cross-border basis without disruption.

Intellectual property rights

As substantially all of Adyen's intellectual property is developed in-house, the protection of such intellectual property, including Adyen's platforms, trademarks, copyrights, domain names, trade dress, and trade secrets is important to the success of its business. Adyen seeks to protect its intellectual property rights by relying on applicable laws and regulations, as well as a variety of administrative procedures. Nevertheless, Adyen's intellectual property rights may be contested, circumvented, or found unenforceable or invalid, and Adyen may not be able to prevent third-parties from infringing, diluting, or otherwise violating them. Any failure to adequately protect or enforce Adyen's intellectual property rights or significant costs incurred in doing so could diminish the value of its intangible assets.

As the number of products in the technology and payments industries increases and the functionality of these products further overlaps, Adyen may become subject to intellectual property infringement and other claims. Adyen’s international growth and development of intellectual property in new jurisdiction can also influence it’s risk of claims. The ultimate outcome of any allegation is often uncertain and, regardless of the outcome, any such

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claim, with or without merit, may be time-consuming, result in costly litigation, divert management's time and attention, and require Adyen to, among others, stop providing transaction processing and other payment-related services or redesign, stop selling its products or services, pay substantial amounts to satisfy judgments or settle claims or lawsuits, pay substantial royalty or licensing fees, or satisfy indemnification obligations that Adyen has with certain parties with whom Adyen has commercial relationships.

Execution risk

Central to the success of Adyen has always been the ability to innovate and respond quickly to opportunities that arise. The organizational competences of speed and decisiveness will also be key in realizing future strategic objectives. Adyen therefore actively mitigates its execution risk, which it has defined as increased complexity leading to a loss of organizational focus and loss of ability to act effectively. Most notably this can be seen via its organizational structure and governance. This structure is relatively flat, aimed at direct co-creation and focuses on growing the business through solutions and workstreams.

Environmental, Social and Governance risk

Climate and environment-related risks are commonly understood to comprise two main risk drivers: Physical and transition risks. Physical risk refers to the financial impact of a changing climate. Physical risk is categorized as “acute” when it arises from extreme events, such as droughts, floods, and storms, and “chronic” when it arises from progressive shifts, such as increasing temperatures, sea-level rises, water stress, biodiversity loss, land use change, habitat destruction, and resource scarcity. This can directly result in, for example, damage to Adyen property or reduced productivity, or indirectly lead to subsequent events, such as the disruption of the Adyen supply chain. Transition risk on the other hand, refers to a financial loss that can result, directly or indirectly, from the process of adjustment towards a lower-carbon and more environmentally sustainable economy. This could be triggered, for example, by a relatively abrupt adoption of climate and environmental policies, technological progress or changes in market sentiment and preferences.

Adyen is not a traditional bank and does not hold assets on its balance sheet that have an inherently high exposure to physical climate risk. It is also not straightforward to make the connection between transition risk and Adyen’s payments business model. As a result, there is not a broad array of inherently high risk climate and environment-related risks.

As its main inherent climate risk, Adyen does recognize the potential adverse impact on Adyen’s ability to provide services to its merchants. Prolonged power outages due to natural disasters could have a devastating

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impact on critical infrastructure used by Adyen and its service providers. Adyen’s headquarters are located in Amsterdam, which is a city potentially vulnerable to flood due to the gradual rise of sea levels. Physical risk could also occur in other locations where Adyen’s offices or vendors are located. Adyen’s offices are typically close to its merchants in metropolitan areas, which could make Adyen vulnerable to the adverse impact from pandemics.

There are structural measures Adyen has implemented that mitigate its environmental risk exposure. The one single platform of Adyen is designed to create redundancy in its critical infrastructure and operations, surpassing traditional back-up setups, as is detailed in the section on availability. Adyen furthermore continues to diversify its global customer portfolio to mitigate any reliance on sectors and markets, which could be more vulnerable to climate-related and environmental risks, both physical as well as transitional.

Adyen also considers the risks it may encounter due to social developments. Specifically how its own workforce develops and the relationship to the society in which it operates, and the political environment. Society sees a role for private companies to support positive social change and Adyen is contributing. It would be limited to only point at reputational risks in this context, diversity is seen as fundamental to Adyen’s company culture. It is included in the Adyen Formula which states we involve others to sharpen our ideas. Adyen’s Diversity, Equity and Inclusion (DEI) initiatives and DEI policy are further testament to this. Adyen risk management identifies and monitors social factors and their effects throughout the year during risk assessments. Adyen also conducts a yearly culture audit, and actively considers geopolitical developments in light of its supply chain as well as interest and inflation expectations.

Governance risk relates to decision making, at Adyen in particular with respect to the distribution of rights and responsibilities among different participants in the company, including the board of directors, managers, shareholders and stakeholders. Mitigating factors are sound management structures, policies and procedures, healthy employee relations, well-thought remuneration and tax compliance.

Adyen sees governance risks as directly connected with the robustness and resourcefulness of the procedures for compliance with the framework of relevant laws and regulations wherein Adyen operates. However, Adyen does go beyond evaluating just the formal routines for compliance, as the company consciously connects to voluntary frameworks such as GRI and sees the company culture as a prime measure in mitigating governance risks.

A considerable amount of new ESG regulation, with accompanying disclosure frameworks, approach Adyen, as explained earlier in this Annual Report. In preparation, Adyen has further integrated ESG during 2021 in its overall risk management framework.

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Operational risk

Adyen recognizes that operational risks 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 a moderate appetite for operational losses. During 2021, Adyen remained well within its risk limits that were set as a reflection of its risk appetite for operational risks.

Merchants’ potential liability for shopper chargebacks

When shoppers claim that a merchant has not delivered goods or services as agreed, issuing banks can file chargebacks. Adyen seeks to offset such chargebacks with the payouts to the merchant, but may not be able to succeed in full. While Adyen has implemented risk mitigation, including withholding funds from the payouts to its merchants based on assumptions and estimates that Adyen believes are reasonable to cover such eventualities, the measures, including the withheld funds, may not be sufficient.

Adyen has a dedicated MPL team that closely follows the development of this risk. The team frequently discussed its observations and recommendations with the Merchant Risk Committee, Management and Supervisory Board throughout the year. Despite the prolonged pandemic lockdown measures in 2021 Adyen has not incurred sizeable MPL losses due to chargebacks during the year. The cumulative MPL losses were well within the set risk appetite.

Availability, connectivity, and performance of products and services

Adyen has a low appetite for issues in the availability, connectivity and performance of the platform. Adyen's systems and those of its third-party service providers, including data center facilities and communication networks, have experienced service interruptions in the past and may experience significant service interruptions in the future. Frequent or persistent availability, connectivity, or performance issues 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, potentially harming Adyen's reputation and brand permanently. Moreover, to the extent that any platform failure or similar event results in damages to Adyen's merchants or their business partners, the 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 or delay Adyen from obtaining additional regulatory licenses that Adyen needs to expand its business.

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Adyen has built its platform and services to avoid the presence of single points of failure, and to ensure that sufficient capability exists to continue normal operations for critical processes despite the loss or unavailability of corporate resources, from information technology, physical locations or even personnel and whole departmental structures. The highly available platform is designed to withstand individual telecommunications, systems and data center instance failures. During 2021, on one operational incident Adyen underperformed the Wft norm. However, no claims were identified and this incident was resolved and used as input for further improvements to configuration. Adyen staff is fully equipped to work remotely, and have been doing so without impact to our payment processing ability.

Information security risk

Adyen and its merchants, partners, and others who use its services, obtain and process a large amount of sensitive data. Adyen's and its partners' IT systems may be vulnerable to physical and electronic breaches, computer viruses and attacks by cyber-criminals, internet fraudsters, employees or others. This 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. Adyen has a low appetite for information security risk which includes cyber security risk. 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 it believes to be reasonable to cover such eventualities, such insurance may not be sufficient to cover all potential losses or could come at a price where it is no longer economically sensible to take out in the future.

Adyen’s Security Officer is responsible for managing the Information Security Program. The goal of the Information Security Program is to ensure the ongoing confidentiality, integrity, and availability of data, systems, and processes at Adyen, and to ensure that specific information security compliance programs are maintained and externally assessed as appropriate. Adyen undertakes background checks for new hires. Training is undertaken on IT security on the first day at Adyen. A follow-up general security introduction, which addresses privacy and confidentiality policies, must be completed within two months of start date. Annual refresher training on topics as privacy and security is mandatory for all employees. Adyen’s risk-based approach has resulted in an efficient and flexible IT infrastructure, which enabled a very steady and stable transition to the work-from-home environment.

Information security will be a structural risk for Adyen, and strengthening our capabilities to mitigate the evolving risk is therefore continuous. Information security risk was not necessarily higher in 2021 compared to previous years, but did have its specific events. Adyen saw for example

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increased DDoS threats in the beginning of the year which Adyen was able to shield effectively, but logically also led to lessons learned. Another example was the Log4j event in December 2021. Within 12 hours from first becoming aware of the Apache Log4j vulnerability, the Adyen platform was upgraded and the fix was verified by Adyen’s Security team. A second and third iteration were done when Log4j versions 2.16.0 and 2.17.0 became available. Although the mitigating factors and existing measures confirmed no exploitation would be possible, Adyen patched all platform and supporting services diligently and also here took on the lessons learned for future development.

