Good morning everyone. Welcome to the video conference for the results of the first quarter of 2023 of Grendene S.A. I want to remind you that if you want simultaneous translation, we have this tool available on our platform. To access, just access the button Interpretation through the globe icon at the bottom of the screen and choose between Portuguese or English. Anyone watching the video conference in English, you can mute the original audio in Portuguese by pressing the Mute Original Audio button. We would like to inform that this video conference is being recorded and will be made available on the company's RI website, ri.grendene.com.br, where you can also find our press release for the first quarter of 2023. You can also download the presentation from the chat icon, which is also available in English.
During the company's presentation, all participants will have their microphones turned off. After that, we are going to start the Q&A session. To ask a question, go to the Q&A icon at the bottom of your screen, write your questions and you will be on a queue. If your name is announced, you will have a prompt to activate your microphone, and then you will have to activate your microphone to ask a question. We would like to recommend that you ask all your questions at once. We emphasize that all the information in this presentation, as well as any statements made during the video conference concerning the business prospects, projections, and operating and financial targets of Grendene S.A. are based on the company's management's beliefs and assumptions, as well as information currently available. Future considerations are not guarantees of performance.
They involve risks, uncertainties and assumptions because they refer to future events and therefore they depend on circumstances that may or may not occur. Investors should be aware that general economic conditions, market conditions, and other operating factors may affect the future performance of Grendene S.A., and result in substantially different results than those stated in such forward-looking statements. Today, we have the presence of the following members of the board of directors: Rudimar Dall'Onder, Chief Executive Officer, Gelson Luis Rostirolla, Chief Operating Officer, and Alceu Albuquerque, Investor Relations Officer, as well as all the key managers of the company. I will now give the floor to Mr. Alceu Albuquerque. Please, you can proceed. Go ahead, Mr. Albuquerque.
Good morning, everyone. Thanks for your presence in our video conference for the results of the first quarter of 2023.
Starting the presentation with the main highlights for the first quarter, I would like to say that the scenario observed on the first quarter of 2023, it was very similar to the one observed in the last quarter of 2022. It's a high inflation scenario that even though it's going down, it is still high. A scenario of high unemployment rates that even though they are falling down, they are still a little bit high. Interest rates are too high, hindering economic activity. We still can see uncertainties observed since the fourth quarter regarding politics. We have been observing uncertainties regarding the government plans for the resumption of our economy. All the scenario, all these factors, they were known by us on the fourth quarter and they remained the same in the first quarter, and they are still current.
On the first quarter, we had, besides all those factors, we had an event that contributed for this challenging environment. It was one of our main retailers that had problems, accounting problems, and that kind of contaminated as a whole. We observed that a restriction of credit lines that impacted many networks of retailers, of different sizes, and that kind of presented challenges for the sector. Even though we have this very challenging scenario, Grendene presented excellent results. We experienced growth in all of our indicators. We grew in volume, in revenue, in gross profit and gross margin. Recurring EBIT, it also has grown and margin as well. Our net profit, recurring net profit, has also grown the same way as our recurring net margin.
This growth of 2.1% in shipped pairs totaling 29.92 million pairs, it was done by the domestic market, which grew 10.9% comparing to the first quarter of 2022. Within the internal market, domestic market, this growth was fostered by the brands of Division One. They're all the brands except for Melissa. This set of brands grew 7.8% in revenue on the first quarter. The volume grew 13.2% and revenue 28% and volume 13%. We had a growth of gross revenue per pair in 3.2%, a reflex of price readjustments throughout the period, but also of a mix with higher added value.
Our gross margin consolidated of those brands from Division One, the recurring EBIT margin, I'm sorry, grew 14.6% in the period. When we look at the mix of the segment as a whole, all the segments presented a growth in volume and revenue, with a special highlight for the female segment with Zaxy, Grendha, and Azaleia that grew 16% and 39% in volume. Also a highlight for Ipanema, who has grown 30.8% in revenue and 10.7% in volume, reflecting an increase of the average ticket in 1%. This 18% growth of gross revenue per pair of Ipanema reflects not only price readjustments, but also the shipping of the higher added value products. We shipped flip-flops, sandals, slides of Ipanema, and they are very well represented in the brand mix of Ipanema.
