Good afternoon, ladies and gentlemen. Thank you very much for waiting. Welcome to Via Varejo conference call to discuss the results for the third quarter of 2018. This call is being broadcast via internet at our website, www.viavarejo.com.br/ir, where you'll also find the company's presentation. The slide selection will be managed by you. This replay will be available after the call is finished. The company's press release is also available at its IR website. This call is being recorded, and all participants will be in listen-only mode during the company's presentation. After Via Varejo's remarks are completed, there will be a question and answer session when further instructions will be given. Should you need assistance during this call, please press star zero to reach the operator.
Before proceeding, we should say that forward-looking statements made during this conference call regarding business prospects, projections, and operating and financial goals, are based on the beliefs and assumptions of Via Varejo management, and also on information currently available to the company. Forward-looking statements are no guarantee of performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Via Varejo and cause results to differ materially from those expressed in such forward-looking statements. I would like to turn the floor to Mr. Flávio Dias, the CEO of the company. Good afternoon, everyone, and thank you very much for participating on our conference call for the third quarter of 2018.
Here with me, I have Paulo Nagaiato, our COO, Felipe Negrão, our CFO, Izabel Branco, our CHRO, and for the first time with us on this call, Maurizio de Franciscis, our CDO, that has joined our team recently, just a few weeks ago. He is taking care of IT, marketing, marketplace, and e-commerce. In this quarter, we have taken some crucial steps in the transformation phase of the company, and we had gain of market share in both channels, both in brick-and-mortar stores as well as on the online channel. We have faced a difficult market and other challenges that have affected our profitability in the period. The advancements in our processes of integration and transformation of the company, a lot of them that materialized in the past month, have brought important changes to our operations, especially in our brick-and-mortar stores when we implemented VMI.
It's important to say that we are coming to an end of a year now, 2018, in which we have decided to integrate, replace, or at least to re-engineer a lot of the systems and the critical processes of the company. In addition to being very confident about our strategy and also this new value proposition that comes with it, we are sure that the structural part of the process, that is the most difficult one and very sensitive part of the process, is already behind in this year of 2018. Therefore, we can say for sure that we have paved the road on which we'll be able to accelerate our operations in 2019. Despite of the important progresses, we know that this is a long journey and a lot of challenges will lie ahead.
It's important to say that in a way of turning this progress more tangible, I would like to share with you, and this is still very recent, but we already have promising results coming from these first stages of the transformation. Starting by VMI that had its rollout to all the stores up to the end of August. Today, we are already going over 70% of transactions, those are going through this new system, and we already have benefits there. The conclusion time for sales that have reduced an average 60% versus the Picão, our prior selling system. A variation, a change in the performance of the heavy users of VMI versus the heavy users of Picão that are still using that old system.
There is clearly a performance difference of 30% higher in the CDC for VMI than 20% more for services, and also with some gain in the performance of sales and margin, lower than 5%. That should increase, especially, as soon as we go forward with mobility. Not only in the learning curve for the new system, but also with the functionalities that come with the mobile system. That should be in the next weeks. We believe that by the end of the year, we will have all transactions already running in this new system. Via Única also is our sophisticated tool for data and allows us another level of customization in our media strategy and also CRM. That has allowed us, for instance, in August, to have an increase of 63% in email sales, and basically 70% increase in our ROI in our activities.
It's also important to talk about EVA, our virtual assistant. It's integrated as an app, and it also contributes a lot for the improvement of the performance, especially of those that are getting more engaged with the app. We have our measurement of those that are more or less engaged, and we see that 10% of targets meeting of the most engaged ones and 20% more of average productivity. That is very important figures as well. I should also comment the launching of our new app for Casas Bahia. It was much expected. We did a soft launch of that app at the end of July. We worked throughout August so that we could fine-tune the app, and in September, we had the first month with a whole base of customers using this new app.
Here in September, we had 300% more of orders versus our best month in the year so far with the app, which had been June. We did have an important significant leap there. Now in these past few weeks, we are just seeing the share of this app growing consistently. As a challenge now, we should expedite the acquisition of new clients and customers that will download the app. We are working on that, and we are very excited about this possibility. Last week, we just launched also a Ponto Frio app with the same capabilities of Casas Bahia app. This is a native app, much lighter, and it's using the same platform, and it should bring the same type of benefits to the banner.
