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Edited Transcript of BVMF3.SA earnings conference call or presentation 9-Aug-19 3:00pm GMT

Q2 2019 B3 SA Brasil Bolsa Balcao Earnings Call

Sao Paulo Aug 16, 2019 (Thomson StreetEvents) -- Edited Transcript of B3 SA Brasil Bolsa Balcao earnings conference call or presentation Friday, August 9, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Daniel Sonder

B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers

* Rogério de Araujo Santana

B3 S.A. - Brasil, Bolsa, Balcão - MD of IR

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Conference Call Participants

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* Daer Labarta

Goldman Sachs Group Inc., Research Division - VP

* Domingos Falavina

JP Morgan Chase & Co, Research Division - Head of Latin America Financials

* Felipe Gaspar Salomao

Citigroup Inc, Research Division - Analyst

* Pedro Gonzaga;Pacifico Gestão de Recursos;Partner;Analyst

* Thomas Peredo

Banco BTG Pactual S.A., Research Division - Analyst

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen, and welcome to the Audio Conference Call about the Earnings Results of B3 for the Second Quarter of 2019. (Operator Instructions) 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 Mr. Daniel Sonder, Chief Financial Officer of B3.

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Daniel Sonder, B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers [2]

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Hello, everyone. I'd like to welcome you to B3's Second Quarter 2019 Earnings Call. I'm here with Rogério Santana, Head of Investor Relations as well as the Finance and Investor Relations team. And I'd like to thank them all for preparing the documents you have in front of you. Additionally, on behalf of the entire executive team, I'd like to thank you for your continued trust and support.

Starting the presentation on Slide 3, I'd like to highlight some important achievements and figures of the second quarter of 2019. Once again, the quarter was marked by the expansion of the business opportunities for our clients and by high activity in the financial markets in Brazil. In this context, we saw strong numbers in the listed market. ADTV in cash equities of BRL 14.7 billion, and ADV of fixed income, currencies and commodities of 3.9 million contracts.

There are 2 other aspects that deserve mention: first, the incentive programs in the equity market and in Treasury Direct, aiming to expand individual investor base, the rebates and discounts related to these programs totaled BRL 57.8 million in the quarter and we'll discuss this topic in more depth later in the presentation; second, the revision of our guidance for adjusted expenses as a consequence of the inclusion of expenses from BLK Sistemas Financeiros and Portal de Documentos, 2 companies recently acquired by B3. As you know, we do not have a revenue guidance out to the market, but the acquisition of these 2 operational companies will have a positive impact on revenues as well.

Regarding our financial performance in the quarter, the diversification of our business across different markets again demonstrated its strength, and our revenues reached BRL 1.6 billion, an increase of 14% when compared to the second quarter of '18. Our adjusted expenses reached to BRL 250 million in the quarter, 5.3% higher than in the second quarter of '18, which we will explain in more details later in the presentation. EBITDA adjusted for nonrecurring items reached BRL 999 million, an increase of 3% over the previous year, with an EBITDA margin of 70.3%. Recurring net income reached BRL 785 million, a reduction of 8%. This decrease is mainly explained by higher income tax with no cash impact in the second quarter of '19 and the increase in noncash expenses connected to our own share price.

We move now to Slide 4. We think it's important to highlight the level of activity of the local capital markets. We are seeing an unprecedented positive scenario for the development of the capital markets in Brazil, with important factors contributing to the structural change.

First, the current level and a consistent outlook for low interest rates, which creates demand for diversification and more risk appetite from investors; second, there's a significant and hopefully permanent change in the policy adopted by Brazilian state-owned banks regarding lending to corporates. This creates an opportunity for the capital markets to become the main source of funding for the issuers, which is leading company to alter the capital and ownership structures. The result of these changes can be seen on that chart, which shows that we already reached more than BRL 200 billion in equity and fixed income offerings, an impressive amount when compared with previous years.

Now Rogério will give some more details about our performance by segments.

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [3]

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Thank you, Daniel. Hello, everyone. I would like to ask you to move forward to Slide 5, where you will see the performance of the listed equity markets.