Third party risk

Vendors and supply chain dependencies could negatively impact Adyen’s operations and security of data, systems, and services. Adyen has a low appetite for dependency on third-parties in its critical processes. Adyen strives to minimize outsourcing of activities directly related to its core processes or platform to avoid dependency on suppliers. Adyen believes that not being limited by third-party software in its core operations is a key factor in its ability to rapidly increase the number of transactions that the platform can process. Adyen has established a Third Parties Policy, which defines a framework, including clear ownership, for assessing third-party risk. Adyen is monitoring third-party risk on a continuous basis with support of a third party risk management tool. In 2021, Adyen carried out a periodic review on its most important third parties to update their risk profile and monitor compliance with the policy. The review was completed on all in-scope vendors, resulting in reclassifications, updates of third-party risk profiles or off-boarding advice due to inactivity. 

Data privacy

Adyen is subject to several privacy and data protection laws and regulations, such as the GDPR, CCPA and LGPD (referred to as "privacy laws") relating to the collection, use, retention, security, processing, and transfer of personal data about its merchants, shoppers, third-parties and others, and their transactions in the countries wherein Adyen operates. Adyen’s expanding global footprint and product offering requires Adyen to steadily adapt, improve and strengthen its processes and procedures and closely monitor any changes to new and existing privacy laws.

Any failure, or perceived failure, by Adyen to comply with its privacy policies or with any applicable privacy laws in one or more jurisdictions could result in proceedings or actions against Adyen by governmental entities or others, including class action privacy litigation in certain jurisdictions, significant fines, penalties, judgments, and reputational damage. Adyen has a low appetite for data privacy risks and promotes a culture of diligence and high ethical standards with regards to the collection of information. Please refer to the ‘Data Privacy’ section in this Annual Report for more information on the topic.

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Entrepreneurial culture

Adyen is committed to maintaining its entrepreneurial company culture, which fosters innovation, diversity, and talent development, and therefore has a low appetite for elements threatening this culture. Adyen's entrepreneurial culture has been one of the primary drivers of its historical growth. As Adyen continues to grow, it may not be able to maintain its entrepreneurial culture. 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 net revenues. Adyen promotes and safeguards the key elements of its culture through the Adyen Formula.

During 2021, Adyen saw the benefits of the changes that were made to accommodate working-from-home. The onboarding process and the company introduction sessions are delivered online, with real-life interaction possible and complementary if the regional situation permits. Senior management spent significant time on the online company introductions by hosting Adyen Formula chats and continued to meet every new hire before they joined the team. When possible, company events were organized that emphasized Adyen’s unique culture and the shared responsibility of maintaining it.

Talent

Adyen's future performance substantially depends on the continued services of key talent and its ability to attract, retain, and motivate such talent. The loss of services of any of Adyen's key talent or Adyen's inability to attract highly qualified key talent may adversely affect its operations. Adyen has low appetite for the loss of key talent and actively manages the composition and quality of its talent pool.

2021 continued to impact Adyen’s relatively young labor force in different ways. Working from home often became the default for employees and sustainable and structural ways to develop, grow and bind talent were implemented. Many of these measures placed team leads in a central role, but personal lessons learned and guidance from the Management board also took shape via the “The Adyen from Home Formula”. Adyen has been able to grow the team considerably during 2021, but, despite Adyen being a preferred employer in the Netherlands, finding the right (technical) skills is becoming an increasingly global challenge which is expected to remain a challenge in the upcoming years. Therefore, two Adyen tech hubs in Chicago and Madrid were announced. These two locations are focused on technically growing the platform, provide an inspiring environment for engineers and tap into the locally available talent pool. Adyen furthermore strives to hire, promote, and enable underrepresented groups, while

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challenging the status quo in the communities in which it operates. In realizing this aspiration, Adyen deployed a number of actions during 2021. The ‘People and Culture’ section in this Annual Report provides more information.

Integrity risk

Integrity risk is the risk of inappropriate behavior of employees and board members or third-parties (merchants, suppliers, advisers) posing a current or future threat to Adyen and/or the proper functioning of the financial system that can be attributed to Adyen or in which Adyen acts imputable. Inappropriate behavior generally refers to insufficient compliance with relevant rules or regulations, internal policies, and/or the Adyen Formula. If Adyen (or a third-party it does business with) fails to comply with laws and regulations, or expectations by the market or society of ethical business conduct, supervisory authorities may initiate legal and regulatory proceedings against Adyen. Fraud is a risk Adyen is exposed to both internal as well as external. Merchants (and their shoppers) and Adyen employees may attempt to act in such a way intended to obtain personal gain. Adyen has a low risk appetite for non-ethical behavior of its management, employees, and third-parties that could negatively affect Adyen’s reputation or brand, lead to compliance breaches of laws or regulations or endanger its future existence.

Adyen has no risk appetite for facilitating money laundering or terrorist financing and therefore sets limits on acceptance of prospective merchants as well as the nature of services offered to accepted merchants. Although Adyen has policies and procedures that it believes are sufficient to comply with currently applicable anti-money laundering, anti- corruption, bribery and sanctions rules and regulations, it cannot guarantee that such policies and procedures completely prevent situations of money laundering, terrorism financing or corruption, including actions by Adyen's employees, merchants, third-parties, 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.

Tax

Adyen has a low appetite for risk forthcoming from its tax obligations. Adyen wants to meet its obligation to pay the amount of tax legally due in any territory, in accordance with rules set by governments. The determination of Adyen's worldwide provision for income taxes, value-added taxes, and other tax liabilities requires estimation and significant judgment. Like many other multinational corporations, Adyen is subject to tax in multiple tax jurisdictions. Key tax risks, that could potentially affect the strategic and operational objectives, are identified through the annual top-down and bottom-up company-wide risk assessments. When a specific tax risk is encountered, we may seek for professional advise and strive for open communication towards tax authorities.

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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. Adyen has not observed adverse impact from the COVID-19 pandemic on its ability to report taxes in a timely and accurate manner. For more information, please refer to the ‘Tax’ section in this Annual Report.

Financial reporting

Gaps in internal controls could negatively impact the accuracy of our financial and management reporting. Adyen has a low appetite for errors in financial reporting and does not accept material misstatements in the financial statements. Adyen has implemented internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with financial reporting standards. Due to its inherent limitations, internal control over financial reporting can’t provide absolute assurance that a misstatement in Adyen’s financial statements would be prevented or detected. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Financial risks

Adyen has a limited appetite to incur losses from financial risks, please refer to Note 12 ‘Financial Risk Management’ of the attached Consolidated Financial Statements for additional disclosure.

Credit risk in respect of counterparties, including other financial institutions

Credit risk at Adyen can originate from the risk that a counterparty will not settle the full value of an obligation — neither when it becomes due, nor thereafter (default risk), or the risk of losses stemming from on- and off-balance sheet positions arising from concentrations in exposures to a single counterparty or a group of connected counterparties (concentration risk). Within the regulatory limits set by the Large Exposure framework Adyen has a moderate risk appetite. Adyen makes good choices in our financial counterparties and actively monitor them, nevertheless engaging with partner banks resulting in a credit exposure is unavoidable in certain circumstances for providing payment services. Adyen did not see a material increase in counterparty credit risk that can be directly related to the COVID-19 pandemic. For markets or jurisdictions that are considered key to

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successful operations, Adyen seeks to work with at least two different partner banks. During the year 2021, Adyen remained comfortable within its internally set risk appetite limits for its credit risk related indicators, as well as within the regulatory relevant limits.

Fluctuations in foreign currency exchange rates

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 if Adyen incorrectly sets its foreign exchange rates or 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 affected by the translation of these non-euro currencies into euro. While Adyen has measures in place intended to manage its foreign exchange risk, primarily natural hedges and spot trades for any net open positions forthcoming its acquiring activities for merchants, no assurance can be given that fluctuations in foreign exchange rates will not have a significant impact on Adyen's results of operations. Adyen is also exposed to foreign exchange risk on its assets and liabilities denominated in currencies other than the functional currency, including certain contract assets, its holding of Visa Inc. shares and the assets and liabilities of its subsidiaries. The majority of these assets to which Adyen is exposed to are denominated in US dollars. Adyen pays specific risk management attention to the FX position that originates through the international payment services it provides for its merchants, this FX position originates as a result of transactions done by merchants. Contrary to its own longer term balance sheet positions, Adyen does not control this FX origin directly and during 2021 Adyen performed spot trades on a daily basis to maintain FX positions within its risk appetite set limits. Note 12 of the financial statements supports this, as it shows the limited effect that a 10% shock of the Euro FX rate has on the 31-12-2021 net position of USD (EUR 3.2 million) and GBP (EUR 0.0 million).

Price risk of financial instruments

Adyen's exposure to price risk of financial instruments at fair value arises from a holding of Visa Inc. shares and a derivative financial liability. Any movements in the underlying share prices could have a significant impact on Adyen's financial condition and results of operations. Adyen obtained the Visa Inc. shares as the result of its previous holding in Visa Europe, which subsequently was acquired by Visa Inc., which resulted in amongst others Adyen being issued shares of Visa Inc. as consideration for the acquisition. Adyen has no appetite to take on additional equity positions and resulting price risk.

