Good morning, ladies and gentlemen, and welcome to the audio conference call of B3's earnings results for the fourth quarter of 2022. 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 assistance during the call, please press the star key followed by zero. As a reminder, this conference is being recorded and broadcasted live via webcast. The replay will be available after the event is concluded. I would now like to turn the conference over to André Veiga Milanez, B3's Chief Financial, Corporate and Investor Relations Officer, who will be joined by Fernando Campos, Investor Relations Associate Director. Please, you may proceed. Thank you. Welcome everybody to our first quarter results. First, a few highlights about the environment during that period. In Brazil we still had a scenario with a very high level of interest rates. A period that was heavily influenced by the elections, both pre-election and post-election period, which have impacted primarily our listed segment business. Going quickly through some highlights. On the cash equities market, we closed the quarter with an ADTV of BRL 32 billion, an advance of more than 2% in relation to the fourth quarter of 2021. Significant increase in relation to the 3rd quarter of 2022, growing by almost 24%, which was propelled especially by the performance during October and November, where we had a lot of volatility associated with the election, as I mentioned before. Another highlight in terms of the cash equities business is that we saw some decrease in margins during this period, which was primarily driven by a higher volume of options, indices options exercised during the month of December. This is a more, let's say, impact given the specific situation of mix, and I think it's worth reinforcing here that there hasn't been any changes to our pricing schedule. The last quarter of 2022 had also less trading days, which also impacted the revenues. Talking about the listed derivative segment, our ADV was 44.5 million contracts, which represented a reduction in relation to the fourth quarter, but it was pretty much in line with the volumes that we have seen during the third quarter. I would like to call now Fernando to go through some other highlights of the other business segments. Thank you, André, and good morning, everyone. I'll start with the OTC segment. The OTC segment benefits from a high interest rate scenario, and we had a solid performance during the quarter in this segment. We saw an increase of 33% against the fourth quarter of 2021 in the outstanding balance of instruments and Tesouro Direto, reflecting the efficiency of the strategy of revenue diversification of B3. In infrastructure for financing, also impacted by the higher level of interest rates we saw. Here we had a negative impact in the number of vehicles financed. That decreased 3.6% versus fourth quarter 2021. We had in technology and access, I think it's worth mentioning the growth in the line of utilization of 3.13% against the fourth quarter of 2021, which usually grows with the funding industry in Brazil, mainly this year, the growth in fixed income funds throughout the year. Now moving a little bit to move into the financial performance. In revenues, we saw a growth in gross revenue of almost 6% compared to the fourth quarter of 2021. In equities, the revenue was 4% higher compared to the fourth quarter of 2021 with the volumes reflecting a little bit of the operational performance that André mentioned with a little above that we had on the fourth quarter of 2021 that was partially offset by the lower margins. In listed derivatives, we saw 7% in line with the growth in volumes. In listed, in the listed market as a whole, as André mentioned, I think it's worth mentioning again, the third quarter of 2022, that we had 4 less trading days in the fourth quarter, which impacted our revenues. In our OTC, we saw a growth of 16. 16%, mainly as of the increase in interest rates, which impacts the flow, the number of registers and registrations and the outstanding balance of that line. Infrastructure for financing saw a reduction of 3% reflecting the harsh scenario for the automotive market. In technology data and service, in technology, we saw increase of 15% with the highlight here being the, like I said, the increase in the number of funds and the annual correction of prices that are done by the inflation. In data, we saw an increase of 80%. Given the consolidation of Neoway. Without Neoway, the growth would be still significant of 19%, mainly reflecting growth in market data. I'm turning back into Milanez to talk a little bit about expenses and other advances, strategic advances that we had during the quarter. Thank you, Fernando. Talking about the expenses, I think that you guys saw that there was some acceleration in our expenditure during the quarter. Overall, this is something that typically happens during the quarter, but I think during this quarter we also, as we pointed out in release materials, some extra non-recurring items. The personnel expenses, we had the impact of course of Neoway, which was not part of the B3 group, in 2021. As I mentioned, no recurring expenses related to the termination of some employment contracts as part of an efficiency project that conducted during the second half of 2022. Th e impacts of that have also affected the expense line with third-party services, with costs associated with consultancy firm that helped us in carrying out this project. This was also affected by non-recurring expenditure related to the acquisition of Neoway, fees, lawyers and advisors involved in the acquisition. We have also seen a trend that we have already highlighted in other quarters, where we are seeing much more investment in nature, expenses that were potentially capitalized, being now recognized as expenses giving the new dynamic and the costs involved in the development of those new initiatives. Talking about some other updates. I think worth highlighting that during the fourth quarter, we have concluded