Good morning, everybody, and welcome to Intelbras conference call to discuss the Fourth Quarter 2021 earnings results. I am Bruno Teixeira, the Head of Investor Relations of the company, and it is a pleasure to be here with you. We have today with us Altair Silvestri, CEO, and Rafael Boeing, CFO, who have always been here in our earnings calls. Today we also have Henrique Fernandez, our Manager of Operations, and Marcio Ferreira, the Manager of Market, so that we can start our conference. We would like to inform you that this conference is being recorded and will be available at the company's website, where you can also find the slide deck. You can download the deck and also the replay of the video. in the Q&A session, you can send your questions using the chat box and the Q&A tool.
You just have to click on the Q&A icon, type in your name, the name of your company, if you want to ask the question in English or Portuguese, and we are going to answer them in sequence. When your time comes, I will ask you to unmute your microphone. The information contained in this presentation and forward-looking statements are based on the management's beliefs and assumptions, and they involve risks and projections and forecasts, and they are based on currently available information. They are not any guarantee of performance, and they refer to future events, and therefore depend on circumstances that may or may not occur. Investors should understand that the conditions related to macroeconomic and industry conditions and other factors could cause an impact on the company's results and cause them to differ materially from those expressed in such forward-looking statements.
Now, I would like to start the presentation, and at the end of the presentation, we can start the Q&A session. Okay. Let's start with the fourth quarter highlights. We had a record-breaking net revenue with a 24% growth in comparison with 4Q 2020, reaching BRL 906 million. The fourth quarter 2020 was already a very strong comparison base, and still we are delivering a 24% growth in our revenue. Now, when it comes to EBITDA, we grew by 9.4%. Here you can see the adjusted EBITDA figures. You know that in 4Q 2020, we accounted for win in the lawsuit for the exclusion of the ICMS tax from the PIS/COFINS tax calculation base. So without that adjustment, we would see a decrease in our EBITDA and also net profit. But these numbers are very interesting anyhow, BRL 100 million.
Our ROIC already excluding the win in the lawsuit was at 25%, which is a good reference for us in the new way we are operating with the capital that was raised in the IPO. Of course, as we invest, we are gradually going to achieve the same levels that we had before. Here you can see the figures without the adjustment to our EBITDA and to our net profit. EBITDA with a drop of 27% and the net profit with a drop of 51%. Now, when it comes to our net revenue track record, you can see that we have been delivering a 24.5% CAGR over the past five years. Our net revenue was almost BRL 3.1 billion, BRL 3.087 billion, with a 44% growth year-on-year.
And you can also see here that our EBITDA increased significantly with a CAGR of 20%, 13.4% in the year and 9% in the quarter. Now let's take a look at the evolution of our EBITDA over the last 12 months. We should always remember that the 12% or 13% EBITDA margin is a good level according to our track record, and we are bringing our operations to that level. The levels around 19% or 20%, as we saw last year, actually in 2020, those levels were very different from our regular operations. And now we are reaping the benefits of the businesses that were created during the pandemic. And also in 4Q 2021, we accounted for the win in the lawsuit. So you can see here the highlight related to that lawsuit on our 2021 EBITDA. Now let's talk about the business units and the segments we are present in.
Starting with electronic security, accounting for 51% of our revenue. And in 2021, it finished the year with 52% of our revenue. The inventories in 4Q 2021. You can see that we are building a new market for face recognition access control systems, and we can see that this market has been growing and it has been established in itself, and the distribution market is still heated with appropriate inventory levels. We were able to stabilize the inventories across our channel over the year as well. And you can see that the margins dropped a little bit in the fourth quarter. It is a little bit below last year, and it is related to the freight cost increase and raw material cost increase, and we are trying to restructure our price model and pass those costs on.
And you should remember that when we have temporary cost adjustments, we don't pass that on to consumers, and that, of course, takes a toll on our margins. We made a commitment with the market of bringing, at the end of the year, the market share analysis. So you can see the breakdown here in the two business units. Security increased in share throughout the year, reaching 48%. And access control, you should pay attention to the main point here, which is the addressable market for the gate automation systems. So besides the increase in the market that was already expected, we also added a new market in which Intelbras is now present with the launch of the gate automation system in June.