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Interest rate risk of cash and cash equivalents

Adyen’s customer centric business model is fee-based and doesn’t depend on the transformation of assets or any interest spread. Therefore, the currently low interest rates do not impact Adyen’s revenues. However, Adyen is exposed to interest rate risk in the banking book in relation to its high-quality liquid assets in the form of cash held at central banks within EU for which it is subject to negative interest rates. Second, a limited amount of cash is invested in money-market funds that hold US-government T-bills. Despite this low risk profile, in 2021 Adyen quantified the impact of interest rate movements in its earnings as well as market value changes of its financial instruments and their direct effect on capital for each significant currency. The results of this exercise show minimal impact, as is also supported by the overall limited impact of finance expense in our financial statements of EUR 12.8 million, which can be primarily attributed to negative interest paid on the DNB central bank account.

Liquidity and funding risk

Liquidity risk is the risk that Adyen could not meet its short- to medium- term payment and collateral obligations without affecting daily operations. Adyen has no appetite for not being able to meet its payment and collateral obligations without affecting daily operations. Funding risk is the risk that Adyen will not have stable sources of funding in the medium and long term, resulting in the current or prospective risk that it cannot meet its financial obligations, such as payments and collateral needs, as they fall due in the medium to long term, either at all or without increasing funding costs unacceptably. Adyen aims for a simple, stable, and solid funding position and the central ratio it monitors in this context is its Net Stable Funding ratio.

Secure financing on favorable terms

Adyen has funded its operations since inception through equity financing. Adyen is currently able to generate sufficient cash through operational results to fund its upcoming operations, but there is no guarantee that Adyen will be able to continue doing so in the future. Going forward, Adyen may require additional funding to respond to business opportunities or unforeseen circumstances and may decide to engage in equity or debt financings or enter into credit facilities for other reasons, and may not be able to secure any such debt or equity financing or refinancing on favorable terms in a timely manner, or at all. If Adyen is unable to obtain adequate financing or financing on terms satisfactory when it requires it, its ability to continue to grow or support its business and to respond to business challenges could be significantly limited.

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Emerging risks

Regulatory environment

Adyen does not only need to comply with laws and regulations in the jurisdictions in which it operates, but also with laws and regulations that have worldwide application. 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 over time. If Adyen's efforts to comply with laws, regulations, and standards differ from the activities intended by regulatory bodies or supervisory authorities, they may initiate legal and regulatory proceedings against Adyen. To ensure that applicable laws and regulations are identified and mapped to the activities and services Adyen offers in local markets, Adyen performs ongoing regulatory scanning by regulatory compliance specialists with validation from external legal counsel.

Adyen believes that the use of a single platform is best overlaid with a global compliance and risk framework, whereby Adyen strives for global application of best practices while being cognizant of the need to implement local deviations where required or for better fit. Maintaining a proactive approach to regulation, Adyen is well placed to deal with regulatory complexity and differences in supervisory approaches in a sustainable manner. However, accents and focus areas of supervisors within regulatory frameworks differ across the globe. To manage the variety of supervisory conversations, Adyen actively invests in the relationships with regulators and payment schemes, maintaining transparent and constructive interactions.

Protectionism

Adyen’s growth strategy is focused on its single platform approach. Changes in foreign policies and trade laws in certain key markets, including tariffs and sanctions, could lead to negative impact on the trade levels and flows of our merchants. The changes could also create boundaries to us. For example, if the use of certain (foreign) payment methods would not be allowed in a market, or if (foreign) payment service providers would not be allowed to charge fees for their services under a policy that payments should be free of charge.

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Compliance

The Compliance Opportunity

We are building for the long-term based on a strong culture of integrity. To this end, we ensure that compliance forms an integral part of everyday decision making by integrating a global compliance program into daily business activities and strategic planning. In light of our growth, the effectiveness of the compliance program depends on scalable compliance solutions. Consistent with our core business, this scalability is achieved primarily through the use of technology and data-driven solutions, in the pursuit of lasting and sustainable growth.

In addition to the technology-driven approach to compliance, each and every employee is encouraged to act as the “eyes and ears” of Adyen. This principle of joint responsibility is reflected in the three-lines-model employed as part of Adyen’s governance framework and promoted openly by both tiers of the Board — tone starts at the top.

As a technology company operating within the financial services space, effectively managing compliance risk not only serves as Adyen’s license to operate, it also maximizes Adyen’s opportunities in the market and enhances Adyen’s competitive position by building trust.

We make good choices to build an ethical business and drive sustainable growth for our merchants

Adyen Formula

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Compliance and integrity

Central to Adyen’s compliance framework is the identification, mitigation and monitoring of integrity risks, being the risk of inappropriate behavior of employees and board members or third parties (merchants, suppliers, advisers) posing a current or future threat to Adyen and/or the proper functioning of the financial system, that can be attributed to Adyen or in which Adyen acts imputable. Inappropriate behavior generally refers to insufficient compliance with relevant rules or regulations, internal policies and/or the Adyen Formula.4 

To ensure Adyen proactively identifies and effectively mitigates integrity risks that may affect its business, including to account for evolution with respect to the product offering, the markets in which Adyen operates and the general growth as a business, a systematic integrity risk analysis (SIRA) is performed on an ongoing basis. The SIRA assists Adyen to identify, mitigate, measure and monitor potential integrity risk scenarios as described below.

Integrity Risk Identification

Adyen identifies a number of integrity-related topics as being core to maintaining control from a compliance perspective5:

•Money laundering

•Terrorist financing

•Circumvention of sanctions legislation

•Corruption (bribery), fraud and conflicts of interest

•Non-compliance with relevant laws and regulations — including evasion or avoidance of tax regulation

•Socially unacceptable behavior and market manipulation

•Data privacy and cybercrime

Consideration of the how the identified integrity risks could manifest to impact compliance at Adyen, applicable laws, regulations, industry standards, and best practice related to payments or financial services are continually monitored to identify compliance obligations and standards. Once identified, the obligations and standards are mapped and translated into principle-based policies and procedures that act as the starting point for Adyen’s compliance program.

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Integrity Risk Mitigation

Adyen’s policies and procedures set minimum standards for all employees, and give direction to business operations in accordance with business objectives and the Adyen Formula. Such policies and procedures set out due diligence requirements with respect to both Adyen’s employees, merchants and partners in relation to (amongst others) risks of bribery, fraud, human rights violations and other socially unacceptable behaviors. In 2021, Adyen has continued to develop and refine principle-based policies, supported by globally applicable scalable procedures, to combat misuse of the financial system and build scalable compliance solutions to meet Adyen’s regulatory obligations as a financial institution. For example, Adyen has launched this year Adyen Speak Up, an online integrity reporting tool allowing stakeholders to report suspected wrongdoing on an anonymous basis.

Particular focus continues to be given to anti-money laundering, counter-terrorist financing (AML, CFT) and sanctions regulations as further described in the Risk section of this report.

The Compliance Handbook and its related policies and procedures additionally promotes integrity and ethical conduct throughout Adyen. The Handbook, and associated standards, are communicated initially through introductory sessions and subsequently promoted on an ongoing basis, including through annual refresher training sessions. The Compliance Handbook is applicable to all Adyen employees worldwide.

With specific reference to Integrity Risks associated with Adyen’s merchant base (and the industries in which such merchants operate), Adyen maintains a Prohibited and Restricted List in relation to customer business models. The Prohibited and Restricted List (supported by Adyen’s Customer Risk Methodology and related Integrity Procedures) acts as an articulation of Adyen’s risk appetite — specifying which merchants Adyen will do business with based on relevant scheme rules, regulations, industry standards and Adyen’s own long-term objectives. The Prohibited and Restricted List was continually updated throughout 2021 to align with developments in scheme rules, regulations and emerging trends/industries.

To ensure new products, features or markets are appropriately accounted for in Adyen’s compliance program, a Product Approval and Review Process (PARP) is undertaken as part of launch preparations. The purpose of the PARP is to ensure relevant stakeholders can identify and assess potential risks for both Adyen and its merchants, and ensures mitigating actions are taken when necessary. In 2021, the PARP was updated to ensure scalability and numerous PARPs were undertaken in connection with new products or markets and expansion in existing markets, including by way of example, the launch of Adyen Bank. In addition, during the year, additional features to exiting products were reviewed as well as new products being approved. In total six products were reviewed and/or approved in 2021.

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In line with the Formula, Adyen ensures, when engaging with partners, suppliers and merchants, it takes into consideration integrity topics including human rights, environmental protection standards and appropriate working conditions, including the prohibition of child labor.

Integrity Risk Monitoring

In accordance with the three-lines model, teams within the second line of defense are mandated with an independent position from which to monitor and advise on the implementation of integrity risk controls within Adyen. This independent position is warranted by (without limitation), the power to investigate, challenge and escalate any concerns without influence from the business.

As part of the ongoing maturity of Adyen’s compliance program, the independent second line compliance monitoring team has been focusing on the development and maintenance of data-driven monitoring tools to provide oversight on the implementation of integrity risk controls in a scalable and technology-led manner.

Regulatory Environment, including AML, CFT and Sanctions Regulation

The global regulatory landscape for payment and financial services is varied and constantly changing. Still, Adyen continues to see alignment between the underlying principles and objectives of financial regulation around the globe and leverages this as the basis for its global compliance program. As a result, Adyen continues to embrace regulation in building for the long term. Regulation allows Adyen to continually improve the quality of processes, sharpen thinking and explore and develop new product opportunities.

