Slide 1: 3Q23 Earnings Presentation
3Q23 Earnings Presentation 1
Slide 2: Important Disclosure
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. (th
Slide 3: Index
Index 01 Key Highlights 02 3Q23 Financials 03 Q&A 04 Appendix 3
Slide 4: Key Highlights
1 Key Highlights
Slide 5: Continued Growth With Profitability & Efficiency
3Q23 Results 1,080 Continued 1,024 Client R$ 1.1 Tr 946 Growth Assets +6% QoQ 815 With Profitability & Net R$ 1.1 Bn Income Efficiency 660 +30% CAGR +11% QoQ Since IPO Efficiency Ratio¹ 37.3 % -108 bps QoQ 409 ROAE² 22.6 % Client Assets 202 +58 bps QoQ R$ Billions 126 65 Diluted R$ 1.96 8 11 15 25 E
Slide 6: Strategy Tracker
Strategy Tracker Leadership in Superior Product Client Investments Offerings Focus Long-Term Strategy Absolute Leadership Grow with Our Premier Service in Core Business Clients’ Needs with Unique Value ✓ All-time-high in ✓ New Verticals grew ~3x ✓ We remain at the top of different Investments in two
Slide 7: Key Quarter Updates
Key Quarter Updates • Sequential Growth in Top-Line led by DCM Activity in the Quarter Financial • Improved Profitability Metrics Results – +74 bps EBT Margin Improvement (QoQ) – +58 bps ROAE (QoQ) Improved Profitability – +R$ 0.13 in Diluted EPS (QoQ) While Making Progress in Modal’s Integration •
Slide 8: 3Q23 Financials
2 3Q23 Financials
Slide 9: Gross Revenue
Gross Revenue Gross Revenue Breakdown Gross Revenue Breakdown R$ Million % Retail Institutional Corporate & Issuer Services Other Retail Institutional Corporate & Issuer Services Other 4,364 281 5% 4% 5% 5% 4% 6% 9% 8% 8% 8% 3,811 11% 3,728 519 12% 3,618 170 167 10% 10% 173 11% 436 3,337 3,326 283 1
Slide 10: Retail Revenue – Core
Retail Revenue – Core Retail Revenue Breakdown – Core R$ Million Equities Fixed Income Funds Platform 2,172 Strong Sequential 2,040 1,890 1,982 323 Improvement in Fixed 398 282 1,699 1,715 341 Income 580 489 311 313 578 718 332 393 ...Combined with Stabilization in Equities & 1,063 1,120 995 1,069 1
Slide 11: Retail Revenue – New Verticals
Retail Revenue – New Verticals Retail Revenue Breakdown – New Verticals R$ Million Retirement Plans Cards Credit Insurance 442 36 406 398 31 All New Vertical Products 364 36 49 47 32 44 Continued to Grow 291 21 41 258 23 40 259 38 234 …With Cards Being the 232 204 146 Highlight in 3Q23 116 85 93 87
Slide 12: Core Retail vs. New Verticals Revenue
Core Retail vs. New Verticals Revenue Revenue R$ Million +75% 11,188 New Verticals Continue to Help 9,793 +182% 2,010 Offset Macro Headwinds 914 571 1,610 6,401 … And May Provide Upside, at 194 780 the Core, as the Market 8,309 7,568 Recovers 5,426 2020 2021 3Q23 LTM Core¹ New Verticals² Other Notes
Slide 13: Corporate & Issuer Services Revenue
Corporate & Issuer Services Revenue Corporate & Issuer Services Breakdown R$ Million Corporate Issuer Services 519 436 Issuer Services Growth 335 228 322 Mainly Related to DCM 275 266 283 Activity In The Quarter 210 140 99 157 207 197 167 125 135 126 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 +105% QoQ Growth in
Slide 14: Sales, General & Administrative Expenses (SG&A)
Sales, General & Administrative Expenses (SG&A)¹ SG&A¹ R$ Million People Non-people 1,541 1,501 1,469 1,377 375 444 1,246 493 SG&A¹ Expenses 485 1,045 347 Have Risen Mainly Related 285 to Modal & Expert Event 1,094 1,057 1,048 892 899 760 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 R$3.8 Billion in SG&A1 YTD Note
Slide 15: Efficiency & Compensation Ratios
Efficiency & Compensation Ratios Efficiency Ratio1 Compensation Ratio2 LTM % LTM % 29.8% We Remain Disciplined 41.7% in Our Cost Controls 28.5% 40.4% … With Both Our 27.9% Efficiency & Compensation Ratios 38.4% 38.3% 26.8% Continuing to Fall Steeply 37.3% 25.7% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q2
Slide 16: Earning Before Taxes (EBT)
Earning Before Taxes (EBT) EBT EBT Margin R$ million % +18% +86bps 1,157 28.0% 983 968 27.2% 27.3% We Achieved Significant Margin improvement … Driven By Improving Operating Leverage 3Q22 2Q23 3Q23 3Q22 2Q23 3Q23 16
Slide 17: Net Income
Net Income Net Income Net Margin R$ million % -218bps +7% 1,087 1,031 28.5% 977 27.5% Net Income Also Benefited 26.3% from Operating Leverage... ... With Lower Net Margin due to Modal, Expert Event & Higher Tax Expenses 3Q22 2Q23 3Q23 3Q22 2Q23 3Q23 17
Slide 18: Annualized Return on Average Equity
Annualized Return on Average Equity ROAE¹ % +58bps QoQ 24.4% 22.6% 22.9% Our ROAE¹ Has Continued to 22.0% Grow Sequentially... 18.7% 18.1% … In Line With Our Focus on ROAE¹ Growth Over The Next Years 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Notes: 1 – Annualized Return on Average Equity. 18
Slide 19: Q&A
3 Q&A
Slide 20: Appendix
4 Appendix
Slide 21: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Assets (from the factors listed below) reflects our business more realistically Simplified Balance Sheet (in R$ mn) Key factors inflating our balance sheet [B] Retirement Adjusted Assets Assets [A] [C] Float Plans [A-B-C] Total 233,427 53,280 17,062 163,086 [B
Slide 22: Net Asset Value
Net Asset Value (in R$ mn) 3Q23 2Q23 3Q23 2Q23 Financial Assets 216,300 216,881 (=) Adjusted Gross Financial Assets 19,078 18,715 Securities & Derivatives 165,515 165,380 (-) Gross Debt (9,428) (7,946) Loans 26,645 24,088 (-) Bonds (3,398) (3,246) Repos 12,252 15,786 (-) Debentures (2,656) (2,379) O
Slide 23: Investor Relations
Investor Relations ir@xpi.com.br https://investors.xpinc.com/ 23