XP Inc. (NASDAQ: XP) (“XP” or the “Company”), a leading
tech-enabled platform and a trusted pioneer in providing low-fee
financial products and services in Brazil, reported today its
financial results for the first quarter of 2023.
Summary
Operating Metrics (unaudited)
1Q23
1Q22
YoY
4Q22
QoQ
Total Client Assets (in R$
bn)
954
873
9%
946
1%
Total Net Inflow (in R$ bn)
16
46
-65%
31
-48%
Annualized Retail Take Rate
1.21%
1.23%
-2 bps
1.22%
-1 bps
Active clients (in '000s)
3,966
3,504
13%
3,877
2%
Headcount (EoP)
6,146
6,323
-3%
6,928
-11%
IFAs (in '000s)
13.0
10.7
21%
12.3
6%
Retail DATs (in mn)
2.4
2.3
2%
2.7
-12%
Retirement Plans Client Assets
(in R$ bn)
62
50
23%
61
2%
Card's TPV (in R$ bn)
8.6
4.5
90%
8.2
4%
Credit Portfolio (in R$ bn)
17.5
11.5
52%
17.1
2%
Financial Metrics (in R$ mn)
1Q23
1Q22
YoY
4Q22
QoQ
Gross revenue
3,326
3,270
2%
3,337
0%
Retail
2,569
2,307
11%
2,549
1%
Institutional
332
548
-39%
357
-7%
Corporate and Issuer Services
266
249
7%
275
-3%
Other
158
166
-5%
156
2%
Net Revenue
3,134
3,121
0%
3,177
-1%
Gross Profit
2,050
2,231
-8%
2,067
-1%
Gross Margin
65.4%
71.5%
-606 bps
65.1%
33 bps
EBT
816
856
-5%
738
11%
EBT Margin
26.0%
27.4%
-140 bps
23.2%
281 bps
Net Income
796
854
-7%
783
2%
Net Margin
25.4%
27.4%
-197 bps
24.6%
76 bps
Basic EPS (in R$)
1.48
1.53
-3%
1.43
4%
Diluted EPS (in R$)
1.48
1.48
0%
1.39
7%
ROAE1
18.7%
22.8%
-413 bps
18.1%
54 bps
ROAA2
2.4%
3.3%
-97 bps
2.4%
2 bps
_____________________________________________
1 – Annualized Return on Average
Equity.
2 – Annualized Return on Average Adjusted
Assets. Adjusted Assets excludes Retirement Plans Liabilities and
Float Balance.
Discussion of Results
Detailed impact of one-time non-recurring loss
(in R$ mn)
1Q23
One-time loss
1Q234
1Q22
YoY4
Total Gross Revenue
3,326
(164)
3,489
3,270
7%
Retail
2,569
(95)
2,664
2,307
15%
Institutional
332
-
332
548
-39%
Issuer Services &
Corporate
266
-
266
249
7%
Other
158
(69)
227
166
37%
Net Revenue
3,134
(160)
3,294
3,121
6%
EBT
816
(160)
977
856
14%
EBT Margin
26.0%
n.a.
29.6%
27.4%
221 bps
Tax Expense (Accounting)
(20)
30
(50)
(2)
n.a.
Tax expense (Tax Withholding in
Funds)3
(147)
(17)
(131)
(161)
-19%
Effective tax rate
(Normalized)
(17.4%)
n.a.
(16.3%)
(16.0%)
-27 bps
Net Income
796
(131)
927
854
8%
Net Margin
25.4%
n.a.
28.1%
27.4%
76 bps
Total Gross Revenue
Gross revenue was R$3.3 billion in 1Q23, flat QoQ and up 2% YoY.
Excluding a one-time non-recurring loss of R$164 million related to
the bonds of a large corporate issuer that filed for bankruptcy,
gross revenue was R$3.5 billion, up 5% QoQ and 7% YoY.
