B3 Sa Brasil Unsp/Adr

Good morning, ladies and gentlemen, and welcome to the audio conference call of B3's earnings results for the first quarter of 2023. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions to participate will be given at that time. If you should require operator assistance during the call, please press star zero. As a reminder, this conference is being recorded and broadcast live via webcast. The replay will be available after the event is concluded. I would now like to turn the conference over to Andre Vega Milanese, B3's Chief Financial, Corporate and Investor Relations Officer, who will be joined by Fernando Campos, Investor Relations Associate Director. Please go ahead.

Thank you and good morning, everyone. Thanks for joining our first quarter results call. The first quarter we found a still challenging scenario with an environment where interest rates remained at very high levels in Brazil. A lot of uncertainty, not only in relation to the local economy, but in relation to the global markets as well, particularly in Brazil, uncertainties about the fiscal policy, which ended up impacting our performance during the quarter. As a result of that, we posted gross revenues of $2.5 billion, a reduction of 3% and 4%, respectively, in relation to the first quarter, and the fourth quarter of 22. If we look at the volumes, particularly for the stock market during the quarter, the reduction that we saw in the average daily trading volume was mainly the result of the compression that we saw on the company's market cap. although we remained with turnover velocity very healthy above 150%. Fernando will comment a little bit more on the operational performance of each one of our segments, but I think it's worth highlighting here once again the strength of our diversified business model and in a scenario where we saw the conditions negatively impacting our business on the market, that also had positive impacts to the other segments. Particularly here, I would like to highlight the performance on our listed derivatives segment. and on the over the counter segment on the OTC segment that ended up offsetting the reduction that we saw on the stock market. In relation to the I think as we mentioned during the first quarter results call, we did have We did see an acceleration of our expenses during the first quarter, but they were also impacted by non-recurring items, particularly non-recurring items related to efficiency initiatives that we started or carried out during the second half of last year. So the first quarter this year, without any large non-recurring items, we already saw the positive, we started to see the positive impacts that those initiatives had, particularly in our personnel line. With that, we ended up presenting a reduction in total expenses both against the first quarter of last year and the last quarter of last year as well. I think I would like to reinforce here our commitment with cost discipline. I don't think that has ever been away from our agenda, but perhaps we're going to give special attention to that matter now. We will continue to look throughout the year at expenses very carefully, always seeking to optimize our cost structure without having to compromise our growth strategy. As I mentioned in other occasions, our goal is to be on the lower range of our expense guidance for this year. I'm going to call Fernando now to talk a little bit about the operational performance of each one of our segments, and I'll get back afterwards. Fernando.

Hey, everyone. Good morning. Talking a little bit about the operational performance for the quarter, starting with cash equities. We saw an ADTV of $25.2 billion on the cash equity market, 20% below the first quarter last year and the fourth quarter last year. I think here, just to reinforce what André mentioned before, it has much more to do with the compression, the reduction of market cap of companies, because we still saw turnover velocity at high levels, about more than 150%, 150%. 3%, to be more precise. I think it's important also to highlight the decrease in margins in the fees of the cash equity market. And this retraction, when we compare to the first quarter last year, although we saw an increase compared to the fourth quarter last year, reflects the investment that the company is making on strengthening its central book, when in the times where in a challenging scenario, as André mentioned, where we see what can we call organic liquidity a little lower than usual. And we do that through the expansion of market-making programs and liquidity provider programs as well. Talking a little bit about listed derivatives, we saw an all-time record of a 6.1% contracts traded in average daily, a growth of 36% year-on-year and 33% quarter-on-quarter, mainly reflecting the interest rates in BRL contracts, which in its turn reflects the volatility in the interest rate curve that we saw during the quarter as a result of all the uncertainty regarding the fiscal policy. OTC also had a good performance. The volume of issuances and outstanding balance grew 15% when compared to the first quarter of last year. When compared to the fourth quarter last year, we saw a higher acceleration on the outstanding balance with issuances more stable, which I think also reflects the scenario we are going through with the uncertainties. And then in the technology and data line, I think it's worth highlighting the growth in the utilization line, the OTC, which grew 11% quarter-on-quarter and 2%. sorry, 11% year-on-year and 2% quarter-on-quarter, and this line mainly grows with the fund industry, in which we are seeing an increase in the fixed income funds during this period. It's also worth highlighting the growth in NEWA's revenue, which grew 15% year-on-year, although we saw a small decrease, a quarter-on-quarter, given the loss of a client that was important for Neway in the period. Now I'm going to get back to André to talk about the financial results, return to shareholders, and other highlights.