Throughout 2021, key focus areas for Adyen to maintain control and leverage regulation as an opportunity included:

•Utilizing the growing commonality in the purpose and objective of AML, CFT and Sanctions regulation to future proof the scalability of Adyen’s core integrity policies and procedures, including to ensure such policies and procedures can be applied irrespective of merchant type, merchant location, or the financial products and services provided to such merchants.

•Supporting Adyen’s expanding global footprint from a regulatory perspective, including to identify new or changing obligations and implement appropriate controls, in relation to (without limitation):

•North America and the United Kingdom in relation to the applications for bank branch authorizations;

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•Asia-Pacific — new payments/financial licenses or authorizations for Adyen’s locally operating subsidiaries, owing to both regulatory change and/or expansion in the activities of such subsidiaries;

•Latin America — increasing regulatory requirements relating to expansion in the activities of locally operating subsidiaries.

•Middle East — newly issued set of regulations applicable to payment service providers.

•Investing in data-driven compliance technology to support scalable compliance efforts, with particular focus on the use of post-event transaction monitoring systems and machine learning to combat misuse of the financial system and meet Adyen’s regulatory obligations arising out of AML, CFT and Sanctions regulation.

•Taking advantage of opportunities created by the Second Payment Services Directive (PSD2) with particular focus on new Strong Customer Authentication (SCA) requirements to reduce fraud within the financial system.

Through the power of a unified platform, Adyen is well positioned to deal with increasing regulatory complexity. Adyen continues to take a proactive approach to building relationships with regulators and payment schemes, maintaining transparent and constructive interactions to build a sustainable business. Adyen is committed to maintaining and strengthening its global compliance program to support sustainable business and drive growth for merchants.

Given the regulated nature of Adyen’s activities in several jurisdictions, Adyen is subject to the on-going supervision by competent authorities ensuring proper oversight over Adyen’s operations. In 2021, as part of the authorization and supervision cycles of these competent authorities, Adyen was subject to integrity oversight and audits by Dutch Central Bank in the Netherlands, the Federal Reserve and Office of the Comptroller of the Currency in the United States and the Monetary Authority of Singapore. Adyen has been working on addressing and implementing the feedback received from these competent authorities as part of Adyen’s continued commitment to improve its integrity framework on an ongoing basis.

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Tax

To help our merchants grow, we focus on long-term, scalable solutions. As such, responsible tax behavior is an essential element of our business. We pay taxes in the countries wherein we have a taxable nexus, dependent on the laws of the respective countries. In line with this approach and our values, we do not seek refuge in tax havens and, when making decisions, we respect relevant laws and regulations. We support the principles that are the fundamentals of the OECD’s work on Base Erosion and Profit Shifting (BEPS), including country-by-country reporting to tax authorities. We maintain an open relationship with all relevant tax authorities, which includes that we may conclude a tax agreement.

When it comes to tax, Adyen has a low risk appetite. We operate a global, scalable tax framework which aims to support the business in its growth, while simultaneously allowing us to be in control of our tax position. Our global tax framework covers Adyen’s total tax contribution, both the corporate income taxes paid and the taxes collected, such as: Value added tax, withholding tax, and payroll tax. More details on the taxes paid and taxes collected can be found in the Financial Statements.

Tax governance, control, and risk management

Adyen utilizes a tax control framework to manage and control Adyen’s global tax risks, compliance requirements, and processes. Having a robust governance, control, and risk management system for tax ensures Adyen’s tax strategy and approach to tax are properly embedded within the organization.

The tax control framework6 defines the roles and responsibilities within Adyen when it comes to managing tax risks and ensuring compliance requirements are met. Adyen’s tax team is responsible for all Adyen’s tax affairs around the world. Members of the tax team enrol in external tax trainings. Compliance with the tax control framework is effectuated through a set of internal controls for which evidence is documented and collected on a regular basis. Internal Audit Control continuously monitors and tests compliance with the tax control framework. As part of our internal control processes, we perform an annual tax in-control statement. We continuously seek for ways to embed technology in all areas of our tax control framework, including tax processes and tax data management.

The tax strategy is monitored by the tax team on a continuous basis and is formalized in the tax policy. The tax team updates the tax policy at least annually or in case of significant changes. The Risk Committee reviews the

6 Governed in accordance with the three-lines-model as defined in the ‘Risk management’ section of this Annual Report.

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policy before submitting it to the Management Board for their approval. The tax strategy as included in this Annual Report and as included in the tax policy is ultimately signed-off by the Management Board. We refer to our Whistleblowing Policy for the mechanism for anyone within Adyen to report its concerns about unethical or unlawful behavior in relation to tax.

Stakeholder engagement and management of concerns related to tax

Adyen maintains an open relationship with all relevant tax authorities. We are open to participate in cooperative compliance agreements in order to seek an active real-time audit, whereby clearance is obtained for any significant transactions or tax risks. This may result in Adyen concluding a tax agreement with a tax authority to get upfront certainty on any tax implications that may arise.

Adyen typically refrains from public policy advocacy on tax, nor engages in any lobbying activities related to tax. There is no active involvement in the development of tax systems, legislation, and administration. Within Adyen, tax follows the business. Adyen’s tax team is well embedded in the organization to engage with (external) stakeholders and address any views and/or concerns. The description of our tax strategy, as presented in this Annual Report, is constantly evaluated and iterated following an active dialogue with stakeholders.

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Data Privacy

Data privacy compliance is one of the key commitments Adyen makes to all of its merchants. Building for the long run means building a platform that has privacy ingrained in its design, from the outset. In 2021 Adyen continued to improve and strengthen its privacy compliance framework by designing and incorporating specific internal data privacy controls. These controls monitor the effectiveness of Adyen’s procedures and policies focusing on the rights of individuals and the lawfulness of processing activities. Furthermore, there are adequate processes in place to ensure that Privacy by Design-principles are addressed during Adyen’s product approval process and data privacy impact assessments.

Adyen continues to strive for a global privacy approach, thereby taking into account applicable privacy legislation from different regions such as the General Data Protection Regulation (the GDPR), the California Privacy Rights Act (the CRPA) and the Lei Geral de Proteção de Dados (the LGPD) in Brazil. To facilitate Adyen’s global footprint, Adyen transfers data to its affiliated companies across the globe. During 2021 the new Standard Contractual Clauses (SCCs), containing “Schrems II” obligations, were published. Adyen has implemented the new SCCs into its contractual framework and plans to replace the existing SCCs in 2022. Adyen has also finalized several data transfer impact assessments in order to ensure its transfers are compliant with both “Schrems II” and the new SCCs.

Data privacy is a responsibility for everyone at Adyen. The Privacy team works in close collaboration with the Information Security team, and is closely involved in both strategy setting and day-to-day operations (e.g. launching new products and expanding into new markets). Every Adyen employee is comprehensively trained on data privacy, security and confidentiality principles, including an annual mandatory refresher training to remind all team members of the significance of keeping our data and our merchants’ data safe. Adyen is committed to further improve, develop and strengthen its privacy compliance efforts and standards.

For Adyen’s internal data privacy compliance, in 2021, Adyen continued to focus on its third-party process to make sure that Adyen’s vendors and suppliers match Adyen’s privacy and security standards.

In 2021, Adyen has reported two notifiable data breaches to the Dutch Supervisory Authority, ‘de Autoriteit Persoonsgegevens’. The affected individuals were informed about the incident and no indication of misuse of the data has been reported. Furthermore, Adyen has not identified any substantiated complaints related data privacy matters from relevant regulators and/or third parties.

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Statement by the Management Board

The Management Board of Adyen is responsible for establishing and maintaining an adequate system for risk management and internal control. This system is designed to manage risks effectively and efficiently, to provide reasonable assurance that objectives can be met, that financial and non-financial reporting is reliable and that laws and regulations are complied with.

Internal control over financial reporting is an integral part of the risk management and control systems of Adyen. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with IFRS and IFRIC interpretations as endorsed by the European Union and in accordance with sub article 8 of article 362, Book 2 of the Dutch Civil Code. Internal control over financial reporting includes:

•Maintaining records that, in reasonable detail, accurately, and fairly reflect our transactions

•Providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements

Due to its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Management Board has performed a company-wide risk assessment and described the principal risks facing the Company in relation to its risk appetite in the section ‘Risk factors’ of this Annual Report.

The Management Board has assessed the effectiveness of the design and operation of the risk management and control systems as of December 31, 2021. The results were shared with the Audit Committee and the Supervisory Board and discussed with the independent external auditor (hereafter “external auditor”).

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Based on the assessment and with reference to best practice provision 1.4.3 of the Dutch Corporate Governance Code, the Management Board confirms that to the best of its knowledge and belief:

•This Annual Report provides sufficient insights into any failings in the effectiveness of the internal risk management and control systems (see section ‘Risk management’);

•The aforementioned systems provide reasonable assurance that the financial reporting does not contain any material inaccuracies (see section ‘Risk management’);

•Based on the current state of affairs, it is justified that the financial reporting is prepared on a going concern basis (see ‘Financial statements’); and

•This Annual Report states those material risks and uncertainties that are relevant to the expectation of the Company’s continuity for the period of twelve months after the preparation of this report (see section ‘Risk Factors’ and ‘Financial statements’).

