Slide 1: 1Q20 Earnings Presentation
1Q20 Earnings Presentation May 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 01 1Q20 KPIs and Financials 02 COVID - 19 Update 03 Closing Remarks and Q&A 04 Opening Remarks
Slide 4: Opening Remarks
1 Opening Remarks
Slide 5: Opening Remarks
5 UNIQUE PLATFORM EDUCATION DNA Opening Remarks CLOSER TO CLIENTS Sustained by our competitive advantages, crises create opportunities for improvement ADDRESSABLE MARKET LONG - TERM VIEW Increased interest for investments in Brazil reflected in record audience in our platforms in Mar - Apr Supported
Slide 6: 1Q20 KPIs and Financials
2 1Q20 KPIs and Financials
Slide 7: KPIs: AUC, Active Clients and NPS
7 (58) KPIs AUC, Active Clients and NPS Assets Under Custody (AUC) (R$ in bn) Highlights ▪ AUC decrease versus 4 Q 19 was mainly driven by market depreciation and a single one - off corporate outflow ; ▪ R $ 12 billion monthly net inflow pace in 1 Q 20 vs R $ 11 billion in 4 Q 19 . Active Clients (‘
Slide 8: 1Q20 Revenue and Breakdown
8 1Q20 Revenue and Breakdown RETAIL INSTITUTIONAL ISSUER SERVICES DIGITAL CONTENT 68 % 18 % 7 % 1 % Other Revenue represented 6% of Total Gross Revenues Total Gross Revenues (in R$ mn) Highlights ▪ Growth was driven by : ( 1 ) increased trading volume in equity and derivatives, impacting Retail and
Slide 9: Retail Revenue and Take Rate
9 Retail Revenue and Take Rate Strong performance driven by record volumes in equities and higher management fees following AUC growth LTM Take Rate (LTM Retail Revenue / Average AUC) Retail Revenue (in R$ mn) Highlights ▪ The increase in sequential LTM take rate reflects : ( 1 ) record retail volum
Slide 10: Institutional and Issuer Services
10 Institutional and Issuer Services Strong volumes persist and intense deal activity until late February Issuer Services Revenue (in R$ mn) Institutional Revenue (in R$ mn) Highlights ▪ ( 1 ) REITs ; ( 2 ) DCM and ( 3 ) ECM, with deals concentrated especially in January and February . Highlights ▪
Slide 11: Digital Content and Other
11 Digital Content and Other Solid growth following the expansion of XP’s platforms and ecosystem Other Revenue (in R$ mn) Digital Content Revenue (in R$ mn) Highlights ▪ Mainly driven by increase in adjusted gross financial assets from R $ 2 . 3 billion at the end of 1 Q 19 to R $ 8 . 1 billion at
Slide 12: COGS and SG&A
12 COGS and SG&A Gross margin stability and efficiency gains on G&A COGS (in R$ mn) Operating Expenses (in R$ mn) 308 579 1Q19 1Q20 +88% 66.6% Gross Margin 67.0% 33.9% % Net Revenue 38.9% 71 1Q19 28 1Q20 363 589 62% Share Based Compensation Non - Recurring Item Highlights ▪ Adjusting for the non - r
Slide 13: Adjusted Net Income and Margin
13 1Q19 1Q20 1Q20 1Q19 Adjusted Net Income and Margin Strong margin expansion in 1Q20 vs 1Q19 Highlights ▪ Growth in Adjusted Net Income driven by ( 1 ) accelerating increase in total revenues, especially brokerage in Retail and Institutional businesses and ( 2 ) lower consolidated tax rate . 168 41
Slide 14: COVID-19 Update
3 COVID - 19 Update
Slide 15: COVID-19 Update | April 2020: Healthy growth despite challenges
15 COVID - 19 Update | April 2020 Despite challenging scenario in April, growth remained healthy AUC (in R$ bn) ▪ R $ 19 billion increase in AUC in April - 2020 was driven by R $ 7 billion net inflow and R $ 12 billion market appreciation . ▪ As expected, monthly net inflow pace decelerated in April
Slide 16: COVID-19 Update | Client base kept growing in April
16 COVID - 19 Update | April 2020 Client base kept growing consistently in April Active Clients (‘000) ▪ Active Clients totaled 2 . 1 million in April, up 24 % vs 4 Q 19 . ▪ New Active Clients per month accelerated in 2020 versus 4 Q 19 . New Active Clients per month (‘000) 4Q19 1,702 2020 YTD 2,112
Slide 17: XP Inc. continues to reinforce its competitive advantages
17 COVID - 19 Update | April 2020 XP Inc. continues to reinforce its competitive advantages AWARDS x XP elected best investment advisory company by São Paulo residents ( DataFolha ) RECORDS x Retail Equity Custody Market Share x Retail Equity Volume Market Share x Research Platform Audience x Organi
Slide 18: Closing Remarks
4 Closing Remarks
Slide 19: XP Inc. will continue its mission to transform Brazil's financial markets
19 XP Inc. will continue its mission to transform the financial markets in Brazil Closing Remarks LARGE AND CONCENTRATED MARKET DIFFERENTIATE D TECH - ENABLED PLATFORM MISSION - DRIVEN CULTURE STRONG BALANCE SHEET POSITION Investment assets of over R$8 trillion¹ with ~90% controlled by 5 banks Custo
Slide 20: Q&A
Q&A
Slide 21: XP's first office in Porto Alegre, Brazil
21 Closing Remarks XP ´ s first office in Porto Alegre, Brazil
Slide 22: Investor Relations
Investor Relations Carlos Lazar André Martins 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 ) 1Q20 1Q19 YoY 4Q19 QoQ Net Income 398 210 89% 390 2% (+) Share Based Compensation 28 - - 8 278% (+) IPO expenses - - - 22 - 100