Investor relations. Monthly presentation PUBLIC INFORMATION PUBLIC INFORMATION SAO PAULO, JUNE

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1 Investor relations Monthly presentation SAO PAULO, JUNE

2 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 works 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, and 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. 2

3 B3 Brasil, Bolsa, Balcão The infrastructure that develops the market Diversified and vertically integrated model Single infrastructure integrated to the financial system Broadly held corporation with solid governance R$45 billion in market capitalization¹ Revenue of R$4.4 billion in 2017² More than R$12.0 billion distributed to shareholders in 10 years ¹ As of May 30, th largest exchange by market value. ² Combined information. 3

4 B3 Brasil, Bolsa, Balcão Agenda Complete multi-asset and vertically integrated model: highly critical to users Diversified revenue sources in high growth markets Operational excellence, innovation and client focus: long term drivers of value Solid financial profile and commitment to returning cash to shareholders 4

5 Integration with market participants One-stop-shop adding value in every step of the financial market value chain The infrastructure offered by B3 integrates in several points with market participants systems, supporting a significant number of their core activities Financial Listed (equities, derivatives spot FX and others) Trading Central counterparty and settlement Central depository Institutions Brokerage OTC derivatives Registration Central counterparty and settlement houses Asset Corporate bonds Trading / Registration Central counterparty and settlement Central depository managers Issuers of financial Banks funding instruments Registration Settlement Central depositary Trade repository securities Loans & liens Central depositary (vehicles and real estate) Liens database and loans transmition 5

6 B3 Brasil, Bolsa, Balcão Agenda Complete multi-asset and vertically integrated model: highly critical to users Diversified revenue sources in high growth markets Operational excellence, innovation and client focus: long term drivers of value Solid financial profile and commitment to returning cash to shareholders 6

7 Diversified revenue sources Diversified business lines with different revenue drivers Company s revenue breakdown (Combined information; B3); (R$ Millions) BM&F (derivatives) Bovespa (equities) Cetip Securities (OTC derivatives and banking instr.) Cetip Liens & loans Main drivers Interest rate and FX volatility Risk appetite and sophistication of investors Credit outstanding Cross-border transactions (funding and export/import) Outlook for the economy and companies Volatility Interest rate level Risk appetite and sophistication of investors Credit outstanding and risk appetite Volatility and risk aversion Interest rates (trade-off: new volume registered vs. growth of growth of volume outstanding) Vehicle sales and financing penetration Outstanding volume of real estate credit Electronification of processes Other Fees for packages of services, maintenance or registration/custody volume (market data, listing and depository) Risk appetite of investors (securities lending) 7

8 BM&F segment Exposure to volatility and FX rate Volume and price drivers Average daily volume (ADV) Interest rate and FX volatility Risk appetite and sophistication of investors Revenue breakdown ADV (millions) Revenue (R$ millions) Credit outstanding Cross-border transactions (funding and export/import) Revenue per contract (RPC) Each group of contract has a RPC (revenue per contract) set in R$ or US$ (mix effect) RPC (R$) * = RPC differs by maturity (interest rate contracts) Discounts for day trades, HFTs and options on futures Discounts by volume tiers for all clients Growth drivers Regulatory framework Post-trade Identification of the final beneficial owner OTC derivatives Must be registered. May be with or without a central counter-party (CCP) Credit to GDP 1 (% of GDP; Source: Central Bank of Brazil) Government debt composition (%; Source: Brazilian Treasury) ¹ Updated to Apri 18. 8

9 Bovespa segment Pro-cyclical model of revenues Volume and price drivers Average daily trading value (ADTV) Outlook for the economy and companies Volatility Revenue breakdown Market Cap (R$ trillions) and Turnover Velocity (%) Revenue (R$ millions) Interest rate level Risk appetite and sophistication of investors Margin Basis points on the financial volume traded Different fees for cash equities and equity derivatives (options and forwards) Discount for day trades and local institutional investors; and for the whole market when ADTV exceeds R$9 billion ADTV (R$ billion); Margin (bps) Growth drivers = Regulatory framework Trading Market formally open for fragmentation since 2007, but dark pools, MTFs and internalization are prohibited (competition is possible only between exchanges) Post-trading Identification of the final beneficial owner Market Cap to GDP (%) and # Companies (Source: World Bank) Investment Funds 1 (R$ billions; % of total; Source: ANBIMA) Pension Funds 2 (R$ billions; % of total; Source: ABRAPP) ¹ Updated to Apr 18. ² Updated to Dec 17 9