I also should highlight another important step we have taken regarding the future of the company in terms of means of payment. We signed a new partnership, we have already disclosed it. A partnership with Airfox. It was incubated at Harvard Lab. By this partnership, we will expedite the process of digitization of credit operation, we will have more productivity for our salesperson because the process will be automated. We also have gone forward with our digital portfolio, we opened the front to new services, which is allowed by this partnership. Airfox is already a digital portfolio that is operating. Also we had another partnership with Getnet to develop a sellers portal that will work as a white label platform for Via Varejo.
In addition to traditional tools, it will also offer bank products to all our sellers and all partners just by one click. It's very easy, very simple. To conclude, I should say that just recently we signed an agreement with Zurich, after that agreement, now Via Varejo is concentrating most part of its insurance portfolio in this same company. Now we are starting to standardize the products and the offers from all the different channels, that will have a significant contribution to our omni-channel approach. I end here my comments. Now I turn the floor to Felipe Negrão, our CFO, he will be talking about the quarter's results. Good afternoon, everyone. Thank you very much for being here with us. Let's start talking about the results of the third quarter of 2018 and business perspective.
On slide number five, in the third quarter of 2018, we had growth of the net consolidated revenue of 4.4%, reaching BRL 6.4 billion. In brick-and-mortar stores, net revenue was up 5.2%. In the online channel, revenue was up in 1%. We should remind you that over the quarter, we did have important tools such as VMIs that have contributed positively to the future performance of the companies that are still in the process of maturation and learning. On slide number six, invoice GMV for 3P increased 19.5%, the performance of invoice GMV for 1P has grown 11.6%. Click and collect still is showing important growth, reaching 31.3% in the main categories. The click and collect is very strategic for Via Varejo.
One, it allows us to have better customer service, lower logistics costs, also the possibility of having upsell and cross-sell both for products as well as for financial services. Which is very important for our profitability. We have around 7,000 points for pickup, 980 stores, 6,000 post office branches. On slide number seven, the competitive environment post World Cup has contributed to pressure in our results. In addition to that, a lower approval rate for credit operations lower efficiency in the selling of financial services has resulted in a reduction of the growth margin of the company from 32.8%-29.2%. We had important gains in productivity in expenses such as PDA logistics. We did have greater investments in marketing in the period, as well as we increased the number of lawsuit settlements, thanks to the Legal Factory project.
The greater expenses with marketing is very important to increase sales of the company and also to foster the download of the new app. The Legal Factory settlements also impact in the short term, but they do bring value to the company in the long term. We still have several projects that aim to increase efficiency of the company without hurting customer service and without compromising the delivery of projects that are important for the future of the company. As a result of that, the G&A, as a percentage of the net revenue, went from 26.3% to 27.1%. Because of that, our adjusted EBITDA margin dropped from 6.9% to 2.5%. On slide number eight, the net financial results before adjustments went from 3.9% to 3.2%. The company had a loss in the period of BRL 79 million.
On slide number nine, the company maintains its sound financial position with a net cash of BRL 1.6 billion. I conclude here my comments and open for the Q&A session.
The Q&A session is now open. Please, we would like to ask you to ask all questions at once. To ask a question, please press star one. Thiago Macruz from Itaú BBA has a question. Hello, good afternoon. My question is about what you announced, this agreement with Zurich. This agreement that you have signed recently. I would like to have more information on that. How did this agreement happen? What were the financial issues? What you should be getting and when? I think it would be nice to have more information on that, please. Good afternoon, Macruz. This is Felipe. Let me explain and put this into context. We did have two contracts with Zurich.
One was regarding extended warranty in brick-and-mortar stores. This was from 2014. Another one was covering all the other products with them, and this other contract was for 2016. These were contracts in which the economy was under different perspectives. We had another agreement that was with Nova and TWG regarding extended warranty on the online channel for products there, for Nova products. As Flávio said, now we have to integrate the activities of both companies, and so it becomes difficult to separate what is an online and an offline sale. We have different channels. It's difficult in the context of these contracts to determine this is an offline sale or this is an online sale. That was also impacting the contracts we had, and the goals meetings, and also the profitability of the company.
