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MarketScreener Homepage  >  Equities  >  Bolsa de Valores de Sao Paulo  >  B3 S.A. - Brasil, Bolsa, Balcão    B3SA3   BRB3SAACNOR6

B3 S.A. - BRASIL, BOLSA, BALCÃO

(B3SA3)
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B3 S A Brasil Bolsa Balcão : 3Q20 Results Presentation

11/13/2020 | 08:17am EST

3Q20 EARNINGS PRESENTATION

November 13, 2020

INFORMAÇÃO PÚBLICA

1

Forward looking statements

This presentation may contain certain statements that express the management's expectations, beliefs and assumptions about future events or results. Such statements are not historical fact, being based on currently available competitive, financial and economic data, and on current projections about the industries B3 operates in.

The verbs "anticipate," "believe," "estimate," "expect," "forecast," "plan," "predict," "project," "target" and other similar verbs are intended to identify these forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from those projected in this presentation and do not guarantee any future B3 performance.

The factors that might affect performance include, but are not limited to: (i) market acceptance of B3 services; (ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive industries in which B3 operates; (iii) changes in (a) domestic and foreign legislation and taxation and (b) government policies related to the financial and securities markets; (iv) increasing competition from new entrants to the Brazilian markets; (v) ability to keep up with rapid changes in technological environment, including the implementation of enhanced functionality demanded by B3 customers; (vi) ability to maintain an ongoing process for introducing competitive new products and services, while maintaining the competitiveness of existing ones; (vii) ability to attract new customers in domestic and foreign jurisdictions; (viii) ability to expand the offer of B3 products in foreign jurisdictions.

All forward-looking statements in this presentation are based on information and data available as of the date they were made, B3 undertakes no obligation to update them in light of new information or future development.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securities law. No offering shall be made except by means of a prospectus meeting the requirements of the Brazilian Securities Commission CVM Instruction 400 of 2003, as amended.

INFORMAÇÃO PÚBLICA

2

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

3Q20 Highlights - Operational Performance

3Q20

3Q20 / 3Q19

(%)

Listed - Equities

ADTV (R$ millions)

28,759.7

+67.7%

Equities

Average Fee (bps)

3.992

-0.290 bps

ADV (thousands of contracts)

2,659.2

+69.9%

Stock Indices

Average RPC (R$)

0.994

-1.3%

ADV total (thousands of contracts)

3,988.4

-1.7%

Listed - Derivatives

Average RPC (R$)

2.142

+45.2%

OTC

New issues (R$ bn)

3,468.2

+35.9%

Fixed Income

Outstanding volume (R$ bn)

3,452.3

+27.3%

New transactions (R$ bn)

2,409.5

-10.2%

Derivatives

Outstanding volume (R$ bn)

4,137.1

+56.3%

INFORMAÇÃO PÚBLICA

3

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

3Q20 Highlights - Financial Performance

R$ million

Total revenues

3Q20

3Q20 / 3Q19

2,535.5+48.6%

Listed

1,682.4

+48.0%

OTC

262.9

+9.5%

Infrastructure for financing

111.6

-19.0%

Technology, data and services

290.5

+51.1%

Net revenues

2,288.8

+49.6%

Adjusted expenses1

(216.1)

-23.1%

Recurring EBITDA1

1,665.7

+50.1%

Recurring EBITDA margin1

79.2%

+669 bps

Financial Result

(26.4)

+382.5%

Recurring net income2

1,143.2

+34.4%

INFORMAÇÃO PÚBLICA

¹ See reconciliation at the appendix on slide 17. 2

See reconciliation on slide 18.

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

4

Guidance

Guidance

Status

Current

Previous

2019

Leverage (Total Debt/EBITDA LTM)

REVISED

1.2x

1.5x

1.0x

Reasons for change

Consequence of making the company's gross debt compatible with the new level of expected EBITDA for the year, driven by the expressive growth of market volumes in 2020 and their respective impact on revenues. The target for this projection is up to 1.2x Gross Debt / EBITDA trailing 12 months (previously up to 1.5x).

