Good morning, everybody. Welcome to Allied Tecnologia conference call. We are to share you the results of the third quarter of 2022. I am Fabiana Lawant, and this event is being recorded and simultaneously translated. First, we will listen to the conference, and then we will have a question-and-answer session. You can send questions through the chat at the present screen. Forward-looking statements are based on beliefs and assumptions of the companies and are subject to uncertainties that may or may not happen. I hand this over to Silvio Stagni and Gustavo Antunes . Now, I look forward to see you, then we will share with you the highlights of the quarter.
Thank you, Fabiana. Good morning. I would like to thank you for your presence. On Monday, we published our results to the market, and today we are going into detail on the numbers we send you. Our agenda today, we start with some highlights, qualitative highlights of this quarter. Then Gustavo will go into more details about our financial results, and then we will open the question-and-answer session. We will start with the landscape of the quarter, and I would like to talk about this quarter of the electronics market. Our comparison basis are with the previous year.
For the electronic market to compare 2022 with 2021 is very hard. 2020 and 2021 were years during COVID, where the demand for electronics was very high. We comment in other opportunities, this was the moment that people bought electronics to work better at home and for entertainment. So we had a very high demand. Just to give you a take, this semiannually, the third quarter, notebooks had an increase of 7%, the smartphones 5%, tablet 12%.
So it was a year where the electronics demand was lower than last year. Another impact was the financial cost, and Gustavo will mention this later on. But we are proud to say that our multiplicity of channels and products is still giving resilience to the results. In spite of being below of what we had in 2021, once again, we have a positive net profit, all of them with profitability, and this is what we care for in the company. As always, we introduce the company, the three pillars, digital, retail, B&M, retail, distribution. In digital, we closed the year with 37 stores with our brand and others like Apple, Google, HyperX, and iPhone Para Sempre, iPhone Forever. In physical retail, B&M, 136 stores, 135 stores on the store and one truck applied. In distribution, we keep our level of more than 3,000 active clients.
In spite of this, several growth initiatives that we are talking with you were very successful, and we will highlight three of them. B2B, Confee, and the refurbish market. Also a quarter that we found new growth drivers. We will comment here the international expansion and introduction of new products. In the next slide, we see each of these three pillars, and I want to start talking about our market share. Strongly based on distribution, we have three categories with a very strong quarter. Notebook, if you look at the amount, the quarter grows 11%, Allied grows 21%, getting a 2% of market share. This in the third quarter was quite high, Allied. In retail, 7% the market, we 36% growth, and today we hold 34% of this market. The third category, printers.
In the quarter has a drop of 8% in terms of quantity, while we grew 28%, increasing our market share to 8% in the Brazilian market. In spite of having a hard quarter in these three categories, we exceeded the market and we grew our market share, which is important to the distribution. The other point is our B2B market. When we say B2B distribution, it is when we sell to a company where the company will be the users of these products. In a B2B2C, we sell to 3,000 clients, and these clients sell to consumers. But here, we are talking specifically to B2B, where we sell to the company being a consumer. We are investing strongly in this segment. It has a very big investment. We are strongly investing in three pillars: education, IT, and government. If you look for the graph, you see our growth.
If we compare 2021 and 2022, the average growth is 79% a year, and this is a BRL 10 billion potential market. We have a lot to grow. New categories in this segment. It is an important growth driver and accounts for 7% of the distribution sales. Still in distribution, we talk about our international expansion. We opened Allied Miami in the third quarter, and Allied Miami plays two roles. The first is we started with it to be distributor to other Latin America countries in addition to Brazil. TV, computers, they manufacture in Brazil, so there is no competitiveness. But several other countries buy from Miami, so we opened Allied Miami to open this market. This is the first role, and the second is to make feasible for bringing to Brazil products that we still do not have here.
We have the possibility of having new and different products from what we have today through Allied Miami. We show some numbers just to give you an idea of the size. These are internal estimates. It is hard to survey this number. But anyway, 93 million are shipped from Miami to Latin America, except Brazil, representing, if we sell the other electronics, means a $2.5 billion market, a potential market in Latin America, not including Brazil. So it is an important driver to our future growth. Now, the B&M retail. Along this year, we did a declaration of the point of sales. We almost closed our store in store. Retail were concentrated in Samsung stores and what we call store in store, which are stores in retailers, Marabraz, Zig, et cetera.
