Slide 1: 2Q23 Earnings Presentation
2Q23 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 2Q23 Financials 03 Q&A 04 Appendix 3
Slide 4: Key Highlights
1 Key Highlights
Slide 5: We Continue Winning Market Share
2Q23 Results 1,024 Client R$ 1.0 Tr We Continue 946 Assets +21% YoY Winning 815 Gross Revenue R$ 3.7 Bn Market Share +3% YoY 660 R$ 968 Mn Profitably +30% CAGR EBT +12% YoY Since IPO Net R$ 977 Mn 409 Income +7% YoY Retail Take Rate¹ 1.30 % Client Assets 202 +9 bps QoQ R$ Billions 126 65 ROAE² 22.0
Slide 6: Overview Market Trends & Our Profitability
Overview • Strong Fixed Income Volumes • Pick-up in Equities Momentum Market – Follow-on Window Opening in Late June • Easing Cycle Could Create Tailwinds Market Trends & Our Profitability Improved in 2Q23 • Continue to Gain Operating Margin Leverage – 123 bps EBT Margin Improvement (QoQ) Profitabil
Slide 7: Positive Momentum in Operating Trends
Positive Momentum in Operating Trends … Client Assets (R$ bn) Active Clients (mn) IFAs (000s) 1,024 4.0 4.0 14.1 3.8 3.9 954 925 946 3.6 13.0 873 3.4 3.5 12.3 846 3.3 11.6 817 815 3.1 11.3 789 10.7 10.3 9.6 8.9 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
Slide 8: Driving Recovery in Financial Results
…Driving Recovery in Financial Results Gross Revenue (R$ mn) EBT (R$ mn) Net Income (R$ mn) 3,811 1,121 1,031 3,728 991 3,618 977 3,447 1,002 931 936 3,368 3,337 3,326 983 968 913 3,200 3,270 908 854 856 867 783 796 816 738 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4
Slide 9: Key Quarter Updates
Key Quarter Updates • New Verticals Continue to Grow Rapidly New – Diversifying our business Verticals – Contributed 11% of Total Revenue in 2Q23 We Continued To Make Progress Across Strategic • Transaction Closed on July 1st Initiatives – Will be incorporated into 3Q23 Results Modal Acquisition – I
Slide 10: 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 ✓ Significant Increase in ✓ Awarded Best Credit ✓ NPS Score at 76 Client Assets Card in Brazil (+6
Slide 11: 2Q23 Financials
2 2Q23 Financials
Slide 12: Gross Revenue
Gross Revenue Gross Revenue Breakdown (R$ mn) Gross Revenue Breakdown (%) Retail Institutional Corporate & Issuer Services Other Retail Institutional Corporate & Issuer Services Other 3,811 3,728 3,618 170 5% 5% 4% 5% 5% 4% 167 173 8% 8% 8% 8% 436 3,337 3,326 283 9% 11% 3,270 335 156 158 166 10% 10%
Slide 13: Retail Revenue – Core
Retail Revenue – Core Retail Revenue Breakdown – Core (in R$ mn) Equities Fixed Income Funds Platform 2,040 1,982 1,890 1,791 398 341 Sequential Improvement in 282 1,699 1,715 268 311 313 Fixed Income & Funds 425 580 489 578 332 393 …Combined with a Stabilization in Equities 1,098 1,063 1,120 995 1,
Slide 14: Retail Revenue – New Verticals
Retail Revenue – New Verticals Retail Revenue Breakdown – New Verticals (in R$ mn) Retirement Plans Cards Credit Insurance 406 398 31 364 36 All New Vertical Products 47 32 44 41 291 Continued to Grow 258 21 40 23 228 23 38 234 232 …With Cards & Insurance 35 204 146 Performing Well in 2Q23 116 97 81
Slide 15: Core Retail vs. New Verticals Revenue
Core Retail vs. New Verticals Revenue Revenue R$ Millions +67% 10,638 9,793 1,892 New Verticals Continue to 914 +156% 571 Help Offset Market Slowdown 1,460 6,401 780 … And May Provide Upside as 194 the Market Recovers 8,309 7,287 5,426 2020 2021 2Q23 LTM Core¹ New Verticals² Other Notes: 1 – Include
Slide 16: Sales, General & Administrative Expenses (SG&A)
Sales, General & Administrative Expenses (SG&A)¹ SG&A¹ R$ Millions People Non-people 1,501 1,469 SG&A¹ Expenses 1,377 1,255 1,246 Remain Under Control 375 444 485 355 1,045 347 285 ...Reinforcing the Annual Guidance of R$5 to 5.5 1,094 1,057 billion 899 892 760 899 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 R$2.
Slide 17: Efficiency & Compensation Ratios
Efficiency & Compensation Ratios Efficiency Ratio1 Compensation Ratio2 LTM % LTM % 29.8% 42.0% 29.5% 41.5% We Remain Disciplined in Our Cost Controls 28.5% 40.4% … Improving Our Efficiency 27.4% & Compensation Ratios 38.7% 38.4% 38.3% 26.8% 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 2Q21 3Q21 4Q21
Slide 18: Earning Before Taxes (EBT)
Earning Before Taxes (EBT) EBT EBT Margin R$ millions % +12% 968 27.3% 867 816 +198bps We Achieved Significant Margin improvement 26.0% 25.3% … Driven By Improving Operating Leverage 2Q22 1Q23 2Q23 2Q22 1Q23 2Q23 18
Slide 19: Net Income
Net Income Net Income Net Margin R$ millions % +7% 977 +91bps 27.5% 913 Top-Line Growth & 796 26.6% Operating Leverage 25.4% … Combined to Generate In-Line Profit Growth 2Q22 1Q23 2Q23 2Q22 1Q23 2Q23 19
Slide 20: Annualized Return on Average Equity
Annualized Return on Average Equity ROAE¹ % +334bps QoQ 24.4% 22.8% 22.9% 22.0% Focus on ROAE¹ Growth Over 18.7% 18.1% the Next Years... … Through both Earnings Growth and Capital Distributions 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Notes: 1 – Annualized Return on Average Equity. 20
Slide 21: Q&A
3 Q&A
Slide 22: Appendix
4 Appendix
Slide 23: 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 230,781 50,907 15,451 164,423 [B
Slide 24: Net Asset Value
Net Asset Value (in R$ mn) 2Q23 1Q23 2Q23 1Q23 Financial Assets 216,881 180,747 (=) Adjusted Gross Financial Assets 18,715 18,772 Securities & Derivatives 165,380 139,577 (-) Gross Debt (7,946) (9,950) Loans 24,088 23,107 (-) Bonds (3,246) (3,497) Repos 15,786 11,830 (-) Debentures (2,379) (2,235) O
Slide 25: Investor Relations
Investor Relations ir@xpi.com.br https://investors.xpinc.com/ 25