Revenue-linked expenses (in

REAFFIRMED

170-200

n/a

239

n/a

R$MM)

Adjusted Expenses1 (in R$MM)

REAFFIRMED

1,125-1,175

n/a

1,074

n/a

Depreciation and amortization2

REAFFIRMED

1,030-1,080

n/a

1,030

n/a

(in R$MM)

CAPEX (in R$MM)

REAFFIRMED

395-425

n/a

279

n/a

Payout (% of IFRS Net Income)

REAFFIRMED

120%-150%

n/a

130%

n/a

  • Expenses adjusted for: (i) depreciation and amortization; (ii) expenses related to long-term incentive plans (compensation); (iii) integration-related expenses; (iv) provisions; and (v) revenue-linked expenses.

INFORMAÇÃO PÚBLICA 2including amortization of intangible assets

5

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Performance by segment

Listed - equities (44.2% of total revenues)

(R$ million)

Performance (vs 3Q19): +52.4%

1,120

67.7% increase in cash equities ADTV and 69.9%

1,053

in stock indices future contracts ADV

Growth between Jan-Sep/20 of 84% in the number of investors in the equity depository (greater demand for investment diversification combined with the maintenance of the incentive program to brokers)

Revenue from Stock Lending impacted by a 24.8% increase in the average financial volume of open positions

INFORMAÇÃO PÚBLICA

6

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Performance by segment

Listed - equities (continuation)

Equities Depository Breakdown

The increase in the number of individuals in the depository

Avg Balance (R$ billion)

continued in 3Q20.

Local institutional investors decreased their participation in

ADTV, reaching 24% of the total

Investor's participation in the cash equities ADTV - 3Q20

INFORMAÇÃO PÚBLICA

7

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Performance by segment

Listed - FICC (22.2% of total revenues)

(R$ million)

Performance (vs 3Q19): +40.0%

FX related contracts1

ADTV down by 1.7% reflecting mainly the decrease of 7.1% in ADV of interest rate contracts in BRL

Average RPC (R$)

The average RPC of the segment showed growth, mainly influenced by the appreciation of the US dollar against the Real

¹ The average RPC of FX Rate and Interest Rate in USD contracts in 3Q20 takes into account the average PTAX closing price at the end of Jul'20, Aug'20 and Sep'20 (R$5.38), while the average RPC for 3Q19 takes into account the average

INFORMAÇÃO PÚBLICA PTAX closing price at the end of Jul'19, Aug'19 and Sep'19 (R$3.97).

8

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Performance by segment

OTC (10.4% of total revenues)

(R$ million)

Performance (vs 3Q19): +9.5%

Fixed Income

Treasury Direct: revenue of R$ 40.4 million (vs R$ 7.2 million revenue in 3Q19). Incentives in the expansion program are now classified as expenses

Increase in issuances of corporate debt offset by redemption of debentures issued by leasing companies¹

Derivatives

An increase of 28.7%, mainly due to the appreciation of the US Dollar against the real, along with an increase in the average price of new issues resulting from the mix of contracts in the quarter

  • In Oct'16, the Central Bank published a resolution prohibiting the execution, extension and renewal of REPOS with securities issued by companies linked to the same financial conglomerate, including debentures issued by leasing

INFORMAÇÃO PÚBLICA companies.

9

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Performance by segment

Infrastructure for financing (4.4% of total revenues)

(R$ million)

Performance (vs 3Q19): -19.0%

National Liens System (SNG)

3.5% drop in the number of vehicles financed

Contracts System

Number of transactions in 3Q20 was 9.5% lower, reflecting the decreased number of financed vehicles, combined with a reduction in B3's market share

INFORMAÇÃO PÚBLICA ¹ Considers only the revenue-linked expenses related to the Infrastructure for financing segment.