Now, let's move on to communication, accounting for 25% of our revenues in the fourth quarter, and it finished the year accounting for 30% of our net revenue. And out of all of these segments, this was the most affected one due to logistic struggles. And now the market is recovering, going back to the pre-pandemic levels. And that slight increase in margins that you can see from the third to the fourth quarter reflects the amounts and the volumes that were sold for the home and office products. They bring a lot of value and volume, but their margins are a little bit lower. And communications accounted for 30% of our revenues at the end of the year, and the revenues increased significantly.
We should always remember that in 2020, the market was very strong for communication, and in 2021, we delivered an 18% growth despite the strong bases that we had in 2020. Let's take a look at the market share for communication and networks. The market grew for communications, and we increased our market share. In networks, our market share decreased, but in 2021, we started including the structured cabling market, and we started to sell those products towards the end of the year. We are not including almost any revenue here because we are including this new market, which is around 900 million BRL. You can do your math later, and you will see that our performance in networks was good regardless of the inclusion of this new market that became a part of our business. Let's talk about energy.
We have two business units in this segment, and they are increasing. They are growing. I believe that we have talked to many of you in other meetings, and I always remind you that energy is growing significantly, but they are reported side by side with a business that is growing very much as well. You might have the impression that it is not growing because solar energy is growing so much, but the two units are growing. The main highlight here is that energy started to account for 24% of our revenues, and in the consolidated year figures, it accounted for 18%, but in 2020, it used to be 10%. You can see that there was a significant growth there. Our highlight here is solar. We finished the year with available inventory, envisioning a strong growth in 2022.
Our perspectives are very positive for the two energy business units. Let's talk about market share. This market has been growing, as I said. We have been gaining share. The energy guys are doing a great work. In solar energy, the market is growing in revenue, but the market share gain is a little bit more limited. We are at about 3% market share. We have some more highlights about inventory. We have been talking about logistics difficulties, so I would like to highlight our inventory levels over the past five quarters. At the end of last year, we had about 180 days of inventory, so we are ready to sustain our growth plans in 2022.
On the other hand, we have to start the process of recovering the appropriate levels of inventories, and we should know that it should be around 120 days. We are going to see that movement throughout the year. The supply chain guys and the ops guys, they are aware of that increase, and we are trying to organize things here little by little without exposing ourselves to any shortage. But we want to go back to 120 days because that is important for us in terms of operating cash generation. About cash, we can see here that in the fourth quarter we had a negative cash generation because of our decision of strengthening our inventories. Another highlight here is the credit line with the BNDES. It is very interesting because the cost of that is very positive for us.
We have a BRL 180 million credit line approved, and we have already raised BRL 72 million in that credit line. Let's take a look at our CapEx. We adjusted the way we show these numbers on the chart. You can see here that we are showing the numbers for the first six months, the first nine months, and the entire year. We are completing our investment plan according to our initial plans. We acquired Comp, and that is accounted for in our expansion CapEx. Our maintenance CapEx is about 2.2% of our net revenue. Our CapEx is in line with our track record and our perspectives for growth in the future.
Another point that I would like to highlight is that we are reaching our first anniversary as a publicly listed company, and at that time we talked to the market and we explained about how we were going to use the proceeds. Here we would like to show you exactly what we are doing with that capital. We are using part of the proceeds for the expansion of our plants. We have already invested a little bit more than BRL 100 million in 2021, and we're going to invest another BRL 100 million in the expansion of the plant's capacity in the state of Santa Catarina, in the state of Manaus, and in the state of Minas Gerais. We are moving forward with that plan. Another part of the proceeds would go to internal projects. One of the highlights here is the izy Connected Home line.
We always said that we are using our distribution channel, but we are always using the retailers as well. We made available 50 different programs to train over 14,000 people, so that this workforce can help us consolidate this market. The connected home market has to be established, it has to be built, and we are going to use this army of partners to establish this market appropriately. In 2021, we sold over 300,000 products, and we are proud to announce that we have the most complete portfolio. We have over 40 items in our portfolio. We launched the line in March 2021 with 27 items. We added another 13 throughout the year, and that takes us to 40 items. You can automate your home entirely using one single app, and this is the value that we are delivering to the market with our izy line.
