Good afternoon, everyone, and welcome to the results conference call of CVC Corp for the fourth quarter 2023. The presentation will be led by the CEO, Fabio Godinho, and by the CFO, Carlos Wollenweber, who at the end will be available to answer any questions. We would like to point out that the simultaneous translation tool is available on the platform. To access it, simply click on the interpretation button at the bottom of the screen and choose your preferred language. This conference is being recorded and will be available on the company's IR website, which includes the presentation presented here. Please note that all participants will be in listen- only mode during the presentation. Ensuing this, we will begin the question- and- answer session when further instructions will be provided.
Before proceeding, please bear in mind that forward-looking statements are based on the beliefs and assumptions of the company and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events, and therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists should bear in mind that events related to the macroeconomic environment, this segment, and other factors could cause results to differ materially from those expressed in the respective forward-looking statements. We will now turn the floor over to Fabio Godinho, who will begin the presentation. You may proceed, sir.
Well, good afternoon to all of you, and welcome to the earnings results call for CVC Corp for the fourth quarter 2023 and the second quarter that has been disclosed since we took up the company management the second half of the year of 2023.
The fourth quarter, we have some highlights, of course, several enhancements that we have been doing in the company and that have offered a significant result as part of the financial and operational indicators. First, we have the cash net income that we began to follow up on when we arrived at the company. Now, for the second consecutive quarter, this indicator has become positive with BRL 18.8 million of net income for the fourth quarter 2023, a reversion of more than BRL 216 million vis-à-vis the fourth quarter of 2022, showing the commitment of this management in generated cash for the company. Now, to speak about our top line, a priority, of course, and a focus for B2B sales. It's important to highlight that the confirmed reservations in B2C versus the fourth quarter 2022 had a growth of 21.2% with same- store sales versus the same period last year increasing 20%.
As part of those 20%, we consider the sales of the RexturAdvance that take place at the sales points of CVC. Their sales of air tickets, part of the online sales carried out in our franchise network. The figures are quite expressive for the fourth quarter 2022 in B2C with a network of offers for domestic traveling in Brazil vis-à-vis the fourth quarter of the previous year, with an addition of capacity. This shows the robust recovery of sales on the part of our franchisees. Once again, shows that CVC has a good market share and our stores, our franchises recovering their financial health, which accredits the continuity of the opening of sales point during coming months. We opened 60 stores in the second half of 2023. We had had a series of continuous closings.
Now, regarding the net revenue, the increase was 9.6% thanks to the strong increase in take rate vis-à-vis the same period last year, and by maintaining that level of 9.6% as part of the consolidated results of CVC. This already points to a certain stability in our take rate levels following our historical results before the pandemic. Now adjusted EBITDA with a significant improvement, BRL 86.4 million for the quarter. An improvement quite similar to what we had in the third quarter with BRL 82 million increase versus all EBITDA in the fourth quarter 2022. An EBITDA margin of almost 25%, 23.2 percentage points. Once again, almost the entire increase versus the fourth quarter 2022, a robust decrease in general and administrative expenses, as we have been carrying out every quarter, going more in depth with the figures that we developed.
We have a reduction of almost 30% in SG&A, with an increase in customer satisfaction, increase in the satisfaction of franchisees, and increase in sales. What is important in this result is that after several quarters, the company has attained a breakeven in operating cash flow now in the fourth quarter. It is important to underscore that part of the breakeven includes the consumption of the company's working capital. Further ahead with Carlos, we are going to show you that cash burn quarter on quarter. In the third quarter, we improved the take rate net revenue. We have cut down on costs and improved the top line, but the working capital needed some quarters to fully absorb, with maturity, all of the actions we were carrying out. We had an important cash need in the last quarters, including in the third quarter, despite the enhancement we had in the P&L indicators.
Now we include the indices of the balance of the fourth quarter 2023, closing cash at BRL 482.8 million at the end of the year. It is important to mention that we had a successful funding of the follow-on with subscription bonuses of BRL 226 million. This reinforces the capital structure, which as a total has BRL 800 million. We have been communicating to the market since we took on the management, and after the follow-on, the pillars of the strategy, which are back to basics for CVC, and that we began implementing in the second half of last year. All of the results we have just mentioned, these four pillars, which we have communicated oftentimes to the market, are corporate governance, reinforcement of capital structure, a right strategy, and of course, a team with a very significant track record to minimize the risk of execution.