However, the risk management and internal control systems cannot provide absolute assurance that missing of objectives, misstatements, fraud or non-compliance with laws and regulations will not occur.

In accordance with Article 5:25c of the Financial Supervision Act, the Management Board confirms that to the best of its knowledge and belief:

•The financial statements of 2021 give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

•The Annual Report 2021 gives a true and fair view of the position as at December 31, 2021, the development and performance during 2021 of Adyen, together with a description of the principal risks that Adyen faces.

Amsterdam, the Netherlands, March 9, 2022

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02

Governance

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Corporate Governance

A solid, transparent, and seamless corporate governance structure is key to Adyen. It is consistent with the Adyen Formula and allows us to focus on growing our business. In setting up and maintaining our governance structure Adyen is guided by Dutch statutory requirements, the Dutch Corporate Governance Code (the Code), European Banking Association (EBA) Guidelines on Internal Governance and international best practices. As Adyen is operating globally, international developments are closely monitored.

Adyen’s corporate governance is reflected in its Articles of Association, the Management Board By-Laws, the Supervisory Board By-Laws, the Terms of Reference of our Supervisory Board committees and certain other internal policies and procedures. These documents are available on Adyen’s website (www.adyen.com/investor-relations/governance).

Management structure

Adyen maintains a two-tier board structure consisting of a Management Board and a Supervisory Board, each of which have specific responsibilities. The Management Board is collectively responsible for the overall management, which includes, among others, developing and executing Adyen’s strategy and risk management policy, and setting and achieving Adyen’s objectives. The Supervisory Board oversees and advises the Management Board, and can give guidance to its general development. Each board is accountable to the General Meeting for the performance of its duties.

Management Board

Composition, Powers, and Function

Per December 31, 2021, Adyen’s Management Board is composed of the following members (the Managing Directors):

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Each Managing Director has duties related to their specific area of responsibilities and expertise. In performing their duties, the Managing Directors are required to be guided by the best interests of the Company and the business connected thereto, taking into consideration the interests of the Company’s stakeholders. The Management Board By-Laws set out rules regarding the composition, responsibilities and objectives of the Management Board.

Per April 1, 2021 Mariëtte Swart also heads up both Security and Corporate Risk in her position as Chief Legal and Compliance Officer (CLCO), following Management Board approval. Until this date, Ingo Uytdehaage (CFO) had assumed the responsibilities for risk management, while Mariëtte Swart had assumed the responsibilities for security.

Arnout Schuijff stepped down as Chief Technology Officer (CTO) as per January 1, 2021. Alexander Matthey has taken over the position of CTO after approval of shareholders during the Extraordinary General Meeting held on February 12, 2021.

More information on the Management Board can be found at www.adyen.com/about.

Subject to certain statutory exceptions, the Management Board as a whole is authorized to represent the Company. Two Managing Directors acting jointly are also authorized to represent the Company. This reflects the four-eyes principle that Adyen operates across the organization: (At least) two Adyen Managing Directors must sign off on significant business decisions.

Appointment and dismissal

The Articles of Association provide that the Management Board shall consist of two or more members and that the Supervisory Board determines the exact number of Managing Directors after consultation with the Management Board.

Managing Directors will be appointed for a maximum term of four years, after which they may be reappointed for another four years. The General Meeting appoints Managing Directors upon a nomination by the Supervisory Board in accordance with the Articles of Association. The Supervisory Board shall make one or more nominations to the General Meeting in case a 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 such nominee shall be adopted by an absolute majority of the votes cast. However, the General Meeting may at its discretion appoint a Managing Director other than upon the nomination of the Supervisory Board, provided that a proposal to appoint such other person has been put on the agenda of the relevant General Meeting. A resolution of the General Meeting to appoint a

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Managing Director other than in accordance with a nomination of the Supervisory Board, but in accordance with the agenda for such General Meeting, shall require a majority of two thirds of the votes cast representing more than half of the Company's issued share capital.

Adyen is a licensed credit institution, which means that any appointment of a Managing Director must be approved by the Dutch Central Bank (DNB). In connection with its approval procedure, DNB will test the proposed new Managing Director on integrity and suitability.

The General Meeting may at any time, at the proposal of the Supervisory Board, suspend or remove a Managing Director with a resolution adopted by an absolute majority of votes cast. Should the General Meeting wish to suspend or remove a Managing Director other than in accordance with a proposal of the Supervisory Board, such suspension or dismissal needs to be adopted by a majority of two thirds of the votes cast representing more than half of the Company's issued capital. The Supervisory Board may at any time suspend but not dismiss a Managing Director. A General Meeting must be held within three months after a suspension of a Managing Director has taken effect, in which meeting a resolution must be adopted to either terminate or extend the suspension, provided that in the case that such suspension is not terminated, the suspension does not last longer than three months in aggregate. The suspended Managing Director must be given the opportunity to account for his or her actions at that meeting. If neither such resolution is adopted nor the General Meeting has resolved to dismiss the Managing Director, the suspension will cease after the period of suspension has expired.

Supervisory Board

Composition, powers, and function

Adyen’s Supervisory Board is composed of the following members (the Supervisory Directors) as of December 31, 2021:

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The Supervisory Board oversees the conduct and policies of the Management Board and the general course of affairs of the Company and its business. The Supervisory Board also provides advice to the Management Board. In performing their duties, the Supervisory Directors are required to be guided by the interests of Adyen which includes the interests of the business connected with it, taking into consideration the interests of the Company’s stakeholders. These interests are driven by Adyen’s focus on long-term value creation and its implementation in Adyen’s strategy and culture. The Supervisory Board also has due regard for corporate social responsibility issues relevant to the Company. The Supervisory Board By-Laws set out rules regarding the composition, responsibilities and objectives of the Supervisory Board.

On February 12, 2021, Caoimhe Keogan was appointed as Supervisory Director during the Extraordinary General Meeting of shareholders. Following her appointment, she also became a member of the Nomination and Remuneration Committee. More information on her background can be found in the ‘Report of the Supervisory Board’ below.

Appointment and dismissal

The Articles of Association provide that the Supervisory Board must consist of three or more individuals, with a maximum of five persons. The exact number of Supervisory Directors is to be determined by the Supervisory Board. Only natural persons may be appointed as Supervisory Director.

Supervisory Directors will be appointed for a maximum term of four years, after which they may be reappointed for another four years. Reappointment after eight years shall be motivated in the Supervisory Board Report. After this term, a Supervisory Director may once again be reappointed for a term of two years, which can be extended for another two years. Supervisory Directors are appointed by the General Meeting upon a nomination of the Supervisory Board in accordance with the Articles of Association. The Supervisory Board shall make one or more nominations in case a Supervisory Director is to be appointed.

In the event that the Supervisory Board has made a nomination, the resolution of the General Meeting to appoint such nominee shall be adopted by an absolute majority of the votes cast. However, the General Meeting may at its discretion appoint a Supervisory Director other than upon the nomination of the Supervisory Board, provided that a proposal to appoint such other person has been put on the agenda of the relevant General Meeting. A resolution of the General Meeting to appoint a Supervisory Director other than in accordance with a nomination of the Supervisory Board, but in accordance with the agenda for such General Meeting, shall require a majority of two thirds of the votes cast representing more than half of the Company's issued share capital. The Supervisory Board shall appoint one of its members as chairman and shall appoint one of its members as vice-chairman.

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Any appointment of a Supervisory Director must be approved by DNB. In connection with its approval procedure, DNB will test the proposed new Supervisory Director on integrity and suitability.

The General Meeting may at any time, at the proposal of the Supervisory Board, suspend or remove a Supervisory Director with a resolution adopted by an absolute majority of votes cast. Should the General Meeting wish to suspend or remove a Supervisory Director other than in accordance with a proposal of the Supervisory Board, such suspension or dismissal needs to be adopted by a majority of two thirds of the votes cast representing more than half of the Company's issued capital.

Supervisory Board committees

The Supervisory Board has appointed from among its members two permanent committees: A 'Nomination and Remuneration Committee' and an 'Audit and Risk Committee' (the Committees). Each of these Committees has a preparatory and/or advisory role to the Supervisory Board. The Committees report their findings to the Supervisory Board, which is ultimately responsible for all decision making. Terms of Reference apply for each Committee, which can be found at www.adyen.com/investor-relations/governance. All Supervisory Directors have a standing invitation to attend meetings of Committees of which they are not a member and have accepted these invitations on a frequent basis in 2021.

Nomination and Remuneration Committee

The Supervisory Board has assigned certain tasks to the Nomination and Remuneration Committee. This Committee drafts proposals for Adyen’s remuneration policy, and it proposes the remuneration of the individual Managing Directors and Supervisory Directors. It analyses developments of the Code and other applicable laws and regulations, and prepares proposals for the Supervisory Board on these topics. It further advises the Supervisory Board on its duties regarding the selection and appointment of Managing Directors and Supervisory Directors. The Committee is also responsible for carrying out annual assessments on the functioning of the individual Managing Directors and Supervisory Directors and on the functioning of the Management Board and Supervisory Board as a collective.