The third point that we have mentioned in terms of how we would invest the IPO proceeds is the acquisition of companies. We acquired Khomp early last year. 10 days ago, we delivered the biggest acquisition, adding Renovigi to our business, and there are other three M&A deals being conducted here at the company. All businesses, all units have been looking at opportunities apart from solar energy. We are assessing 10 companies right now in our funnel. We are being very cautious in the assessment of these targets. As these deals evolve, as they progress, we are going towards the end of the year to announce more acquisitions. Also part of the IPO proceeds were supposed to be dedicated to the recurring revenue project. We had an accumulated revenue of BRL 60 million in 2021.
Our monthly recurring revenue is at BRL 7 million, so there's a lot of room to grow, but it is important to share these numbers with you because we feel that this project can add to our revenue line. The recurring revenue project is not really about replacing any other revenue line. No, it is supposed to add to our revenue, and it is very much in line with our project strategy. The projects for major corporations, the large-sized projects, and the high-end projects. That's why I wanted to highlight this point here. Year on year, you can see that the recurring revenue grew by 50%. If we look at our project funnel, if you look at the pipeline, you are going to see that we are capturing 3x more projects.
The cycle for this project is a little bit longer, so we really have to build the project together with the clients, and you are going to see the results from those projects becoming a more significant part of our revenues. Lastly, before we start the Q&A session, we have some perspectives for 2022. We are optimistic, and optimism is part of our business. As entrepreneurs, we have to look to the future with optimism, but we have to be cautious. The macroeconomic scenario is tougher, and now, of course, we have sensitive issues going on in Europe. So we have to be cautious and wait to see what consumption is going to be like. We have to pay attention to all of that. So we are optimistic and also cautious and paying close attention to everything that is going to happen in 2022.
Now, about the three segments, I would like to highlight once again the fact that we're starting to resume the pre-pandemic levels. It is very clear to us that the growth in the communication segment is going to be more concentrated in the second half of the year. We have to make some adjustments in our supply chain, and we're going to do that in the first half, and we are going to unlock our growth more in the second half of 2022. In the security segment, our growth avenues that we have in our security business plan have been promoting important opportunities for us. For example, access control is one of those big growth avenues. The projects are also a big avenue. Connected home, and how easy it is to install a camera or an alarm and connect them to the app.
All of that brings great opportunities for us. So security is going to tread that path over the course of 2022. For energy, we are going to grow organically in a very significant way. Now with the new acquisition, we believe that we are going to finish the year with energy as the most significant business unit in the company in terms of revenue. We are aware that there's a lot to be done with that cautious optimism in 2022, but we know that the year is going to be a great year once again. Now I would like to turn it over to you. Let's start the Q&A session. I'm going to take a look at the Q&A box to see if you have already submitted any questions. Let me see. I think Cristian asked a question here about the performance of the security business.
I'm going to read your question, Cristian, but if you would like to unmute your microphone at any time, please feel free to do so. Cristian is an Analyst from Itaú BBA, and he's asking this: We saw a strong change in comparison with the previous quarters in terms of the contribution of this business in revenue. We grew more in revenue than volume, and I would like to know what explains that movement. Is it related to the supply chain? Is it related to an increase in the average ticket? He's asking about the volume and revenue for the next quarters.
Good morning, everybody. Well, this happens at some moments. At some points, we have a higher average ticket. For example, in the solar business and in the communication business, sales are going well in the corporate sector. But the retail products that have a lower average ticket, there was a drop in the sales there. There was a drop in the volume. This happens. You can see a drop or a pseudo drop in the volumes. But our strategy, of course, is always about improving the ticket and investing in projects and products that have a higher value added. We're investing increasingly in the corporate sector because we know that retail is a little bit vulnerable.
Since we have been working with retail for many years, we have that expertise. We have been working with corporate and retail for many years, and we never depend on retail because it is unstable and the average ticket is also lower.
Thank you very much, Bruno and Mr. Altair. This is Cristian. I just wanted to explain a point about my question. If we compare the 4Q with the previous quarters in the security business, the volume used to be very significant at about 20%-25%. But this quarter, the growth was flat in comparison with 2020, and there was a sharp change from one quarter to the next in terms of average ticket, and that caused the revenue to be higher. Of course, there are different average ticket levels across the product line, but I would like to know if there was any impact other than that impacted security as it happened with the communication business. Or is this just a normal movement related to the average ticket?