I believe that we have just referred to the results based on the figures delivered in the last six months. Let us begin with the corporate governance, which is where we plant all of the other seeds. What we want here is to have a combination of shareholders and players who have deep knowledge of the capital market as well as the tourism market. As everybody knows, the Paulus family has come back as the major shareholder of the company, along with partners like Opportunity, with a deep knowledge of the capital market and replicating what happened when the CVC was extremely successful along with Carlyle. Of course, these shareholders have a seat in the board and they bring together knowledge of the financial market.
We have Flavio from Patria, Eduardo from Opportunity, and Mateus Bandeira and Valdecyr, who have deep knowledge of the tourism market and the CVC core companies. With Valdecyr and Mateus, our two independent advisors, we have a very good governance for CVC Corp. Secondly, we are reinforcing the capital structure carried out through our primary, well, our follow-on, I am sure, sorry, that ended up with BRL 800 million in gross capital coming into the company, equaling out the structure, the balance, and enabling the company to have the financial tranquility to continue on with its operations, growth of sales, the growth of stores and franchises, giving confidence to franchisees, shareholders, partners in the capital market, and confidence of our employees. The company has a sound financial health to continue on with all of the strategies that we want going forward.
Third of all, the strategy that we have set forth for the company, as many of you have heard in the different meetings we have had with the market, this strategy is based on four main points. First of all, the return and the company focus on exclusive products, strategic suppliers, a volume concentration, a portfolio curatorship, so that we have 80% of the volume concentrated on 20% of the suppliers. This is a warranty of availability and price among our products, among our main partners, the air products to offer more leases, block out passages both domestically and internationally. The development of new routes, which not only will increase the strategic competitiveness of the company with products that only CVC has, but also with a significant impact on the cash flow because of the share and penetration of strategic products, exclusive products, where we have a different way of payment.
We have already reached a breakeven in our cash flow in the fourth quarter of 2023. The land packages, which had practically disappeared, we once again offer them to our franchisees. This has a much higher take rate. We are speaking of non-air packages where you can issue an air ticket based on miles and combine this with the different options we have of non-air packages that have been launched. Now, these packages reflect the deep regional knowledge that CVC has, which is very difficult to replicate. These packages are geared to a regional demand, and they had practically disappeared. This reinforces the deep regional knowledge that CVC has of every region in Brazil. All of this reflected in Black Friday, that ended up being a huge success, the best sales day of the company.
We had 40% growth of sales vis-à-vis the previous year, with 84% growth in margin take rate, showing the commitment of our sales team, our franchisees, our product team, our marketing and operations team, enabling us to attain the successful results during the second half of 2023. Another important point of our strategy is the diversification of payment methods, alternative payment methods, to aid and abet the customer not to use the limits they have in their credit cards. Nowadays, 2.5 passengers will acquire the same package in CVC. Families travel with 2.5 people buying the average tickets of the company, and obviously, this is a relevant ticket for the average Brazilian company. So we help our passengers. They are the raison d'etre, the reason for our existence. So we guarantee them the best assistance through alternative payment methods. We, of course, have the credit card.
We're back to our credit table now that the company has sufficient funds for this. But of course, in a highly controlled way, this represents 10%- 12% of our B2C sales, with relatively low default levels, lower than 1%. So, not to use the company equity to do this, but to offer alternatives to our customers. In the second half of 2023, we have an exclusive line of Banco do Brasil to fund the ticket in 60 installments. We also have what is called the FGTS Saque-Aniversário withdrawal payment through the PicPay platform, and pilot program for payroll deduction payments for public servants that will become part of the package in 2024. We have also reinforced the phygital journey. Nowadays, phygital represents 30% of the store's transactions at CVC. It's an important way in which customers can acquire their vacation packages.