10 Cetip Securities segment High predictability and resilience Volume and price drivers Volumes Credit outstanding and risk appetite Volatility and risk aversion Interest rates (trade-off: new volume registered vs. growth of volume outstanding) Pricing Basis points on the financial volume registered and/or under custody Monthly systems utilization fee Transaction fees (vary according to volume, settlement type and time of the transaction) Price differentiation by type of instrument Regulatory framework Securities and OTC derivatives Mandatory registration and custody in central depository Funding instruments issued by banks Mandatory registration in a central registration system Revenue breakdown Registration: volume (R$ trillion) and average price (bps) Maintenance (CSD/TR): volume (R$ trillion) and average price (bps/month) Growth drivers Bank Funding (%; Source: Central Bank of Brazil) Utilization: avg # of clients (thousand) and avg price LTM (R$ thousand) Transaction: # of transactions (millions) and avg price (R$) Others On-lending Open market Time dep (local) Revenue (R$ million) Credit outstanding total growth 2 (R$ billions; Source: Central Bank of Brazil) Savings deposit ¹ Updated to Nov Updated to Apr 18 10

11 Cetip Liens and Loans segment Tied to the economic cycle Volume and price drivers Revenue breakdown Volume Vehicle sales and financing penetration Outstanding volume of real estate credit Electronification of processes Pricing Fees in R$ for inclusion of liens in SNG (National Liens Database) Fees for financing contract registered Fees per search conducted in the system or per report requested (market data) Financing of Vehicles (millions; Source: Cetip) Total Revenue (R$ millions) Regulatory framework Loans (vehicles and real estate) Mandatory registration of auto loans, as determined by Central Bank rules Similar regulations for real estate loans come into effect in Oct 17. Growth drivers Monthly default 1 (%; Source: Central Bank of Brazil 1 ) Selic interest rate 2 (%;Source: Central Bank of Brazil; FOCUS²) ¹ Updated to Apr 18, ² FOCUS report (market survey) of Jun

12 Other Listing¹ Market Data¹ Securities lending Depository Other revenues Diversified and recurring revenues Fixed monthly fee per investor / account¹ Basis points on the market value deposited (larger accounts) Tesouro Direto (basis points on the value under custody) Basis points on the financial value of open positions Other 26% Depository 34% Market activity level Investors risk appetite Listing 9% R$670 mn 2017 Monthly fee per user (client) Clients profile and services used FX rate (R$/US$) Market Data 16% Securities lending 15% Annual listing fee charged from listed companies and other issuers Size of companies (capital stock) BM&FBOVESPA Settlement Bank (back-office services) Market participant access (services packages) ¹ Fees adjusted annually by inflation. 12

13 B3 Brasil, Bolsa, Balcão Agenda Complete multi-asset and vertically integrated model: highly critical to users Diversified revenue sources in high growth markets Operational excellence, innovation and client focus: long term drivers of value Solid financial profile and commitment to returning cash to shareholders 13

14 IT Infrastructure investments Assuring the smooth functioning of the markets R$1.5 billion invested in the last 5 years Operational excellence and highquality services are important competitive advantages Combined investment (R$ millions; Combined information) Main infrastructure projects deployed over recent years ( ) PUMA Trading System: low-latency and high-capacity multi-asset and multi-market trading platform B3 Clearinghouse: single infrastructure and risk / margin model for derivatives (listed and OTC) and equities New Data Center: scale to host own infrastructure and clients (colocation) Enhancements to IT infrastructure Moving and consolidation of Data Centers Mortgage registration platform (2018 Budget) Trading infrastructure moving PUMA (DR site) Definitive facilities structure Market Data 14

15 B3 Brasil, Bolsa, Balcão Example of new products and enhancements to existing products L I S T E D P R O D U C T S PROJECTS Market Data Market Maker Tesouro Direto Implied Volatility Products UNDER ANALYSIS Securities Lending (BTB) Government Bonds Lending REPOs Digital Options Sinacor OTC P R O D U C T S PROJECTS Internalization of Trader System OTC Derivatives with CCP Depository and Liens Covered Bond UNDER ANALYSIS Registry of Receivables Funds Platform 15

16 B3 Brasil, Bolsa, Balcão Agenda Complete multi-asset and vertically integrated model: highly critical to users Diversified revenue sources in high growth markets Operational excellence, innovation and client focus: long term drivers of value Solid financial profile and commitment to returning cash to shareholders 16