Well, in the security business, we don't see any unusual movements. Henrique can jump in and add to what I'm saying, but I don't see any unusual movements apart from the average ticket issue.
Good morning, everybody. This is Henrique. On the contrary, Cristian, for electronic security during the pandemic, we had some difficulties in relation to availability of products, but nothing stopped. We received some chipsets that allowed us to have products that have a higher average ticket. But in the latest months, we are reaching a very stable level in terms of inventory. Starting next month, we are not going to have any shortages of any items in the security business. So we have already resumed stability. Of course, when the FX rate went up, the prices went up as well besides the average ticket. So it's a little bit of everything.
Okay, that's very clear. Thank you very much, Henrique and Altair.
Thank you, Cristian. We have a second question here from Guilherme with Mar Capital. He is talking about the restrictions imposed by the United States to Russia in terms of the import of chips, that is going to have an impact on China. China is probably going to take that impact and be the primary supplier. He is asking if we have any relationship with the suppliers in China.
I believe that right after the attack, we had a meeting and we assessed all potential impacts. We did not see any risk. We did not see any risk of the situation worsening in terms of chipset supply. Especially in the telecommunications business, we still have some shortages, but we can see that worldwide, the production of chipsets is now above the pre-pandemic levels. Companies like us that build a larger inventory, now we are going to go back to the usual levels. Everybody around the world did that. Also the inflation rate and some measures being taken by governments around the world, all of that should take those levels down as well.
I believe that we are going to reach normal levels in the supply chain in the first half of the year. We do not see any difficulties related to the attack to Ukraine. Henrique, if you would like to add any comments, feel free.
No, that is perfectly correct.
Okay. Thank you very much.
Do you have any other questions? We spent the week at a conference talking to many people, so maybe you do not have that many questions. If you do not have questions, that is either because everything is okay or that is because you gave up asking questions. Let us unmute Ali's microphone from Kapitalo Investimentos. Good morning, Ali. Go ahead.
Good morning, everybody. This is Ali, and thank you very much for taking my question. If we look at your EBITDA growth, it was driven by a growth in the top line, but also in the cost efficiency. If we look at the sales cost breakdown, we can see that there was a drop in the personnel line. Since you are growing in the top line, what drove the cost decrease? I would expect to see a proportional increase or at least an increase in the same line.
Can you repeat, please, what line are you referring to? You are talking about the expenses, right?
Yes. SG&A, personnel, and benefits. I did the math here, and when we compare the total expenses in the third quarter, and when I look at the numbers from the fourth quarter, there was a decrease in the benefits and personnel lines. I am referring to the sales expenses, not the SG&A expenses.
Okay. I do not know exactly how you calculated that, but in general, our expenses are stable. They have been stable. In the third quarter earnings call, we said that we have our teams in place, especially for projects and solar energy. They are in the field, but the revenues are below the potential. We just had to work on that so that we would reap the benefits over the course of 2022. But for sales expenses and workforce, we do not see any drop in the expenses there. I do not know exactly what numbers you are looking at, but in general, these expenses are supposed to be flat.
Okay.
Actually, this is Altair. Just to add to what Bruno said, that is actually a trend. Since the company is growing at important volumes, we are going to increase our structure as well to support that growth. Margins and investments in that structure should be a little bit to stabilize our expenses. We still believe that we are going to continue to grow at the same levels that we have been growing over the past years.
Okay. Yes, my next question was about your perspectives for the future, but I think you have already addressed that, Mr. Altair.
I think Cristian wants to ask another question. Cristian from Itaú BBA, please go ahead. Oh, Cristian, I think that you were going to ask exactly what Ali just asked, right?
But, if you could explain some more details about the potential recovery in the communications business in the second half of the year. Also, if you could give us more color about what you have seen in terms of the progress for that business line.
In the fourth quarter, we saw a result that was a little bit better than what we saw in the third quarter. So maybe we could start reaching the normal levels in the second quarter of 2022. Well, about margin recovery, I believe that should happen starting in the second quarter of 2022, and it is going to be more concentrated in the second half of the year. That's when we are going to see a significant improvement with normal inventory levels. We also adjusted our strategy, as I said earlier, because in the retail market, there was a shortage of lower price products. Since the market increased so much, since the demand for those products increased so much, there was an oversupply of those products.