These points of sales, after the pandemic, were not providing the flow and profitability that we desired, so we closed them. The results were very positive. First, if you get the market of the B&M retail of the smartphones in this semester, the market dropped 5%. In our store, we grew 12% in relation to last year, showing that the performance of the stores we kept is better than the performance that we used to have. In addition, if we compare the revenue for point of sales and average ticket, our revenues grows 79% and our average ticket is 6% above the market. So this shows our results. We have a better performance and a healthier sales volume. Still on B&M retail, the games is a very important segment. We have HyperX, Logitech, and in this quarter, we had the BGS, the largest Latin America games event.
With our expertise in B&M retail and HyperX and Logitech, we built a store for each of these brands. Only in this event, these two stores accounted for more than BRL 1 billion in sales. Next page, the digital market. Digital retail, we are using GfK. The online market dropped 7% and we grew 11%, so we performed better than the market, showing we said in other opportunities, our room for growth on online market is still big. On the next slide, I highlight the program iPhone Para Sempre. We launched in September 2020 with Apple and Itaú, where through the Itaú app, the consumer can buy iPhone with the 21 installments, very small, and a 27 installment.
At that moment, the consumer has the option not to pay this installment to return the used iPhone and get a new iPhone with a new subscription. This channel became one of the major sales iPhone channels. Last year, we have the iPhone Day, 24 hours of promotion, very successful. In September, we repeated the iPhone Day, the second edition. To show the importance of this program, this year, the sales were 40% greater than last year. This is a very strong program and will continue in the future. iPhone Day in May this year completed the 21-month cycle. We started to receive the return of the iPhones, and we launched our Trocafone, our site of refurbished products. Another point, important partnership in this quarter. We sell wearables, specifically watches and earbuds through Track&Field, the perfect target audience.
In the website of Track&Field or in the Track&Field stores, we have Apple and Samsung. We close these two categories. It's an important category for the growth of this market. Now about Soudi. Before Soudi, another point concerning distribution. One of the growth drivers of distribution is to bring new products to the market. In this semester, we brought a tablet of the Kross brand. It's very affordable. We are selling for corporations and government, and also for the public. A smartphone brand, Glo, that was in Brazil, and we brought it back. We are launching in September with a very attractive cost benefit. At this moment, Allied is the only distributor of this product in the Brazilian market. Now about Soudi. Soudi is our arm for financing for the consumer. We have embedded technology in Samsung smartphones.
We use this technology, and we have access to this consumer through the smartphone screen with the possibility of a lack of payment to block the consumer's smartphone. This brings more consumers at a lower cost for consumers. We launched Soudi. We launched it for our stores, Samsung store, trying to increase the consumer power. Now Soudi is becoming a directed credit society. It's a step above the solution we have today with two objectives. First, new products. With this new association, we can bring more credit solutions and also the reduction of our funding cost. We use partner bank for the funding, and this will bring a cost reduction. These are some Soudi numbers, BRL 45 million in receivables, 75 with active ports. We want to reach 8%-10% of the Samsung sales in Samsung store. We have a high volume through Soudi.
Soudi is now a funding instrument only for Samsung stores, but also Samsung stores of other partners and operators of some current operators. Some numbers of good percent of the good performance, 10% of NPL and 4.6% of EFIC. These costs are good if you compare to the market, and this is the result of the important technology we use in this funding. In summary, our top-line numbers on the next slide. As I said, this is a year that is smaller than last year, especially for distribution. This is due to the market mainly because it was smaller for electronics than last year. But the other pillars, B&M and digital retail, present good results. Digital retail grows, and if you compare to pre-pandemic, we are more than 3x what we used to be in 2019.