Retail Revenue
(in R$ mn)
1Q23
One-time loss
1Q234
1Q22
YoY4
Retail Revenue
2,569
(95)
2,664
2,307
15%
Equities
1,069
-
1,069
1,098
-3%
Fixed Income
332
(95)
427
425
0%
Funds Platform
313
-
313
268
17%
Retirement Plans
87
-
87
74
17%
Cards
204
-
204
97
112%
Credit
41
-
41
35
19%
Insurance
32
-
32
23
42%
Other Retail
490
-
490
287
70%
Annualized Retail Take Rate
1.21%
4 bps
1.26%
1.23%
2 bps
_____________________________________________
3 - Tax adjustments are related to tax
withholding expenses that are recognized net in gross revenue. 4 -
Excludes one-time non-recurring loss related to the bonds of a
large corporate issuer that filed for bankruptcy.
1Q23 Retail revenue was R$2.6 billion, growing 1% vs 4Q22 and
11% vs 1Q22. Excluding the one-time loss of R$95 million from the
bonds of a large corporate issuer, Retail revenue was R$2.7
billion, growing 5% and 15% QoQ and YoY, respectively.
Stronger client activity and performance of the advisory network
relative to 4Q22 were the main factors driving sequential
improvement, despite the still very challenging macro scenario.
Among revenue lines, Fixed Income, as expected, saw the largest
spike in demand from clients while Structured Products within
Equity recovered from an unusually weak 4Q22. Revenue from stocks
and futures intermediation, on the other hand, followed lower
market volumes and were the main negative drivers.
Retail-related revenues in 1Q23 represented 78% of consolidated
Net Income from Financial Instruments, as per the Accounting Income
Statement.
Take Rate
Annualized Retail Take Rate was 1.21% in 1Q23 as reported and
1.26% accounting for the one-time non-recurring loss.
Institutional Revenue
Institutional revenue was R$332 million, down 7% QoQ and 39%
YoY, mostly impacted by weaker trading activity on our main product
lines in the quarter. The decrease is more noticeable versus 1Q22,
when market volatility boosted overall volumes in trading desks,
leading to a peak in demand for hedging.
Institutional revenue in 1Q23 accounted for 7% of consolidated
Net Income from Financial Instruments, as per the Accounting Income
Statement.
Corporate & Issuer Services Revenue
Revenue totaled R$266 million in 1Q23, down 3% QoQ and up 7%
YoY. Sequential contraction in revenue happened mainly due to
weaker capital market activity in the quarter, which followed the
bankruptcy of a relevant Brazilian retailer and the consequent
worsening of overall corporate credit dynamics.
Corporate and Issuer Services related revenues in 1Q23
represented 7% of consolidated Net Income from Financial
Instruments, as per the Accounting Income Statement.
Other Revenue
Excluding the one-time non-recurring loss of R$69 million on the
quarter, Other revenue was R$227 million in 1Q23, up 46% QoQ and
37% YoY.
Other revenue in 1Q23 accounted for 8% of consolidated
Net Income from Financial Instruments, as per the Accounting Income
Statement.
Costs of Goods Sold and Gross Margin
Gross Margin was 65.4% in 1Q23 versus 65.1% in 4Q22 and 71.5% in
1Q22. Accounting for the non-recurring loss of R$164 million
related to a single issuer, 1Q23 gross margin was 67.1%. QoQ
improvement was mainly due to a more favorable product and channel
mix and the absence of the one-time impacts on cards and prepaid
expenses of 4Q22.
SG&A Expenses
(in R$ mn)
1Q23
1Q22
YoY
4Q22
QoQ
Total SG&A5
(1,045)
(1,255)
-17%
(1,377)
-24%
People
(760)
(899)
-16%
(892)
-15%
Salary and Taxes
(378)
(346)
9%
(337)
12%
Bonuses
(329)
(354)
-7%
(379)
-13%
Share Based Compensation
(53)
(200)
-73%
(176)
-70%
Non-people5
(285)
(355)
-20%
(485)
-41%
LTM Compensation Ratio6
28.5%
28.9%
-43 bps
29.5%
-107 bps
LTM Efficiency Ratio7
40.4%
40.1%
24 bps
42.0%
-161 bps
Headcount (EoP)
6,146
6,323
-3%
6,928
-11%
SG&A5 expenses totaled R$1.0 billion in 1Q23, down 24% QoQ
and 17% YoY, and reflecting primarily the impact of company-wide
efficiency initiatives implemented in the quarter. Because of the
reduction in headcount and related Share Based Compensation
forfeits, share based compensation expenses decreased relative to
4Q22 and the run rate of 2022FY.
