Slide 1: 3Q20 Earnings Presentation
3Q20 Earnings Presentation November 2020
Slide 2: Important Disclosure
2 Important Disclosure IN REVIEWING THE INFORMATION CONTAINED IN THIS PRESENTATION, YOU ARE AGREEING TO ABIDE BY THE TERMS OF THIS DISCLAIMER . THIS INFORMATION IS BEING MADE AVAILABLE TO EACH RECIPIENT SOLELY FOR ITS INFORMATION AND IS SUBJECT TO AMENDMENT . This presentation is prepared by XP Inc
Slide 3: Index
3 Index 0 1 3Q20 KPIs and Financials 0 2 Growth Strategy Through Technology 0 3 Q&A 0 4 Opening Remarks
Slide 4: Opening Remarks
1 Opening Remarks
Slide 5: Accountability: Almost a Year Since our IPO, Business Plan Delivery in a Crisis Period
5 Accountability: Almost a Year Since our IPO Business Plan Delivery in a Crisis Period OUR PROMISSES AND WHAT WE HAVE DELIVERED... STRONG FINANCIAL RESULTS GROWTH STRATEGIES 2,645k ACTIVE CLIENTS +72% YoY R$ 563 bn TOTAL AUC +61% YoY R$ 161 bn NET INFLOW +29% YoY R$6,142 bn GROSS REVENUE +66% YoY R
Slide 6: 3Q20 KPIs and Financials
2 3 Q20 KPIs and Financials
Slide 7: KPIs: AUC, Active Clients and NPS
7 KPIs AUC, Active Clients and NPS Assets Under Custody (AUC) (R$ in bn) Net Inflow (R$ in bn) 3Q20 3Q19 1,536 2,645 +72% Active Clients (‘000) 350 563 195 3Q19 18 Market Appreciati on Net Inflow 3Q20 61% 36 29 39 1Q20 2Q20 3Q20 15 29 117 1Q20 2Q20 3Q20 Net Inflow Adj. by Extraordinary Inflows (R$ i
Slide 8: KPIs: Average Trades and NPS
8 KPIs Average Trades and NPS Note: NPS, is an independent widely known survey methodology that measures the willingness of customers to recommend a Compan y’s products and services. The NPS calculation as of a given date reflects the average of the answers in the previous six months Retail Equity D
Slide 9: Shift to Higher-Yielding Assets
9 Shift to Higher - Yielding Assets: 3 - year Review S ecular trend with a long journey ahead: R$1 trillion in Poupança 0.23 Pension Alternatives 1.34 Multimarket 0.15 0.73 0.21 0.34 Fixed Income Equities 5.80 0.84 1.92 4.15 0.97 0.50 0.06 REITs Total 2.22 +16% +59% +32% +120% +61% +127% +40% Sep -
Slide 10: Pension Funds important growth driver and source of diversification
10 Pension Funds important growth driver and source of diversification Player 1 Player 2 Player 3 XP Vida e Previdência 9% 33% 30% 27% 18% 6% 20% 1% Net Inflows Market Share YTD AUC Market Share YTD YTD Pension Funds Market Share (R$ in million) 55% Market Share in Transfers YTD: R$5 billion R$9.6 b
Slide 11: 3Q20 Revenue and Breakdown
11 3Q20 Revenue and Breakdown RETAIL INSTITUTIONAL ISSUER SERVICES DIGITAL CONTENT 76 % 11 % 8 % 1 % Other Revenue represented 5% of Total Gross Revenues Total Gross Revenues (in R$ mn) Highlights ▪ Growth was mainly driven by strong performance in Retail ; ▪ In the 9 M 2020 , YoY growth was 66 % vs
Slide 12: Retail Revenue and Take Rate
12 Retail Revenue and Take Rate Strong expansion following client addition and healthy net inflow LTM Take Rate (LTM Retail Revenue / Average AUC) Retail Revenue (in R$ mn) 3Q19 3Q20 1.2% 1.2% 944 3Q19 3Q20 1,698 +80% Highlights ▪ Stable take rate as higher Equities and Futures’ trading volumes and
Slide 13: Institutional and Issuer Services Revenue