They begin with internet, but they do want to close the packages with a franchisee at a store because of the confidence they have in the system. This has generated several campaigns on Instagram, WhatsApp, Facebook, media using artificial intelligence. We go down the sales funnel until we get to the face-to-face service for the close of the package. Now, when the travel agent closes the package, the sales conversion tends to be 4x-5x higher than the sales conversion of 100% digital platform. We have been going more in depth, qualifying this type of process so that we have a greater penetration of this form of selling in our stores. When it comes to implementing enhancement, this phygital journey is using artificial intelligence integrated with the front of our stores.
We are now in the 4.0 version of Chat CVC, a proprietary app from the company. The integration of WhatsApp and CVC in the sales platform, when we generate a lead for the store, is integrated online, but through the sales front, not through the seller, but through our sales tools. We are able to control how many leads we have in the store conversion, cost per lead, as well as additional metrics we have been measuring since we began to toil in this phygital sales journey. We have phygital sales offer, a dynamic budget, and several other tools that we're putting in place, and that we will gradually disclose in the coming quarters, all of which will substantially enhance this very important way of selling, which is the phygital sale.
We're ready to service digitally 100% and physically 100%, but we truly believe in this mixed format where people mix the practicality of an internet consultation with the confidence and security of closing a package at a store. There are several details when you're closing a package, the time of the trip, and all of this is done at a store. This is a streamlined way of selling vacations and had a significant impact at the end. There are regions that have 45% of phygital sales. We have stores with a 75% penetration of phygital, and 35% of the CVC network is selling based on this format. That is why it is important to bring together the stores in the hinterlands and stores in the capital cities, where the type of transaction tends to be ever more transactional, and the stores in the hinterlands are more relational.
There are regions that work more with a phygital journey, others work more with a physical journey, some working 100% with the phygital journey. CVC is a domestic company. It is the only company that extends nationwide with deep knowledge, and we are ready to service whatever it is the customer wants to acquire. Another fundamental point of bringing together the physical and digital is that previously, when CVC focused 100% on physical sales, it was in shopping malls or in cities with 100,000 inhabitants, the most expensive sites. As we have customers walking through the door of a store and through a computer, we can work with a lower CapEx and a lower OpEx. Presently, therefore, we can enter cities of 15,000 inhabitants. Until 2019, CVC was in less than 10% of Brazilian cities.
We now have a huge market opening up with 50% of the cities of Brazil, and CVC uses technology to open more stores where we have that combination of the support of physical sales plus the digital sales. We had the opening of stores for the fourth quarter, 42 new stores. As part of this back to basics, we are trying to eliminate all of the issues so that our stores that have a deficit can be cleaned up. We have closed down 26 stores during the fourth quarter, and now in 2024, we expect to close stores of only five per quarter, five to 20 stores per year. Which means that we are cleansing out the stores with issues, with problems, with a deficit, and we will go back to a normal pace in store closing.
Our goal to grow the number of stores this year is 290 new stores, approximately, as we have already been broadly communicating to the market, with a significant growth of penetration in smaller cities and cities outside of the capitals. We have corporate governance that is right, a capital structure that is well-adjusted, a very clear strategy so that everybody can execute it. We eliminate the risk of execution through a team that has a broad track record in the tourism market. As we have mentioned oftentimes, we have six directors in our business units and four directors in the support units. So in our business units, we have Belan, Carla, Hugo, Marvio, Bruno, and Diego with deep experience in their verticals, and they are responsible for each brand within CVC.
On the other hand, we have Fabio Mader , Ricardo, Paulo, and Carlos, and they work horizontally, rendering services to all of the business units. I will now give the floor to Carlos, our CFO, who will go into the details of our figures for the fourth quarter.
Good afternoon, and it is a pleasure to present the operational and financial figures for the fourth quarter 2023. On slide 18, you see the good performance of our confirmed bookings in the fourth quarter. Sales totaled BRL 3.8 billion, an increase of 9.1% versus the fourth quarter 2022. We sold BRL 15.4 billion, a growth of 10.4%.