All the brands had a positive performance. When we look in terms of sales channels, stores, retail, specialized stores and huge magazine stores, C&A retail. Huge retailer stores like Renner and C&A, they have a positive growth also. When we look at self-service, like our indirect channel, where we sell to distributors and retailers, so they can sell for smaller markets. In the self-service channel, they presented stability. Even though with this stability, the self-service channels, in comparison to the market as a whole, because the self-service market, the food market, it kind of has decreased a little bit. We, we kind of, we gain market share 0.8% or PP, percentage points on that. That's our third quarter in a row where we have been gaining market share.
When we talk about Melissa in the domestic market, Melissa had a lower performance than the one presented in the first quarter of last year. It went down 13% and volume 14.8%. That's, it's a reflex of the economic situation of Brazil. We noticed that the power of purchase of Class C, it's been going down, and they are kind of, they represent a lot of the consumer of the Melissa brands because it's an aspirational type of consume. Increase of prices in products because of readjustments, remembering that we try to do the minimum, we try to re-readjust as minimum as we could, but the price point made the product's price to be a little bit higher.
The population with less purchase power, alike to the prices of the products, they kind of hinder the rate of consumption, these factors. Another factor that has contributed to this performance of Melissa is the uncertainty of all the franchisees and the multi-brand clients. We don't know what's gonna happen regarding economy in the next years and months. We have been observing people they are postponing placing orders. When we look at the volume of orders of inventory of our franchises, when we observe the absolute figure, it's lower than the one observed in previous years. When you observe the rotativity of the inventory, circulation of inventory, it's smaller, but the volume of inventory is lower than the volume of the one presented in previous years.
A fourth factor that would explain this lower performance of Melissa is the lack of hits, that hit products. At Target, just for you to have an idea, on the first quarter of 2022, two products represented 11% of the total sales of Melissa clubs. Now on this first quarter, to make 10% of the Melissa clubs, we needed six products. The lack of hits of special products has been hindering Melissa's performance a little bit. What we have been doing to address this situation. Firstly, we have been adequately our product portfolio trying to offer products in the end that cost less than BRL 200 . We are also working hard to develop products that have a appeal for the public, for the main audience. That's the performance of our domestic market.
That's what supported the growth in the first quarter. The foreign market had a performance a little bit lower when compared to last year also. The volume went down 15%, reflecting the dynamic observed in the footwear industry as a whole, if we observe according to Abicalçados data, exports in Brazil have went down 5.4% in volume. That's the result of the acceleration of the world economy. It's a result from a high inflation at global levels. It's a result of China coming back to be a protagonist in the exports of the world footwear industry because their policies in the COVID, zero COVID, was supposed to make available, and China is also producing again and having products available for imports. Also the low in freights also.
Freight prices, we used to pay $2,000 during the pandemic. This $2,000 went up to $14,000, making the Chinese product. When you add freight prices, they become less competitive. Now we can observe freight values from China and Asia being lower than the pre-pandemic prices, comparing to the same $2,000. China's products are also competitive again. A sort of the hitting of the North American economy is also a problem, a challenge now. Those are the factors as a whole, and they apply to Grendene as well. Our decrease was bigger than the footwear industry as a whole. They went down 5.7% and we went down 15%. Because besides all these factors, we had situations with countries from Latin America.
such as Argentina, for example, our imports went down more than 90% when compared to the first quarter of last year because of the situation of the country, the economic situation of Argentina. Grendene historically works with exports, where receiving credit letters or anticipated payments, and we are not being able to work with any of those ways of payments. Importers cannot do that because there are restrictions from the Argentinian government saying that payments should happen only 180 days after the arrival of the products in the country. To issue credit letters also, banks are not doing that for Argentina. We have spoken to a few banks where we work, which we work in Brazil. They also have units in Argentina, especially, and our importers are clients of these banks, and these banks don't wanna issue any credit letters.