We would meet the goal of one channel, and that would have an impact for profitability. If I would sell via another channel, that would impact the other channel. Also because these contracts had been signed in years different, the targets and also the profitability was different for products, and both for Via Varejo as well as for the insurance company. If I were to sell one product more than another, I would find a profitability impact for Via Varejo and for the insurance company. Actually, the customer should choose that. Should choose the channel and should choose the insurance. That's where it all started.
In February, we started a negotiation with the insurance company to try and unify everything, to have everything under the same umbrella, all the contracts under the same umbrella, and all the products in a way that they are equivalent. That is, a customer may choose product A or B according to his desire, and that would be better for our customers, for the company, and for the insurance company. That's how we started. In this negotiation, we have a rebalancing of our goals considering our current economic perspective. Also, we have an extension of the term that goes up to 2063. Contracts now are a single contract with Zurich. We have product A and product B, and it depends. Regardless of the channel, this is an insurance for the product.
This was very good for the company, and this was our main reason to unify the contract. Because of that, there was a great improvement in our NPV for the company. If we check the cash flow, our current contract and this new contract is generating value for our shareholders, which is very important. Also, we see no difference that is significant in our EBITDA for the next years. If there is a positive impact, it's because our customers will be buying better. We'll be able to provide better service, and these customers will be buying more. I believe this will have a positive impact in the financial results, because with this transaction, we will have a total of BRL 830 million, and BRL 715 million have already been advanced, and the remaining part should be in by the beginning of next year.
Probably by the end of the year, this should be settled. I think that's it. We'll have a positive result in our net income for the next years. We'll have value generation, and these are the main reasons why. Perfect. Felipe, thank you very much. In summary, if fact and EBITDA is going to be neutral looking ahead, the net-net of this transition is a good proxy of value for you. It's a good positive result. That is, I won't have to do any negative adjustments here after this transaction with Zurich, right? Thank you. Yeah. Mr. Richard Cathcart from Bradesco BBI has a question. Good afternoon, everyone. I have two questions. The first one is about the pricing strategy of the company.
We see that you had a margin drop in 5% average, I would like to understand if you have a problem in terms of pricing. If you have a problem there, what are the initiatives that you are taking to address the problem and maybe grow in a more expedited fashion, considering that you have that lower growth margin? My second question, maybe can you quantify what you see for next year in terms of legal claims cost reduction? Hello, this is Natalia. I will talk about pricing, and then I'll turn it to Felipe. He will talk then about the legal claim process. As you mentioned, the margin, we don't have a problem of pricing here. We do have a sound investment on our tools, our pricing tools for online channels, for brick-and-mortar channels. This is growing in an important way.
We did have a quarter with two distinct moments. We start the quarter right after the World Cup. It was a post-World Cup effect. It is a more competitive environment. As Flávio has mentioned, we worked to implement several tools, and that is very important for the company. We had to do that type of acceleration, and that is rolling out in the period so that we could adjust ourselves and to start the fourth quarter in a more confident fashion, being able to benefit from all these tools. In addition to that, Via Única that Flávio mentioned as well, it is helping us work in a distinct fashion our marketing investments. Marketing investments with better flow generation and demand in different channels. That also is helping us positively in terms of our pricing strategy.
We see a scenario of adaptation in this third quarter with a higher investment in marketing that is reflecting in our results. We are using all technology that we have been developing over these past few months with Via Única projects. Now we are working in an integrated way with our pricing tools so that we can have better prices, sales increase with margin increase. I think that is what is our outlook for pricing. Good afternoon, Richard. This is Felipe. About the lawsuits. First, we should say that these are expenses that are fixed. They did not stand in the short-term sales of the company. As I have been saying, there is an ongoing project. Actually, it is better than what we had planned. We are now delivering exactly what was budgeted for the year, for this year.
We still have a final quarter to go, so far we are in line with the year budget. For next year, we are still working on our budget, so I will only be sure in a month from now. I believe that nominally for labor expenses, which are the main expenses in this line, we will have a reduction from 10%-20% compared to this year, starting on the first quarter, and that will depend on our will to reduce more or less the number of legal lawsuits, and that will be balanced. As you know, the net revenue depends on the revenue as well, on the sales as well. We are bringing down the number of lawsuits, and also we expect a higher level of sales next year. Okay.