17 Financial robustness Summary of income statement¹ Net revenues Adj. expenses² Adj. EBITDA³ Recurr. net income (R$ million; % of change) (R$ million; % of change) (R$ million; % of change) (R$ million; % of change) +31.8% +27.5% +46.7% +16.7% Revenue growth, despite macro crisis in Brazil Expenses growth below inflation (Average per annum: 3.9%) Strong cash generation Return of major part of earnings to shareholders ¹ Combined managerial information. ² Adjusted to (i) depreciation and amortization; (ii) long-term stock-based compensation (principal + payroll taxes); (iii) integration-related expenses; (iv) revenue-linked expenses; and (iv) provisions. ³ Adjusted to: (i) integration-related expenses (ii) non-recurring provisions and (iii) other non-recurring items. 17

18 Focus on expense control Historical adjusted expenses¹ (Combined information; R$ millions) CAGR Total 3.9% IPCA² 6.4% 2017 adjusted expenses breakdown (Combined information) ¹Expenses adjusted to: (i) depreciation and amortization; (ii) long-term stock-based compensation (principal + payroll taxes); (iii) expenses connected to the business combination with Cetip; (iv) revenue-linked expenses; and (v) provisions. ² IPCA accumulated between 2012 and 2017 (Source: IBGE). 18

19 Temporary financial leverage as a consequence of the business combination of the Companies Solid balance sheet and strong cash generation allow company to seek financial deleverage while maintaining distributions to shareholders Free cash¹ ~R$3.2 billion + 12 months Adjust. EBITDA² R$2.8 billion (R$ billions) Debt amortization schedule Expected IoC and dividends payment to shareholders³ ¹Mar 18 combined short-and long-term cash and financial investments excluding: (i) third-party cash; and (ii) minimum operational cash. ² EBITDA for the period between Apr 17 to Mar 18 adjusted by: (i) stock grant plan expenses; (ii) expenses connected to the business combination with Cetip; and (iii) non-recurring provision expenses.. ³ Subject to performance of the business and BoD approvals in each quarter. 19

20 Appendix 20

21 B3 Brasil, Bolsa, Balcão The infrastructure that develops the market Mar/17 Founding of Bolsa Livre (BOVESPA's predecessor) Demutualization and IPOs of BOVESPA Hld and BM&F Demutualization of Cetip Acquisition of GRV by Cetip Merger approval and creation of B Start of Cetip activities 1986 Start of BM&F activities 2008 BM&F and BOVESPA Hld merger creation of BM&FBOVESPA 2009 IPO of Cetip May/16 Agreement between BM&FBOVESPA and Cetip (shareholders approval) 21

22 Management & Board of Directors Board of Directors Board of Directors Integration committee Audit committee Corporate governance and nomination committee Product & pricing committee Compensation committee Risk and financial committee Issuer regulation committee IT committee Current BD composition Antônio Quintella (Chairman) Former CEO of CS Brasil and Americas; Portfolio Manager Luiz Nelson Guedes de Carvalho (Vice-Chariman) Former Central Bank and S. Commission Officer; Member of IIRC and CPC/IASB; Professor of Accounting; Chairman of Petrobras Edgar da Silva Ramos Partner of brokerage houses and former Chairman of Cetip Florian Bartunek Partner and CIO at Constellation Asset Management Guilherme Affonso Ferreira Founder and Partner of Teorema José Lucas Ferreira de Melo Former VP of Unibanco, Former auditor of PWC, Former Director of Cetip Laércio José de Lucena Cosentino Founder and CEO of TOTVS Luiz Antonio de Sampaio Campos Former Director of CVM; Lawyer Denise Pauli Pavarina Bradesco Executive Eduardo Mazzilli de Vassimon Director of Itaú and CRO of Itaú Holding José Berenguer Neto CEO of JP Morgan Brazil José Roberto Machado Filho Executive Officer of Banco Bandepe (Santander) and Former Director of Cetip Luiz Fernando Figueiredo Former Governor of the Central Bank; Portfolio Manager Independent members Linked to market participant 22

23 Management & Board of Directors Executive Board Chief Executive Officer GILSON FINKELSZTAIN Chief Operating Officer Chief Financial Officer Chief Product and Client Officer Chief Technology Officer CÍCERO VIEIRA DANIEL SONDER JUCA ANDRADE RODRIGO NARDONI Executive Director of the Financing Unit MARCOS FERREIRA 23

