Slide 1: 4Q23 Earnings Presentation
4Q23 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 4Q23 and 2023 Financials 03 Final Remarks 04 Q&A 05 Appendix 3
Slide 4: Key Highlights
1 Key Highlights
Slide 5: 2023 Highlights and Results vs. Guidances
2023 Highlights 2023 Results vs. Guidances Client R$ 1.1 Tn Assets +19% YoY Gross R$ 15.7 Bn Revenue +12% YoY Continuous Net Income4 R$ 3.9 Bn Net Income 2023 Guidance R$ 3.8 – 4.4 Bn Growth +10% YoY SG&A¹ 2023 Guidance R$ 5.3 Bn With SG&A¹,4 R$ 5.0 – 5.5 Bn -5% YoY Profitability & Efficiency Ratio²
Slide 6: Strategy Tracker
Strategy Tracker Retail Retail Corporate Investments Cross-Sell & SMB Long-Term Strategy Absolute Leadership Grow with Our Premier Service in Core Business Clients’ Needs with Unique Value ✓ +66bps Gain in Market ✓ Official Launch of ✓ Better Solutions by Share for Individuals in Global Account Leve
Slide 7: Value Creation Cycle with Tangible Actions
Value Creation Cycle with Tangible Actions Financial Planning Roadmap and Features Understanding Transforming clients’ ✓ Centralized Asset Allocation across clients’ needs needs into practical actions channels ✓ Aligned Incentives ✓ Goal-driven Financial Planning ✓ Consolidated Portfolios with Liqui
Slide 8: 4Q23 and 2023 Financials
2 4Q23 and 2023 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 15,726 842 5% 6% 5% 5% 5% 14,036 8% 9% 1,576 12% 10% 666 12% 1,295 11% 1,516 14% 10% 9% 10% 1,919 4,364 4,309 281 2
Slide 10: Retail Revenue – New Verticals
Retail Revenue – New Verticals¹ Retail Revenue Breakdown – New Verticals¹ R$ Million Retirement Plans Cards Credit Insurance 491 1,695 46 149 442 406 36 46 180 31 49 47 1,183 New Verticals¹ Growth 97 160 of 43% YoY 234 259 306 1,001 571 593 60 104 180 93 98 94 333 365 227 4Q22 3Q23 4Q23 2021 2022 20
Slide 11: Core Retail vs. New Verticals Revenue
Core Retail vs. New Verticals Revenue New Verticals Have Continued to Push Retail … While We Are Poised to Unlock Operating Leverage as Growth in 2023… Market Recovers Revenue R$ Million 11,791 2,023 9,793 Core Retail Investments 2021 2023 914 571 3x 1,695 Client Assets (R$ Bn) 627 882 -3% Take Rate
Slide 12: Corporate & Issuer Services Revenue
Corporate & Issuer Services Revenue Corporate & Issuer Services Breakdown R$ Million Corporate Issuer Services 519 1,576 508 Complete Product 1,295 908 Range Supports Our 322 330 699 Continuous Growth 275 140 ...With +22% YoY Growth 668 197 596 177 135 4Q22 3Q23 4Q23 2022 2023 12
Slide 13: Sales, General & Administrative Expenses (SG&A)
Sales, General & Administrative Expenses (SG&A)¹ SG&A¹ R$ Million People Non-people One-off² SG&A¹ Expenses 1,547 1,509 5,602 5,347 5% Lower YoY and Within (44) (44) 1,377 Annual Guidance, Despite 1,659 499 488 1,619 485 Modal’s Acquisition ...Reflecting Cost Reduction 1,048 3,943 1,022 3,728 Made S
Slide 14: Efficiency & Compensation Ratios
Efficiency & Compensation Ratios Efficiency Ratio1 Compensation Ratio2 LTM % LTM % 42.0% Cost Control Discipline 29.5% Has Remained One of Our Top Focus in 2023 28.4% 39.2% ...With Efficiency Ratio 38.3% 26.8% Reaching Its Lowest 37.3% 25.7% Level Since IPO 36.3% 36.0%³ 25.1% 4Q21 1Q22 2Q22 3Q22 4Q2
Slide 15: Earning Before Taxes (EBT)
Earning Before Taxes (EBT) EBT and EBT Margin¹ R$ Million and % 28.0% 25.8% 26.8% 26.5% Growth of +16% YoY in 23.2% 25.7% 24.6% 3,980 44 3,445 Annual EBT¹ 1.157 1,039 44 ...With Impacts In The 738 3,936 Quarter Related To One-Off 995 Events And Revenue Mix 4Q22 3Q23 4Q23 2022 2023 Notes: 1 – Include
Slide 16: Net Income
Net Income Net Income¹ and Net Margin R$ Million and % Despite a Challenging 26.8% 26.4% 26.3% 26.2% Environment, Annual Net 26.5% 25.7% 3,930 24.6% 31 Income Grew +10% YoY¹ 3,580 1,087 1,071 31 783 ...While We Have Reached a 3,899 Payout Ratio of 114%, 1,040 Returning R$4.5 Billion in 2023 to Share
Slide 17: Return on Tangible Equity
Return on Tangible Equity Annualized ROTE¹ and ROAE² % ROTCE ROAE 25,8% 25,6% 25,2% 25.0% 22,6% We Believe ROTE¹ Is A More 21.1% 22,8% 21.4% 19,9% Accurate Reflection Of Our Core Operations 18,1% 4Q22 3Q23 4Q23 2022 2023 Notes: 1 – Annualized Return on Average Tangible Equity. Tangible Equity exclud
Slide 18: Final Remarks
3 Final Remarks
Slide 19: CEO Priorities
People and 1 ✓Talent Pool Culture Cost 2 ✓Our long-term competitive advantage, always a priority Discipline CEO Priorities ✓Financial Planning with optimal asset allocation for all 3 Quality clients – affluent clients with HNW service level 2024 Penetration and 4 ✓New Verticals’ consolidation Princi
Slide 20: Q&A
4 Q&A
Slide 21: Appendix
5 Appendix
Slide 22: Investor Day Checkpoint
Investor Day Checkpoint Gross Revenue Representativeness From New Verticals and Corporate & SMB¹ + 7x New Verticals + Corporate & SMB 17.5% • Retirement Plans • Cards • Loans • Insurance • FX • Digital Account • Global Investments • Corporate & SMB¹ 2.6% 2019 2023 Notes: 1 – Includes Corporate and S
Slide 23: Total Loan Portfolio
Total Loan Portfolio¹ R$ billion Secured Unsecured Total Loans 19.4 1.7 21.1 Credit Card 5.4 2.3 7.7 Main Activities • Investment Banking Corporate Securities 3.3 12.3 15.6 • Fixed Income Distribution • Corporate Credit Credit Portfolio 28.2 16.3 44.5 Note: 1 – Gross of Expected Credit Losses. Data
Slide 24: 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 249,041 56,409 16,944 175,688 [B
Slide 25: Net Asset Value
Net Asset Value (in R$ mn) 4Q23 3Q23 4Q23 3Q23 Financial Assets 231,903 216,300 (=) Adjusted Gross Financial Assets 19,506 19,078 Securities & Derivatives 177,934 165,515 (-) Gross Debt (9,575) (9,428) Loans 28,552 26,645 (-) Bonds (3,322) (3,398) Repos 14,889 12,252 (-) Debentures (2,212) (2,656) O
Slide 26: Investor Relations
Investor Relations ir@xpi.com.br https://investors.xpinc.com/ 26