B&M retail, even with the declaration of a point of sales this year, we are above last year, and we see that we still have a very important period, Black Friday, Christmas, and this will have a positive influence. In summary, the last 12 months closing September 30, BRL 6.6 billion gross revenue, an EBITDA of BRL 339 million, and adjusted BRL 125 million. 136 points of sales physical. We are improving our NPS was 85%, 37 online stores, and our market share grew significantly in these categories, 30% laptops, 12% of tablets, and 34% of video game market shares. These are the numbers we have to present, and Gustavo will go in more details about our financial results.
Good morning, everybody. Thank you for your presence. Much of what Silvio said translates in our numbers. The word for aligning this quarter was resilience. Not only Allied, but a great part of retail went through a hard moment, especially electronics. For a great part of these categories, it was a period of market reduction. But when we compare to last year, we are comparing with a period of a great prosperity for our company and the future. When we compare with last year, it's hard.
On the other hand, even in a difficult scenario of the third quarter, we are delivering a result of profits for the company within growth in important categories and showing our strategy to take the digital. In summary, we deliver in the third quarter sales above BRL 1.1 billion. Our adjusted EBITDA is at BRL 64 million and BRL 10 million of net income. When we look at the nine months of the year, we will see this in the other slides.
We have a harder year than 2021 that, again, was a very atypical year when we benefit from that. We had several problems with the supply chain internationally, but we had a demand that was very demanding from people, schools, people working from home. In 2022, in a world with no restrictions and supply chain reestablished, we are delivering sales above or higher than the pre-pandemic period, with also a higher EBITDA. As all companies in the market, the fact that we have a more expensive cost of money also impacted us in financial expenses. That's why the net income is slightly below. Now, the next slide, and we detail our business unit. Here we have the distribution. This is where we suffer most. Distribution accounts for 75% of our sales. So here we feel more everything I mentioned before.
Our sales drops about 27%, but on the other hand, the gross margin is slightly below our history that we think to be reasonable, and we deliver 9.5%. We also say to investors that the gross margin normalized fluctuates around 10%. In cyclical periods, we have peaks and valleys, but not so significantly. We have two effects when we compare to last year, the effects of lower sales and the margin that you see is 11.3%. 11.3% is extremely favorable for us. We have two effects when we compare 2022 with 2021. But even though in the year accrued, we see the market decreasing, but it decreases 12%, and we deliver a gross growth higher than 2020 and 2019. The part below at the right side is the efforts of Allied. We started as a distributor of smartphones. We are diversifying.
Our mix tends to be similar to the size of the categories of the market in Brazil. Our smartphone market is higher than notebooks and TVs. The line of the graph on the bottom right side shows the amount, how much of the sales is made of smartphones and tablets. The message is that we are able to make this close to half- and- half. Half to smartphones and tablets, and half to the other categories. On the next slide, we talk about retail. In the third quarter, retail, whether digital or B&M, grows almost 4% against 2021 and drops 8% compared to 2020. In the year accrued, we increase when compared with both years. On the right side, first digital retail. Here, over this year, we have the expansion of our capillarity in several stores with different categories.
Our mix is almost half- and- half with smartphones and others. But here is still smartphones is quite representative. Our efforts is in diversification. It is a technical subject, but it is worth to think about it. There is a problem, a dispute of the tax burden on the e-commerce sales in 2022. All retailers are involved. But this impacts companies in different ways. We at Allied, we have this conservative position of pricing our product as the tax burden on the dispute would be the highest possible. We believe that we could be more aggressive depending on the assumption we take, but we are protecting the company from a risk that if this dispute or the result will be opposite to what the taxpayer is requesting. Our message is that our digital retail is increasing compared to 2021, even with our conservative position.
In 2023, if this uncertainty is over and everybody plays the same rules of the game, this will be solved. But it is with a great satisfaction that we deliver more than BRL 200 million of sales in digital retail and almost BRL 600 million in the year accrued. Now with this period, Children's Day, Black Friday, Christmas, our assumptions is very important. B&M is where we most suffer in the pandemics, and we leave the first half of the year with a clearing of our stores. The result, as you saw in our administration report, we show this, the sales per store after this exercise increased substantially, meaning that we will enter in the fourth quarter of this year with the physical retail or B&M retail much more productive than what we had. This is what Allied is.
