Adyen Action Forum

Adyen Q3 2024 $ADYEN (-4,7 %)

Financial results

• Net revenue: EUR 498.3 million in Q3 2024, an increase of 20% year-on-year; on a constant currency basis, year-on-year growth was 21%.
• Volume processed: 320.6 billion euros, an increase of 32% year-on-year.

Balance sheet and cash flow overview

• Balance sheet: The report does not contain any specific balance sheet information.
• Income statement: Apart from net sales, no further details on the income statement are provided.
• Cash flow: Cash flow details are missing from the report.

Key figures and profitability metrics

• EBITDA margin: The company is aiming to improve its EBITDA margin to over 50% by 2026.

Segment information

• Platforms: Volume processed increased by 44% year-on-year; excluding eBay, growth was 54%.
• Digital: Processed volume increased by 29 % year-on-year.
• Unified Commerce: Volume processed increased by 33% year-on-year.

Competitive position

• Scaling the customer base: The company is constantly expanding its customer base; 25 platforms currently process over one billion euros annually, compared to 17 in the previous year.

Management forecasts and comments

• Net sales growth: Expected to grow net sales between low and high 20 percent ranges annually through 2026.
• Capital expenditure: Capital expenditure to be maintained at up to 5% of net sales.

Opportunities and risks

• Opportunities: Expansion in North America and improvements to the product range, such as the "Intelligent Payment Routing" solution.
• Risks: Dependence on a single large customer, which could affect volume growth.

Positive aspects

• Strong sales growth: Net sales increased by 20% year-on-year.
• Platform expansion: Processed volume via platforms increased by 44 % year-on-year.
• Unified Commerce growth: Processed volume increased by 33% year-on-year.
• Product innovation: Launch of new products such as the SFO1 terminal and "Intelligent Payment Routing".
• Expansion of the customer base: Increasing number of platforms with a processed volume of over one billion euros annually.

Negative aspects

• Dependence on volume growth: Limited volume growth due to a single large customer.
• Lack of financial details: No detailed balance sheet, income statement or cash flow information.
• Unchanged financial targets: No adjustment to financial forecasts despite market conditions.
• Hiring challenges: Non-linear hiring processes, yet focus on key investments.
• Currency effects: Currency fluctuations slightly affect net sales growth.

Summary Earnings, 07.11.

$MUV2 (-0,5 %)
| Munich Re Q3 24 Earnings

EPS EU7.02 (est EU6.67)

Sees FY Insurance Rev. About EU61B, Saw About EU59B

Sees FY Profit Above EU5B, Saw EU5B

$RHM (+1,63 %) | Rheinmetall AG Q3 24 Earnings

Sales EU2.45B (est EU2.42B)

Still Sees FY Sales About EU10B (est EU9.99B)

Sees FY Operating Margin At Upper End Of Guidance

Nissan Motor Q2 2024 Earnings $7201 (+0,06 %)

Q2 Operating Income 31.91B Yen (est 65.25B Yen)

Q2 Net Loss 9.34B Yen (est Profit 49.07B Yen)

Sees FY Oper Income 150.00B Yen, Saw 500.00B Yen

To Cut 9,000 Jobs Globally

To Reduce Global Production Capacity By 20%

To Sell Back Up To 10.02% Of Mitsubishi Motors Shares

Air France KLM Q3 24 Earnings $AF

EBITDA EU1.90B (est EU1.9B)

Rev EU8.98B (est EU8.88B)

Net Income EU780M (est EU874.3M)

Sees FY Capex EU3B, Saw Below EU3B

$TEF (+1,75 %) | Telefonica Q3 24 Earnings

REV. EU10.02B (est EU10B)

Adj. EBITDA EU3.26B (est EU3.26B)

Net Income EU10M (est EU357M)

To Book €314 Million Non-Cash Impairment For Peru

ArcelorMittal Q3 24 Earnings: $MT (-1,08 %)

- Sales $15.20B (est $15.23B)

- EBITDA $1.58B (est $1.47B)

- Still Sees FY CAPEX $4.5B To $5.0B

- Markets Conditions Are 'Unsustainable'

- Positive On Medium/Long Term Outlook

Daimler Truck Holdings Q3 24 Earnings: $DTG (-4,27 %)

- Rev EU13.14B (est EU12.98B)

- Adj EBIT EU1.19B (est EU1.13B)