24 Corporate governance and ownership structure Broadly-held corporation with solid corporate governance structure Sound corporate governance practices Listed at Novo Mercado (voting shares only and other shareholders rights, transparency, etc.) Board of Directors: Majority independent, including the chairman (regulatory requirement) Other Board members are linked to market participants (are not connected to controlling group or management) 10% 7% 5% 4% 1% Board of Directors and its Committees have clearly-defined activities Management compensation aligned with Company s performance and strategic objectives, as well as with shareholders long-term interests Solid risk management and internal control structures and policies 73% Capital World Investors GIC Private Limited Treasury Stock Oppenheimer Funds BlackRock Funds Others 24

25 Debt profile Cetip Lux 1 Loan Cetip Lux 2 Loan BVMF Debentures BVMF Notes Value USD 100 m USD 50 m R$3 bi USD612 m Issuance Aug/14 Sep/16 Dec/16 Jul/10 Amortization % Dec/18 - Maturity date Aug/20 Aug/19 Dec/19 Jul/20 Interest rates 3.50% 4.00% % CDI 6.47%¹ Interest payments Quarterly Mar and Sep Jun and Dec Jan and Jul ¹ Effective rate after tax for loans in foreign currency. 25

26 B3 - Business combination between BM&FBOVESPA and Cetip (cont.) Commitments undertaken with the regulators cash equities fees rebalancing Fees (bps) Current fees (before the rebalancing) Fees (bps) Fees after the Rebalancing Institutional Investors Other Investors Institutional Investors Other Investors Trading Trading CCP Post-trading (CCP and CSD) CSD Total Total The Rebalancing proposal described above is subject to adjustments depending on the results of the public hearing procedure. Furthermore, the Rebalancing should not be implemented if the arbitration mechanism described is triggered, in which case a price will be set for the transferring of securities within the CSD as a result of transactions cleared and settled by other FMI, subject to the regulatory agencies 26

27 B3 s Clearinghouses Safeguard Structures Robustness that assures market integrity B3 S.A Brasil, Bolsa, Balcao Clearing Risk Metrics As Of September 29, 2017¹ Clearinghouses B3 (derivatives and equities) # of clearing members (CM) 70 Margins Total margins deposited (R$ bn) Confidence level (%) 99.96% At risk / close-out period Type of collateral eligeble for margins Margining system Margin calculation level Futures contracts 2-10 days; listed options 5 days; OTC derivatives 10 days; cash equity, forwards and securities lending 3-10 days Cash BRL, Brazilian government bonds, corporate bonds, gold, ETF, stocks, banks LC and CD, shares in selected funds, rural products notes and international securities CORE - CloseOut Risk Evaluation Calculates margin at the investor level (individuals who hold positions directly or funds). The clearing member's house position is deemed as an additional single client portfolio ¹ Besides B3 Clearinghouse, B3 owns and manages two other clearinghouses (Spot FX and Government Bonds) that represented only 0.3% of the total amount of collaterals pledged in B3 Clearinghouse. 27

28 B3 s Clearinghouses Safeguard Structures (Cont d) Robustness that assures market integrity B3 S.A Brasil, Bolsa, Balcao Clearing Risk Metrics As Of September 29, 2017¹ Clearinghouses Clearing funds (CF) B3 (derivatives and equities) General approach for calibrating the size of the guaranty funds Waterfall order Default fund replenishment following a default Loss sharing powers Default experience The Clearing Fund is composed by variable contributions made by clearing members (proportional to its risk exposure at the CCP) and fixed contributions made by B3 1.Collateral deposited by the defaulting final investor; 2.Collateral deposited by the defaulting broker; 3. Collateral deposited by the defaulting clearing member; 4. The defaulting clearing member's contribution to the default fund; 5. The B3's contribution to the default fund; 6. The non-defaulting clearing members' contributions to the default fund; 7. B3 capital dedicated to CCP activities Maximum amount replenished by a CM over a 20 day period: 3 times the value of the fixed contribution requirement applicable. The amount deposited to replenish the fund can only be used to cover losses from defaults subsequent to the default which caused the use of the fund and its replenishment No None ¹ Besides B3 Clearinghouse, B3 owns and manages two other clearinghouses (Spot FX and Government Bonds) that represented only 0.3% of the total amount of collaterals pledged in B3 Clearinghouse. 28

29 B3 Goodwil from the business combination with Bovespa Holding Status of the ongoing discussions Administrative level Tax year (notices received) Notional amount under discussion as of Mar 18 (R$ bn includes fines and interest) DRJ (local IRS) CARF (IRS appeal - lower chamber) CARF (IRS appeal - higher chamber) Judiciary (three levels) (11/29/2010) R$1.3 billion 10/21/2011 (partial impugnation) 05/09/2014 (3x3 votes) 04/05/2017 (4x4 votes) We are here (04/02/2015) R$2.5 billion 04/27/2016 (partial impugnation) 06/21/2017 (5x3 votes) We are here (09/21/2017) R$3.1 billion We are here 29