Last twelve months compensation ratio6 in 1Q23 was 28.5%, an
improvement from 28.9% and 29.5% in 1Q22 and 4Q22, respectively.
Also, our last twelve months efficiency ratio7 reached 40.4% in
1Q23, compared to 40.1% and 42.0% in the same periods.
EBT
EBT was R$816 million in 1Q23, and excluding the R$160 million
one-time non-recurring loss recognized in the quarter (after sales
tax), EBT was R$977 million, up 32% QoQ and 14% YoY. EBT Margin,
excluding the one-time nonrecurring loss, was 29.6% in the quarter,
up 641 bps QoQ and 221 bps YoY, in line with our medium-term annual
guidance of 26% to 32% between 2023 and 2025.
Net Income and EPS
In 1Q23, Net Income was R$796 million, up 22% QoQ and down 8%
YoY. Basic and diluted EPS were R$1.48.
Excluding the R$131 million one-time non-recurring loss
recognized in the quarter (after taxes), Net income was R$927
million, up 18% QoQ and 8% YoY.
_____________________________________________
5 - Total SG&A and non-people SG&A
exclude revenue from incentives from Tesouro Direto, B3.
6 - Compensation ratio is calculated as
People SG&A (Salary and Taxes, Bonuses and Share Based
Compensation) divided by Net Revenue.
7 - Efficiency ratio is calculated as
SG&A ex-revenue from incentives from Tesouro Direto, B3, and
others divided by Net Revenue.
Other Information
Webcast and Conference Call Information
The Company will host a webcast to discuss its second quarter
financial results on Monday, May 15th, 2023, at 5:00 pm ET (6:00 pm
BRT). To participate in the earnings webcast please subscribe at
1Q23 Earnings Web Meeting. The replay will be available on XP’s
investor relations website at https://investors.xpinc.com/
Important Disclosure
In reviewing the information contained in this release, 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 release is prepared
by XP Inc. (the “Company,” “we” or “our”), is solely for
informational purposes. This release does not constitute a
prospectus and does not constitute an offer to sell or the
solicitation of an offer to buy any securities. In addition, this
document and any materials distributed in connection with this
release are not directed to, or intended for distribution to or use
by, any person or entity that is a citizen or resident or located
in any locality, state, country or other jurisdiction where such
distribution, publication, availability or use would be contrary to
law or regulation or which would require any registration or
licensing within such jurisdiction.
This release was prepared by the Company. Neither the Company
nor any of its affiliates, officers, employees or agents, make any
representation or warranty, express or implied, in relation to the
fairness, reasonableness, adequacy, accuracy or completeness of the
information, statements or opinions, whichever their source,
contained in this release or any oral information provided in
connection herewith, or any data it generates and accept no
responsibility, obligation or liability (whether direct or
indirect, in contract, tort or otherwise) in relation to any of
such information. The information and opinions contained in this
release are provided as at the date of this release, are subject to
change without notice and do not purport to contain all information
that may be required to evaluate the Company. The information in
this release is in draft form and has not been independently
verified. The Company and its affiliates, officers, employees and
agents expressly disclaim any and all liability which may be based
on this release and any errors therein or omissions therefrom.
Neither the Company nor any of its affiliates, officers, employees
or agents makes any representation or warranty, express or implied,
as to the achievement or reasonableness of future projections,
management targets, estimates, prospects or returns, if any.
The information contained in this release does not purport to be
comprehensive and has not been subject to any independent audit or
review. Certain of the financial information as of and for the
periods ended of December 31, 2021 and December 31, 2020, 2019,
2018 and 2017 has been derived from audited financial statements
and all other financial information has been derived from unaudited
interim financial statements. A significant portion of the
information contained in this release is based on estimates or
expectations of the Company, and there can be no assurance that
these estimates or expectations are or will prove to be accurate.
The Company’s internal estimates have not been verified by an
external expert, and the Company cannot guarantee that a third
party using different methods to assemble, analyze or compute
market information and data would obtain or generate the same
results.