Revenue in this segment grew 26% year-over-year, mainly driven by growth in revenues from trading, post-trading services in cash equity and equity derivatives markets. ADTV in the cash equity market grew to 22% from BRL 12 billion in the second quarter 2018 to almost BRL 15 billion in the second quarter of 2019. This performance reflects the increase in the turnover velocity from 89% one year ago to more than 95% in the second quarter '19, coupled with the increase of almost 16% in the average market capitalization of listed companies in the same period.

Moving to the trading, post-trading revenue, the ADV of stock index future contracts increased by almost 110%, reflecting the growth in trading of Mini contracts notably by the legal investors and high-frequency traders. It's worth mentioning that revenues from our equity depository were impacted by incentive problems, as Daniel mentioned, offset in the increase in the number of accounts in the quarter. I will go in more details on that later in the presentation.

Moving to Slide 6, you will find details on the performance of the listed fixed income, currencies and commodity derivatives, which grew 7.6% in revenues. The main factors behind this performance were the high single-digit growth in the average volume, in this segment, coupled with the appreciation of the U.S. dollar against the real in the period, which had a positive effect on the RPC of U.S. dollar-linked contracts.

Next, on Slide 7, we present the performance of the OTC segment. In the fixed income revenue line, the increase in volume of bank funding instruments, mainly certificates of deposits was offset by 2 things: first, the decrease in the Treasury Direct revenue due to the incentive programs implemented in January 2019 to foster growth of this product, and we will go in more details later; second, the redemption of debentures issued by leasing companies following regulatory change that offset the growth in the local corporate debt markets, mentioned by Daniel earlier in this presentation. This is not a new aspect. It is something that is impacting our business for the last few quarters. In derivatives, higher revenue were product by the increase in volumes of FX-linked swap agreements and by the appreciation of the U.S. dollar against the real in the periods, which impacted FX-related derivatives.

In Slide 8, we show revenues for the infrastructure for financing segment, which grew 36% over the second quarter 2018, reflecting the effect of change in the business model of the Contracts System adopted in some states of Brazil during 2018 and early 2019. To clarify the impact of these new models in the Contracts System, we show in the chart, the breakdown of revenues as well as the breakdown of revenue-linked expense, along with services in the segment. As you see, the growth in Contract Systems revenue has been more than offset by higher revenue-linked expense resulting in a small conversion of our gains in this segment.

Besides that, the National Liens System, or SNG, was positively impacted by the 7.2% increase in the number of vehicles financed. Additionally, there was the annual price adjustment by inflation applied on our fees that also had a positive impact on revenues. It's also worth mentioning that we completed the acquisition of the Portal de Documentos as Daniel mentioned, in the first slide, which we trust will have a positive impact on revenues from this segment going forward.

Moving to Slide 9, we can see the performance of the technology, data and services segment, which grew 8.7% in revenues. The growth seen in the technology and access line is related to the entry of new clients in the OTC markets, which pay monthly fee to access our platforms. In the case of the data in the analytics line, the solid performance reflects the appreciation of the U.S. dollar against the real, given that almost 58% of this revenue line is U.S. dollar-denominated.

On Slide 10, we give more details on the incentive programs to expand individual investor base in B3. Like Daniel mentioned before, the lower interest rate environment is shifting investments from more conventional fixed-income products to more sophisticated ones. In this context, we are aiming to fulfill our potential role in the development of the capital markets in Brazil and support the outstanding work done by brokerage firms. We had 2 incentive programs to expand the individual investor base in Brazil. One in equities -- in the equity depository, and the other in the Treasury Direct, a platform that allows individual investors to buy government bonds directly. This is consistent with B3's stated objective of sharing with market participants and clients in our ecosystem, part of the [current opportunities] that we can from the growth in volumes in our markets. And here, we are combining this objective with clear growth targets for this participant and target -- and clients, sorry.