30 Operational Performance 30

31 Volumes Bovespa segment Average Daily Trading Value ADTV (BRL billion) Average annual market cap (BRL trillion) Turnover Velocity² (12 months average) ¹ Updated to Apr/18. ² Ratio of cash equities trading volume to the overall market capitalization. 31

32 Volumes BM&F segment Average Daily Traded Volume ADV (Thousand of contracts) Revenue Per Contract RPC (BRL) ² ¹ abr'17 mai'17 jun'17 jul'17 ago'17 set'17 out'17 nov'17 dez'17 jan'18 fev'18 mar'18 abr'18 mai'18 Int Rates BRL FX Equities Int Rates USD Commodities Mini Contracts OTC Total RPC ¹ Updated to Apr 18. ² As of 2016 it does not consider OTC volume Mini contracts were weighted in its respective standard contracts: Equities, FX and 32 Commodities.

33 Investor participation in volumes Bovespa segment BM&F segment ¹ Updated to May 18. ² Starting from 2016 excludes OTC data. 33

34 Volumes Cetip Securities segment Registration Volume (BRL trillion) Utilization Average number of clients (Thousand) Maintenance (CSD/TR) Volume (BRL trillion) Transactions Quantity (Thousand) 34

35 Volumes Cetip Liens and Loans segment Vehicles financed (Thousand) % Penetration (Vehicles financed / vehicles sold) Vehicles sold (Thousand) 35

36 Trading in ADRs of Brazilian companies Novo Mercado Launch (Dec. 2000) End of CPMF (Financial Transaction Tax) Sarbanes-Oxley Act (Jul. 2002) End of IOF Tax (2%) for foreign investors (Dec. 2011) May/ % 17.8% 7.3% 36.2% 74.9 % 38.8% Source: Bloomberg (in USD traded value of 35 companies with ADRs programs ) 36

37 1Q18 Earnings Presentation May 11,

38 Operational 1Q18 1Q18/1Q17 Financial (R$ mn) 1Q18 1Q18/1Q17¹ BM&F Net revenue 1, % ADV (mn) % RPC (R$) % Adj. expenses² % Bovespa 1Q18 highlights Solid operating performance: growth in all business segments ADTV (bn) % Adj. EBITDA² % Margin (bps) % Cetip Securities Adj. EBITDA margin 68.4% 15 bps Value oustanding (tn) (CSD/Trade Repository) % Cetip Financing Financial result % Vehicles financed (mn) % CS market share (%) bps Rec. net income³ % 1 1Q17 numbers based on a managerial combined income statement. ² See reconciliation 38 in the slide 53 in the appendix. ³ See reconciliation in the slide 54 in the appendix. 38

39 Revenue breakdown 1Q18 Revenue growth in all segments well balanced revenue diversification REVENUE (in R$ millions / % growth YoY) (Combined information; B3) +18.3% 39

40 BM&F segment Higher ADV from all groups of contracts led to revenue growth REVENUE¹ (in R$ millions) +24.1% ADV (in thousand of contracts) CONTRACTS 1Q17 1Q18 YoY Interest rates in BRL 1, , % FX rates % Stock indices % Interest rates in USD % Commodities % TOTAL 2, , % REVENUE PER CONTRACT 2 (in R$) 1Q18 HIGHLIGHTS Stock indices ADV growth driven by HFTs and retail investors Higher share of HFTs and day-trades drove RPC down CONTRACTS 1Q17 1Q18 YoY Interest rates in BRL % FX rates % Stock indices % Interest rates in USD % Commodities % TOTAL % ¹ Revenue does not consider the revenue line foreign exchange of the BM&F segment, as reported in the financial statements note 20, which totaled R$4.6 million in 1Q18. ² Mini contracts volume were weighted in the respective standard contracts, impacting volumes and RPC of these contracts groups. 40

41 Bovespa segment Market capitalization recovery and higher turnover velocity drove volumes up REVENUE¹ (in R$ millions) +31.2% ADTV (in R$ billions) AND MARGIN (in bps) MARKET CAPITALIZATION (in R$ trillions) AND TURNOVER VELOCITY (%) 1Q18 HIGHLIGHTS ADTV growth driven by a 29.4% YoY growth in market capitalization and higher turnover velocity (+599 bps) Trading and post-trading margins of bps, 3.6% decrease YoY Lower participation of derivative contracts and discounts to the market triggered by higher volumes traded ¹ Revenue does not consider (i) the revenue line others of Bovespa Segment, as reported in the financial statements note 20, which totaled R$ 4.8 million in the 1Q18. 41