Statements in the release, including those regarding the
possible or assumed future or other performance of the Company or
its industry or other trend projections, constitute forward-looking
statements. These statements are generally identified by the use of
words such as “anticipate,” “believe,” “could,” “expect,” “should,”
“plan,” “intend,” “estimate” and “potential,” among others. By
their nature, forward-looking statements are necessarily subject to
a high degree of uncertainty and involve known and unknown risks,
uncertainties, assumptions and other factors because they relate to
events and depend on circumstances that will occur in the future
whether or not outside the control of the Company. Such factors may
cause actual results, performance or developments to differ
materially from those expressed or implied by such forward-looking
statements and there can be no assurance that such forward-looking
statements will prove to be correct. These risks and uncertainties
include factors relating to: (1) general economic, financial,
political, demographic and business conditions in Brazil, as well
as any other countries we may serve in the future and their impact
on our business; (2) fluctuations in interest, inflation and
exchange rates in Brazil and any other countries we may serve in
the future; (3) competition in the financial services industry; (4)
our ability to implement our business strategy; (5) our ability to
adapt to the rapid pace of technological changes in the financial
services industry; (6) the reliability, performance, functionality
and quality of our products and services and the investment
performance of investment funds managed by third parties or by our
asset managers; (7) the availability of government authorizations
on terms and conditions and within periods acceptable to us; (8)
our ability to continue attracting and retaining new
appropriately-skilled employees; (9) our capitalization and level
of indebtedness; (10) the interests of our controlling
shareholders; (11) changes in government regulations applicable to
the financial services industry in Brazil and elsewhere; (12) our
ability to compete and conduct our business in the future; (13) the
success of operating initiatives, including advertising and
promotional efforts and new product, service and concept
development by us and our competitors; (14) changes in consumer
demands regarding financial products, customer experience related
to investments and technological advances, and our ability to
innovate to respond to such changes; (15) changes in labor,
distribution and other operating costs; (16) our compliance with,
and changes to, government laws, regulations and tax matters that
currently apply to us; (17) other factors that may affect our
financial condition, liquidity and results of operations.
Accordingly, you should not place undue reliance on forward-looking
statements. The forward-looking statements included herein speak
only as at the date of this release and the Company does not
undertake any obligation to update these forward-looking
statements. Past performance does not guarantee or predict future
performance. Moreover, the Company and its affiliates, officers,
employees and agents do not undertake any obligation to review,
update or confirm expectations or estimates or to release any
revisions to any forward-looking statements to reflect events that
occur or circumstances that arise in relation to the content of the
release. You are cautioned not to unduly rely on such
forward-looking statements when evaluating the information
presented and we do not intend to update any of these
forward-looking statements.
Market data and industry information used throughout this
release are based on management’s knowledge of the industry and the
good faith estimates of management. The Company also relied, to the
extent available, upon management’s review of industry surveys and
publications and other publicly available information prepared by a
number of third-party sources. All of the market data and industry
information used in this release involves a number of assumptions
and limitations, and you are cautioned not to give undue weight to
such estimates. Although the Company believes that these sources
are reliable, there can be no assurance as to the accuracy or
completeness of this information, and the Company has not
independently verified this information.
The contents hereof should not be construed as investment,
legal, tax or other advice and you should consult your own advisers
as to legal, business, tax and other related matters concerning an
investment in the Company. The Company is not acting on your behalf
and does not regard you as a customer or a client. It will not be
responsible to you for providing protections afforded to clients or
for advising you on the relevant transaction.
This release includes our Float, Adjusted Gross Financial
Assets, Net Asset Value, and Adjustments to Reported Net Income,
which are non-GAAP financial information. We believe that such
information is meaningful and useful in understanding the
activities and business metrics of the Company’s operations. We
also believe that these non-GAAP financial measures reflect an
additional way of viewing aspects of the Company’s business that,
when viewed with our International Financial Reporting Standards
(“IFRS”) results, as issued by the International Accounting
Standards Board, provide a more complete understanding of factors
and trends affecting the Company’s business. Further, investors
regularly rely on non-GAAP financial measures to assess operating
performance and such measures may highlight trends in the Company’s
business that may not otherwise be apparent when relying on
financial measures calculated in accordance with IFRS. We also
believe that certain non-GAAP financial measures are frequently
used by securities analysts, investors and other interested parties
in the evaluation of public companies in the Company’s industry,
many of which present these measures when reporting their results.