the execution of our buyback program. As you know, we already announced a new buyback program for this year, for 2023. Executed roughly BRL 3 billion in buybacks. Ended up buying back almost 4% of our market during this program, which is quite a significant amount. In relation to the acquisition of Neoway that we have announced at the end of last year, we are still waiting for final approval from the Securities Commission, which we expect to take place over the next few weeks. Of course, as soon as those approvals are obtained, we will inform the market and by then conclude the acquisition and start the integration project with NeuroTech. Another acquisition that last year that was concluded at the beginning of this year, a company called Datastock. We will now start the integration and ramp up the business in connection with the financing unit. Discussions and developments with our large trade block facility for large blocks has continued to advance. There are still some de-definitions that are pending in terms of discussions with the regulator. We do expect those to be concluded and potentially to be able to launch our solution by the end of this first half or beginning of the second half. Finally, I think another point I would like to highlight was the launch of a new product in partnership with the National Treasury Secretary, which is called Tesouro RendA+, which is a government bond designed specifically for the retail investor and that could be an interesting alternative for planning, you know, retirement and things like that. Also, we started to offer ETFs that distribute dividends during the first quarter of this year. I would like to open the floor for questions and answers. Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session from investors and analysts. If you have a question, please press the star key followed by one on your touch tone phone now. If at any time you would like to remove yourself from the questioning queue, press star two. Our first question comes from Tito Labarta with Goldman Sachs. Please, Tito, go ahead. Hi, André. Fernando, good morning. Thank you for the call and taking my question. My question, I guess, is on your EBITDA margin. I know you don't give guidance here, but just want to think about, you know, as you're investing in the business and now you have kinda your verticals with data services from Neoway and Neurotech, how should we think about that EBITDA margin, right? I mean, you're now at 70% this quarter. You've been well above that in the past, but, you know, like maybe is this level that we're seeing now, is this more like the recurrent level that we should think about going forward? How do you think these additional investments will impact margins from here? Thank you. Thank you, Tito Labarta. I'll start here and Fernando Campos please jump in if you want to add anything. Well, I think what we saw in the fourth quarter was as I mentioned, I think the reduction was especially in this quarter, had much more to do with the, let's say, behavior of the expenses with some extra non-recurring items, which we do not expect to see them from, you know, happening again. This was main of an efficiency project that was conducted during the fourth quarter. We have pretty much concluded all the action plans that came as part of this project. We start the year of 23, I would say, lighter in terms of the savings that were obtained as a result of that. I think, you know, as you know, our margins are much more driven by the performance top line than in expenses. Having said that, as you probably know as well, those, let's say, new verticals, especially the data business, does not have a margin of the same size as the one from the main business. Typically, margins for these segments are around, you know, 30%-40%. This is currently the margin for Neurotech, and we hope that Neoway will get there over the course of the next year or so. I think what, perhaps, will happen at some point is that as this business, become more and more relevant in terms of the overall composition of our revenues, we might have some reduction in the overall margin of the company as a result of that. We will also have revenues that are less, let's say, transaction in nature, more recurring in nature, less exposed to the cycle. Of course, that will also depend a lot on the performance of the core business, which as you know, has a lot of potential to grow. I think those are the things to take into consideration when think about our margins. As you said, it's really difficult for us to give guidance on margins, especially because those are much more dependent on the performance of the top line, which where we have less control and influence rather than on the expenses side. On the side that we control, what I can tell you is that the fourth quarter is not something that you should take as a trend going forward. Great. That's very helpful. Thank you, André. Well, I guess one follow-up, if I may. Just like, I guess, with Neoway and Neurotech, how do you, how much of your business do you think will come from data, you know, like mid to longer term? You know, I don't expect a specific number, but just kinda general ballpark, like how big that can be, how significant, as, you know,% of revenues or EBITDA, in the medium term. If you add all of the, let's say, data revenues that B3 already has today, including Neoway, and of course that includes market data revenues, we have around half a billion BRL a year in revenues coming from data. Market data and also all the data solutions, and definitely in that composition, there is a lot of data revenues coming from the financing unit and also the core business, the capital markets business, but also of course, coming from Neoway. Our mission is that to become a much more relevant business with revenues over BRL 1 billion in 3 years. That's our ambition here. That's also take into account the acquisition of Neurotech and the ramp up of the business, capturing all the cert revenue synergies that we have