B3 Sa Brasil Unsp/Adr

Good morning, ladies and gentlemen, and welcome to the audio conference call of B3's earnings result for the first quarter of 2024. We would like to inform you that all participants will be in listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question and answer section when further instructions will be given. As a reminder, this conference is being recorded and broadcasted live via webcast. The replay will be available after the event is concluded. We'll now like to turn the conference over to André Milanese, B3 CFO, who will be joined by Fernando Campos, Investor Relations Associate Director. Please, André, you may proceed.

Thank you. Good morning, everyone, and thanks for joining our conversation. first quarter results call. I'll start with a few remarks, general remarks, and then I'll hand over to Fernando to go into a little bit more detail about the dynamics, especially on our revenues. I think we saw a first quarter, which was not, that different from recent trends that we have been observed recently. Even though we had interest rate cuts in Brazil, they are still at high levels and all the uncertainties about the future of interest rates outside Brazil have also contributed to a scenario where a more recovery in the equities market has not been seen. So as a result of that scenario, we saw a negative impact on our cash equities business. But that scenario has also had also positive impacts, particularly on the OTC market and on the listed derivative volumes, which benefit from those uncertainties and that volatility. And once again, that reinforces the resilience of our business model and of our diversification in terms of revenues. As a result of that, we've seen a quarter of stable revenues where all the other business have grown and kind of compensated the reduction that we've seen in the equities segment. Even if we exclude Neurotech, which was not present as part of the first quarter of last year, our revenues would only be 1% below what in relation to last year. So I think that's a very positive result. And as I said, once again, that reinforces the diversification of our business model and the resilience of our results. In relation to the expenses, as we have been discussing during the fourth quarter results, we had a last quarter of 23 that was marked by some non-recurring impacts that we discussed earlier. at length with you at the time. Given that and without those impacts, as we have been saying, it was natural that we would see expenses this quarter returning to levels that were more similar to what we have seen throughout 23. If we take into account that, again, we didn't have neurotech as part of our numbers in comparison to the first quarter of last year, and the, let's say, non-recurring impact of the Dezenhola program, which has revenues associated with it, we would have grown our expenses below inflation which again, I think it is positive and very consistent to what we have been saying to you guys in relation to our cost discipline and our objectives for cost control. I'll pass on now to Fernando to give more details about the operational performance and I'll get back later on to talk about other things.

Thank you, André, and good morning all. Starting with the cash equity segment, where we had an ADTV of R$23.6 billion in cash equities, which represented a decrease of 7% and 3% compared to 4Q23 and 1Q23, reflecting the scenario that André mentioned previously. And this lower volume impacted the turnover, which stood at 128%. Regarding fees, we saw an increase due to the lower day trading volume in the quarter and the low participation of high-frequency traders in market-making programs and liquidity provider problems. And here it's important to highlight the importance of our product development agenda. It's worth noting that we actually saw growth in volumes of ETFs, BDRs, and listed funds, which represented 12% of the ADTV in the first Q24 versus 10% in the first Q23. In listed derivatives, we saw strong growth even despite the decline that we had in revenue, reflecting the lower revenue per contract in the quarter. Here are two main effects. The first one is some adjustments that we made in the fees of DI futures, DI contracts impacting the revenue per contract of this kind of contract and also the appreciation of the Brazilian real against USD, which affect the fees, the revenue per contracts of FX contracts and interest rates in USD contracts as well. In OTC, we saw a solid growth in revenue of 13%, with significant increase in fixed income and treasury direct outstanding balance compared to the first quarter of 2023, reflecting, as mentioned before, the high interest rate scenario. Here it's worth noting that despite the corporate debt market being really hot lately, the decrease that we saw in the outstanding balance of corporate loans in Brazil represents that some of the leasing debentures, we saw there was a high volume of leasing debentures that matured in this quarter. So that's the main effect here. Finally, in technology data and services, it's worth highlighting the growth in the utilization line of OTC, 8% compared to the first quarter of 23, and that this grows with the funding industry in Brazil. And it's, as André mentioned, it's worth uh uh highlighting here that the data revenue includes neuro protect revenue which accounted for which total 30 million reais uh in this uh first quarter uh and we don't we didn't have that in the the first quarter 33 but here i think it's important to to point out that Even though we didn't have that consolidated with us, the growth in Neurotech's revenue compared to the first part of 2023 was 30%. So, showing a good trend in this business. Now, I'm going to return to André. He's talking a little bit about other highlights.