Where necessary, the Nomination and Remuneration Committee prepares proposals for (re)appointments and drafts the selection criteria for the (re)appointment of Managing Directors and Supervisory Directors.

The Nomination and Remuneration Committee meets as often as required for a proper functioning of the Committee. The meetings are scheduled semi-annually, and as of 2022, three times a year. The Committee consists of at least three Supervisory Directors. The Committee members are Joep van Beurden (Chairman), Piero Overmars, and Caoimhe Keogan, who

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became a member of the Nomination and Remuneration Committee as of her appointment as Supervisory Director on February 12, 2021.

The composition and number of members of the Committee provide for sufficient capacity to carry out the supervisory functions. The members of the Committee have the specific skills and experience required to properly carry out their duties.

Adyen’s CEO, CFO and CLCO have a standing invitation for each Committee meeting. The Company’s HR Director also attends the meetings of the Committee.

Audit and Risk Committee

The Supervisory Board has assigned certain tasks to the Audit and Risk Committee (formerly: Audit Committee). This Committee supervises the provision of the Company’s financial information. The Committee issues preliminary advice to the Supervisory Board regarding the approval of Adyen’s interim and annual accounts.

It also advises the Supervisory Board on the nomination of the external auditor, who is appointed by the General Meeting. It is in regular contact with the internal audit function and the external auditor, and monitors the auditor’s independence. In addition to advising the Management Board on tax and finance matters, it is also responsible for supervising compliance with relevant legislation and regulations.

The Audit and Risk Committee meets as often as required for a proper functioning of the Committee. The meetings are held at least four times a year. The Committee consists of at least three Supervisory Directors. The Committee members are Delfin Rueda Arroyo (Chairman), Piero Overmars and Pamela Joseph. The composition and number of members of the Committee provide for sufficient capacity to carry out the supervisory functions. The members of the Audit Committee have the specific skills and experience required to properly carry out their duties.

Adyen’s CEO, CFO and CLCO have a standing invitation for each Committee meeting. The Company’s internal auditor and external auditor also attend the meetings of the Committee.

General Meeting, shares and shareholders

Extraordinary General Meeting

On February 12, 2021, an Extraordinary General Meeting was held to appoint Alexander Matthey as member of the Management Board as Chief Technology Officer and Caoimhe Keogan as member of the Supervisory Board. Both were appointed for a four-year term.

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General Meetings

Adyen holds a General Meeting of shareholders within six months of the end of the financial year. The agenda for this meeting includes (i) the adoption of the annual accounts, (ii) the Annual Report, (iii) the remuneration policy and remuneration of the Management Board and the Supervisory Board, (iv) the release from liability of the members of the Management Board and the Supervisory Board for their performance during the financial year, (v) the policy of the Company on additions to reserves and on distributions of profits, (vi) any proposal to distribute profits, (vii) the auditor’s report, and (viii) any other proposals placed on the agenda by the Management Board.

General Meetings can be held as often as the Management Board or the Supervisory Board deem necessary. A General Meeting is also convened in case of a decision entailing a significant change in the identity or character of the Company or its business. One or more shareholders representing at least the statutory threshold of 3% of the voting rights may request that the Management Board places items on the agenda of a General Meeting. Such a request must be honoured by the Management Board provided that the request is received in writing at least 60 days before the date of such a meeting.

The Annual General Meeting of 2021 was held on June 3, 2021. Aside from the topics of this meeting as listed above, Ingo Uytdehaage was re-appointed as CFO and member of the Management Board for a period of four years, and Delfin Rueda Arroyo was re-appointed as member of the Supervisory Board for a period of four years, effective June 3, 2021.

Our next Annual General Meeting will be held on June 1, 2022.

Voting rights

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

Amendment to the Articles of Association

The General Meeting may pass a resolution to amend the Articles of Association with an absolute majority of the votes cast. A proposal to amend the Articles must be made by the Management Board and must be approved by the Supervisory Board. When a proposal to amend the Articles of Association is made to the General Meeting, the intention to propose such resolution must be stated in the relevant notice convening the General Meeting.

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Issue of shares

Shares can only be issued pursuant to a resolution of the General Meeting, unless the General Meeting has designated this authority to the Management Board. During the Annual General Meeting held on June 3, 2021, the General Meeting granted the Management Board — subject to the Supervisory Board’s approval — the authority to issue ordinary shares or to grant rights to subscribe for ordinary shares for a term of 18 months as of June 3, 2021 for up to 10% of the total number of shares issued at the time of the General Meeting for any purpose. Hence, within the aforementioned limit shares can be issued by a decision of the Management Board, which allows the Management Board to react promptly when for example a business opportunity arises which requires such issuance. This decision must be approved by the Supervisory Board. Any issuance exceeding the aforementioned limit needs approval by the General Meeting.

In addition, the General Meeting granted the Management Board — subject to the Supervisory Board’s approval — the authority to restrict or exclude applicable pre-emptive rights when issuing ordinary shares or granting rights to subscribe for ordinary shares for a term of 18 months as of June 3, 2021.

Repurchase of shares

Shares can only be repurchased by Adyen pursuant to a resolution of the General Meeting and subject to any required regulatory approvals. The General Meeting may designate the authority to repurchase shares to the Management Board. During the General Meeting held on June 3, 2021, the shareholders granted the Management Board — subject to the Supervisory Board’s approval — the authority to acquire shares in the capital of the Company, either through purchase on a stock exchange or otherwise. The authority applies for a term of 18 months as of June 3, 2021, under the following conditions: The repurchase (i) may constitute up to 10% of the total number of shares issued at the time of the General Meeting; (ii) provided that the Company will not hold more shares in stock than 10% of the issued share capital; and (iii) at a price not less than the nominal value of the shares and not higher than 110% of the opening price at Euronext Amsterdam at the date of the acquisition. Any repurchases exceeding these limits need approval by the General Meeting.

Issued capital and shareholdings

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

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Report of the Supervisory Board

The Supervisory Board is pleased to present its report for 2021 — again a challenging year for society, our team and many businesses due to the COVID-19 pandemic. In 2021, the Adyen platform processed €516.0 billion, growing 70% year-on-year. Adyen has proven resilient due to the further diversification of its merchant base across geographies and verticals, despite the difficult macroeconomic environment continuing to be a disrupting factor to many of its merchants. In 2021, Adyen was able to grow the team to a total of 2,180 FTE as of December 31, 2021.

This report includes a more specific description of the Supervisory Board’s activities during the financial year 2021 and other relevant information on its functioning.

Composition

Adyen has established a two-tier board structure consisting of the Management Board and the Supervisory Board, as explained in the section ‘Governance’ of this Annual Report. The Supervisory Board functions as a separate corporate body and is fully independent from the Management Board. The composition of the Supervisory Board is such that members are able to act independently of one another, the Management Board and any particular interest and allows for properly carrying out all Supervisory Board tasks, including staffing of committees. The Supervisory Board is capable of assessing the broad outline of the overall policy of the Company and of the most important risks incurred. The background, knowledge and expertise of each Supervisory Director adds to the Board’s effectiveness, enabling it to fulfil its duties in the Company’s best interest.

As of December 31, 2021, the Supervisory Board is composed of five members — Piero Overmars (Chairman), Delfin Rueda Arroyo, Joep van Beurden, Pamela Joseph and Caoimhe Keogan.

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

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Delfin Rueda Arroyo serves as CFO and Vice-Chair of the Executive Board and Management Board of NN Group, and is a member of the Supervisory Board of Allfunds Bank S.A.U. and Allfunds Group plc. 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. Delfin Rueda Arroyo holds a master 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).

Joep van Beurden is CEO and member of the Executive Board of Kendrion and member of the Supervisory Board of the Twente University of Technology (the Netherlands). In addition to these positions, Joep serves as a member of the Advisory Board of PlantLab. 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. Joep van Beurden holds a degree in Applied Physics from Twente University of Technology.

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

Caoimhe Keogan serves as CPO (Chief People Officer) for Aveva Group plc. Previously, she served as Chief People Officer for Moneysupermarket Group plc, and as SVP People, Places & Community at SoundCloud. Prior to these roles, she was Senior HR Business Partner at Google. Caoimhe Keogan holds a degree in Occupational Psychology from Queen’s University Belfast (UK).

Supervisory Board meetings

The Supervisory Board convened for eight regular meetings, of which two were held at the offices of Adyen, and six were held via videoconferencing due to the COVID-19 pandemic. The meetings were held in the months February, March, May, July, August, November and December. Members of the Management Board were also present during these meetings.

In 2021, Pamela Joseph was absent at one Supervisory Board meeting. Her attendance rate was therefore 87,5%. The attendance rate of the other Supervisory Directors was 100%.

The Supervisory Board meets at a minimum each half year before the publication of the half-yearly results, and discusses these results with the Management Board, as well as the draft press release and auditor’s report on the procedures performed. These documents are first discussed in the Audit and Risk Committee meeting prior to the Supervisory Board meeting.

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In addition to the regular agenda for the Supervisory Board meeting — which includes topics such as risk management, business performance, strategic updates and the development of the financials — the Supervisory Board discussed topics related to culture, diversity, social responsibility and sustainability, compliance with relevant legislations, relations with regulators, brand positioning and the preparation and evaluation of the Annual General Meeting of Shareholders. Furthermore, deep dives and educational sessions on topics relevant to Adyen’s business were held, such as security, privacy, PSP and Bank, brand positioning, and compliance & regulatory complexity.