The non-GAAP financial information is presented for informational
purposes and to enhance understanding of the IFRS financial
statements. The non-GAAP measures should be considered in addition
to results prepared in accordance with IFRS, but not as a
substitute for, or superior to, IFRS results. As other companies
may determine or calculate this non-GAAP financial information
differently, the usefulness of these measures for comparative
purposes is limited. A reconciliation of such non-GAAP financial
measures to the nearest GAAP measure is included in this
release.
For purposes of this release:
“Active Clients” means the total number of retail clients served
through our XP Investimentos, Rico, Clear, XP Investments and XP
Private (Europe) brands, with Client Assets above R$100.00 or that
have transacted at least once in the last thirty days. For purposes
of calculating this metric, if a client holds an account in more
than one of the aforementioned entities, such client will be
counted as one “active client” for each such account. For example,
if a client holds an account in each of XP Investimentos and Rico,
such client will count as two “active clients” for purposes of this
metric.
“Client Assets” means the market value of all client assets
invested through XP’s platform and that is related to reported
Retail Revenue, including equities, fixed income securities, mutual
funds (including those managed by XP Gestão de Recursos Ltda., XP
Advisory Gestão de Recursos Ltda. and XP Vista Asset Management
Ltda., as well as by third-party asset managers), pension funds
(including those from XP Vida e Previdência S.A., as well as by
third-party insurance companies), exchange traded funds, COEs
(Structured Notes), REITs, and uninvested cash balances (Float
Balances), among others. Although Client Assets includes custody
from Corporate Clients that generate Retail Revenue, it does not
include custody from institutional clients (asset managers, pension
funds and insurance companies).
Rounding
We have made rounding adjustments to some of the figures
included in this release. Accordingly, numerical figures shown as
totals in some tables may not be an arithmetic aggregation of the
figures that preceded them.
Unaudited Managerial Income Statement (in R$ mn)
Managerial Income Statement
1Q23
1Q22
YoY
4Q22
QoQ
Total Gross Revenue
3,326
3,270
2%
3,337
0%
Retail
2,569
2,307
11%
2,549
1%
Equities
1,069
1,098
-3%
995
7%
Fixed Income
332
425
-22%
393
-15%
Funds Platform
313
268
17%
311
1%
Retirement Plans
87
74
17%
93
-7%
Cards
204
97
112%
234
-13%
Credit
41
35
19%
47
-13%
Insurance
32
23
42%
31
2%
Other
490
287
70%
443
10%
Institutional
332
548
-39%
357
-7%
Issuer Services &
Corporate
266
249
7%
275
-3%
Other
158
166
-5%
156
2%
Net Revenue
3,134
3,121
0%
3,177
-1%
COGS
(1,084)
(891)
22%
(1,110)
-2%
Gross Profit
2,050
2,231
-8%
2,067
-1%
Gross Margin
65.4%
71.5%
-606 bps
65.1%
33 bps
SG&A
(1,042)
(1,251)
-17%
(1,135)
-8%
People
(760)
(899)
-16%
(892)
-15%
Non-People
(282)
(351)
-20%
(243)
16%
D&A
(48)
(61)
-21%
(46)
5%
EBIT
960
919
4%
886
8%
Interest expense on debt
(163)
(48)
238%
(150)
9%
Share of profit or (loss) in
joint ventures and associates
19
(14)
-234%
1
-258%
EBT
816
856
-5%
738
11%
EBT Margin
26.0%
27.4%
-140 bps
23.2%
281 bps
Tax Expense (Accounting)
(20)
(2)
822%
44
-145%
Tax expense (Tax Withholding in
Funds)8
(147)
(161)
-8%
(192)
-23%
Effective tax rate
(Normalized)
(17.4%)
(16.0%)
-136 bps
(15.8%)
-157 bps
Net Income
796
854
-7%
783
2%
Net Margin
25.4%
27.4%
-197 bps
24.6%
76 bps
Adjustments
23
133
-83%
110
-79%
Adjusted Net Income9
819
987
-17%
893
-8%
Adjusted Net Margin
26.1%
31.6%
-549 bps
28.1%
-199 bps
_____________________________________________
8 - Tax adjustments are related to tax
withholding expenses that are recognized net in gross revenue. 9 -
See appendix for a reconciliation of Adjusted Net Income.