10

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Performance by segment

Technology, data and services (11.5% of total revenues)

(R$ million)

Performance (vs 3Q19): +51.1%

Technology and access

New OTC pricing schedule

Increase of 6.3% in number of clients in the OTC segment

Data and analytics

Positive impact from the appreciation of the US Dollar against the Real (approx. 42.6% of this revenue is linked to the US Dollar in 3Q20)

INFORMAÇÃO PÚBLICA

11

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Adjusted expenses1

(R$ million)

Adjusted personnel²

(+3.5%): annual inflation adjustment and new hires

5.9

280.9

Adjusted Expenses 3Q19

(in R$ million and % of total

Adjusted

adjusted expenses)

personnel

Data processing

Third-party services

Others³ (-23.7%)

(+7.0%): R$4.2 million

(+11.6%): increase in

increase due to the

project expenses

intensification of project

execution

4.2

1.7

(8.9)

1,0%

Data

Third-party

Others

processing

services

283.8

Adjusted Expenses 3Q20

3Q20

175.2 (61.7%)

63.3 (22.3%)

16.6 (5.9%)

28.6 (10.1%)

3Q19

169.3 (60.3%)

59.2 (21.1%)

14.9 (5.3%)

37.5 (13.4%)

¹ Adjusted to exclude (i) depreciation and amortization; (ii) long-termstock-based compensation (principal + payroll taxes); (iii) integration-related expenses; (iv) provisions and (v) revenue-linked expenses. ²

INFORMAÇÃO PÚBLICA

Excludes the long-termstock-based compensation (principal + payroll taxes). 3 Includes expenses with communication, maintenance, taxes, board and committee members compensation and others.

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

12

Financial highlights

Cash and Financial Investments1

Financial Leverage and Debt Schedule

(R$ million)

Debt Amortization Schedule (R$ billion) and Financial Leverage5

16,881

3Q20

6.8

6.9

14,719

2Q20

12,0223Q19

0.0

Third-party

Total

Restricted and unrestricted

4

  • Third-partycash of R$4.5 billion is not considered as B3's own cash, but the Company earns interest on most of this cash balance.

Short-term

Long-Term

Total Debt

Cetip Lux Loan

CCB

Local Bonds

Indebtedness includes:

  • R$1.25 billion in bank loans issued in Jun'20; and
  • a debenture of R$3.55 billion issued in the end of August'20

In June, B3 repaid the 2020 Global Bond which totaled (net of hedge position) R$2.3 billion

Gross indebtedness at the end of September was 1.2x recurring EBITDA

1 There was a change in the manner that we present the Company's cash position and financial investments for an easier reconciliation with the financial statements 2 Includes earnings and rights on securities

INFORMAÇÃO PÚBLICA

in custody. 3 Primarily composed of B3 Bank clients' deposits. 4 Does not include investments in Bolsa de Valores Mexicana, Bolsa de Comercio de Santiago, Bolsa de Valores de Colômbia, Bolsa de Valores de

13

Lima and B3 Inova.

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Financial highlights

Cash Generation - 9M20

Cash Uses - 9M20

(R$ million)

(R$ million)

8,449

9M20

9M19

-246

Adj. net cash from operating activities¹

6,124

4,183

-2,483

Net cash from investment activities²

1,079

-54

Net cash from financing activities

1,247

972

before distributions³

5,720

Cash generation (before

8,449 5,026

distributions, capex and acquisitions)

9M20 cash

Distributions

Capex

related to the

generation

fiscal year 20204

  • Cash flow from operating activities, adjusted by the variation of financial investments and third-parties collateral. ² Cash flow from investment activities other than capex and acquisitions. ³ Cash flow from INFORMAÇÃO PÚBLICA interest and amortization paid and debt issued in the period. 4Distributions include dividends, interest on capital (IoC) and share buyback.