The Supervisory Board also discussed Adyen’s (long-term) strategy including its Solutions, Streams, focus areas and associated risks, and reviewed proposed annual and other financial reporting.

The Company Secretary attended all Supervisory Board meetings and Committee meetings, and acted as the secretary of the Supervisory Board and its committees. The Chairman of the Supervisory Board met regularly during the year with the CEO and other Managing Directors to discuss the performance of the Company and projects as part of executing the strategy. The Supervisory Directors also interacted individually and collectively with Managing Directors outside the formal Supervisory Board meetings.

In 2021, there were no conflicts of interest between Adyen and Managing Directors or Supervisory Directors.

Committee reporting

The Supervisory Board has established two Committees, as further explained in the chapter ‘Governance’: The Nomination and Remuneration Committee and the Audit and Risk Committee. The main considerations and conclusions of each Committee were shared with the full Supervisory Board.

Nomination and Remuneration Committee

The duties and composition of the Nomination and Remuneration Committee are described in the section ‘Governance’ of this Annual Report.

The Nomination and Remuneration Committee convened twice in 2021. All Committee members attended all meetings. The Committee has reviewed the composition of the Supervisory Board and Management Board. The Committee monitored and analyzed developments of the Code and applicable laws and regulations in relation to remuneration policies, reviewed Adyen’s Remuneration Policy and its execution for compliance with the Code and the Dutch Act on Remuneration Policies Financial Undertakings (Wet beloningsbeleid financiële ondernemingen) as implemented in the Dutch Financial Supervision Act (Wet op het financieel toezicht). For more information on the Remuneration Policy, please refer to the section ‘Remuneration Report’ of this Annual Report.

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The Nomination and Remuneration Committee leads the evaluation of the performance of the individual Managing Directors and Supervisory Directors. During the evaluation the Committee took note of the Managing Directors’ views on their own remuneration. The Committee drafted proposals to the Supervisory Board for the remuneration of the individual Managing Directors and Supervisory Directors. The remuneration of the Supervisory Directors remained unaltered in 2021. The Nomination and Remuneration Committee has drawn up a plan for the succession of the Managing Directors and the Supervisory Directors.

Audit and Risk Committee

The duties and composition of the Audit and Risk Committee are described in the section ‘Governance’ of this Annual Report.

In 2021, the Audit and Risk Committee convened for four regular meetings. The Committee discussed the quarterly results and the financial statements. Furthermore, the Committee discussed the reports from internal and external auditors, reviewed the Annual Report and the H1 and H2 Shareholder Letter including the relevant press releases, and discussed the overall internal control environment. The Committee also discussed other topics including compliance, governance, ICLAAP, SREP, tax, information security, legal, risk, merchants’ potential liability, investor relations and treasury. The members of the Committee met with the internal and external auditors outside the Committee meetings to ensure all relevant information was discussed. The Committee evaluated the performance and remuneration of the external auditor. All Committee members, the internal auditor and the external auditor attended all meetings held in 2021.

Diversity

The Supervisory Board values and promotes diversity, both within the Supervisory Board and the Management Board, as within Adyen in general. Differences in amongst others educational background, nationality, age, race, gender, experiences and beliefs are vital to the business, enabling the Boards and the Company to look at issues and opportunities differently and to respond to challenges in new ways. Diversity is a key driver for innovation and allows Adyen to attract and retain the most talented and smart people. This standpoint has also been embedded in the Adyen Diversity, Equity and Inclusion (DEI) Policy, which has been adopted in 2021 — please refer to the ‘People and Culture’ section and ‘Compliance with the Dutch Corporate Governance Code’ section of this Annual Report.

The Supervisory Board aims for a balance in its composition with respect to gender, nationality, age, experience and affinity with the nature and culture of the business of Adyen in all countries in which it is active. In line with the Company’s DEI Policy and the adoption of the legislative proposal introducing stricter gender diversity measures for Dutch listed (in line with

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the SER’s guideline on Supervisory Board composition), Caoimhe Keogan has been appointed as Supervisory Director in the Extraordinary General Meeting which was held on February 12, 2021. The Supervisory Board now consists of 40% women.

Independence

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

Performance assessment

In 2021, the Supervisory Board has assessed its performance and composition and that of its Committees. The Supervisory Board has conducted the annual self-assessment without the Managing Directors being present. The main results of the self-assessment have subsequently been shared with the Management Board. The performance of the Supervisory Board, the Nomination and Remuneration Committee and the Audit and Risk Committee has been assessed as satisfactory. The functioning of the Supervisory Board fully complies with the relevant principles and best practices as set out in the Dutch Corporate Governance Code.

The points for follow-up as proposed in last year’s external evaluation have been implemented successfully, such as the set-up of additional bilateral meetings with fellow Supervisory Directors and the Supervisory Board as a body. For the upcoming year, the Supervisory Directors among others aim to dedicate even more time to second-line functions within the Company.

Financial statements

The Financial Statements for the year ended December 31, 2021, were prepared by the Management Board and approved by the Supervisory Board. The Report of the Independent Auditor, PricewaterhouseCoopers Accountants N.V. (PwC) is included in the Independent Auditor’s Report in the ‘Other Information’ section of the Financial Statements. The Supervisory Board recommends that the General Meeting adopts these Financial Statements.

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Appreciation

Looking back at 2021, the Supervisory Board would like to thank all Adyen employees for their contribution during what has again been a challenging year in many aspects. The Supervisory Board is proud to see the team was able to continue to serve the interests of merchants, shareholders and other stakeholders of the Company with the highest standards.

Relevant documents on our Governance website

•Remuneration Policy — Management Board and Supervisory Board

•General Remuneration Policy

•Reporting and Whistleblower Policy

•Terms of Reference Nomination and Remuneration Committee

•Terms of Reference Audit and Risk Committee

•Diversity, Equity and Inclusion Policy

•Disclosure and Bilateral Dialogue Policy

These documents can be found on www.adyen.com/investor-relations/governance.

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Compliance with the Dutch Corporate Governance Code

Adyen acknowledges the importance of good corporate governance. The Company agrees with the general approach and with the provisions of the Code7. As such, it fully complies with the Code with the exception of Best Practice provision 4.3.3 of the Code, which provides that the general meeting of shareholders of a company not having statutory two-tier status may pass a resolution to cancel the binding nature of a nomination for the appointment of a member of the Management Board or of the Supervisory Board and/or a resolution to dismiss a member of the Management Board or of the Supervisory Board by an absolute majority of the votes cast. It may be provided that this majority should represent a given proportion of the issued capital, which proportion may not exceed one-third. However, Adyen applies a higher proportion of one-half, which follows from a previous arrangement with Adyen’s shareholders.

In line with the request from the Monitoring Commission Corporate Governance Code to comply and explain over 2021 with regards to the topics of long-term value creation, culture and diversity, the Company provides insight into these topics below.

Long-term value creation, as set out in Principle 1.1 of the Code, is one of the leading topics for the Adyen, and therefore for the Management Board. When formulating the mid- to long-term strategy, the Supervisory Board is kept informed and is asked to provide feedback on a continuous basis. This not only with regards to the overarching organizational structure, but also on a more granular implementation level. The Supervisory Directors have one-on-one meetings with key people within the Company, and are involved in the assessment of risks, not only via the regular Supervisory Board and Committee meetings, but also in an informal way. Please refer to the ‘Management Report’ for further information.

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On diversity, as set out in Best Practice 2.1.5 and 2.1.6 of the Code, Adyen has adopted a Diversity, Equity, and Inclusion Policy in 2021. The Policy sets out the Company’s guiding principles while designing for diversity, as well as the accompanying commitments. One of the commitments is to maintain a Supervisory Board that is at least one-third female (currently two out of five Supervisory Directors are female). Next to this, Adyen is committed to increase the gender balance of its Management Board and Senior Management together, to consist of at least one-third female members. The Senior Management Group includes among others direct reports to the Management Board, Critical Roles, as well as the Global Leadership Group. As mentioned in the ‘People & culture’ section of this Annual Report, the Company is committed to hire, promote, and enable underrepresented groups across all levels of the organization. The full DEI Policy can be found at adyen.com/investor-relations/governance.

With regards to culture as set out in Best Practice 2.5.4, this is of the utmost importance to Adyen, as it enables an open and inclusive environment which is key to innovation. The Adyen Formula defines the key principles on culture within the Company, and is valued highly. Culture is furthermore yearly audited by the Internal Auditor in the Culture Audit. Please refer to the ‘People and Culture’ section in the Management Report for further information.

Adyen Annual Report 2021

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Remuneration report

This remuneration report explains how the remuneration policy for the Management Board and Supervisory Board was put into practice in 2021. The current remuneration policy was approved by the General Meeting in 2020 with a 98.61% approval rate. The remuneration report has been prepared in accordance with article 2:135b of the Dutch Civil Code and the Dutch Corporate Governance Code. It will be presented for an advisory vote to the shareholders at the 2022 General Meeting of Shareholders.

Reward Principles

Equal pay

We are committed to ensure equal pay between women and men. We value all perspectives, so we see no reason to reward one more than the other — same role, same pay. Our annual equal pay audit is designed to safeguard same pay and uphold this standard.