It's a very atypical situations that we are living now. We have a few alternatives, but These factors have affected a lot our exports to Argentina. When we look at Peru, for example, Peru has going through some political situations that generate uncertainties, just like here in Brazil. Our clients have been postponing placing orders. In Colombia, which is a huge destination of our exports, we have commercial situations with our importers that we solved so up to now, and now they're starting to become regular, normal again. This scenario made our volume to grow 2.2%, but that was a result of the sales in the domestic market. Gross revenue grow 14%, 15.2% in the domestic market, and last 19% in the external market.
Gross revenue increased more than volume. We can see a gross revenue per pair an increase of 2.1%. That reflects the prices readjustments. In the domestic market, the growth of gross revenue per pair was 4%. In the foreign market, we observed a decrease of 4.9%, especially because an increase in volume of exports to Paraguay and Bolivia, regions where they historically demand products with less added value. We have anticipation of a few orders, which made our representativeness of our exports for these countries to grow. Our gross profit went up 11.2%. It reached BRL 200 million . The gross margin increased two point PP to 41%, it went up.
We can see here more intensely what I've been saying over the past quarters, is that our raw materials, they have been going down since January 2022. Between the price of raw materials, those quotes we have from the market and our COGS, it has a little bit of a delay. We can see the first impact of raw materials in our fourth quarter of 2022. As I mentioned before, on the first quarter of this year, it would hit us in a more intense way, and that's what happened.
As I'm going to show you later on, have withdrawn. That makes our gross margin to grow 4%. Recurring EBIT has reached BRL 74.5 million, it grew 4.1% from 10% - 14.3%. Four percentile points have come in this improvement, 0.1 percentile points came from the improvement in operational expenses. I'm going to show you later on that we've had 35.9% of non-recurring expenses that we didn't consider to be part of our daily practice. Therefore, we're showing here a recurring EBIT. When we go to recurrent EBIT, we've reached R$56 million, a growth of 4.5 percentile points of the gross margin. That would be 25.5% - 30%.
Different from the large companies in Brazil, this increase in the Selic have impacted us in a positive manner regarding the financial results, given that we have a liquid cash flow superior over BRL 2.8 billion. In this slide, I show you the impact in the gross revenue in the company. Internal market has contributed in BRL 46 million in a positive way. Price and mix have contributed with BRL 19 million to implement the gross profit. Volume of external market has withdrawn BRL 30 million compared to the first quarter in 2022, and mix price 7.2%. Currency was 7.2% stronger in the first quarter rather compared to the previous. We've had BRL 1.2 million from the gross revenue.
If we check COGS here, it dropped compared to 2022, the gross margin has grew 0.5%. Meaning, net revenue increased, COGS have decreased, we have it differently. I'm going to show you later on. As you can see here, all components of COGS have shown improvement. The raw material has withdrawn 10.8%. It's around 5%, manpower is 0.5%. By looking forward on the right, when we take a look at the gross margin and COGS and the representativeness of these components regarding COGS, we can see that raw material has withdrawn 3.2 percentile points compared to the first quarter in 2022. It used to represent 29% in the first quarter, it's now representing 25.8% in this first quarter.
We can see here plenty of opportunities to have more gains regarding raw material. Why am I saying that? Because our average cost for inventory and composed with the COGS that we have more representativeness compared to our raw material, our average cost for inventory is around 4.2% above the replacement cost. Meaning, as we consume this inventory and we buy new merchandising, more resin, more plastic, our average cost of inventory drops. Manpower has also had an improvement to 21.3% of the net revenue, an improvement of 0.2 PPs. In this 21.3%, we have 0.6% that respond for adjustments that we've made along the first quarter of adapting structure, adapting manpower according to the volume of production that we had at the floor.