We test the business model, we decorate this, and then we continue with the efforts, the endpoints that bring more profitability to the company, shareholders, and business partners. Going back to the left side, the bottom side, we always say in a simple way that we sell three-fourth of our sales in distribution with a 10% margin and one-fourth of the retail with approximately margin of 10%. This is a quarter that we basically continue to deliver what we did historically, especially in terms of margins, is a quarter that is in line with what we talk to the market. We are working so the retail aura will have a greater participation in our sales. Now the next slide. We mentioned the business profitability. When we see the consolidated numbers, we have BRL 174 million.
Our gross margin, whether in this quarter or last year in the nine accrued months is about 15%. I want to talk about the expenses. If we sum our expenses in this quarter, not including depreciation, only expenses, we have about BRL 116 million of expenses in 2021 and BRL 127 million in 2021 and BRL 129 million in 2022. We are hand-in-hand with the same period of last year. However, what happened this year were two big movements. First, the expenses with sales commission, online sales got higher. The other expenses, we made an effort of renegotiation of contract, optimization of expenses. If we separate the expenses incurred on online commissions, there is almost a cost because it is compulsory to our sales. If you get all the rest that we incur, the reduction is about 7%.
We are in the middle of these efforts, and we are working to make the company more productive with operational leverage. This is what we have. I would like to highlight this point. The other points, just go to the last page. We deliver adjusted EBITDA about 64% and net income of 1%. In the next page, when we talk about indebtedness, I would like to highlight that although we have closed. The last observation of last year is difficult to compare because you had a very high cash. When we compare the end of the year with this period, the net cash is atypical. We explained in the last meetings the reason for that. We got longer terms and the advancement of receivables. Anyway, we close the third quarter of 2022 of 1.6x leverage, which is still a comfortable level for us.
What we increased with the second quarter of 2022, part of our inventory is prepared for the seasonality, and this was reflected in our cash. Even though you can see that with a harder market, a very hard comparison with last year, I would say this was very prosperous. The third quarter for Allied is a quarter of resilience, delivering profit to the shareholder, a better leverage so we can be more comfortable. This is one of the strengths that Allied has, the capacity of respond quickly in expansion moment to be aggressive, in a more difficult moment to work with more cautious, but even so, delivering results to our shareholders. With this, I close my part here, and I give the floor to Fabiana to open the question-and-answer session. Thank you.
Let us start the question-and-answer session. I will start with the question of Marcus from XP. Can you comment on the dynamics of commissions and margins in the marketplaces, and what do you expect? If you want to complement in this part of commissions, feel free. The perspective of sales for 5G devices, do you expect to have a higher demand?
Thank you. I will start here, Gustavo, then you add if you want. The dynamic of commissions and margins in marketplaces. To me, the end of last year and beginning of this year, there was a reasonable increase in the take rates in marketplace, and we felt this impact. I think this is a natural action of marketplaces trying to have healthier business conditions. This made the prices in marketplace to increase together with these take rates.
Since the beginning of the year, we haven't seen big changes, and I believe we reached the point that it should have been since the beginning. We don't see big variations except for those that occur on the beginning of the year. Now, going to 5G. I'll give you some numbers. In January, 5% of the smartphone sales were for 5G. In September, 26% for 5G. The share of 5G is significantly increasing because it brings benefits of speed. The operators are working on this. The Brazilian consumer are tuned to technological launches. We see a growth for 5G, but especially in value. In September, a 4G average price is BRL 1,500, and the 5G is BRL 3,500. We see a drop this quarter, but it's much more in volume than in value. What compensates is the higher average price of the 5G.
This will continue to be a driver pulling the average price of the market value in reais. Obviously, the 5G price will drop, as always happen with new technologies. We still have a long time that way. 5G will have a significantly higher price than 4G, and this will bring a healthier market to all players. Anything to add, Gustavo?
Yeah. I'd like to say that we believe we are well-positioned to capture the demand for 5G. As an important part of the smartphones we sell belongs to the channels of the smartphones focused on premiums line, whether on physical stores or online. We are well-positioned to capture the increase. This is important for the S line of Samsung and iPhones. This is already happening.