Accounting Income Statement (in R$ mn)
Accounting Income Statement
1Q23
1Q22
YoY
4Q22
QoQ
Net revenue from services
rendered
1,346
1,265
6%
1,565
-14%
Brokerage commission
494
560
-12%
544
-9%
Securities placement
249
291
-15%
361
-31%
Management fees
382
329
16%
412
-7%
Insurance brokerage fee
41
36
14%
47
-13%
Educational services
13
8
69%
6
108%
Commission Fees
189
93
103%
237
-20%
Other services
101
89
14%
102
-1%
Sales Tax and contributions on
Services
(123)
(141)
-13%
(145)
-15%
Net income from financial
instruments at amortized cost and at fair value through other
comprehensive income
502
(145)
n.a.
14
n.a.
Net income from financial
instruments at fair value through profit or loss
1,286
2,001
-36%
1,598
-20%
Total revenue and
income
3,134
3,121
0%
3,177
-1%
Operating costs
(1,017)
(864)
18%
(1,071)
-5%
Selling expenses
(15)
(19)
-22%
(48)
-69%
Administrative expenses
(1,094)
(1,293)
-15%
(1,368)
-20%
Other operating revenues
(expenses), net
19
0
n.a.
235
-92%
Expected credit losses
(68)
(26)
156%
(38)
77%
Interest expense on debt
(163)
(48)
238%
(150)
9%
Share of profit or (loss) in
joint ventures and associates
19
(14)
n.a.
1
n.a.
Income before income
tax
816
856
-5%
738
11%
Income tax expense
(20)
(2)
n.a.
44
n.a.
Net income for the
period
796
854
-7%
783
2%
Balance Sheet (in R$ mn)
Assets
1Q23
4Q22
Cash
3,089
3,553
Financial assets
180,185
177,682
Fair value through profit or
loss
99,527
96,730
Securities
84,511
87,513
Derivative financial
instruments
15,015
9,217
Fair value through other
comprehensive income
29,145
34,479
Securities
29,145
34,479
Evaluated at amortized
cost
51,514
46,473
Securities
10,905
9,272
Securities purchased under
agreements to resell
11,830
7,604
Securities trading and
intermediation
2,607
3,271
Accounts receivable
595
598
Loan Operations
23,107
22,211
Other financial assets
2,470
3,517
Other assets
6,194
5,761
Recoverable taxes
283
163
Rights-of-use assets
233
258
Prepaid expenses
4,250
4,240
Other
1,427
1,099
Deferred tax assets
1,582
1,612
Investments in associates and
joint ventures
2,256
2,272
Property and equipment
304
311
Goodwill & Intangible
assets
830
844
Total Assets
194,441
192,035
Liabilities
1Q23
4Q22
Financial liabilities
128,402
127,709
Fair value through profit or
loss
26,545
22,135
Securities
11,472
13,529
Derivative financial
instruments
15,073
8,605
Evaluated at amortized
cost
101,857
105,574
Securities sold under repurchase
agreements
25,921
31,790
Securities trading and
intermediation
15,269
16,063
Financing instruments payable
46,482
43,684
Accounts payables
586
617
Borrowings
1,825
1,866
Other financial liabilities
11,774
11,554
Other liabilities
48,916
47,173
Social and statutory
obligations
503
968
Taxes and social security
obligations
400
365
Private pension liabilities
47,806
45,734
Provisions and contingent
liabilities
79
44
Other
127
62
Deferred tax
liabilities
76
111
Total Liabilities
177,395
174,992
Equity attributable to owners
of the Parent company
17,039
17,036
Issued capital
0
0
Capital reserve
19,195
19,156
Other comprehensive income
(48)
(134)
Treasury
(2,903)
(1,987)
Retained earnings
795
-
Non-controlling
interest
7
6
Total equity
17,046
17,042
Total liabilities and
equity
194,441
192,035
Float, Adjusted Gross Financial Assets and Net Asset
Value
(in R$ mn)
We present Adjusted Gross Financial Assets because we believe
this metric captures the liquidity that is, in fact, available to
us, net of the portion of liquidity that is related to our Float
Balance (and therefore attributable to clients). We calculate
Adjusted Gross Financial Assets as the sum of (1) Cash and
Financial Assets (comprised of Cash plus Securities – Fair value
through profit or loss, plus Securities – Fair value through other
comprehensive income, plus Securities – Evaluated at amortized
cost, plus Derivative financial instruments, plus Securities
(purchased under agreements to resell), plus Loans and Foreign
exchange portfolio (assets) less (2) Financial Liabilities
(comprised of the sum of Securities loaned, Derivative financial
instruments, Securities sold under repurchase agreements and
Private pension liabilities), Deposits, Structured Operation
Certificates (COE), Financial Bills, Foreign exchange portfolio
(liabilities), Credit cards operations and (3) less Float
Balance.