Remuneration

The size of an individual remuneration package is based on the scope of responsibilities, the employee’s experience and performance, and the local market circumstances, which varies depending on country.

The total remuneration of individual staff members, including the Managing and Supervisory Directors, is determined by considering the long-term strategy of Adyen and aimed at ensuring a sustainable and durable company for stakeholders.

The remuneration of the Management Board is reviewed annually and any adjustment of the remuneration will be in accordance with the remuneration policy. Remuneration decisions such as pay increases will take account of the individual Managing Directors delivering on specific areas of focus, including sustainability and the Adyen Formula, as well as company performance.

Remuneration may consist of a base salary, share-related remuneration, pension entitlements and other emoluments. For certain employees remuneration may also include variable pay.

Adyen has the right pay mix in place to mitigate short-term orientation and contribute to the long-term performance of the company. This is specifically achieved by awarding staff members, including the Management Board, with (long-term) share-related remuneration. The purpose of the share-based payments is to put staff members in a financial ownership-like position where shares are concerned and for them to obtain an economic interest in the pursuit of Adyen’s long-term objectives such as sustainable growth, development, profitability, and financial success of Adyen.

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Adyen remuneration policy

The objective of our remuneration policy is to recruit and retain the best talent worldwide by offering competitive payment structures that take account of our strategy to focus on our merchants’ growth, changing the payment landscape and having fun while doing so.

Adyen observes the laws and regulations applicable to the company, which includes the remuneration regulations as provided in the Act on Remuneration policy Financial Undertakings (Wet beloningsbeleid financiële ondernemingen) and the EBA Guidelines on Sound Remuneration Policies (EBA Guidelines) (the Remuneration Regulations). Moreover, this Remuneration Report has been inspired by the EC Guidelines on the standardised presentation of the remuneration report. Adyen's remuneration policy is in line with the Remuneration Regulations.

Our remuneration policies are consistent with, and promote, sound and effective risk management and are always aligned with our strategy and the Adyen Formula to create long-term value for our company and our merchants. As such, our remuneration policy does not contain incentives that exclusively benefit staff members themselves or encourage improper risk-taking.

The remuneration policy of Adyen is published on Adyen’s website.

There have been no deviations from the remuneration policy or the procedure for its implementation in the financial year 2021.

Variable remuneration

In the financial year 2021, Adyen has not rewarded any variable remuneration to the members of the Management Board. Adyen does not award variable remuneration to members of the Supervisory Board.

The total global company-wide amount of variable remuneration awarded over 2021 was EUR 19,861,792 (2020: EUR 17,092,364) compared to total staff expenses of EUR 240,538,495 (2020: EUR 180,013,967).

Malus and Claw Back

In accordance with the Remuneration Regulations, variable remuneration will be subject to hold back and claw back instruments. As no variable remuneration has been awarded to the members of the Management Board or the Supervisory Board in the financial year 2021, no variable remuneration has been adjusted or clawed back over 2021 or previous years in accordance with these instruments .

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Identified staff

In 2021 there were 26 employees (2020: 21) identified as “Identified Staff”.

Total annual remuneration

In 2021 there were 3 employees to whom total annual remuneration (including employer pension contributions and any severance payments made) of EUR 1,000,000 or more was awarded.

Management Board Remuneration

The remuneration policy that applies to the Managing Directors is in line with the remuneration policy that applies to all staff. Adyen’s Management Board remuneration is consistent with and promotes a sound and effective risk management and has always been aligned with Adyen’s strategy to create long-term value for its merchants. It is thus set up with the aim to contribute to Adyen's long-term goals. As such, the remuneration policy provides an incentive for prudent and sustainable risk-taking.

The remuneration of the Managing Directors is determined by the Supervisory Board with due observance of the remuneration policy as adopted by the General Meeting.

Base salary

The Managing Directors provide the Nomination and Remuneration Committee with their individual views with regard to the amount and structure of their own remuneration. In 2021 base salaries of the Managing Directors were increased with 3%, in line with the average salary increase of an Adyen employee in 2020.

The Management Board’s remuneration is compared to AEX companies. The Management Board remuneration is below the median of the benchmark.

In 2022, Adyen will apply the same principle of increasing Management Board compensation in line with the organization. Two exceptions will be made. Per January 1, 2022, the total remuneration of Adyen’s Chief Legal & Compliance Officer will be adjusted to EUR 750,000, based on full-time employment to reflect the increased scope of role and responsibilities, and to bring it towards more market competitive level. An adjustment will also be made for Adyen’s Chief Technology Officer. To recognize experience and ensure the remuneration change is in line with the technology organization and external technology sector, the total remuneration will be adjusted to EUR 600,000.

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Variable remuneration

No variable remuneration has been awarded to members of the Management Board in 2021.

Pension & Benefits

Pension

As from January 2017, all Dutch Managing Directors participate in the Collective Defined Contribution (CDC) pension plan, with respect to their salary up to EUR 112,189 gross per year for 2021 ((2020: EUR 110,111). On behalf of each Managing Director, Adyen pays a contribution of 4% of the pensionable salary — being 12 times the monthly fixed salary plus holiday pay up to the fiscally allowed maximum minus a deductible — for the accrual of old age pension benefits as well as the administration costs. If and as far as fiscally allowed, each Managing Director has the possibility to make additional contributions in order to accrue additional pension capital.

Kamran Zaki participates in a 401k retirement plan in the US, for which Adyen provides an employer match of up to 2% of base salary. 

Benefits

All Managing Directors are insured under an insurance policy taken out by Adyen against damages resulting from their conduct when acting in their capacities as directors.

All Dutch Managing Directors are insured for the risk of death and disability, for which Adyen pays the insurance premiums.

Scenario Analysis

In line with the revised Dutch Corporate Governance Code, Adyen performed a scenario analysis and back-test on Management Board remuneration. All scenarios resulted in the same outcome as the remuneration of the Managing Directors is not linked to variable remuneration elements.

Pay Ratio

The internal ratio of the Managing Directors’ remuneration and all other Adyen staff was determined. For this ratio, Adyen included all remuneration components of the CEO compared to the average total remuneration of all Adyen employees worldwide. For the CEO a ratio of 7:1 applies (2020: [7:1]). For the other Managing Directors, a ratio of 6:1 applies (2020: [6:1]).

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Management Board Remuneration in 2021

The table below provides an overview the Management Board remuneration in 2021 and 2020. Compared to last years report, all allowances and benefits have moved to a separate column to ensure better transparency on base salary paid. Total remuneration numbers did not change.

The Managing Directors did not receive variable remuneration. Share-based compensation refers to share-based fixed remuneration awarded in depository receipts.

All amounts are in EUR

* 0.9 FTE

**0.6 FTE

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Stock options awarded in previous years

The table below provides an overview of the stock options per December 31, 2021 that have been granted to Managing Directors as part of their share-based compensation. No new grants were given in 2021.

The stock options held by Ingo Uytdehaage and Roelant Prins expired on December 1, 2021. Mr. Uytdehaage and Mr. Prins gradually sold their stock options in the period running from July 1, 2019 (i.e. after expiry of the Post-IPO Shareholders’ lock-up period) until December 1, 2021. The stock options were sold on a monthly basis in portions equally divided over the 3 (three) calendar years with due observation of a 15% daily trading-cap. The stock options held by Kamran Zaki expired on January 1, 2022. Mr. Zaki instructed ABN Amro to sell to cover in order to exercise and hold the remainder of his stock option portfolio. As per the instruction the stock options shall be sold at any given market-price. Upon each sale appropriate notifications were made via the AFM register.

The stock options held by Mariëtte Swart are due to expire November 1, 2023.

The stock options held by Alexander Matthey are due to expire December 1, 2023.

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*Former Managing Director

Pieter Van der Does (through Spreng BV) has irrevocably instructed a bank to gradually sell 100,000 shares from April 2022 until March 2023. The shares shall be sold on a monthly basis, in substantially equal portions divided over the calendar year. As per the instruction, the shares shall be sold at any given market-price. Upon each sale, appropriate notifications shall be made via the AFM register.

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Share and Depositary Receipt holdings

The table below reflects the equity position directly or indirectly held by the Managing Directors as per December 31, 2021, 2020 and 2019:

*Former Managing Director

Service and Severance Agreements

All Managing Directors have entered into a service agreement (overeenkomst van opdracht) with Adyen N.V. effective as of the date of the listing of Adyen, whereby Kamran Zaki is currently assigned to Adyen N.V. San Francisco Branch. The terms and conditions of these service agreements have been aligned with the Dutch Corporate Governance Code. The service agreements will be entered into for a term of 4 years. The service agreements provide for a severance of one annual base salary if the Managing Director is not re-appointed or otherwise terminated by Adyen (for any reason other than urgent cause within the meaning of article 7:678 of the Dutch Civil Code (dringende reden)), in accordance with the Dutch Corporate Governance Code. In the financial year 2021, no severance payment has been paid to any Managing Director.

Loans

No loans, advance payments and guarantees have been granted to or on behalf of the Managing Directors.

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Remuneration and Company Performance Development

The below table shows the difference in Management Board remuneration compared to the previous year and company performance over the last two reported financial years:

*Became Managing Director as per 2021

Supervisory Board Remuneration