Just to understand, that reduction from 10%-20% that you mentioned, and I know in March figures, this would be for the whole year or just the first quarter or the first month? No, for the whole year. This is for the whole year. We will have a behavior that will be specific for the quarter. We expect to have that per quarter, but distributed over the year. If we decide to expedite the reduction in the number of lawsuits to close, to settle these lawsuits. That will vary between those 10%-20%. It will depend on the decision that we will make next year. Once again, we have not closed on our budget for next year yet, that is what we estimate for the year. Okay. Thank you very much. Mr. Ruben Couto from Santander has a question. Good morning, everyone.
I have two questions. First, can you tell us more about B2B segment and the hub services on the online channel? Because we see 1P GMV growing, but I would like to have more visibility about the rest of the online channel. What can we expect for the fourth quarter? In addition to that, I would like to hear from Maurizio as well. How is the digital positioning of Via Varejo? The increased investment in marketing that we have seen in the third quarter was one time off because of the app. Do we have a structural change, something that we will see next year? I would like to see and to hear a little bit more from him on what we should expect in terms of marketing as well. Hello, this is Flávio, I will address the first part of your question.
About other businesses, B2B had good performance. It was an important growth when compared to prior year. Another component that is important here is wholesale. For wholesale, we are reworking the process, reworking the business, that's important. It's impacting the sales share. Last year, there was a greater share there, other things are part of these figures, but the main deterioration comes especially from wholesale, which is positive. We understand that this is the right movement, we want it to grow again, but following a more sustainable and profitable model. B2B is going very well. It's growing. There are new partnerships coming in. The volume is increasing. We do have opportunities in wholesale. About marketing, yes, I can tell you a little bit. I'll turn to Maurizio for his initial remarks on that.
I'm sure that with the maturity that we are gaining with Via Única, we have been able to have a good visibility on the return, better than what we had before. Therefore, we can make better choices based on statistics, on data, new attribution models. We see the increase of the customer lifetime value. This is important. We didn't measure that before. Now this is being translated on how we see now people are coming and buying with us more frequently. We do have a lot to improve, but just there is an example of increased sales via email, that reflects another direct communication. We have had a better conversion rate because of greater relevance that we have now, thanks to our advancement and segmentation.
Therefore, we see that component of rebuying the importance of CRM growing as Via Única matures, also increasing our returns on investment. Yes, we do have more investments to make at the top of this funnel to acquire apps that as we had in the third quarter, it should continue, maybe not at the same speed when compared to revenue, still, yes, we will have important investments there.
We will have apps there implemented to improve our results from now on. I think that the trend for the next years, our understanding is not to increase the marketing investment as a percentage of the company's GMV. We do have, though, with efficiency gains, to be able to continue doing this type of rationalization. We do understand that this is important, and we already see how this is going to reflect in the sustainable part. Good afternoon. I would like to add. We are having a more precise attitude in terms of marketing and investment, in terms of our decisions. It's very clear, maybe if you consider the variety and types of investment and all the fronts in which we invest with marketing, products, and together with that, we have an evolution in our technology base, the growth in the app use.
Which should play a very important role in terms of sales channels in the next two or three quarters. This also has to do with our marketing cost in order to boost sales. Confirming what he was saying, we have fundamentally a scenario in which we do not foresee an increase in our marketing investments regarding our GMV, and we have the opportunity ahead in this sense. Very clear. Thank you very much. Mr. Luiz Guanais from BTG Pactual would like to ask a question. Good afternoon, everybody. My question has to do with the growth of the Marketplace. Could you talk about the evolution in the number of sellers and SKUs over this quarter? Another question, what about the evolution of Full Commerce? What about the development of this in the last few months? What about your platform, the number of sellers?
Because you have been launching quite a few initiatives, and I believe that VMI will contribute to the growth of Marketplace in the next few years. I would like to understand this evolution, please. Marketplace had a very good evolution in the number of sellers over this quarter and a few quarters ago. We made a decision to make a more restrictive attitude in terms of the coming on board of sellers. This was very important for us. We were able to restrict the process. In the last few months, we were able to combine an important inflow of sellers and maintain your standard of quality, with about 4,100 active sellers and exceeding 2 million SKUs in the same time frame.