- Still Sees FY Rev EU53B To EU55B (est EU53.45B)

Adyen disappoints with lower than expected sales growth and loses 13% on the stock market. $ADYEN (-4,7 %)

Lanxess-shares rise by 4.4% to 26.80 euros after a positive quarterly report, having previously fallen by 13%. The operating margin exceeds expectations, although prices weaken. $LXS (-3,58 %)

National Grid increased its adjusted operating profit by 14% to 2 billion pounds in the first half of the financial year and expects an increase of around 10% for the year as a whole. Higher fees in New York and higher revenues in the UK are supporting growth. $NG. (-0,42 %)

AMS-Osram increased its profitability in the third quarter despite a decline in sales, but expects business development to be subdued in the fourth quarter and early 2025. To ensure profitability, the company plans further cost reductions of 225 million euros by the end of 2026. $AMS

Suess Microtec is more optimistic after a strong third quarter and now expects to achieve its annual targets in the upper half of the forecast range. Sales are expected to reach 380 to 410 million euros, with an EBIT margin of 14 to 16 percent. $SMHN (+1,16 %)

The investment company Mutares slips into the red operationally in the third quarter with an adjusted EBITDA loss of EUR 16.5 million. However, sales increased by 14% to 3.9 billion euros. $MUX (-3,12 %)

Delivery Hero expects a free cash flow of EUR 50 to 100 million for 2024 and anticipates GMV growth at the upper end of the forecast of 7 to 9 percent. However, the Group expects adjusted EBITDA to be at the lower end of the range of EUR 725 to 775 million. $DHE

Deutz recorded an 80% drop in profits to EUR 7.2 million in the third quarter and slipped into the red with a bottom line of EUR 2 million. Turnover falls by 14.9% to 430.4 million euros due to a slump in demand. $DEZ (-3,78 %)

Compugroup Medical records a decline in EBITDA in the third quarter

EBITDA fell by 12% to 54.9 million euros in the third quarter, but slightly exceeded

analysts' expectations slightly. Turnover falls by 1% to 283.4 million euros

euros, and the company confirms its reduced forecast for 2024. $COP (-0,13 %)

Alzchem reports a jump in profits for the first nine months with

a 36% increase in EBITDA to EUR 76.8 million and increases the EBITDA margin to

EBITDA margin to 18.5 %. The Group is sticking to its profit target for 2024

but is aiming for the lower end of the sales forecast due to the discontinuation of low-margin

the lower end of the sales forecast. $ACT (-2,51 %)

Nordex is raising its forecast for the EBITDA margin for 2024 and

now expects it to be closer to the upper end of the range of three to four

percent. In the first nine months of the year, the company recorded

an increase in revenue of 14 percent to EUR 5.1 billion and an improved

improved EBITDA margin of 3.7 percent. $NDX1 (-0,04 %)

Nemetschek recorded an increase in revenue in the third quarter thanks to the

thanks to the GoCanvas acquisition, Nemetschek recorded a 15.1% increase in revenues to 253 million euros,

however, earnings remained slightly below expectations. The

The operating costs of the acquisition put pressure on profits, so that EBITDA

increases by 6.7 %. $NEM (-0,52 %)

Rational increases earnings before interest and taxes in the third quarter

taxes by 18% to just under 78 million euros, exceeding analysts'

analysts' expectations, while sales revenues grew by 8% to 294 million

euros. The company confirms its forecast for the year. $RAA (+2,46 %)

Part 2:

The evolution of embedded finance: banks at a crossroads

Reading time: approx. 4 minutes

The emergence and growth of embedded finance have presented banks around the world with a strategic decision: Do they give up "simple" payments and payment processing and focus on more more complex services such as asset management, M&A and IPOs? Or do they continue to build the financial infrastructure to keep pace with fintechs and tech companies?

To grasp the deep understanding of embedded finance and the role of banks, we need to analyze the change in the financial world and the shift in power between traditional banks and tech giants.

Embedded finance: redefining the role of banks

Historically, banks have been banks were not only the main players in the provision of financial products, but also the sole point of access to these services. However, the digital revolution, led by tech giants and fintechs, has profoundly changed the relationship between bank and customer. Embedded financewhich enables the seamless integration of financial services into digital platforms, poses a major challenge for banks.