This growth was driven by CVC Lazer in Brazil, that grew 18% for the year due to three factors: an increase of 20% in same-store sales, a good performance during Black Friday, and the opening of 42 stores during the quarter in Argentina, a growth of 20% a year and 17%. We had an interruption of marketing to some areas, which was correct because of the credit risk and a reduction in international sales hampered by the war in the Middle East. We go to the right of the slide. Net revenue and take rate, we had an increase of 9.6% in revenues vis-à-vis the fourth quarter 2022, totaling BRL 352 million, and a growth of 5.8% for the year totaling BRL 1.3 billion. The growth in revenues in CVC Lazer was 11% below the sales growth.
Given the average term of boarding of the passengers due to the share in exclusive products, then enhance the working capital dynamic in CVC, as we will see in the other slides. The graph shows our priority for healthy sales in the three business units. We expanded the take rate of CVC Corp by 0.7 percentage points totaling 9.4%. In B2C Brazil, the expansion was 0.6 percentage points. In B2B Brazil, 0.4 percentage points. And in Argentina, 0.8 percentage points. In the next slide, we show you the consolidated financial performance. We had an increase in margin in sales, reduction in expenses, and a better dynamic of working capital. We reduced our G&A 28.7%. In January, we had a reduction of 10% of headcount in Brazil. G&A over net revenue had a reduction of 78% to 54% in the fourth quarter.
As a result, we are reporting BRL 86.4 million of adjusted EBITDA versus only BRL 4 million in the fourth quarter of 2022, consolidating a margin of 24.4%. For the year, adjusted EBITDA had a growth of 165%. It is important to recall that the result of 2023, in essence, was built during the second half of the year after a change in management and the capital increase carried out in June. Another important data is the cash net profit. In the fourth quarter, we delivered BRL 18.8 million versus a loss of BRL 198 million in the same period of 2022.
To go down to the capital structure, to the right of the page, you can see that we had a reduction of BRL 200 million and some in our debt for two reasons, because we had a successful subscription bonus and the break-even in the operating cash of CVC because of a better dynamic in working capital in Brazil due to the share of exclusive products and an anticipated marketing, as you can see to the left of the slide. We ended the fourth quarter with BRL 483 million. I would now like to return the floor to Godinho to conclude the presentation.
Thank you, Carlos. To conclude, of course, we have in the second half of 2023, basically concluded our strategy of back to basics. We enhanced sales, we enhanced same-store sales. We had a positive dynamic in store opening. We adjusted the profitability structures of B2B and fostered a significant reorganization within the company, and we can clearly see the results through the EBITDA that the company delivered, not only in the third, but also in the fourth quarters of 2023, bringing together sales, a better take rate, and an increase in profitability for the third and fourth quarters.
Along with the governance, the capital structure, the right strategy, and the right team for the implementation, we practically have concluded the back to basics strategy with the company at a break-even position, which was one of our significant goals. Going forward, we will work with a combination of all of these factors. Additionally, for 2024, we will significantly enhance and streamline the CVC business model, because back to the basic is a strategy that extended for six months with very good results.
Going forward, we have to think about the next 50 years of CVC, and quarter on quarter, we will speak about all of these transformational projects that truly streamline the CVC business model. Thank you very much for your attendance, and this concludes my presentation.
With this, we will go on to the question- and- answer session. Should you have a question, please click on the Q&A icon at the bottom of the page. Write in your name to become part of the queue. Our first question is from Ruben Couto from Santander. We are going to unmute your mic. You can pose your question. You can proceed.
Good afternoon. We have two questions at our end. First, I would like to hear about trends in the B2B segment, more specifically in the fourth quarter, which is the impact of Israel. How has it impacted the fourth quarter, and how does it compare with the reduction that you had previously? W e believe this exposure to milheiros will continue during 2024, which is the procedure you will adopt for this. Regarding Argentina, if you can share with us something regarding the beginning of the year, this first quarter, and which will be the impact because of the devaluation of the peso and perhaps a slowdown in consumption that we see in other companies that also happened here in October and November. If in the beginning of the year, there was a more negative macro effect. Thank you.
Hello, Ruben. This is Godinho. Thank you for the questions. First of all, regarding the B2B dynamic, how did this work? Of course, we have several travel agencies with this focus on religious groups to Israel. We service them through the advanced structure.