13 Highlights ▪ Main highlights : ( 1 ) REITs, with eighteen executed deals and ( 2 ) Equity Capital Markets (ECM) division, with participation in fourteen deals . 143 169 3Q19 3Q20 18% Highlights ▪ Higher equity trading volume was the main driver, followed by Fixed Income secondary trading . 173 23
Slide 14: COGS and SG&A
14 COGS and SG&A Gross margin slight compression following distribution channel investments COGS (in R$ mn) Operating Expenses (in R$ mn) Highlights ▪ Year - over - year gross margin contraction due to product mix and investments in the IFA network . 445 706 3Q19 3Q20 59% 66.4% 67.2% Gross Margin 31
Slide 15: Adjusted Net Income and Margin
15 Adjusted Net Income and Margin Net margin expansion driven by strong growth across Retail and a lower tax rate Highlights ▪ Year - over - year growth in Adjusted Net Income and margin driven by ( 1 ) strong performance of Retail and ( 2 ) lower effective tax rate . Adjusted Net Income (in R$ mn)
Slide 16: Growth Strategy Through Technology
3 Growth Strategy Through Technology
Slide 17: Technology Update: Comprehensive and robust Fintech ecosystem
17 Technology Update Comprehensive and robust Fintech ecosystem driving efficiency gains Financial Company ▪ Business Teams control Tech Teams ▪ Technology as a tool Waterfall Model 4 dev teams Agile Model 10 Squads Agile Model 35 Squads 7 Tribes Fintech Transition Ecosystem ▪ Business and Tech Team
Slide 18: Growth Strategy Through Technology
18 Growth Strategy Through Technology Social Media and Influencers Info M oney DIGITAL CONTEN T Dedicated Support Teams Trading Desk s 7.0 k IFAs XP Direct / Online Services INSTITUTIONA L ISSUER SERVICE S Capital Market Securities Placement Complementary Services EXPERT Event EXPERT Content Platfor
Slide 19: Technology Update Case: XP App Metrics Evolution
19 Technology Update Case: XP App Metrics Evolution XP App Launch Wealth Evolution Charts + Stock Trading October 2020 December 2019 Septembe r 2018 New Layout + Banking Capabilities 100k 500k 830k 2018 2019 2020 MAU FREQUENCY PER MONTH NPS APP RATING 3x 15x 18x 2018 2019 2020 18 63 75 2020 2018 201
Slide 20: Technology Update: Goals and Achievements
20 Technology Update Goals and Achievements USER - CENTRIC DATA - DRIVEN Higher investment provides a new level of service quality to our customers QUALITY SCALE XP Inc.’s scalable systems accelerate growth Full focus on customer experience fast solutions for priority problems Data - Driven decisi
Slide 21: Q&A
Q&A
Slide 22: Investor Relations
Investor Relations Carlos Lazar André Martins Natali Pimenta ir@xpi.com.br IR Website: investors.xpinc.com
Slide 23: Appendix
Appendix
Slide 24: Non-GAAP Financial Information
24 Non - GAAP Financial Information Adjusted Net Income and Adjusted Gross Financial Assets 24 Adjusted Gross Financial Assets (in R $ mn ) Adjusted Net Income (in R $ mn ) R$ million 3Q20 3Q19 YoY 2Q20 QoQ Net Income 541 261 108% 541 0% (+) Stock Based Compensation 44 - n.a. 40 10% (+) Offering exp
Slide 25: Recent Achievements
25 Recent Achievements XP Inc. continues to reinforce its competitive advantages and collect achievements AWARDS x Top of Mind of Best Investment Advisory by Folha de São Paulo x North American Costumer Centricity Awards 2020 in the category “Best Measurement in Customer Experience” x Época Negócios