Both programs reward brokerage firms based on similar goals: growth in number of investors and growth in outstanding positions, where the higher the target achieved, the higher the rewards. In the case of the equity depository, brokerage firms receive discounts, while in the case of the Treasury Direct, they receive rebates. The amount returns to this market participants totaled BRL 67.8 million in the second quarter 2019 and BRL 80 million, if we consider the first half of the year. These are good examples of price incentives we can introduce to foster market development. We consider that the expansion of individual investor base in our markets and products will be extremely positive for the market and for B3 in the medium to long term. Examples of potential benefits from a larger individual investor base are positive impact from (inaudible) [loss] of the cash equity market and increased liquidity of incipient products like ETFs, REITs, single stock derivatives and small-cap companies. We will continually use these programs and also seek new ways to further develop our market in close partnership with our clients and individuals.

In the next Slide #11, we show the company's adjusted expense, which reached BRL 249.9 million, a 5% increase year-over-year. The main factors were the increase in adjusted personnel expense as a consequence of the annual collective bargaining agreements in August 2018, and the third part was mainly related to advisory services in connection with product development.

Now I will hand over the presentation back to Daniel who will show other financial highlights of B3.

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Daniel Sonder, B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers [4]

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Thank you, Rogério. On Slide 12, we demonstrate our financial robustness, with the solid position in cash and a very healthy balance sheet, which is an important part of the business of being a credible counterparty in the financial market.

On the left side, we show total cash amounted to BRL 10.9 billion at the end of the quarter, composed of B3's own cash as well as third-party cash, mainly related to collateral pledged in cash by clients. In the light blue bars on this chart, you'll find B3's own cash position amounting to BRL 7.6 billion in the second quarter of '19, which includes BRL 601 million of interest on capital and dividends already paid out in early July 2019.

On the right side, you see the company's debt profile and amortization schedule. As previously announced, our guidance for financial leverage for 2019 is 1.5x total debt to last 12 months recurring EBITDA. In line with this guidance, this quarter, we concluded the issuance of 3-year debentures amounting to BRL 1.2 billion, paying an interest of 102.8% of CDI. Finally, we reaffirm our payout ratio guidance between 120% and 150% of IFRS net income.

With this, I'd like to conclude the presentation here and open our Q&A session. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Labarta, Goldman Sachs.

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Daer Labarta, Goldman Sachs Group Inc., Research Division - VP [2]

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Daniel and Rogério, couple of questions. I guess first if you could maybe give some more color on the potential positive impacts from the acquisitions that you did? You mentioned it should contribute positively to revenue. So just want to get a sense of how you see it will benefit the business, in general? And any color you can give on the potential impact? And I guess second question, just in terms of margins, right? I mean we saw expenses rise, although partially due to some revenue-linked expenses and stock options. So margins fell a bit in the quarter.

So how should we think about your EBITDA margin? Because you do have operating leverage but given some of these expenses tied to somethings, I guess, outside of your control, in a sense. Is it reasonable to assume that margins can increase as volumes continue to go up? Or is this 70% EBITDA margin sort of the peak? So just want to get a sense of your thoughts on that?

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Daniel Sonder, B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers [3]

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Thank you, Tito. This is Daniel. So on the acquisitions, we are not providing details and guidance on the revenue side.

Again, these are very small businesses compared to the total revenues of the company. We find that they are long-term opportunities for us to strengthen our relationship with key clients. In the case of BLK, as you saw by the numbers in the transaction, this is a quite a small company, but which we think provides a pretty nice service to the brokerage as well as the buy side asset management community. We don't expect a meaningful financial impact from this in the near-term. Portal de Documentos has a slightly bigger sized deal, very small compared to overall revenues to us, which, again, shouldn't make a big impact on anything going forward in terms of projections in the near future.

But it does, again, speed up our deployment of real estate related products in the finance unit and brings us closer to the retail side of these large financial conglomerates, which we already serve under the loan platform but, which traditionally, historically, has been a smaller client of ours.

So we want -- we typically serve the wholesale side of financial institutions where the treasury and brokerage areas and trading areas and so forth. So that's what we can say for now about these transactions that they are not, again, very meaningful. We did, however, want to disclose the expense impact. Because as you know, we have established a pretty tight and a budget policy internally for us as well as disclosing that to the market in terms of our adjusted expenses. So we wanted to ensure that everybody understood that any changes in the expenses for the year would -- due to these acquisitions, rather than to any sort of more flexible position with respect to expense management in B3.