mapped when we were discussing the acquisition of these two companies. Okay. That's great. Thank you, André. Our next question comes from Pedro Leduc with Itaú BBA. Please, Pedro, you may proceed. Thank you so much for taking the question as well as hosting the call. A little bit on pricing and cash market margin dynamics, please. There's a sequential drop, 15 bps or 0.15 bps, the same as year-over-year. Of course it's explained a little bit by higher volumes of high frequency trading or day trades. Wanna get your brains a little bit on how we're seeing that for 2023, you know, average margins on the cash market. If you're seeing much more room for HFT penetration or if there's lower volumes than we're seeing, at least so far in the year, could insight the price stable to move up a little bit? Just wondering how we could get your help to perhaps model out this line, pricing margin for cash market in 2023, thinking about the different mix and volume components. Thank you. Thank you for the question, Pedro. That's a tough one, 'cause we are now basically going to see margins, the margin behavior, fluctuate in accordance with the mix of the product. I think, you know, we highlighted that special reduction because in our earnings because as you probably will notice, even though we saw weaker volumes in December, the margin reduced as well, which is not what you would expect because of the index options exercise volumes that I mentioned. But I think, you know, if you take November and October, what you should expect typically is that the higher the volume, the lower the margin will be. If the... If we see lower volumes, margins will be slightly higher because that's the way the our pricing schedule is currently set up. It's really hard to predict, you know, particular events such as the one that we saw in December. You know, I think perhaps the best way for you to think about that when modeling, you know, the average behavior that you saw during last year as let's say, as initial point for your projections, going forward, especially because we are not envisaging or considering any major changes to our pricing schedule as the one we had a few years ago. Appreciate it. Thank you. Our next question comes from Kaio Prato with UBS. Please, Kaio, you may proceed. Hello. Good morning, everyone. Thank you for the opportunity to ask questions. On my side, I would also like to talk a little bit more on the listed trading fees. More specifically talking a little bit more the competition front. With the recent news of potential interest of a new competitor, again, which is always a headwind for the stock, then the start of the block trades possibly outside of B3 this year. I would like to understand a little bit more what's your view about this recent movement, what impacts you foresee, and if there is any plan of a potential review of the fee structure, again, especially the one charged in the listed segment, please. Thank you. Thank you, Kaio. This is something that we have already been discussing for quite some time. As you know, we already have positioning in several segments of our business. We already compete with global markets and we have always been discussing the possibility of a new entrant into the, let's say, exchange arena here in Brazil. This is the second time we had an announcement like this. As you know, company has been preparing itself for a more competitive environment. I should say what could be the potential implications of that project. I think it is a very, let's say, ambitious project. As you know, competing in trading is not it's easy, let's say that the barriers of entry there are lower, but the competition on the clearing space in our is much, much, much tougher. It will definitely require a lot of investment and time to put that together, with you know, good chance of taking longer than one might expect. The company has been preparing for that. As you know, since the B3 was created, we have been turning this company more and more every time towards its customer needs, turning this company into a more client-centric organization. Working very robust roadmap of products to not to leave any open space that could be explored by a new entrant. What I can tell you is that, they, you know, they are not gonna have an easy time if the project goes effectively ahead to compete with us. I think that hasn't anything. There's no direct connection between that and the other discussion that you mentioned on large blocks. There you had a flexibility introduced by a regulator to potentially try to make to meet a market demand in order to make a more efficient process for trade for the trading of large blocks. We were already expecting that change and have been preparing ourselves for that with the development of our solution. As I mentioned during the call, we are very advanced with that on the development of the platform. Are still discussing some final details with the regulator in terms of what is gonna be allowed and what's not gonna be allowed in order to be able to get the approval for our platform and start operating. We might see other participants offering similar solutions, but we are very confident in our solution and the features that our solution is gonna have. Okay. Thank you. Just, final one. In terms of a potential review of the fee structure, is there any plan about that and to do that again or not? Look, I don't see any reasons for that to occur short-term. Of course, pricing is always a lever, a lever that you could use in a situation where you have a more, let's say, a fierce competitive environment. I don't see any reason for that to take place or to occur in the short term. Great. Really clear. Thank you very much. Our next question comes from Ian White with Autonomous Research. Please, Ian, you may proceed. Hi. Thanks for doing the presentation and for taking my questions. Two from me, please, both on costs. Firstly, can you set out for us how much of the cost base is for growth versus run the business type expenditure? I