Now, if you look at the total drop in revenues that we had in the B2B segment, I would say that 10% is due to that problem of the war in the Middle East, where we had to cancel the trip of groups and postpone the date for the future. Many of them did not receive a reimbursement. They simply set up another date, but there was a negative impact in the boardings of the quarter. 90% of the impact of this drop, as you mentioned, is due to the size that we have with the people traveling on miles. Before the problems of 123milhas and other companies that had credit problems with a default of at least BRL 100 million in the market and where CVC had no impact whatsoever because of this impact that most of the market was exposed to.
This was very positive for us, of course. Our vision and our goal in B2B, that had a transition in the third and fourth quarters, is clearly to improve the profitability of this segment in having a higher share, a very high take rate, like we have in [inaudible], but also in the company that makes BRL 5 billion of gross bookings a year and in which we are fostering a significant enhancement in their take rate. Our focus here is quality in the net revenues we have, quality of the take rate, and quality in the service that we offer to travel agents. If you recall, because of this, we separated the business units that had all been joined together under the B2B unit. We once again created TREND Viagens, RexturAdvance, and Visual Turismo that will begin to operate in 2025.
This led to an enormous [churn] of customers and a radical drop in take rate. All of this has gone back to normalcy with specialized service for each vertical and [inaudible] going from 3% to 5%. This is what is happening with B2B. The priority is quality and service, of course, with profitability and respect the role of airline companies and work very carefully with those that are traveling on miles. Of course, we're not going to ignore the rules of the game, whether it is in the hotel sector or airlines. If the airline set forth a rule that we can't service people traveling on miles, we will comply with this. Luckily, we had no impact of the huge default there was in the market.
The dynamic of results in Argentina, as you mentioned, before the election, because of the exchange rate gap, it was an advantage to anticipate the purchase of your trip. Before the elections, there was a change between the black market and official market of 50%. After the elections, this gap dropped to 20%-25%. It now stands at 23%. The Argentines, who are quite used to this volatility, anticipated their purchases, and we had significant growth in the confirmed bookings in the fourth quarter, and these will be consumed in the first quarter. The first quarter will have all of these confirmed bookings, where passengers will board, and this will be positive for us in the first quarter, vis-à-vis the bookings that were confirmed in the fourth quarter. There's another dynamic that has aided and abetted us in the fourth quarter of Argentina, the sale in dollars.
Before the elections of President Milei, you know that in Argentina, 90% of the share of trips are international traveling, and they're quoted in dollars, but you could only sell in pesos. So there's an exposure of the exchange rate. Either you are exposed or you work with a hedge, and this was a problem for the company. When the new president took office, the companies are now able to sell it to the dollar, as this is possible. We did this in Ola since the beginning of the year. We have Ola working with multi-brand agents and Almundo working with a base of franchisees as if it were CVC, a single brand of travel agencies in Argentina that represents what CVC is in Brazil. In the first half of March, we were able to adapt the system of Almundo so they could also sell based on dollars.
Now, the sale in dollars as part of the sales represents 70% of customers buying their tickets on dollar because they do not have the country taxes, and the dollar exchange rate is more favorable, and this gives us a competitive edge. The local online sellers are unable to sell based on dollars. We have recovered our leadership position in international traveling that represents 90% of the Argentine tourism market. In March, CVC is now a leader in the issuance of international tickets. We do have some data for the first quarter in Argentina as well.
That was very clear. Thank you, Godinho.
Thank you, Ruben, for the question. Our next question comes from Victor from Itaú BBA. We are going to unmute your mic so you can pose the question. You can proceed.
Good afternoon, Carlos and Godinho. Thank you for taking my question. Regarding Argentina, you mentioned a non-recurring event, if you could give us more detail about this, and if we should expect more non-recurrent events in the coming quarters.
My second question refers to working capital. When we look at the line items of supplier advancement and other line items, if you could explain which were the drivers underlying those line items in the fourth quarter, and how can we think of the evolution of these line items in the coming quarters. Regarding working capital, if you could come up with a response, taking into account an evolution of the volume of discounts going forward. These are my two questions. Thank you.