With respect to the margins, again, it's -- as you mentioned, the impact in margins was most mostly due to these expenses that are linked to our stock price. These are noncash expenses, provisions and adjustments in our -- in sort of the value of our stock-based compensation programs. So this is -- what happened this quarter, it's very hard for us to give any sort of guidance on margin. That's not how we think about the business in terms of putting a margin objective. We -- as you know, we have operating leverage. We have systems and platforms and personnel that can deal with much larger volumes. And what you see is that we are implementing new programs, new projects as well as partnerships in coordination with the brokerage industry to push out volumes higher -- and their volumes higher, if possible. One thing to note is that going forward, you should see less volatility on these expenses linked to stock compensation. Because as of the beginning of this year, we've implemented a hedging onto those expenses by signing swap agreements with financial institutions where we basically have the negative position vis-à-vis those banks with regard to our stock price. So that should be a more stable, and you can take the second quarter expenses as a reference -- a better reference going forward because you should see less change in that line.

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [4]

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Tito, this is Rogério. Just adding to these last comments made by Daniel. Remember that we have 2 expense lines that move according to the share price, one is related to personnel expense and more specifically, long-term incentives for the management and other employees. These revenue lines, the one for which we hedged the share price exposure. But the other expense line related to provisions for legal dispute for this one, we will still see volatility because we do not have a hedging for that. Although it's -- a last important comment is that there are, as you know, different treatments for shares that we have in treasury. And in fact, we already have that but the share price change does not impact our earnings.

But at the same time, this provisions impact our earnings because it's mark-to-market, our exposure to the trading price every single quarter.

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Daer Labarta, Goldman Sachs Group Inc., Research Division - VP [5]

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Right. Okay. Yes, that's very helpful. Just one follow-up on the acquisitions. Since you do give guidance on the cost side, should we think about the impact on revenues as marginal? So there's no impact on revenues? Or do we think that there's some offsetting revenue, so the impact on earnings is marginal? Just want to get a sense here given that you did give some guidance on the cost.

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Daniel Sonder, B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers [6]

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The companies have revenues. They're not -- just not very big. And in terms of both -- their revenues compared to total revenues is not very big. And the net impact of revenues minus expenses in the total EBITDA or net income of the company is very, very small at this point. These are operating companies that have real revenues and clients.

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Operator [7]

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Our next question comes from Domingos Falavina, JPMorgan.

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Domingos Falavina, JP Morgan Chase & Co, Research Division - Head of Latin America Financials [8]

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Rogério de Santana, congrats on the strong quarter. My question is more regarding the vehicle financing units. We noticed the SNG, the contract registration revenue growing 48% year-on-year. And based on the monthly figures, it seems volumes of contract added and grew 5% year-on-year. So my question is, if you were to break down the 48% increase in revenues or 40% -- let's say, 40%, adjusting for the units, 40% price increase. How much of that is driven by new models where you have a cost embedded in the product, how much of that is actually met revenue gains or price increases?

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [9]

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So Domingos, this is Rogério. Just -- you mentioned SNG, but just to confirm, you're talking about the Contracts System, right?

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Domingos Falavina, JP Morgan Chase & Co, Research Division - Head of Latin America Financials [10]

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I'm Sorry, could you repeat that? The line broke up.

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [11]

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You mentioned SNG, the lien system, but in fact, your question is related to -- mainly to the Contracts System, right?

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Domingos Falavina, JP Morgan Chase & Co, Research Division - Head of Latin America Financials [12]

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[Circos]. Yes. The Circos , I apologize. Yes.

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [13]

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Okay. Okay. So answering your question, most of the revenue growth is related to the new business model instead of price adjustments. In fact, as we tried to show in the slides, what we're seeing is that although, revenues are growing, expenses -- additional expenses related to these new business model are growing faster. So in fact, we have a small margin compression in our gains related to these services.

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Domingos Falavina, JP Morgan Chase & Co, Research Division - Head of Latin America Financials [14]

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Super clear.

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [15]

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And the only price adjusted to component here -- the only price adjustment that we had was the traditional annual adjustment by inflation in our contracts, only that.

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Domingos Falavina, JP Morgan Chase & Co, Research Division - Head of Latin America Financials [16]

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But that one usually kicks in, in the first Q, right?

