Slide 1: 2Q20 Earnings Presentation
2Q20 Earnings Presentation August 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 0 1 2Q20 KPIs and Financials 0 2 Recent Developments 0 3 Q&A 0 4 Opening Remarks
Slide 4: Opening Remarks
1 Opening Remarks
Slide 5: Key YTD achievements reinforcing our secular growth story
5 CULTURE CONSOLIDATION Opening Remarks ECOSYSTEM REINFORCED Key YTD achievements reinforcing our secular growth story Higher eNPS in our history Villa XP Wealth Services M&As International Funds XP Visa Infinite Credit Card New board Juntos Transformamos ESG Investment Funds launched Commitment to
Slide 6: 2Q20 KPIs and Financials
2 2Q20 KPIs and Financials
Slide 7: KPIs: AUC, Active Clients and NPS
7 KPIs AUC, Active Clients and NPS Assets Under Custody (AUC) (R$ in bn) Active Clients (‘000) 2Q19 2Q20 2,360 1,304 +81% 2,039 2Q20 1Q20 2,360 +16% 274 436 2Q19 2Q20 +59% 366 436 1Q20 2Q20 +19% 144 187 1H20 Jul - 20 +30% 7 8 14 Apr - 20 May - 20 Jun - 20 Monthly Avg. Activated Accounts (‘000) Net I
Slide 8: KPIs: Average Trades and NPS
8 KPIs Average Trades and NPS Note: NPS, is an independent widely known survey methodology that measures the willingness of customers to recommend a Compan y’s products and services. The NPS calculation as of a given date reflects the average of the answers in the previous six months Retail Equity D
Slide 9: 2Q20 Revenue and Breakdown
9 2 Q20 Revenue and Breakdown RETAIL INSTITUTIONAL ISSUER SERVICES DIGITAL CONTENT 72 % 16 % 3 % 2 % Other Revenue represented 6% of Total Gross Revenues Total Gross Revenues (in R$ mn) Highlights ▪ Growth was mainly driven by strong performance in Retail and Institutional businesses . of 2Q20 Total
Slide 10: Retail Revenue and Take Rate
10 Retail Revenue and Take Rate Retail was the main revenue driver of 2Q20 following equitization trend in Brazil LTM Take Rate (LTM Retail Revenue / Average AUC) Retail Revenue (in R$ mn) 1.4% 1Q20 2Q20 1.4% 871 2Q19 1,475 2Q20 +69% Highlights ▪ Stable take rate as equity, futures and fixed income
Slide 11: Institutional and Issuer Services
11 Highlights ▪ Decline was expected as the window for capital market deals was closed during April and May ; ▪ For 2 H 20 , following the recovery seen in May and June, we expect a robust pipeline of capital market transactions . 87 65 2Q20 2Q19 - 25% Highlights ▪ Higher equity trading volume was t
Slide 12: Digital Content and Other
12 Highlights ▪ Result primarily driven by the increase in adjusted gross financial assets, from R $ 3 . 0 bn in 2 Q 19 to R $ 9 . 3 bn in 2 Q 20 . 69 123 2Q20 2Q19 78% Highlights ▪ YoY growth driven by courses and MBAs, which are now under our new brand Xpeed School by XP Inc . 32 46 2Q19 2Q20 42%
Slide 13: Adjusted Net Income and Margin
13 Adjusted Net Income and Margin Net margin expansion driven by strong growth across Retail and Institutional and a lower tax rate Highlights ▪ Year - over - year growth in Adjusted Net Income and margin driven by ( 1 ) strong performance of Retail and Institutional businesses and ( 2 ) lower conso
Slide 14: Recent Developments
3 Recent Developments
Slide 15: Recent Developments (1/2)
15 Recent Developments (1/2) XP Visa Infinite card began its test phase in July CREDIT CARD DCM / ECM / REITs Despite the challenging scenario, 67 deals were executed YTD, totaling R$62bn What’s new in our business roadmap 45 funds available in the platform, which reached R$6 billion in AUC, +500% Y
Slide 16: Recent Developments (2/2)
16 Recent Developments (2/2) What’s new in our business roadmap RECOGNITION Datafolha awarded XP as the best financial advisory in São Paulo during the lockdown period Highest access (logins) number ever in XP, Rico and Clear, +67% YoY in July Online searches for our brands also highest ever RECORD
Slide 17: Closing Remarks
17 Closing Remarks XP is accelerating the disruption of four large markets in Brazil while maintaining its mission and values as core Retail Investments ~R$8 trillion TAM 90% of the market share with 5 largest banks Equitization Equity represents only ~10% of the retail asset allocation Penetration
Slide 18: Q&A
Q&A
Slide 19: Investor Relations
Investor Relations Carlos Lazar André Martins ir@xpi.com.br IR Website: investors.xpinc.com
Slide 20: Appendix
Appendix
Slide 21: COGS and SG&A
21 COGS and SG&A Gross margin expansion and efficiency gains COGS (in R$ mn) Operating Expenses (in R$ mn) Highlights ▪ Year - over - year gross margin expansion due to product mix and equitization accelerating direct channel growth . 366 579 2Q19 2Q20 58% 69.8% 68.1% Gross Margin 35.3% 36.8% % of N
Slide 22: Non-GAAP Financial Information
22 Non - GAAP Financial Information Adjusted Net Income and Adjusted Gross Financial Assets 22 Adjusted Gross Financial Assets (in R $ mn ) Adjusted Net Income (in R $ mn ) 2Q20 2Q19 YoY 1Q20 QoQ Net Income 540 228 137% 398 36% (+) Share Based Compensation 41 - n.a. 28 42% (+/ - ) Taxes (16) - n.a.