know it's about a 70-30 mix in terms of your core business versus new initiatives, but is that the right split in terms of how to think about maintenance versus growth-related expense, please? On the part that is growth related, how should we think about the quantity and timing of revenue benefits to flow through from that, please? Is there a, I guess, just target return or something like that you might be able to share with us to help us think about the yields essentially on that growth-related spend? Just secondly, can you just talk us through please, the linkage between inflation and cost growth for B3. What inflationary impact is already embedded into the cost guidance for 2023, and how will that change in future years, assuming inflation is in the below to mid-single digit range, as is currently expected within the market? Thanks very much. Thank you very much for your question, Ian. I hope you are doing well. I'll try to cover all the points, but please let me know if I missed anything. I'll start with the last point you mentioned. As you know, our cost base is almost fixed in nature, primarily comprised by personnel expenses and technology expenses. A large portion of that is personnel, as you know. In Brazil, we have an annual, let's say, collective bargaining adjustment to salaries. Our base date for that is August. And the adjustment that we had last year was almost 10%. We are carrying a 10% increase in our salary base before any reductions that were obtained as a result of the project that I mentioned to the next year. You have potentially the last quarter of this year influenced by the adjustment that we're gonna have in 23, which is then more linked to the current year inflation projection. That's the implication that we have, and that's why we tend to say that in our core business, our goal is to try to make that our expenses grow according to inflation or slightly above that. Assuming, of course, that there is not a significant swing in the inflation rates because we do have that impact of carrying to the other, to the following year, a lot of the inflation from the past year giving, when the adjustment to our salary base is done. In relation to the breakdown in our expenses between core business and other initiatives, I think first, and this is something that as this business mature we will probably review, is that if you take all the expenses on the new initiatives, we need to separate there and we try to give you that visibility that we have, I would say almost half of those expenses that are represented by expenses of business that are already mature, that are either profitable or closing to get profitable. That's the example of Neoway, and it's gonna be the case with Neurotech, the company that we also acquire, Portal de Documentos. You almost have there a group of expenses that has already a similar level of revenue and where we should not see, let's say, significant growth or need of growth in terms of the cost base in order to keep growing revenues. You have another group of initiatives that are either at a very early stage, such as the initiative that we have with, you know, digital assets or credit card receivables, insurance registration. Some of them already have some level of revenue, but they are in the early stages in the development. Other initiatives which will not have a direct, let's say connection in terms of having direct revenues associated. I'll give you an example. Some of the educational you know, initiatives towards the retail investor, which are relevant for the development of our core business, but will not bring directly themselves, revenues associated with those initiatives. We'll have also, of course, a benefit to the overall performance, to the overall performance of the business. I think that's potentially a way, a better way of looking into that. I think as this business that I mentioned that are more mature progress, we will probably treat them more as part of the, let's say, with a similar dynamic to our core business than the other, the other, let's say, more initial initiatives in the initial stages. That's very helpful. Thank you. Can I just just one clarification on the salary inflation. Have I understood correctly that basically in 2023 embedded within your guidance there's a sort of mid-single digit uplift for salary costs that's-To inflation at that August 2022, and then I should be thinking basically prospectively assuming inflation comes down, that just kind of falls away, you know, by sort of a couple of percentage points or something like that in the future. Have I understood that dynamic correctly, please? Yeah. Well, no, I think you got it right. I'll try to... Let's say that we were working with an inflation of 5%, an adjustment of 5%, for this year, and year... we are already carrying an adjustment of 10% from last year. Overall, it's almost like if we had 3 quarters of 10% and 1 quarter of 5%. Of course, if that fell below 5%, the overall adjustment would be lower if it goes up the other way around. This, and we're probably gonna carry that 5% to next year as well, at least most of the following year. Understood. Understood that clear. Thanks. Our next question comes from Antonio Ruette with Bank of America. Please, Antonio, you may proceed. Hi, guys, and thank you for your time. My question here goes again on costs, okay? I'm just wondering if the investments that you made, the consulting firm that concluded its operations now in the fourth quarter, how should we think about the structural changes here? Because you mentioned that they concluded what they should do here. Do you have an estimate of how much more efficient should you be following this project? Is this already included in your guidance for the year? I know this is a tough one, but consider all these moving parts, not to mention it for margins, because we are going to have more data revenues that have lower margins, we are having inflation, we have your project on a consolidated basis. I know you also don't give a