Hello, Victor. This is Carlos. I will answer your question. First, about the provisioning we carried out for Argentina, not very different than when we entered CVC Brazil. We reinforced what was in the company. As CEO and CFO, we revised all of the processes, the compliance of the local company. We hired consultants to assess the contingencies in the company, especially Ola, Almundo, and Biblos, and we created a provision that we deemed to be sufficient. We are going to follow up on this in the coming quarters. We do not expect to have new provisions for coming quarters.
The second point that refers to the working capital dynamic as Godinho underscored in the presentation, we are based on a tripod, which is increase of profitability, reduction of expenses, and an enhancement in the company working capital. This quarter, we begin to see a more robust growth of exclusive products and parcel or sales in installments. Even if we take away the subscription bonus, we did not have the operational burn of cash. The operational cash flow was neutral in the quarter, and we have reduced indebtedness because of the subscription of BRL 225 million, reducing the net debt of the company. I hope this has answered your two questions.
Well, thank you. Thank you very much.
Thank you, Victor, for the question. Our next question comes from João Soares from Citibank. We are going to unmute your microphone so you can pose your question. You can proceed.
Thank you. Good afternoon, everybody. We have two questions regarding B2C. If you could convey to us your outlook for the beginning of the year, and that extension and penetration of exclusive products would seem to be interesting. Which will be the penetration this year? How plausible is this expansion if we think that airline companies like GOL are facing enormous problems, and this impacts the pace of the increase of penetration of exclusive products? Those are my questions. Thank you.
Hello, João. Thank you for the question. This is Godinho. The B2C dynamic, as you know, the B2C dynamic, contrary to B2B where we focus on service and profitability. In B2C, we are focusing, of course, on profitability. You saw the significant increase we had in take rate in the third quarter, and we are going to maintain that going forward. We saw the continuity of the take rate in the fourth quarter, higher and in line with what we had before the pandemic, along with the growth same-store sales, focusing on profitability of our franchisees. In the fourth quarter, we saw same-store sales. We did not highlight this very much, but it was 20% in our base of 1,050 stores. Few companies in the retail market had that type of growth same-store sales throughout the fourth quarter.
This additionally to the growth of our store base. The plan has been disclosed in our IR site. At the end of last year, we worked on a presentation along with BTG Pactual to speak about the growth of stores throughout 2024, representing a 30% of expansion of the physical footprint we had. We opened 60 stores last year, and we are now opening 290 stores throughout this year. Last year, we also had a cleaning out of the base of stores. Stores in a situation of deficit that continued to work, and as part of that policy of transparency towards the market, making the necessary adjustments and the balance. Of course, this will generate noise in the third quarter and in the fourth quarter, but this is something that has to be done, and it is better to do it initially in the first and second quarters.
We are working with these accounting adjustments, non-recurrent effects that do not have a cash effect and changes in the store base. We opened 42 stores in the fourth quarter. We closed down 26 stores, but this is an adjustment that will not be repeated in the coming quarters. In the first quarter, we have returned to a normal level of closing, which is closing five stores per [quarter] and 20 stores per year. We will have net store openings going forward, and you can imagine the benefits this will have on the results of 2025, 2026, and 2027, gaining maturity with a full year of results. The harvest, the opening of these new 60 stores that were opened in the second half of the year are at 120% of our historical curve.
We follow up on these stores daily. They are performing 20% above our historical curve. A truly positive performance therefore. So B2B, grow margin, grow same-store sales, which is already happening, and expand the physical footprint of stores. We are going to detail that as part of the release for the first quarter. We recently had the convention of CVC franchisees. We brought together 2,000 people in the city of Gramado with all of the DNA of CVC. We had a large number of stores that were signed up by the existing franchisees, people who have been in the system for years and are reinforcing their commitment and confidence in the results that we have been attaining in B2C. So this is the guidance and this is the dynamic that we foresee for B2C throughout 2024, 2025, and 2026.