42 Cetip Securities segment Revenue resilience and recurrence REVENUE (in R$ millions) OPERATIONAL FIGURES +5.1% 1Q17 2Q17 3Q17 4Q17 1Q18 Monthly average value outstanding (CSD/TR) (in R$ trillions) 1Q18 HIGHLIGHTS Utilization: new pricing policy implemented in Jan 18 Sharing expense synergies: full impact of discounts (R$7.8 million in the quarter, or 30% of the synergies captured) Monthly utilization (in thousands) Avg Price (in R$) 42

43 Cetip Liens and Loans segment Recovery in the vehicles financing activity REVENUE (in R$ millions) +16.1% OPERATIONAL FIGURES 1Q17 2Q17 3Q17 4Q17 1Q18 Number of vehicles sold (in thousand) Number of vehicles financed (in thousand) 1Q18 HIGHLIGHTS Increase in both the number of vehicles sold and the credit penetration New business model adopted in the state of São Paulo positively impacted revenues of the Contracts System service (details in slide 9) Vehicles financed / vehicles sold Contracts System (market share) 30.7% 28.3% 28.2% 30.2% 74.4% 74.6% 72.1% 65.2% 32.4% 66.7% 43

44 Cetip Liens and Loans segment New business model for the Contracts System service NEW BUSINESS MODEL ADOPTED IN THE STATE OF SÃO PAULO STARTING FROM JAN 18 Previous business model B3 transmited, on behalf of its clients, information on loans directly to the local DMV, which executed the registration of the loan Economics (in R$) Total fee Revenue tax 3.14 Revenue-linked expense Gain per loan² New business model B3 transmits, on behalf of its clients, information on loans to an Registering Company¹, which, in turn registers those with the local DMV Economics (in R$) Total fee Revenue tax 5.03 Revenue-linked expense Gain per loan² The adoption of the same new business model by other states will impact revenue/expense/earnings in the coming quarters³ AC AM RO RR MT MS RS AP PA PR SC GO SP TO DF MA MG PI RJ BA ES CE RN PB PE AL SE B3 has worked on initiatives to offset most of the negative impact from this new business model (rollout of these initiatives expected for the coming quarters) Contracts System models per state B3 operates (new business model) B3 operates (transition to the new business model) B3 operates (other business models) B3 does not operate ¹ Registering Company accredited by the local traffic department (Department of Motor Vehicles DMV). ² Earn per loan before other operating expenses and income tax. ³ In the 12-month period between Apr 17 and Mar 18, the state of São Paulo represented 44% of the total number of contracts transmitted by B3 and 30% of the total number of vehicles financed in the country. 44

45 Expenses and Guidance Adjusted expenses guidance revised and introduction of a specific guidance for revenue-linked expenses EXPENSE (in R$ millions) Expenses with guidance disclosed Expenses for which no guidance was disclosed FY18 guidance Adjusted expense¹ D&A Related to the combination with Cetip Revenue-linked expenses Stock grant expenses and provisions Total 960-1, ,115-2,275 Expenses exposed mainly to inflation readjustments (wages and contracts) Intangible assets amortization (R$187.2 million in 1Q18) recognized in the combination with Cetip started in Apr 17 Considerable decline due to the progress in the integration process New business model adopted in state of São Paulo for the Contract System service (Cetip Lien and Loans segment) In 1Q17, non-recurring provisions recognized in connection with the combination with Cetip A significant portion of provisions and stock grant expenses varies according to B3SA3 market price ¹ See reconciliation in the slide

46 Adjusted expenses Continued focus on expense management ADJUSTED EXPENSES¹ (in R$ millions / % growth YoY) (Combined information; B3) Adjusted personnel² (-0.9%): annual salaries readjustment more than offset by synergy gains Data Processing (+3.5%) increase in expenses with software maintenance Third party 3 (-24.9%): decrease in third party expenses excluding revenue-linked expenses Others 4 (-15.9%) - 2.9% (in R$ millions and % of total adjusted expenses) 1Q (48.9%) 45.1 (15.2%) 4.3 (1.9%) 29.9 (13.3%) 1Q (58.1%) 43.6 (17.3%) 5.7 (2.5%) 35.5 (15.3%) 1 See reconciliation in the slide 53 ² Excluding the long-term stock-based compensation (principal + payroll taxes). ³ Excluding revenue-linked expenses 4 Includes expenses with communication, maintenance, taxes, board and committee members compensation and others. 46