guidance, a formal guidance here, but considering all these moving parts, how do you see your EBITDA margin going forward? Thank you. Thank you, Antonio. As I mentioned, we have already included in our guidances that were released at the end of last year, the impacts or the benefits of the project that we concluded during the fourth quarter. This is already embedded in our guidances. As I already mentioned, and I'll take the opportunity here just to reinforce that those guidances do not include the number of NeuroTech, simply because the acquisition was not yet completed. Once we have that approval, we will shortly after potentially review our guidances to incorporate the figures from NeuroTech. Look, I think, you know, it's, as you said, it's tough for us to predict the behavior of the margins. As I mentioned, in relation to what we control, which is with what we have more influence, which is our cost base, we did that exercise last year. We start the year lighter and reducing the inflationary pressures over our cost base. As I mentioned, we had a 10% adjustment in August, which will carry most of that impact to this year. We will keep doing a very disciplined way of spending our resources. We should not see the trend that we have seen during this fourth quarter, which was also polluted by some non-recurring items taking place again. In relation to the top line, I mean, it's really difficult, right? We were for a lot of time with operating with a margin, you know, below 70%. When we saw that significant surge in volumes, our margins went up all the way to 80%. Of course, once we have a acceleration, the margins were also retracting a little bit more. I think margin behavior, which will be much more dependent on the performance of the top line, which is associated with, you know, external factors and a more favorable environment to reignite the interest on equities and accelerating our activity again. Perhaps those are the moving parts that you should take into consideration when thinking about what levels our margins could be taking into account the high level of operational leverage that our business has. All right. Thank you. Just a follow-up. How should we think about further investments in querying, considering the Moeda investment? Does it change your investment schedule? Thank you. No, it doesn't, it doesn't change, Antonio. At this point, I think we as I said, we were already working with that possibility. Main difference now is that we have a name to that or more concrete project. We have been working already with that possibility and preparing ourselves. At this stage, I don't think that triggers any need for a significant change in our strategy and therefore in our investment needs. Great. Thank you. Thank you. Our next question comes from Guilherme Grespan with JP Morgan. Please, Guilherme, you may proceed. Thank you, team, for the call and opening for questions. On our end, this is actually very quick. Just on data analytics, you made three acquisitions in the last six months, one year. The question is just if you expect to continue proactively looking for M&A in this segment or basically, the three of them is done, and we should see now a focus on maturing those three business or if we're still pursuing new offerings, new companies to acquire. Thank you. Thank you, Guilherme. No, I think in terms those were two big acquisitions for our standards. As we did mention, those were assets that we had mapped for quite some time. We have now a lot on our plate. The focus for this year is gonna be to, you know, to integrate those business, to capture the revenue synergies that we have mapped when we were considering the acquisition of those companies. There is space also to try to capture some other synergies, tech synergies, etc. This is gonna be one of the key focus for this year and to develop and mature those business. There's nothing significant or of a similar size in our radar, but that doesn't mean that we might not have other M&As taking places, but nothing at the size or the level of what those two companies were. Guilherme? Okay. Super clear, André. Thank you. You're welcome. Our next question comes from the webcast, and it's from Gabriel Gusan with Citi. He asks, "Can you please elaborate about the tax disputes in light of recent news of possible changes to CARF procedures and possible changes to the collection of proceeds from the tax cases? Thank you. Thank you for your question, Ga. I don't think that changes. I don't think, no. That does not change our view in the potential outcome of those discussions. We remain very confident in our cases. You know, with that change, we are basically back to where we were 2, 3 years ago, where, you know, every time you had a tie at the administrative level, the president of the section, which is a representative of the government of the IRS, had the casting vote. With the extinction of the casting vote, more recently, we had a, I would say, a higher chance of having our cases resolved at the administrative instance. Since, until now, all the cases that we lost, we lost given the casting vote. The news of a casting vote coming back, of course, is not, is not very, let's say, something to celebrate. It means that potentially it will take slightly longer to have these matters resolved. I don't think it changes the overall picture in relation to our cases. Okay. Thank you so much. That concludes today question and answer session for the day. I would like to invite Mr. André Milanez to proceed with his closing statements. Please, André. Thank you. Well, thank you everyone for joining our call. I'll take the opportunity also to thank all the team for putting all these materials together. We remain at your disposal for any further questions. Thank you for your support, and have a nice day. Bye-bye. That does conclude B3's audio conference for today. Thank you very much for your participation. Have a good afternoon, and thank you for using Chorus Call Brazil. You may disconnect your lines now.