As you saw, the growth in sales is also coming very well and with a very good evolution, and our participation is increasing overall, and we believe that this will continue from now on. This is an important point. Now, regarding to Full Commerce, we had the implementation and the launch of the store, the Frete grátis, and we have other contracts that are being signed now. It is also important to say that the integration of the company had an impact. In terms of what we intended to launch in Full Commerce systems, and that will bring to us a few months so that we may have a higher number of clients be included in the platform. We are progressing in these negotiations.
A lot of people are interested both on the industry side and the seller side, some new implementations are already happening and will continue to happen still within 2018. Our expectation is that as of the beginning of 2019, we might be able to have a more scalable and more massive coming on board of new clients as soon as we are able to deliver all these adjustments, all the fine-tuning that we are doing now. We do not expect an impact still within 2018. We will still see this format. For 2019, this will be an important component of our strategy and evolution of the model, as well as the revenue inflow that we will have because of the coming on board of new clients. Thank you very much. Gisele Oliveira from UBS would like to ask a question. Good afternoon, everybody.
I would like to know what went wrong in this quarter. So far, little has been said about VMIs, and I would like to know. Well, you already have 60%, and the time for conclusion is much shorter. The performance is as you described. With all that, the impact should have been positive, but I understand you had problems in terms of the implementation. Now, what kind of problem did you face? Was it a pricing problem or systems problem, or maybe a blackout situation? Because we hear so many things that we don't really know what is going on. What went wrong in this quarter with this implementation? Because it came as a surprise to us, and I would like to understand, already linked to this. You talk about lower sales in services and credit operations.
Is this associated to the problem that you are facing in the operation of stores with the new systems, or is it just a change in your policy? I would like to better understand. Paulo said that the quarter started very difficult with competition and the problem of the World Cup. I understand that you expected a certain improvement over the quarter, and this did not happen. I would like to start with the impact of the systems implementation. In this quarter, more specifically, this was important because we made an in-depth change in the infrastructure of our stores, in terms of connectivity, so that the new system could be implemented. Also the implementation of the app. I'm talking about two things.
Like any other change, any other major change, there are some initial instabilities and some adjustments that are necessary, and they have already been carried out. Now we already have the system in place, the adoption was lower over the quarter, it started accelerating after we reached a higher degree of confidence in terms of stabilization of the system and the advantages that you mentioned, that I talked about, the problems that we saw recently and that helped us in the quarter. As always, Paulo said we had two moments in the quarter, two different moments in the quarter. The second moment was a moment in which we started to reap some benefits already, we could have achieved a better performance if we had not needed to carry out these adjustments.
Because of all that I have just described, we delivered the performance that you referred to. I would like to ask Paulo to add. As Flávio said, as far as we were concerned, it would be fundamental for us in the third quarter, going back to Richard's question, to have these implementations in place so that we could go through this robust change. In order for us to get into the fourth quarter already reaping the benefits of these changes and not having this only in 2019. In face of all these changes in the third quarter, this was very important for us. There is an adaptation period, a period in which we have to do the fine-tuning, and because of that, we cannot reap all the benefits of all the advantages that are brought about by these tools.
Felipe referred to a change in our credit policy as well, and this was extremely positive for the company, and it is very positive for the company. If you look at the P&L of financial services, however, it brings about a lower revenue inflow and benefit in terms of our PDA, and this revenue generation has an initial impact on our gross margin. We already see a positive situation, and this is why I say that in the third quarter, we had two different moments. At the end of the third quarter, with the tools already in place, mainly with VMI in the stores, we already see a gain in productivity in the offer of services, especially financial services and direct consumer finance.
That already allows us to go back to the trend of offers and sales, going back to the previous level, the level that we had before implementing these changes. This brings us the benefits that we expected from the implementation of the tools. We also have investment and adjustment in our marketing strategy that you can see in our results and in a very positive manner. This has been showing a very good impact on the traffic of clients into the stores and also online, integrated to the pricing policy. Here I go back to what Richard was saying, allowing us to have an important evolution in our pricing model, aiming at the best.