We've started in last quarter and we kept in the first quarter this year, and we may have the result, the fruit of these adjustments next quarter. We have our other expenses that has withdrawn 0.6%. COGS consumed four percentile points less, and that turns into a gross margin that grew four percentage points from 37% to 41.9% of our gross margin. The next slide shows, I would say, the behavior of our compound since the beginning of the pandemic. We can see a deceleration from 2020, the beginning of 2020 and 2022 in the most raw materials. When we check the behavior of this raw material, we have from January 2020 to January 2023.
When we analyze the behavior of the same raw material in 2023, this is what we have. PVC resin has remained stable in 2023 if we consider the currency until March. With 0.5% of increase. Plasticizer has shown withdrawal of 0.31%, and the quote, throughout this first five months, I would say, or four months, plus the first week of May. Soy oil has withdrawn 19%. When we think about the PVC compound that we talk about, plasticizer, soy oil, and other elements that we have, I would say a smaller representativeness. This PVC compound has shown an accumulated withdrawal of 0.46%. Meaning, the scenario that we see here, most specifically for PVC resin, in a short and long term, is a stability trend or decrease.
Asia and China have shown an excess of offers regarding resin, high levels of inventory, and a weak recovery of internal demand, that pressures the prices down. When we check the U.S., Europe, and India, which are very large demanders of our PVC, we also see a weak demand. In the short and mid-term, the trend that we see for PVC, which is the main component of our raw material, the trend is to withdraw or stabilize price. When we take a look at our recurring operational expenses, we're talking about the total expenses, I am deducting 35.9%. These BRL 39.9 million are BRL 15 million are assets of GGB. GGB. As we've been mentioning, GGB is going through an acceleration process and maturing business.
We haven't reached break-even point, the negative result that's generated in the U.S. should reflect on our financial numbers through assets. Our part on this negative is around BRL 15 million. We have provisional of BRL 13.4 for external losses and we can also do the provisioning of part of this balance that we have to receive from doubtful vendors. We have another item which is managing franchises, BRL 4.7 million. That reflects what we mentioned in the second quarter last year, in which we internalize managing the franchisees. From these BRL 4.7 million, BRL 2.7 refer to payroll of this whole structure that we've internalized. This is January and February payroll, because for January, we still had the contract running.
As from March, the payroll expenses that were absorbed, they are already as a recurring expense. From the BRL 4.7 million, BRL 2.7 million are this payroll item, and BRL 2 million are the commissions referenced to March that we've ran a six month contract of consulting. For six months, they're going to receive commissioning over sales that are closed to Melissa. In six months, this commission will be considered a non-recurring operational expense. As you can see now in recurring, they're stable of BRL 143 million. Commercial expenses have withdrawn 3.4%, from BRL 123 million to BRL 119.7 million. We were more efficient regarding commission, publicity, licensing, and third parties.
When we take a look at the administrative expenses, they grew 4.9%, and that represents BRL 1.2 million. That is regarding readjustments that were considered due to, I would say, adjustments in salary, and they went over 10% last year. That you can have an idea of the strong work we've done about adapting both in the floor and also with personnel. If we get our January, I would say March 2023 payroll and March 2022, it is exactly the same with a very small variation. Even though we've had very strong definitions regarding salaries, and considering, I would say, payroll and paying manpower and administrative expenses and commercial. That has been kept stable, and that shows that there's effort and discipline in our expenses.
This is just to open about operational and operational expenses. They show here that they grew 19%. They were BRL 150 million-BRL 179.5 million. We have BRL 35 million of non-recurring expenses, as I mentioned. These operational expenses have been kept BRL 143 million. The positive contribution were regarding selling that we have BRL 4.2 million lower than the previous year. I'm going to skip a little bit. This is a very similar graph. Instead of talking about recurring expenses, we're talking about the EBIT and recurring EBIT. This BRL 21 million difference that came from BRL 52.7 million to BRL 75.5 million. It's a huge variation of 21.8%.