It is a measure that we track internally daily, and it more
intuitively reflects the effect of the operational profits we
generate and the variations between working capital assets and
liabilities (cash flows from operating activities), investments in
fixed and intangible assets and investments in the IFA Network
(cash flows from investing activities) and inflows and outflows
related to equity and debt securities in our capital structure
(cash flows from financing activities). Our management treats all
securities and financial instrument assets, net of financial
instrument liabilities, as balances that compose our total
liquidity, with subline items (such as, for example, “securities at
fair value through profit and loss” and “securities at fair value
through other comprehensive income”) expected to fluctuate
substantially from quarter to quarter as our treasury manages and
allocates our total liquidity to the most suitable financial
instruments.
In order to explain how we measure our cash position or
generation internally, we are introducing the Net Asset Value
concept. Since we are a financial institution, we hold several
types of financial instruments with different characteristics,
hence the definition of net cash that makes more sense from a
business perspective is the Net Asset Value. It is basically the
adjusted gross financial assets net of debt instruments.
Adjusted Gross Financial
Assets
1Q23
4Q22
Assets
180,747
177,761
(+) Cash
3,089
3,553
(+) Securities - Fair value
through profit or loss
84,511
87,513
(+) Securities - Fair value
through other comprehensive income
29,145
34,479
(+) Securities - Evaluated at
amortized cost
10,905
9,272
(+) Derivative financial
instruments
15,015
9,217
(+) Securities purchased under
agreements to resell
11,830
7,604
(+) Loans and credit card
operations
23,107
22,211
(+) Foreign exchange
portfolio
1,732
2,145
(+) Energy
874
647
(+) Central Bank Deposits
538
1,119
Liabilities
(149,313)
(146,194)
(-) Securities
(11,472)
(13,529)
(-) Derivative financial
instruments
(15,073)
(8,605)
(-) Securities sold under
repurchase agreements
(25,921)
(31,790)
(-) Retirement Plans
Liabilities
(47,806)
(45,734)
(-) Deposits
(21,025)
(20,262)
(-) Structured Operations
(13,204)
(12,110)
(-) Financial Bills
(6,347)
(5,676)
(-) Foreign exchange
portfolio
(2,036)
(2,405)
(-) Credit card operations
(5,245)
(4,987)
(-) Commitments subject to
possible redemption
(1,008)
(1,049)
(-) Other Funding
(175)
(47)
(-) Float
(12,662)
(12,792)
(=) Adjusted Gross Financial
Assets
18,772
18,775
Net Asset Value
1Q23
4Q22
(=) Adjusted Gross Financial
Assets
18,772
18,775
Gross Debt
(9,950)
(9,389)
(-) Borrowings
(1,825)
(1,866)
(-) Debentures
(2,235)
(2,029)
(-) Structured financing
(2,393)
(1,934)
(-) Bonds
(3,497)
(3,561)
(=) Net Asset Value
8,822
9,385
Float (=net uninvested clients'
deposits)
1Q23
4Q22
Assets
(2,607)
(3,271)
(-) Securities trading and
intermediation
(2,607)
(3,271)
Liabilities
15,269
16,063
(+) Securities trading and
intermediation
15,269
16,063
(=) Float
12,662
12,792
Reconciliation of Adjusted Net Income (in R$ mn)
Adjusted Net Income
1Q23
1Q22
YoY
4Q22
QoQ
Net Income
796
854
-7%
783
2%
(+) Share Based Compensation
68
212
-68%
181
-62%
(+/-) Taxes
(46)
(79)
-43%
(71)
-36%
Adj. Net Income
819
987
-17%
893
-8%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230515005747/en/
Investor Relations Contact ir@xpi.com.br
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