The next question, these are also from Francisco: What is the sales perspectives for the fourth quarter by category and channel? Can we expect a recovery in the sales of the smartphones? The next question is: What is the expectations for B2B margin related to B2B2C performance as well?
I will start with the first question. Sales expectations for the fourth quarter. This is a free analysis, okay? There is nothing to prove that this happens or not, but my bet is, first, a very important quarter for the electronics market. Black Friday, Christmas, and World Cup. A different year with Black Friday and World Cup happening together, but three important events for the fourth quarter. We believe this will not be different. Will be a fourth quarter of growth compared to the third quarter. I think we'll have a better number this year, significantly better.
Dividing per category, the TV market for Brazil is a good year because of the World Cup, and then three years that the volume drops, and then it increases again in a soccer World Cup period. So we see the demand for TV growing. The TV market is growing in relation to last year. So for category Black Friday/World Cup, increasing the sales of TVs. We see the computer market is suffering, and it will suffer in the fourth quarter, in my opinion. We see the recovery of computers as of the second half of next year, when we start the period of changing the computers. The smartphone shall be helped by the Christmas season after Black Friday and World Cup. This, I think will bring better numbers than last year. The last category, tablet. This depends heavily on government programs.
When the election campaign, these programs stop, it will come back because the government is buying tablets to equip the public schools. So as we have the transition of administrations, we'll have an increase in tablet sales. This is much more my point of view than any scientific data. This is how I see the market for the fourth quarter. Now, Gustavo, the B2B margins, please.
I think I agree with your answers, and you have already answered some questions that came to us about seasonality. So TVs are increasing this year, even with the World Cup being in the end of the year. But it's growing. The question is: What is the level of profitability of the B2B versus the distribution that is not B2B? Distribution is about 10% of gross margin. The B2B margin usually ranges from 3 percentage points- 4 percentage points higher than the distribution to resale.
It can even be higher, but can also be lower if we get some sales to government. So I think this ends up being an offset. Sales with bigger margins being compensated by lower margins. So in average, it's reasonable to think that B2B sales will be about 3 percentage points- 4 percentage points.
Well, now we have two more questions. Questions from Gabriel from BTG Pactual. The first, continuing in the margin subject. Can you give more details on the gross margin expectations for the future? Then Silvio, the repairs of last year for your recovery and the competition.
So looking ahead, I think in the very short term, at the end of the year is a period where you have some discount in prices. So it is early to see this effect on the quarter. Maybe you have some discount in the fourth quarter, but it's reasonable to think that distribution around 10% and retail 30%. This for the future. In spite of the variations we may have, I think this is the trend, and we believe in it. Now let's see the default. Default for us, we see as good eyes.
Gustavo mentioned that we took a very conservative position during the entire year. There was a dispute about the payment or not of this tax. A difference in the rate of the ICMS. So there was a challenge if this should be paid this year or not, because the new law, the revision of the law was signed in the beginning of the law. So we have the discussion of if this will be charged after 90 days or one year.
We took a very conservative position as the entire market with our actions, with final actions, but we priced our products as if we were going to pay. We had different behaviors in the market. Some retailers were more aggressive and priced their products as if they were not to pay, and others as if they were to pay. In spite of the good results, our online suffered because we lost competitiveness since we consider this tax to be payable. This is being judged by the Supreme Federal Court. If we have not to pay, this will go back to our results. These uncertainties, they harm the whole market because you work with the risks that should not be part of this business, to pay or not to pay a tax. I think the Supreme Federal Court will make this decision very quickly.
When this is solved, we believe that 2023 will be a year with no discussion. The tax will be charged regularly and will not bring different conditions to the market depending on the risk you want to take. I think we are at the final phase for the decision of the Supreme Federal Court to pay or not to pay this tax in 2022. For 2023, there is no challenge for this payment. Everybody will pay this tax.
The next question comes from Eloisa Cruz. This is for Silvio. Can you elaborate on the market share gain and if there is room for this to continue to happen, and what will be the catalyst?