Technological platforms take over payment processing: Companies such as Stripe, Adyen and Square offer comprehensive payment infrastructures that enable platforms to offer financial services without the direct involvement of a bank. These companies are often faster, more flexible and, above all, cheaper than traditional banks.

Banks as infrastructure providersSome banks have opted to take on a strategic role in the background. They provide the infrastructure for payments and loans but leave the customer experience to the platforms. Examples of this are banks such as Hypothekarbank Lenzburgfintechs such as neon to offer banking services without having a banking license themselves.

Retreat into more complex services: On the other hand, there are banks that specialize in high-quality, advisory-intensive services such as asset management, IPOs and M&A transactions focus. These services require deep expertise, regulatory experience and trust - factors that tech companies struggle to replicate.

Which direction are banks taking?

Banks are faced with a strategic choice between (mainly) two models:

1.) Becoming an infrastructure provider:

Some banks no longer want to be the central interface to the customer, but focus on providing a robust infrastructure. BBVA and Goldman Sachs for example, have started to provide their infrastructure via Banking-as-a-Service (BaaS) to other companies. They provide platforms with the necessary financial tools without being in the foreground. The advantage: they can earn money from a growing number of transactions without competing directly with tech companies.

Advantages for the banks:

• Scalability: Banks can use their existing infrastructure more efficiently.
• Revenue through fees for providing payment and credit solutions to fintechs or other companies.

Disadvantages:

• Fewer direct customer relationships.
• Greater reliance on partnerships with tech companies.

2) Focus on advisory-intensive services:

Another group of banks is focusing on high-value financial servicesthat require personalized advice and specific know-how. The UBS is an example of this. By withdrawing from the mass business with simple payments and loans, it can concentrate on asset management and corporate finance where margins are higher and there is less competition from tech companies. The divestment of "Swisscard" to AmericanExpress may be an indication that UBS wants (or needs?) to focus on its core business.

Advantages:

• Higher margins for specialized services.
• Greater trust and long-term relationships with wealthy private clients and companies.

Disadvantages:

• Risk of losing bulk business and therefore volume.
• Dependence on high-end clients who scale back their assets or activities in times of crisis.

Technological change and competitive pressure

A key driver of this change is the technologization of the financial sector. APIs enable platforms such as Amazon, Airbnb or Shopifyto offer financial services without a bank in the foreground. These developments have not only made the banking market smaller, but have also put pressure on bank margins increased.

One example of the influence of embedded finance is the shift in credit and payment options. Klarna offers "Buy Now, Pay Later" (BNPL) models directly at the checkout of online retailers. Although the customer thinks they are paying the merchant directly, the actual credit processing takes place in the background via Klarna. The merchant receives their money immediately, and Klarna earns from the customer's installment payments. This underlines how tech companies have taken over the traditional model of the credit business without being a bank themselves.

Banks at a crossroads?

The future of banks will depend heavily on the strategic decisions they make. The The loss of direct customer contact in payment transactions through embedded finance is a challenge, but banks can use this change to either focus on infrastructure or high-value services specialize in either infrastructure or high-value services. However, both require massive investments in technologyto remain competitive.

In the next part of the series, we take a closer look at how the technologies behind embedded finance work and how banks and companies can use these systems efficiently to consolidate their position in the market.

Let me know what you think! - Leave a comment!

Happy investing! 😊

GG

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BONUS:

The global embedded finance market in 2023 was estimated at USD 83.32 billion and is expected to grow at a compound annual growth rate of 32,8% further growth. This growth is due to the increase in smartphones and internet access worldwide.

Stay tuned, the series continues! ♥️🔥

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A small bet on my part that went quite okay. Apart from that $ADYEN (-4,7 %) delivered good figures and it is unbelievable how much income they are generating. Currently up 22%

Our fingers were tingling this week and we ended up doing a lot of shopping, but also a lot of selling.

Among other things we bought $TEAM (+2,29 %) ; $ACN (-0,5 %) ; $ADYEN (-4,7 %) but also the one or other title that doesn't start with "a" ;-)

Sold were among others: $AAUKF ; Short on the S&P 500; $ZIM (-1,52 %) ...

Have you been as active and if so, what were your buys and sells?

$ADYEN (-4,7 %) After today's price slump, I can't resist, even though they have only recently been taken out via a trailing stop loss.

Depending on the price trend, the position will be expanded further.

Update 29.04.2023: Limit order at €1,150 has hit - purchase of another Adyen at €1,147.60 😁