47 Financial highlights Solid cash position is required for clearinghouse safeguards CASH AND FINANCIAL INVESTMENTS (in R$ millions) (Combined information; B3) 1Q18 7,212 B3 s own cash position totaled R$5.0 bn in 1Q18 R$2.5 - R$3.0 billion to run the business 4Q17 7,510 3Q17 6,884 2Q17 6,874 R$1.1 billion in clearinghouses required safeguards The remaining amount adds to the liquidity that supports the clearinghouse activity and general corporate needs Interest on capital (IoC) payment: Includes R$200 million on IoC deliberated on Apr 18 to be paid on May 18 1Q17 15,658 Third-party cash Not considered as B3 s own cash Third-party Total Restricted and unrestricted The Company earns interest on most of this cash balance ¹ Includes earnings and rights on securities in custody. ² Includes B3 Bank clients deposits. ³ Does not include investments in Bolsa Mexicana de Valores, Bolsa de Comercio de Santiago, Bolsa de Valores de Colombia and Bolsa de Valores de Lima amounting R$335.7 million at 1Q18, booked as financial investments. See note 4 to the financial statements. 47

48 Financial highlights (cont.) Temporally higher financial leverage DEBT AMORTIZATION SCHEDULE (in R$ billions) Financial deleveraging and payout R$1.5bn in debt amortization scheduled for Dec 18 FINANCIAL LEVERAGE (in R$ millions) (in R$ millions) 1Q18 Gross Debt 5,668 Adj. EBITDA (LTM) 2,776 Financial leverage 2.0x B3 expects to be able to reduce its financial leverage to 1x Gross Debt / Adj. EBITDA by the end of 2019 Payout ratio target for the period between 70% and 80% of the IFRS net income 48

49 Other revenues Solid performance of depository and impact of non-recurring provision reversal 1Q18 REVENUE BREAKDOWN (in R$ millions / % of the total) (Combined information; B3) Cetip Securities seg. R$ % Cetip liens and loans seg. R$120,3 9.7% Other lines of business 1Q18 YoY Depository % Securities lending % Bovespa seg. R$ % 13.1% Market data (vendors) % Listing % BM&F seg. R$ % Bank - financial intermediation and bank fees % Market participant access % Other % Total % 49

50 Expense Income Financial highlights Decrease in the financial result due to a lower cash position FINANCIAL RESULT¹ (in R$ millions) (Combined information; B3) Decrease in financial revenue: Payment in Apr 17 of R$8.4 billion related to the cash portion of the combination with Cetip Decrease of Interest rate in Brazil -75.0% -49.0% Decrease in financial expense: Decrease in expenses related to the fair value hedge for the principal amount of the 2020 Notes (Swap) Decrease of Interest rate in Brazil ¹ The Company set a cash flow hedge, designating the 1-year foreign currency loan taken in Dec 16 to cover the effects of currency variations on part of the revenues denominated in USD for BM&F segment, therefore reducing the impact of exchange rate variations on revenues for this segment and, at the same time, on the Company s financial results. The Company ceased to use hedging of USD revenues as of March 1,

51 1 Combination-related Opex and Capex Budget of business combination-related expenses and investments Estimates on expenses and other impacts arising from the completion of the business combination with Cetip¹ (R$ millions) Q e Total Contractual commitments and other accounting impact Cetip s LT compensation and retention programs (cancelation of stock options and payroll taxes) Impairment / write-offs / provision for contractual fines Retention / severance programs approved in the AGM of 04/28/17² ~ Advisors, consultants, branding ~ Total ~ ¹ In comparison with the numbers disclosed in 1Q17, some expenses were reclassified between lines in the table and from expenses related to the combination with Cetip to recurring personnel expenses. ² Includes payroll charges on the amount approved at the Annual General Meeting. In addition to the amount described above, approximately R$44 million will be accrued between 2019 and 2021, according to the vesting periods of the stock grant program. The portion referring to payroll taxes on the stocks that will be transferred in future periods can vary significantly, since it will be calculated based on the stock price on the day of the transfer. Estimates on expenses and Capex necessary to capture synergies (R$ millions) Q e Total Severance and services providers expenses ~ Capex (projects and integration) ~