The best offer with the best margin and the balance between our offer and the margin. So in a nutshell, we had two different moments in the quarter, and in the second part of this quarter, we had very positive signs with a recovery of insurance operations and financial services and improvement in the traffic of clients and the volume of our business as well. We see a very positive trend here, and we are very bullish about that, and we believe that this will continue for the next few quarters. I think it's a little bit more clear. The adoption today is also more than 60%, or almost 100% with VMI. 70%, 75%. We've ended the third quarter with the third quarter. In the fourth quarter, we will have a total implementation.
It is important to say that in terms of security, we have the two environments operating for those who had difficulty regarding the use of the new platform. The old platform is there as a contingency and also being flexible as much as necessary in order to cater to everybody. Lastly, you talked about the volume of sales and that you have already recovered the level that you had before the implementation of the changes, correct? I think this is what you said. We had an important evolution in the volume of sales over the quarter, and this shows a good level of productivity of the team, but especially the more positive combination of all factors: productivity, offers, pricing, and flow or traffic of clients. Gustavo, as we are talking about credit, I would like to add to what Paulo said.
We have been talking very frequently about the change in our credit granting policy, credit assignment policy, and 2 years ago, it was around 70% approval, and now we have about 50% approval rate. You can see our credit revenue, you can see the improvements in our PDA. Part of the PDA is in credit. You also have the financial expenses. In the last quarter, we grew over 50% because of the credit operations, and this has an impact on the gross margin. This is important. But at the end, it is positive for the company, and as Paulo said, inside the store, we will be able to offset this lower rate of approval. We will be able to offset this. There are other initiatives outside the stores as well that will make our process much faster.
We also will be starting a pilot for our employees on December 5, and it is part of what we call the digital CDC. If you don't have a purchase approval because of your credit limit on your card, and this happens quite often, we will be delivering this as of December 5, starting with our employees, just to see if it really works. Then we will be pre-approving this. Afterwards, we will make this delivered or made available for everybody. What would be the effect of this lower credit approval rate on your margin? You had almost 400 BPS in terms of effect on your gross margin. This has to do with revenue from credit operations and merchandise operations, which has impact on the gross margin.
Because of our P&L, you have the interest revenue, of course, coming into play, and you have the PDA and collection, et cetera, the financial expenses that you can see. It's very easy to check the math of that, and you can see the impact there. Joseph Jordan from JP Morgan would like to ask a question. Good afternoon. I would like to ask a question. Thank you very much. You talked about competition and that this had an impact on the quarter. When we look at the level of inventory of the company, you mentioned that this was kept due to strategic reasons. I would like to know if we should expect Via Varejo being a little bit more aggressive, commercially speaking.
Maybe waiving a little bit of the gross margin in order to recover growth. Felipe talked about the costs, and I would like to understand, besides the consumer direct, the CDC, what could we see on Airfox, and how would you monetize this platform initially? If possible, could you give us some details about the economics that lie beyond this? Hello. This is Paulo, and I will be addressing the first part of this question. About this past quarter, we are prepared to have a strong quarter. We know that we are just in the beginning of the fourth quarter. It is a period that has great influence with Black Friday and Christmas, our performance depends upon what lies ahead. All investments that we're making now, all those changes and a well-positioned inventory that we have, all of that allows us to have a robust planning.
I think we are well-prepared vis-à-vis our negotiations with the industry. Also, pricing model, models evolution, and marketing as well. We are starting this quarter with new configurations. The app is the first one that we will see. The app is going to be available. We'll be able to offer different things to our consumers. We will have more productivity, more ability to serve customers. We are optimistic about a good execution in this last quarter. The combination of factors and a well-sized inventory for a robust sales period makes us feel comfortable about facing this moment. Hello. This is Felipe. Good afternoon. About Airfox, let me give you more information on it. On December 11th, we will start a pilot of Airfox. We'll be able to conclude all the credit operations in the stores that we'll be selecting as pilot stores.
You will be able to have the type of availability of credit operations at those stores. We are already operating right now. We are just concluding the process, the bid for the prepaid card and the digital account. We are working with a banner, also another for a processor, another one for the card issuer. In December, we will conclude the bid for these three areas, we should have the prepaid card linked to the digital wallet very soon. Brand is very important for us. We have everything ready in our portfolio, but we have to spend another area right now because we are studying the brand. We're working with that with Airfox to see if Airfox is the name that we're going to keep, if we'll change the name, or to which name we will switch, if that's the case.