Most part is here in the CPV component, the COGS component that we had a better variation. It's a COGS of BRL 19.7 million lower in the same period last year. This BRL 19 million variation represents 90% of that improvement of recurring EBIT. We have other items here that I mentioned before, operational expenses, that contributed to this recurring EBIT to grow 41.6% in the period. Now about the financial results that have contributed to our net results. Our financial was 13.1% higher than the first quarter in 2022. That was a result of flow that was invested 15.5% higher, so about BRL 2 billion. Also result of an average Selic of 3.3 percentile points in the first quarter in 2022, it used to be 10%.
In the first quarter of 2023, it was 13.6%. We represented a financial result of almost BRL 100 million. When we look at that portfolio that we have alternative assets that we had together, we began structuring this in 2019. This portfolio responds to BRL 556.9 million. How is this spread? 81.6% is allocated in projects for development and real estate. We have now the same position that we've been having since the last quarter, which is Vale do Rio Doce. It's the only application we have. 6.3% for some CDBs. How is profitability when we look at this portfolio since the beginning? The project for real estate development has accumulated 57% nominal.
When we compare that to CDI, it's equivalent to 232%. Portfolio for credit is 66% of nominal rentability and 11.1% in the CDI. You can see it's 60% - 111%, 57% - 32%. This is the time and location when we've started having the allocation in these portfolios. Last but not least, when we talk about variable, that has made 195.2% in that same period, which is equivalent to 601%. The portfolio as a whole, it was 94% equivalent to 333% of CDI. Just to remind you that this is a portfolio that is going to reduce from now on.
As projects for real estate development will be maturing, and we are going to receive the main interest and dividends, these values will not be reinvested. They will remain in the cash flow, in the capital to be applied. Now about our digital commerce, how our online sites are. We've seen a very robust growth in our GMV. 43% compared to the first quarter in 2022. We've reached 23.2 million pairs sold, almost 270,000 pairs. 33% in growth. The sessions reached 18.5 million sessions. Our e-commerce has been growing in the quarters because we've been respecting the seasonality of the business. For e-commerce, the first and last quarters are always stronger.
Fourth quarter, which is when we have Black Friday and we have Christmas, the first quarter, which is usually January and February, we are having, like, promotions and sales, and we have very elevated sales in the first quarter. If we compare quarter against quarter, we can see growth in all quarters. Of course, participation of online channels and general sales have grown. When we see all brands, we came from 3.7% - 4.5%.
When we just analyzed Melissa, we came from 8.6% in participation to 13.5% As we see our business growing and revenue grows and expenses are stable because the structure is ready to receive this growth, we have the EBIT margin starts to show up. That one was 4.2 percentile points higher than the first quarter than 2022, and this is the third quarter in a row that e-commerce has generated a positive EBIT for Grendene. By looking at GGB, we have a very robust growth, and we are still growing. When we see total sales, they grew 118% in the first quarter if we compare to 2022. Obviously, this growth is compared to a base that's not so big.
It's a revenue, a nominal sale of $7 million, but it's a sales that has been growing quarter after quarter, month after month. If we look at Melissa's e-commerce, where I put the graphs here, it grew 6x when compared to the first quarter of 2022. On the first quarter, we had almost $400,000 sold, and now $2.2 million. As you are going to start noticing from now onwards, on the last quarters, when we started talking about GGB, we were talking a lot about Melissa and Melissa website and Melissa global sales, Melissa influencers. Now you will notice that we are talking a lot more about Ipanema, Rider, and all the other brands.
Throughout the last year and on this first quarter, we worked in rebuilding the distribution of Ipanema, reorganizing the distribution of Ipanema in United States. Now it's really strong in the physical stores, representing a high rate of sales in United States. You can find Ipanema at Macy's, Nordstrom, Shoe Carnival. These are very important retailers that are selling Ipanema. Besides from being present, we have high valued added products. These retailers nowadays, they want products with more added value. They don't want just flip-flops. As we don't want a variety of archetypes, we don't have a huge one. We can provide sandals, flip-flops, we can provide slides. Nowadays, there is more added value, then retailers can have even bigger margins on products. That has been sped up the sales of Melissa in the retailers.
