7 key takeaways from Amsterdam fintech unicorn Adyen’s 2020 Annual report

7 key takeaways from Amsterdam fintech unicorn Adyen’s 2020 Annual report

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Amsterdam-based fintech unicorn, Adyen, has published its 2020 Annual report that outlines what has happened in the company last year amid the COVID-19 pandemic, financial statements, and much more. 

To reiterate, Adyen is the payments platform that provides a modern end-to-end infrastructure connecting directly to Visa, Mastercard, and other payment methods. The Dutch fintech unicorn delivers frictionless payments across online, mobile, and in-store channels. 

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Here are the key takeaways from Adyen’s 2020 Annual report:

Solid net revenue growth

As per the report, the net revenue recorded by the fintech company touched €684.2M for the year, up 28 per cent year-on-year. 

On net revenue growth, North America (66 per cent) outpaced APAC (29 per cent), Europe (22 per cent), and LATAM (11 per cent). But on the regional net revenue contributions: Europe remained the largest contributor, representing 62 per cent of net revenues – followed by North America (19 per cent), APAC (9 per cent), and LATAM (9 per cent).

Adyen says the business’ resilience was fueled by the continued diversification of their merchant base across regions.

Strong volume contributions amid COVID-19

Adyen witnessed a 27 per cent growth in processed volume for the full year, totaling €303.6B. POS processed volume for the year was €32.2B and 11 per cent of total processed volume, up from €29.2B and 12 per cent of total processed volume in 2019. 

Operating expenses up by 29%

In 2020, the total operating cost was €310.3M, up 29 per cent year-on-year, and representing 45 per cent of net revenue. For the entire 2020, the company spent €180M on employee benefits, up 47 per cent from €122.4M for the full year 2019.

Other operating expenses were €101.9M in 2020, up 7 per cent from €95.1M in 2019. Of these, sales and marketing expenses were €39.6M, up 23 per cent from €32.3M for 2019 as they continue to invest in brand awareness and lead generation across regions. The company also focussed on hosting online marketing campaigns during COVID-19. 

EBITDA displays continued profitability

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) for full-year 2020 was €402.5M, up 27 per cent year-on-year from €316.9M in 2019. EBITDA margin came in at 59 per cent in 2020, the same percentage as 2019. 

Free cash flow conversion is up by 29%

There is a 29 per cent increase in the Free cash flow conversion, which stands at €371.1M in 2020, compared to €287.1M in 2019. The Free cash flow conversion ratio was 92 per cent for the year, up from 91 per cent in 2019. 

Net income and CapEx

Also, the CapEx was 3 per cent of net revenue for 2020, 14 per cent down from 2019, primarily due to the low cost of operating the single platform

The net income was €261M for 2020, up 11 per cent from €234.3M in 2019. It’s worth noting that the full-year net income was impacted by the movement in other financial results.

Financial objectives

In the report, Adyen has also set financial objectives:

On the Net revenue growth: Adyen aims to continue to grow net revenue and achieve a CAGR between the mid-twenties and low-thirties in the medium term. In terms of EBITDA margin, the Dutch fintech plans to improve and increase to levels above 65 per cent in the long term. Lastly, the Dutch company wants to maintain a sustainable capital expenditure level of up to 5 per cent of our net revenue.

Partnership with Glovo

Last month, Adyen expanded its partnership with Glovo to provide card issuing for Glovo’s entire European courier base. The company started rolling out an initial 30,000 cards among Glovo’s European courier base so that Glovo can use Adyen as its exclusive European card-issuing partner.

Expansion to the Middle East

Last year, the company expanded its operation to the Middle East with a regional office in Dubai. With the presence in the Middle East, its existing merchants from other markets can enter the new region easily.

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