Right now, we are working on a strategy to tap into clients. To start, we will depend on the conclusion of this study, which should happen in January. We are in line with the process, with the schedule that we have established and taken to the board. Next week, we'll come up with a new agenda to see if we can expedite the process. This is a network effect business, the fastest, the best. That's how we are working now. We are checking how we can accelerate it, expedite this process. We are following this up very closely so that we can deliver all agreed due dates. Thank you. Tobias Stingelin from Citibank has a question. Hello, everyone. Hello, Flávio. When you're talking about the quarter, you said we are growing, now once again, you said 70%-75% with VMIs.
You said that we know that we have challenges ahead. I would like to know, what are the great challenges that you see ahead? You have to conclude the rolling out in the fourth quarter, what is your main concern in terms of challenges now? Another question, you have been testing VMIs in 100 stores, now you're saying we are expediting the rolling out. These tests that you held before in these 100 stores didn't give you visibility enough? Anything went out of your control? Was there something that you did not see in the past? Thank you very much for your question. Yes, we do have some challenges ahead. I think the challenges are always there. Still in this structural stage, we need to take the final steps on our integration process. We have gone forward very well in the project.
So that at the end of December, we would have the total integration of the company starting 2019 with a single system and under a single company ID number. I think this is going to be the most important in terms of operations of processes and systems. Yes, we are following our schedule. We have a learning curve. We are taking the best out of these new systems and new processes. We do that when we work on it. Now we are working on a continuous improvement system on top of this margin and this new structure we have designed. It's important for us to know that we have that ahead. We are optimistic regarding the choices we have made that are mitigating risks of such an implementation. This is a huge implementation, and we are working hard so that we have no major impact.
I told several of you, I don't know if I did talk specifically to you recently, but we have started this transferring of systems in a partial way so that we could work on a safe side. We have run dozens of thousands of orders from the online under this new system of Via Varejo. By running these thousands of orders, we transferred categories, furniture, TVs, mobile phones, and so on. This partial transfer allowed us to identify adjustments, bugs, improvements that needed to be made at that moment of the integration. We have then decided this transferring process right now, so that we could go through Black Friday and conclude this transferring process after Black Friday, turning everything into a single system after that.
About VMIs, yes, we did run the pilot projects, when we scaled it to other stores, it's only natural that in the scaling process, other things did come up and things that did not show in the pilot process, nothing critical. It's important to mention these were natural instabilities of a large rolling out process. They were quickly addressed, and they are part of this type of process, this type of rollout. I am sure that other companies that have done the same thing also had the same problems. We now are confident that we have a stable process and that is already bringing us gains, as we have already mentioned. Just a quick follow-up. If we look at a trend and everything that you have said before, sales that have grown but did not grow that much, it was a modest growth.
The margin dropped a lot. You have the impact of the financial services, as Negrão has said. You had expenses, you had marketing, you did a lot to grow sales, but sales did not react or didn't react as expected. Obviously, you mentioned systems and other factors. Looking ahead and considering that improvement trend, what can we expect for the fourth quarter? Do you believe the margin will come back to normal? Sales are towards a better direction because the scenario is different, right? Tobias, this is Paulo. You know that we do not provide guidance. I will try to help you in this rationale. As we said, we had a quarter with an important growth in different factors. Those were present at the end of the third quarter.
With the extent of this performance, we also do depend on market conditions also in the third quarter. As far as this period is concerned, where we have the great seasonality of the year, we do have a great expectation of sales increase. We also expect it to grow in margin and also greater demand expressed by our new marketing strategy, considering that all of that is a combination in order to have more sales and more margin. A better execution, maturing the execution with all investment that we have been making, that has great tools that are helping us to make decisions in terms of pricing, media, and sales. We believe the fourth quarter will have a great performance. Thank you very much. Now the Q&A session. We would like to turn the floor back to the company for their final remarks. Very well.
Thank you very much for participating, for asking questions. I would like to stress that the whole team is committed to keep on working hard on the company, accelerating in this transformation process and looking for all types of opportunities we can to generate value that is going to be reflected in our P&L in the short term. We have to do both things together at the same time. Working with these strategic partnerships, we foresee a successful path ahead, although we know that we will have challenges in the future. Once again, thank you very much. Have a nice afternoon.