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Cash generated and retained in the period

14

Appendix

INFORMAÇÃO PÚBLICA

15

Reversal of Provision (Spread's case)

R$ million

3Q20

Provision (06/30/2020)

R$379

(-) Settled payment

R$140

(=) Total reversal*

R$239

Reversal in revenues

R$187

Reversal in expenses

R$52

  • The reversal resulted in a fiscal impact of approximately R$81 million with no cash impact

INFORMAÇÃO PÚBLICA

Reversal allocation

(R$ million)

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

+ R$81 million fiscal impact

Expenses

Revenues

Breakdown

16

Financial Statements

Adjusted expenses reconciliation (R$ million)

(R$ thousand)

3Q20

3Q19

3Q20/3T19 (%)

2Q20

3Q20/2Q20 (%)

Expenses

(648,458)

(677,673)

-4.3%

(733,372)

-11.6%

(+) Depreciation and Amortization

264,348

257,295

2.7%

244,232

8.2%

(+) Long term stock-based compensation

39,992

41,407

-3.4%

35,125

13.9%

(+) Provisions (recurring and non-recurring)

4,135

49,198

-91.6%

138,123

-97.0%

(+) Revenue-linked expenses

56,167

48,854

15.0%

40,635

38.2%

Adjusted expenses

(283,815)

(280,919)

+1.0%

(275,312)

3.1%

EBITDA (R$ million)

(R$ million)

3Q20

3Q19

3Q20/3Q19 (%)

2Q20

3Q20/2Q20 (%)

EBITDA

1,904.7

1,109.4

65.6%

1,419.2

29.4%

(+) Reversal of Spread legal dispute provision (revenues)

(186.7)

-

-

-

-

(+) Reversal of Spread legal dispute provision (expenses)

(52.3)

-

-

-

-

Recurring EBITDA

1,665.7

1,109.4

50.1%

1,419.2

17.4%

EBITDA Margin

79.2%

72.5%

672 bps

74.4%

484 bps

INFORMAÇÃO PÚBLICA

17

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Financial Statements

Net income reconciliation (R$ million)

(R$ thousand)

3Q20

3Q19

3Q20/ 3Q19 (%)

2Q20

3Q20/2Q20

(%)

Net income (attributable to shareholders)

1,136,984

719,830

58.0%

892,388

27.4%

(+) Reversal of Spread legal dispute provision (revenues & expenses)

(238,995)

-

-

-

(+) Impairment loss

67,723

-

-

-

-

(+) Tax impact from provision reversal and impairment loss

57,835

-

-

-

-

(+) Amortization of intangibles (Cetip combination)

119,660

131,177

-8.8%

119,567

0.1%

Recurring net income

1,143,207

851,007

34.3%

1,011,955

13.0%

(+) Deferred Tax (goodwill from the Cetip combination)

119,628

119,629

0.0%

119,628

0.0%

Recurring net income adjusted by goodwill tax benefit

1,262,835

970,636

30.1%

1,131,583

11.6%

Note: amortization of intangible amount net of taxes, calculated at a rate of 34% applied to the deductible portion.

INFORMAÇÃO PÚBLICA

18

INFORMAÇÃO PÚBLICA - PUBLIC INFORMATION

Disclaimer

B3 SA - – Brasil, Bolsa, Balcão published this content on 13 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 November 2020 13:16:02 UTC


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Financials
Sales 2020 8 124 M 1 535 M 1 535 M
Net income 2020 4 023 M 760 M 760 M
Net cash 2020 6 567 M 1 240 M 1 240 M
P/E ratio 2020 30,6x
Yield 2020 3,71%
Capitalization 122 B 23 266 M 23 071 M
EV / Sales 2020 14,2x
EV / Sales 2021 13,3x
Nbr of Employees 1 442
Free-Float 99,2%
Chart B3 S.A. - BRASIL, BOLSA, BALCÃO
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B3 S.A. - Brasil, Bolsa, Balcão Technical Analysis Chart | MarketScreener
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Technical analysis trends B3 S.A. - BRASIL, BOLSA, BALCÃO
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 66,43 BRL
Last Close Price 59,82 BRL
Spread / Highest target 27,0%
Spread / Average Target 11,0%
Spread / Lowest Target -44,8%
EPS Revisions
Managers and Directors
NameTitle
Gilson Finkelsztain Chief Executive Officer
Antonio Carlos Quintella Chairman
Cícero Augusto Vieira Neto Chief Operating Officer
Daniel Sonder Chief Financial Officer & IR Officer
Rodrigo Antonio Nardoni Gonçales Chief Technology Officer
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