52 Financial statements Summary of income statement (consolidated) SUMMARY OF INCOME STATEMENT (in R$ thousands) 1Q18 1Q17 1Q18 / 1Q17 (%) 4Q17 1Q18 / 4Q17 (%) Net revenues 1,111, , % 1,033, % Expenses (602,821) (754,518) -20.1% (589,438) 2.3% Financial result (22,499) 198, % (25,244) -10.9% Income tax and social contribution (172,871) (110,738) 56.1% 97, % Net income 314, , % 516, % Adjusted expenses¹ (224,681) (231,496) -2.9% (283,662) -20.8% Adj. EBITDA¹ 760, , % 672, % Adj. EBITDA margin 68.4% 68.2% 15 bps 66.6% 181 bps Recurring net income² 448, , % 635, % 52 ¹ See reconciliation in the slide 54. ² See reconciliation in the slide 54.

53 Financial statements Adjusted expenses and EBITDA reconciliations ADJUSTED EXPENSES RECONCILIATION (in R$ thousands) 1Q18/1Q17 1Q18/4Q17 1Q18 1Q17 4Q17 (%) (%) Expenses (602,821) (754,518) -20.1% (589,438) 2.3% (+) Depreciation and amortization 236,049 52, % 234, % (+) Long term stock based compensation 34,887 32, % 20, % (+) Expenses related to the combination with Cetip 15, , % 43, % (+) Provisions (recurring and non-recurring) 49, , % (22,558) % (+) Revenue-linked expenses 42,439 20, % 29, % Adjusted expenses (224,681) (231,496) -2.9% (283,662) -20.8% EBITDA RECONCILIATION (in R$ thousands) 1Q18 1Q17 1Q18/1Q17 (%) EBITDA 745, , % 678, % 4Q17 1Q18/4Q17 (%) (+) Expenses related to the combination with Cetip 15, , % 43, % (+) Non-recurring provisions - 134, % (49,434) % Adjusted EBITDA 760, , % 672, % Adjusted EBITDA margin 68.4% 68.2% 15 bps 66.6% 181 bps 53

54 Recurring net income Reconciliation of net income excluding non-recurring items NET INCOME RECONCILIATION (in R$ thousands) 1Q18 1Q17 1Q18/1Q17(%) 4Q17 1Q18/4Q17 (%) Net income (attributable to shareholders) 314, , % 516, % (+) Expenses related to the combination with Cetip 9, , % 28, % (+) Non-recurring provisions - 88, % (32,626) % (+) Impairment - 43, (+) Impact related to CME Group (+) Amortization of intangibles from combination with Cetip 123, , % (+) Amortization of intangibles from combination with GRV - 8, Recurring net income 448, , % 635, % (+) Deferred Tax (goodwill from Bovespa combination) - 133, ,054 - (+) Deferred Tax (goodwill from Cetip combination) 119, , % Recurring net income adjusted by goodwill tax benefit 567, , % 888, % 54

55 Financial statements Summary of balance sheet (consolidated) BALANCE SHEET (in R$ thousands) ASSETS Mar 31, 2018 Dec 31, 2017 LIABILITIES AND EQUITY Mar 31, 2018 Dec 31, 2017 Current assets 7,509,318 6,506,030 Current liabilities 4,347,228 5,491,250 Cash and cash equivalents 252, ,140 Collateral for transactions 1,647,810 2,171,449 Financial investments 6,499,792 4,926,832 Financial instruments for hedge 19,258 18,032 Others 756, ,058 Loan 5,843 43,232 Noncurrent assets 29,478,244 31,073,849 Debentures 1,563,193 1,513,167 Long-term receivables 1,159,704 2,563,595 Others 1,111,124 1,745,370 Financial investments 795,426 2,197,268 Noncurrent liabilities 7,994,941 7,778,615 Others 364, ,327 Debt issued abroad 1,990,729 2,012,331 Investments 45,587 44,962 Loan 511, ,998 Property and equipment, net 593, ,669 Debenture 1,498,110 1,497,434 Intangible assets 27,679,839 27,891,623 Deferred inc. tax and social contrib. 3,230,198 3,081,088 Goodwill 22,338,799 22,338,876 Others 764, ,764 Software and projects 5,168,368 5,548,396 Equity 24,645,393 24,310,014 Others 172, ,680 Capital 3,198,655 3,198,655 Capital reserve 18,384,164 18,399,366 Others 3,052,241 2,701,673 Non-controlling interests 10,333 10,320 Total Assets 36,987,562 37,579,879 Total liabilities and equity 36,987,562 37,579,879 55

56 Investor Relations / 4207 / 7935 / 7451 / 5115 ri@b3.com.br