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [17]

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Yes. It's already reflected in the first Q. You're totally right.

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Operator [18]

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(Operator Instructions) Our next question comes from Thomas Peredo, BTG Pactual.

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Thomas Peredo, Banco BTG Pactual S.A., Research Division - Analyst [19]

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Daniel and Rogério, I would like to ask about 2 things. The first one is related to the rebates and incentives you grant since you extend the retail investor pays. Is that something we should expect to see more often from our own, eventually expanding to other product? What is a little bit more color on the strategy here you're willing to share? More of the profitability with the markets and is there a maximum EBITDA margin that you are willing to surpass? And any color on the incentive strategy will we appreciated.

My second question is related to competition in Cetip business. Mainly on the security units, which we see new companies join the markets. For instance, the CRC is already doing the registration of credit cards receivables in markets you're still not involved with as [seep] from the banks are already having some registration for solutions and feedback we have is that they're planning to expand, smaller banks are getting together and officially launching a competitor. What is the strategy here? Could you -- should we expect you to lower the price as going forward? Or mitigate potential share losses with new product? If you could give more color on this, also we appreciate it.

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [20]

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Excellent. Thank you, Thomas. It's great to hear from you and happy to know that you remain diligent on the other side of the table as you were -- when you were on our team. So just to talk about pricing competition. I think the 2 questions are somewhat related. And let me try to address this.

So with respect to the incentive programs, the -- this is something that we have used in the past and that we have continued to like as a way to bring more clients into the company as well as strengthen our relationship with the distribution network of brokers and banks and other potential partners that are out there talking to investors and talking to clients about B3's services. As a general concept, I would describe our thinking and strategy as follows: the company has the opportunity to use its operating leverage to, let's say, create additional results as volumes grow because our expenses do not grow proportionately in most of the businesses, if not all, except with the financing unit. But in most of the businesses, in OTC and listed, we -- as we have additional volumes, we do not have expenses that grow commensurately.

So we see that it's important for us to use this operating leverage to basically do 2 things, one is to find places in our businesses and services where there is price sensitivity. So if we can, together with our distribution channels, look at pricing as a way to bring on new investors or increase the activity of people that already use B3 that is something that we are inclined to do. Obviously, we'll try to measure impact. We'll try to do performance-related discounts. We'll try to do volume-related discounts. New client additions. All sorts of the classical pricing schemes for the businesses where we see sensitivity to pricing. The second driver will be to look at parts of the business where perhaps, the competition might seem easier or the value perceived by clients is not so high, given the complexity of the products and therefore.

So this I think links somewhat to the OTC registration of bank bonds and other areas of the business where we find that over time, we will consider, again, given volumes and given the strong relationship we have with the clients to review prices gradually as we see opportunities to do so. We -- I think that has connection, and it's a good way to sort of tie to the second point, which you mentioned, which is competition in the securities units. We think that we have a very, very strong position in that business but then nevertheless, there will potentially be other platforms that provide some of the services that we provide as well. I think that's a natural and part of the dynamic of this market as it grows and becomes more sophisticated. And we think that there are essentially 3 ways in which B3 will face this environment, right. It's basically to use innovation, service quality and pricing to continue to impress our clients, right.

So we have to be flexible and creative and very close to the clients to be able to launch products and features and functionalities that they find useful for their development, either new products or by simplifying the internal procedures, trying to lower the cost and therefore, so that's kind of the innovation partner. The other one is quality. We have to remain the most resilient and trusted platform, fully complete with all the features, always on, and very, very reliable as well as improving our customer service, which is something that we are working on. And finally, pricing. We need to be sensitive to the demands of our clients and their valued perception. And if you have this combination, I think we will keep most of the business that we already have and see significant growth as these markets continue to develop in both landing, which means more funding instruments for banks as well as the other lines of fixed income registration. We see enormous potential for that. But we are aware of the fact that there might be here and there some competing firms that we'll have to face.

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Operator [21]

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Our next question comes from Felipe Salomao with Citibank.

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Felipe Gaspar Salomao, Citigroup Inc, Research Division - Analyst [22]

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I have one question regarding technology and access revenues, right? So this is a business segment that grew 12% in 2016, 11% in 2017, 16% in 2018.

