Slide 1: XP Inc.
XP#inc.
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 1. Introduction 2. FY22 KPIs and Financials 3. Q&A
Slide 4: Introduction
1 Introduction
Slide 5: XP benefited from a positive market environment until 2021
5 0.8 2020 2018 2019 2021 1.7 3.2 5.0 465 1,089 3,592 2018 2021 2019 2020 2,081 B3 Individual’s Accounts (in millions) XP Inc.’s Net Income (in R$ mn) 83% CAGR 98% CAGR XP benefited from a positive market environment until 2021 Unique distribution channel and product platform allowed us to help mill
Slide 6: 2022 posed many challenges to our business
6 2022 posed many challenges to our business Source: B3 B3 Individuals’ Equity ADTV (R$ bn) 6.5 0 % 4.5 0 % 2.0 0 % 9.2 5 % Selic Rate EoP 13.75% 2018 2019 2020 2021 2022 2.2 6.4 3.2 6.3 4.6 - 28% 70 42 2013 2014 - 40% 3,592 2021 2022 3,580 0% However, our business model has become less cyclical and
Slide 7: New products and services launched beyond Investments
7 Aligned with our strategy of expanding beyond Investments, new products and services were launched 2019 Banking License XPV&P 2020 Corporate Business Collateralized Credit 2021 Credit Card Margin Loan B2C Expansion 2022 Life Insurance International Platform XTAGE Digital Account Debit Card 2,429 3
Slide 8: Our core business continued to evolve
8 Our core business continued to evolve R$ 155 Billion Net Inflow +460k Net New Clients 2016 2017 2018 2019 2020 2021 2022 R$65 bn R$660 bn R$126 bn R$202 bn R$815 bn R$409 bn R$946 bn Client Assets +2,000 Net New IFAs Would be Brazil’s 3rd largest network
Slide 9: Credit Card, the highest penetration within the new verticals
9 Credit Card, the highest penetration within the new verticals, has only 16% New verticals are less cyclical than investments and enhance clients’ lifetime value Cross - Sell Large, in - house opportunity Penetration in Active Clients Untapped potential: relationship with clients improve as more pr
Slide 10: SG&A Expenses 2023 Guidance
10 SG&A Expenses 2023 GUIDANCE SG&A¹ between R$5.0 - 5.5 billion vs FY22 SG&A¹ of R$5.6 billion Adjustments to cost structure with no impact on service level nor strategic plan 2019 2018 3.2 2021 2020 4.7 2022 1.3 1.9 5.6 Note 1 – Excludes Revenue from incentives from Tesouro Direto, B3 and Others.
Slide 11: FY22 KPIs and Financials
2 FY22 KPIs and Financials
Slide 12: Gross Revenue
12 Gross Revenue 29.8% 33.0% 29.5% 26.9% 23.8% 2022 2018 2019 2021 2020 Q4 seasonality in annual revenue ▪ 4Q usually benefits from performance fees and a more active capital market; ▪ In 2022, polarized Brazilian elections and the World Cup broke this historical pattern Average 3,811 3,337 380 3Q22
Slide 13: Gross Revenue by segment
13 Gross Revenue (in R$ mn) 2022 2021 Δ YoY Gross Revenue 14,036 12,799 +10% Retail 10,157 9,793 +4% Institutional 1,919 1,277 +50% Corporate 596 170 +25 0 % Issuer Services 699 1,043 - 33% Other 666 516 +29% Highlights ▪ After a very strong 2021, gross revenue expanded 10% YoY, reinforcing XP’s res
Slide 14: Gross Margin
14 Gross Margin 72.2% 65.1% 2.6% 1.1% 1.5% 1.9% 3Q22 Prepaid E x pense Write - off Com m iss ionabl e Revenue Mix Credit Cards Ot h er 4Q22 Gross Margin YoY Gross Margin Bridge QoQ Highlights ▪ Despite possible quarterly volatility, Gross Margin for 2023 is expected to be in line with 2021 and 2022.
Slide 15: SG&A Expenses
15 SG&A Expenses 5,500 5,000 425 1,377 1,377 485 Peo p le Non - People 0% 952 892 2021 2022 2023E 4Q21 4Q22 31.6% 25.8% 26 - 32% 34.4% 23.2% Note 1 – Excludes Revenue from incentives from Tesouro Direto, B3 and Others Highlights ▪ SG&A¹ expenses were flat YoY and fell 8% QoQ reflecting the ongoing a
Slide 16: Net Income and EPS
16 Net Income and EPS 991 4Q21 - 21.0% 783 2021 2022 3,580 29.7% 26.8% Net Income (in R$ mn) - 0.3% 3,592 30.4% Net Mar g in 6.42 6.44 1.77 Basic EPS (R$) 4Q22 1.43 24.6% Highlights ▪ Basic EPS fell 19% YoY, while Net Income fell 21% YoY, to R$783 million. Highlights ▪ Ba s ic E P S gr ew margin a l
Slide 17: Key messages
17 Key messages 1 Expenses: Leaner and sustainable cost structure, leading to a higher operational leverage in the future Resilience and Adaptability: Cycles change constantly, we are building a company Cross - sell: Large in - house opportunity to increase penetration of new verticals in 2023 2 3 4
Slide 18: Q&A
Q&A
Slide 19: Investor Relations
19 Investor Relations ir@xpi.com.br https://investors.xpinc.com/
Slide 20: Appendix
Appendix
Slide 21: Non-GAAP Financial Information
21 Non - GAAP Financial Information Adjusted Assets (from the factors listed below) reflects our business more realistically [B] Retirement Plans ▪ AUM from XP Vida & Previdência is accounted in both assets and liabilities f r o m c l ie n t s allo c at ed in [C] Float ▪ Uninv e st e d c ash soverei
Slide 22: Net Asset Value
Net Asset Value 2 2 2 2 Adj. G Financial Assets NAV = Debt - ( - ) Float ( 12 , 792 ) (11,391) (=) Adjusted Gross Financial Assets 18 , 77 5 19,142 (in R$ mn) 4 Q 2 2 3Q22 Net Asset Value 4Q22 3Q22 Financial Assets 177 , 76 1 171,130 (=) Adjusted Gross Financial Assets 18,775 19,142 Securities & Der
Slide 23: XP Inc.
XP#inc.