We have mentioned that our market share gain came from three categories, notebook, printers, and video games, and we have two different situations here. I will start with the video games. Video game is a market that until now we have not tested the demand volume in Brazil because we always had a supply limitation, and what we receive, we sell. Today, we are the largest distributor of Xbox. We have two brands competing in the Brazilian market. Xbox is one of them, and we have a very large market share of Xbox in Brazil.
This came from our partnership with Microsoft that is getting better and better with a higher supply in the third quarter. I still see that we have a high market share, a big market share, but I do not think in the increase, but the size or how much the supply will improve with Microsoft bringing more volume to Brazil. I see the video games market with good eyes.
The other two categories, notebooks and printers, I want to go back and think about the role of the distributor. The distributor is a balance of the market. When you have an excess of supply, the distributor buys this excess of supply and sells to the market at the right moment. The computer and printers market had a big hold in the second semester. When you have a market, the plants cannot stop overnight. They still run for two or three months. We were partners of the manufacturers that sell us printers and computers, HP, Lenovo, and Acer. At the end of the quarter, we increased our inventory volume with this drop in demand. In the third quarter, these companies helped us to put all this volume in the market. We closed the third quarter with the volume regularized, but we benefit from this opportunity.
This is the role of the distributor. With an excess of supply, we have our partnerships with the manufacturers to regularize this.
We have some questions from Carlos, from others. Some were already answered. He asked, how do we see as a trend for the fourth quarter of 2022? We have already answered. He also asked us, what do you see for the year of 2023 and the main concerns and drivers, and if there is any effect of the seasonality or because of the World Cup. You can concentrate the answers here in what we expected from 2023.
I will start and then Gustavo will complement. 2023, some things that we mentioned that will be important for next year. First, on smartphones, the increase of 5G, significant increase, especially the share in the total market, and will also drive the market in BRL.
Talking with the computer manufacturers, we believe that as of the second semester or quarter, we will have a demand growth because it finishes the cycle of two, three years from the beginning of the pandemic when we started a cycle of change in the computer. The refurbished market, we see a significant increase for 2023 and 2024. We bet in this market. On TV sets, due to the World Cup in 2022. Usually, the year following the World Cup is smaller sales year than in a year of the World Cup. But we need to filter this with the macro scenario. Looking at some of your projections, we see that what you estimated for the exchange rate for next year will not bring any big variations. The electronics growth is strongly much more with the U.S. dollar rate of variation than inflation.
The components come from world suppliers that sell in U.S. dollar . If there is not a great variation in U.S. dollar , maybe we will keep the average prices with no big impacts from inflation. This will be extremely beneficial to limit the new consumer's entry or change of products. This year, specifically in smartphones, we have not seen an increase in price. The average ticket grows because of the mix. 4G continues with the same price around this, in spite of inflation. For next year, if the U.S. dollar keeps stable, we believe that price variation will not be big, and this will help in market demand.
Gustavo, I would like to comment two points here. Adding to what Silvio mentioned, again, the efforts for diversification in our digital retail shall bring the video sales that we are not seeing. This is a point. But we also think we are in a competitive position for next year due to the decrease of tax burden. On the other side, B&M retail, we are working on four pillars here to have a reasonable level of profitability.
The ways we supply our stores, the commercial teams, we are working on reduction and optimization of expenses, and also the exposure to a reduction of tax burden in the B&M retail, in the route from the manufacturing to the delivery of the store. But this is in a very good profit level. Where comes the growth drivers from? We are looking at the level of capital employed by the company. This capital is the working capital, receivables, payables. It is the cash flow. As in the last quarters, we saw a difference in the level of the cost of money.
We are working to optimize this and to keep the return of the employed capital at the levels we always had. I think that is it.
Now let us go to the last question from Carlos Leon to Gustavo. Is there any discussion on the rebuy program of the company with the value generation for the shareholders?
No. This is not in the agenda of the company, the repurchase or buyback program. This is not in the radar of the company. With this, because we were able to answer all questions, I thank you for your participation. If you have any other question, please use the investor relations email of the company. Thank you very much, and have a nice day.