But it seems that this revenue is somehow flattish over the past quarters, right? I mean when we look to second Q '19 revenues and compare it to second Q '18, the growth was of 6%.

So my question is, what -- let's say, what the company has been doing to enhance this specific business segment? And what can we expect in terms of growth going forward? Should we see the growth go down into the levels seen in 2016, '17 and '18 or better to keep a more cautious expectation on -- for this specific business?

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Daniel Sonder, B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers [23]

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Yes. Thank you, Felipe. We -- I don't have all the numbers for the previous years and the facts in front of me, we can get back to you off-line. But I -- if I recall correctly, I think that a significant part of that growth in the previous periods was due to currency elements because most of this is market data, and we charge market data from most of our lenders -- from the vendors, which are our clients in U.S. dollar. So that is one factor that might be, let's say, impacting the comparison that you're noting. Having said that, we do have a number of initiatives in the data and analytics segment. These are not short-term things that you see right away. They depend on the development of the market, on the sophistication of our clients and on them also having, let's say bigger assets under management that will demand more information, more analysis, more sophistication on their investment strategy and therefore, also willingness to buy these new data products. So we are working on pricing of fixed income instruments. We're working on several, let's say, reports and different ways of packaging information that we have within B3 to serve these clients.

We're testing some of these ideas with the client community to evaluate their merit. We are looking at what other international exchanges have done and trying to bring that in. We have recently created sort of a specific department within B3 with our new senior leadership to organize internal data and serve the different client areas that -- and products areas that want to create new things. So we are very positive about the long term prospects of data and analytics. We have to, let's say, put this whole discussion also within the context of the new data regulation that has been implemented in Brazil, which both creates some constraints but also we find significant opportunities given what we can now do and how people are looking at data going forward. But it's not going to be an immediate result. And as we have these kind of plans and products unfolding, we will discuss that with our shareholders.

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Operator [24]

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Our next question comes from the webcast. Pedro Gonzaga.

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Pedro Gonzaga;Pacifico Gestão de Recursos;Partner;Analyst, [25]

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[Interpreted] Could you comment a little more about the incentive program to individual investors? Specifically, if more of daily investors were to be added to the Treasury Direct in depository base, what would be the impact on revenues?

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Rogério de Araujo Santana, B3 S.A. - Brasil, Bolsa, Balcão - MD of IR [26]

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Thank you. We halt this incentive program work specifically, in the case of the Equity Depository and this, Treasury Direct. Basically, we set targets in terms of growth for a number of clients and growth for the amount deposited or [and requested] from this client. So -- and we revisit these targets every 6 months. So we have, in front of you the impact from the program that was in place in the first half of 2019. We just revised this program, raising the bar in terms of targets, in terms of goals. And now we will follow how the brokerage firms will perform considering these new targets. So this is something that we will revisit every 6 months. The idea here, as Daniel mentioned, during the Q&A, is to foster market development. And to do that, we are willing to share part of our financial benefit. And we have total flexibility every time we revisit this incentive program to make the targets more aggressive or to adapt that to the new reality, depending on what is happening in the market.

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Daniel Sonder, B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers [27]

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Just one more observation. These incentive programs are published by us to the entire market. So we can speak off-line and sort of help you do the math under the current program. What would be exactly the impact, but we make sure that we disclose this openly to all market participants because it's obviously something that is available for all brokers. But by consequence, also our shareholders have visibility of how those programs work, currently.

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Operator [28]

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(Operator Instructions) This concludes today's question-and-answer session. I would like to invite Mr. Daniel Sonder to proceed with his closing statements.

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Daniel Sonder, B3 S.A. - Brasil, Bolsa, Balcão - VP of Finance, Corporate & IR and Member of Board of Executive Officers [29]

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I'd like to thank everyone for joining the call. Thank you for the excellent questions. Please feel free to call our IR team if you'd like anything else, or if you have any questions later on. And again, thank you for your continued support of B3. And thanks to all the team for putting together the call and the earnings.

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Operator [30]

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That does conclude the B3 audio conference for today. Thank you very much for your participation. Have a good afternoon, and thank you for using Chorus Call Brazil.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]