The second question, referring to the market dynamic for air tickets and penetration of exclusive products. Our exclusive products represented 7%-10% of total sales. In the fourth quarter, we had a penetration of 15.6%, increasing penetration twofold as part of the total consumptions for CVC, which is also part, of course, of that contribution to a higher take rate and an improvement in working capital. In the first quarter of 2023, we were consuming BRL 220 million per quarter. We zeroed out this account in the fourth quarter. It is in P&L and in our balance now to put up blockades in freight flights. We also work in airline management and hotel management. Until the day the companies begin to operate, you have to sell before. You can open up sales without having six months before. Everything will be very gradual.
We will see this quarter-on-quarter growth in the second, third, and fourth quarters. We imagine a penetration that will be double of this or perhaps less throughout the year, reaching the end of 2024. We have to allow the strategy to mature. The company has to deal with the blocks in the system way before to be able to make the most of this type of product in terms of availability and capacity that we have. I will say that we will have more exclusive seats this year than we had in 2018, 2019. What is happening this year, the economy is somewhat more sluggish than it was last year, and with a deflation in the capacity of GOL, it is strong. It impacts the market. GOL was a leader.
LATAM Airlines has a 40% share in the domestic Brazilian market, but LATAM Airlines and Azul are growing in ASK 10% a year, while GOL has had a drop to 8%-10% of ASK. As net this year, we should have an additional capacity of 5% in domestic flights. It's not a year of retraction. It should be a year of growth, as demand is somewhat softer than in previous years. We see this from the data of ANAC in February, where we had a drop in occupation. Even with a more restrictive network, there's a drop in occupancy vis-à-vis the previous year. We should see the same in March, and this opens up an important window of opportunity with all domestic airlines so that CVC can become a feasible alternative for the occupation of those seats.
Based on our supplier base, we know there is no overlap of clients. Clients buying directly from the owner of the assets, whether they are the owners of the airlines or the owners of hotel networks. As funding alternatives exist in the traveling package, and they don't even know how much they're paying in the airline part most of the time. There's a great competitiveness of price availability guaranteed by CVC. We have a positive dynamic in the domestic scenario. The international scenario is good. The network should grow 14%, 15% this year. All the regions showing growth. Europe with significant growth. South America growing around 25%, which is very positive for us, with a deflation in the rates as well as in Europe per year.
Europe. We have a very favorable dynamic in terms of Europe and South America, the Caribbean growing at 15% with Copa Airlines once again operating from their base in Florianópolis, which is very important. Copa Airlines has eight operational bases in Brazil. These three regions in 2024 will have an ASK higher than before the pandemic. The only region that despite having growth, but will not get to the end of the year at the levels before 2019 will be North America. In 2025, there should be that catch-up. Very generally, therefore, we are positioning ourselves very well, even in an adverse scenario domestically in Brazil. We have been able to fully service the needs here.
Excellent. Now, I don't want to be abusive, but there is an important point regarding the low-hanging fruit and the take rate. You have done important businesses with franchisees last year. This year, if we exclude that dynamic that is positive of exclusive products, if we think about other fronts to enhance the take rate, what is happening with the franchisees and what are other opportunities to grow that line item?
This is Carlos. In these six months, we have done our homework in terms of take rate and resumed profitability and sales. When we look at B2B, the airline take rate was very low. We have practically increased the take rate twofold. These are important sales. We're speaking of a volume of BRL 5 billion per year. What is more important or as important are the losses because of default. We had a low take rate in B2B with high losses because of a lack of credit analysis, little efficacy, and collection of the travel agencies. Now you have seen the results.
We have been able to significantly reduce our default levels, bringing about reversions of provisions and doubling the B2B take rate throughout 2024. This will mark a difference in our results. In B2C, perhaps the main detractor was the management of products, especially the exclusive products. They were the wrong products. They would go out for sales without the necessary time with low occupancy rates, and they brought about low consolidated take rate. Besides what we underscored at the beginning of the third quarter, which is the right procedure with franchisees, net payment of commissions, adjustments in the commission models that you're quite familiar with. We are now at a stable level of profitability.
What we will be seeking, as Godinho has shown you, is to scale up the business driven by B2C, but to scale up the business without increasing fixed cost in the same proportion to capture gains in the EBITDA.