This project, I always mention it here, I would like to reinforce that the international operation, we don't build it in just one year. We don't think we are going to rebuild this operation in United States, Canada, and other countries. It's a brick over a brick, but very well-structured bricks, solid bricks. When we put one on top of the other, they maintain themselves. When we look ahead, we will notice that GGB and Melissa grew a very strong international operation. The brands are strong. One of these bricks is the resumption of Ipanema in physical stores. The other brick represents the resumption of Ipanema and Rider at Amazon.
In the first quarter of 2022, They had 6x extra revenues than the second quarter of 2022. We can notice the evolution, and a solid evolution. The numbers are not relevant yet, but we are working to make them relevant. In China, for example, we have a local team, with a 100% structure, just like in United States. I would like to reinforce here another strategy that we've got. We wanna have global brands, but with local presence. There is no point for me to try to set up an operation in China that is the same as the United States and other countries. We have GGB people there. Melissa has been growing month after month in China. Melissa, in April, we launched a campaign with the Melissa ambassador in China, Zhao Lusi.
She's an emerging celebrity in China, and she has, she has a high retention rate. She has her social networks at Weibo. She has more than 25 million followers, 15 million at Red followers. Now we are starting, especially, in Melissa China, to divulge our brand in a stronger way in the country. Melissa, together with this launch of Rosie as the ambassador of the brand of Melissa in China, we have got also the Super Brand Day of Melissa on the Tmall. During the week of the 28th of April, four days we had the big band day, and we sold more than $1.1 million in Melissa in China in four days alone.
We are starting now to do this work to spread into divulge the brand in China and to reconstruct since contracting Rosie Zhao as our ambassador and doing social networks campaigns and live streams as we have done with Li Jiaqi. A live stream with a live commerce, we may say, of seven minutes, where more than 9 million people watched this live stream, and we sold over 10,000 Melissa pairs together with that. We are opening more stores. We have seven new stores in a total of 26 exclusive Melissa stores in China. The work that GGB has been doing United States, Canada, China and Hong Kong, it's a work that we have been doing brick by brick, but it's very well structured and founded. Like if we look at exports, it went through another level at Grendene. It went up a level.
After all the explanations of results, I talk about the distribution of dividends. We had BRL 123 million from this amount. Almost BRL 55 million comes from tax incentives. At this point, the legal calculations for the legal reserve is BRL 69 million. As we have reached 20% of our social equity, we don't have any additional. The amount for dividends is BRL 68.1 million. As we have prescribed dividends in BRL 1 million of people that didn't have their records updated during three years, and this amount wasn't demanded. We included it in our calculation basis. The total amount to be shared is BRL 68.1 million, which is the equivalent of BRL 0.067 per share until the 22nd of May.
The share is ex-dividend on the 23rd of May, and the payment is on the 7th of June. Finally, I have a final slide here to show the total of dividends distributed since 2004. A total of 5.6 billion reais since we went public, since Grendene went public. What I had to present, people, is this. Now I will open for the Q&A session. Reminding you that if you wanna ask questions, click the Q&A button, write your question, and you will be on a queue. When you are announced, it will show a prompt will appear, and you have to activate your microphone, unmute it to ask your questions. We ask you kindly to ask all your questions at once.
We would like to remind you that if you want to ask a question, click on the Q&A icon at the bottom of your screen and write your questions to be on the queue. When you are announced, a prompt to activate your microphone will appear. You have to unmute it to ask your questions. We would like to request you to ask all your questions at once. Thank you. The Q&A session is finished. We'll give the floor to Mr. Alceu for the final considerations. Well, as we didn't have any questions, I hope everybody understood everything and all the explanations are satisfactory. I would like to thank all of you for your presence. If you have any questions, the RI team, the investor relations teams, is available. Thank you, and have a good day.
The video conference regarding the results of first quarter 23 of Grendene is finished now. The investor relations department is available to answer any questions you might have.