In 4Q 2021, and now in the first quarter of this year, the inventories are becoming more normal, but we don't ever want to depend on retail. As I said, retail is a complement. It is about promoting our brand. It is about adding some volume. But our main strategy is corporate, and it is going well. It is still strong. But that line still needs some components that are short now in the first half of the year.
Okay, thank you very much, Mr. Altair.
Now we have a question from Augusto with JAL Asset Management. He wants to know about our solar operation CapEx, and also he's asking about the long-term debts and our expectations about them. Would you like to take that one, Mr. Rafael?
Yes. Well, as we said earlier, we now have a credit line from the BNDES. We just signed it last year in the amount of BRL 180 million. We are going to receive those funds over the course of three years. We have already received BRL 72 million. That should work as capital to fund our engineering projects. A significant part of those funds have very good rates and fees, but in terms of debts, I don't think we are going to see any significant changes. This credit line has been repaid with the capital that we raised in the beginning of the pandemic. We raised BRL 200 million to support any difficult.
So we have been repaying those debts, and by the end of the year, we will be able to pay a significant part of those debts. But we should not see any major changes to our debt level. We want to continue what we are doing. When it comes to investments in solar energy, we are going to invest in distribution centers, so that is probably what we are going to do. As the main CapEx need is related to the distribution structure. As Bruno said, now that things are more organized and the supply chain is going back to normal levels, in the beginning of the second half of the year, we are going to have a normal level of inventories, and that, of course, is going to generate additional cash.
He is asking another question about the solar business, Mr. Altair, related to our gross margin. The EBITDA margin was roughly the same. So he would like to know what are the operating expenses that are lower that allow us to do that.
Well, we put together a very robust structure capable of supporting the high growth, the high volume that we are expecting to see. Especially after we are able to merge the two companies. After the approval by the antitrust authority here in Brazil, we are going to be able to work with better margins without the need to invest more in structure and resources. We are going to start working with that structure with a better productivity than the one that we have now. Our inventories will be normalized, and we will have made progress on a number of fronts. After the deal with Renovigi, after the acquisition, we saw that the company has a great team. They have higher costs in some departments, and we are going to help them decrease those costs to our levels.
They have a significant technical knowledge that we did not have because they started out in the solar business. They are experts in this sector, so this is a very fortunate acquisition for us, which should increase our productivity. Still about Renovigi, there are a few questions here. Maybe we can summarize all of them into one. People are mainly asking about our strategy and the benefits that we can reap with that strategy, the competitive edges in the solar segment, and what are the edges that Intelbras has in that segment.
There is also a question about the timing for the approval by the antitrust authority and what should be our market share after the acquisition.
Well, about the approval by the antitrust authority, there is a lot of red tape. We are going to file the documents for approval, and they have to approve it in 30 or 40 days, if I am not mistaken. Yes, usually it takes 30 days. Our strategy, without a doubt, and Marcio can add more details about our sales strategy. After the signature of the contract, we became even happier about this acquisition because we were able to see how knowledgeable the team is at Renovigi. They have to improve in some aspects. We can improve as well with their expertise. For example, negotiation with partners. That is going to be very important to sign new deals. Logistics also. We are going to try and centralize logistics, and by doing that, we are going to be able to improve our productivity. Also the structure itself.
I believe that putting together the two companies and the two companies' solar structure, we will be stronger to grow more than we would be able to grow if we had not acquired this company. Now we had the chance to talk to almost all resellers that Renovigi has after the signature of the contract. The integrators were very excited about the acquisition because they respect the Intelbras brand. We are now adding those thousands of installers to the Intelbras structure. Marcio can jump in and make additional comments.
Yes, thank you, Mr. Altair. We are very optimistic about the new acquisition. Our sales strategy is based on occupation. We understood since the beginning that there's not much overlap between our distributors and their distributors. That really shows how big the potential of this market is in order for us to grow in market share. In each city, we want to have trained resellers working with the brands. We now have contacted the distributors and installers. After the approval by the Antitrust Authority, we are going to start working more on our strategy. We don't want to have any overlap between the two operations. We want rather to take market share from competitors. That's the focus. We want to increase the number of resellers in each city and improve the average ticket, and also increase our capillarity. Also, we believe that the Antitrust Authority is going to approve the deal.