Well, thank you, Carlos. Thank you both.
Thank you, João Soares, for the question. Our next question come from Nicolás Larrain from JP Morgan. You can proceed, Nicolás, and pose your question.
Well, thank you, Fabio, Carlos. Thank you for taking our question. We have two questions. The first refers to G&A. You have worked with a good rationalization during 2023 and said that you could adjust the situation by 10% in the first quarter. How much more space do you have for further cuts throughout 2024? Or do you think you are at the optimal level based on the size of the company? Secondly, to refer to funding. The CVC funding has increased quarter-on-quarter. Which would be an optimal level that will be the most comfortable for CVC looking forward? Thank you.
This is Carlos. Nicolás. Regarding the SG&A, we did have significant cuts in expenses in Brazil and Argentina in the first quarter. Now in January, we had a 10% reduction of headcount in Brazil. G&A on revenue presently is at 50%. This figure already had reached 80%, but we still see space for further reduction until the end of the year, the percentage of SG&A on net revenue. What we would like to underscore is that the SG&A reduction come hand in hand with an increase in sales. The operations we are carrying out. The level of satisfaction of customers has changed completely. We are RA1000 in Reclame AQUI. The company is ever more dynamic and expeditious.
We have taken out layers that made the company slow, and we are scaling up the operation, the sales and growth, along with a reduction in the G&A. I remind you that in some areas, we have reinforced the SG&A. In core areas, we increased SG&A. We reinforced the structure in areas that do not bring value in the company results and for controls. Here, we were very assertive in terms of reducing fixed costs. Now, regarding the CVC funding, the direct funding of CVC is about 10% presently. What we are seeking here is not to increase direct funding with CVC. It is something different. Once again, Godinho mentioned this in the presentation. The core of the CVC is to have exclusive products for our customers, and we have to offer alternative modes of payment, alternative to the credit card, and this is what we are looking for.
That is why we have payroll credit, the Saque-Aniversário FGTS, a partnership with banks like Banco do Brasil. We are going to offer ever more payment offers to the customer so they are not hostages to credit cards. A trip of a family can be very costly nowadays. Normally, the customer does not have the credit card limit, and nobody wants to travel this way, as most of the expenses during the trip will take place at the site of destination. This is one of the strategic goals, a strategic project of the company to reinforce and offer more payment offers to the client, besides the credit card, of course.
Thank you, Carlos. Thank you.
Thank you, Nicolás, for the question. We would now like to conclude the question- and- answer session. We are going to return the floor to the executives for the closing remarks of the company.
Thank you once again for your attendance. This is Godinho here. We have had a very intensive conversation. We are getting to the end of the first stage of our management, where we conclude the implementation of the back to basics. We have the right governance. We have organized the capital structure of the company. A simple strategy so that from top to down of the company, everybody is aware of where we are heading, our suppliers, our employees, our shareholder base, our franchisees. It is clear to everybody which path the company is taking. The strategic director of the company and a team with a broad track record in each of the verticals, thus minimizing the risk of execution and leveraging results, which is what we saw in the fourth quarter.
In the third quarter, but mostly in the fourth quarter, that growth of share in B2C, same-store sales growth, net sales with an increase as of this year, stabilization of the take rate at a top level as we had in the third and fourth quarters, and continuity and stability of that level of 9.4%, a robust reduction in expenses, prioritizing marketing, sales, the core of the company, and the after-sales part. That is what we do. Growing sales, increasing the satisfaction of the franchisee, and of course, record levels in servicing and assistance to the customers and in satisfaction levels of our customers. We had one of the worst grades for four consecutive months. We have the highest score in Reclame AQUI. We are RA 1000 for four consecutive months already, cutting down costs, but with an agile company offering quality within the control processes of the company.
This is the path that we will follow, and gradually during the coming quarters, we will speak about the transformational products and projects that will streamline the management model of CVC that we are preparing for the next 50 years. We just celebrated 50. It is time to think about the next 50. Thank you for your attendance.
The fourth quarter 2023 conference call for CVC ends here. Thank you all for your attendance.