There's a 99.99% chance that they're going to approve because there's no economic concentration in the hands of one company in this market, since it is so big. There's a very low risk of denial by the Antitrust Authority. We are so confident that we have already started working together, not financially, but we are already putting together the structure and the strategies.
There's another question here about demand.
Yes, that started to happen in the beginning of last year. There is a transition period of 12 months, so this year is going to be very strong in terms of revenue. The market is very heated right now. It's bringing a great demand. Now, I would like to change subject and talk about 5G. We have a few questions here about 5G. Our participants are asking us about Qualcomm as the main partner. Although we have a great partnership with Chinese partners, we ended up creating a partnership with Qualcomm.
Also, there's another question about 5G and our position about this technology coming to Brazil.
Well, Qualcomm was the best option, really, especially in the war between the U.S. and China. Since some companies were a bit outdated in terms of the development of chipsets, Qualcomm has the latest version. It has the latest version that wasn't even available in the market. We are going to be one of the pioneers working with this technology. Because of that, Intelbras felt that Qualcomm was the best partner. We also had great negotiation conditions with them. The chips are going to be manufactured locally. They support us in our technology. They provide us with support, so because of that, this is the best option. Now, Bruno, can you repeat the second question?
Yes, about our position in the 5G market. It is a huge market with the auctions and he wants to know about our focus in this market.
We are going to focus on major carriers. We are establishing negotiations and contacts with them. Also, the internet providers, they will work together with us as well. We believe that the market is extremely interesting for three reasons. Because of the flexibility that this market has, and you can install broadband connection in any place where there is signal, where there is connection, and also the access to the buildings that today struggle with cabling and, for example, one tenant wants to change carriers, and there is a whole problem because of that. So we are going to have many possibilities now with 5G. Also redundance.
People will be able to have a second option with a better speed to provide more security to their operations, and also the expansion of broadband connection and all the needs that IoT requires. Marcio, if you would like to add any comments.
No, Mr. Altair. The focus initially is the carriers. We are going to start testing in April, and manufacturing and sales will start in June, and we are very optimistic about this process. Our goal with 5G is providing 5G signal to consumers at home and distribute internet connection to their families, their homes, and buildings. Since it is part of our agreement to manufacture 5G modules in Brazil, in 2023, that module is not going to be restricted to FWA wireless internet connection at homes. That is going to be brought to many other devices.
For example, cameras, public security cameras with 5G connection, and that makes high quality easier and installation easier without any increase in costs. So we are going to use 5G not only in our portfolio, but we will be able to sell those products to other players that work with measurements and all sorts of devices. There might be uses for 5G that we do not even know now. Actually, we are going to be the sole manufacturers in Latin America, so we will be able to provide these modules to the entire Latin American region. I usually say that we are going to use from the antenna to the consumers. That will be our side of the operations. By producing the modules locally, there are many opportunities that we can tap into.
Thank you, Marcio and Mr. Altair. We still have a few questions. I am going to try and summarize them. One of the questions here is about our perspectives in foreign markets. We export very little right now. Do we have any perspectives for exporting more, and is there any challenge in relation to that?
We actually had a meeting that we had scheduled a while ago, and that meeting took place this week. We believe that right now, Intelbras is much more mature and prepared to take steps towards exports. Our focus to defend the Brazilian market, the Brazilian territory, and we were able to succeed in that effort. But we feel that there is space for increasing exports in a number of product lines that we can offer. We can do that in Latin America, in particular, and we can also sign some M&A deals with distributors, and that would make things easier for us in that sense.
We are exporting only 0.5%, and we have a project to bring that to 10%. It is not much, we know, but we are going to see the evolution of that plan over the next years. Exports, of course, help us with revenue and revenues denominated in dollars, but it also gives us security. Because when enemies come to Brazil, we know that they will also have to face us in other markets. We have a lot to learn from these wars and battles in other territories. Connecting that to another question about dollar revenues. Yes, of course, that is interesting. If the FX rate goes down, well, it started to increase again, but if it still goes down and if it is kept at the level that it is, around 5, is that going to hurt our revenues?
Because we have talked a great deal about what happens when the FX rate goes up, right? So this person would like to know what happens when it goes down. Well, we do not have many changes in relation to the depreciation of the dollar. If it continues to drop during the month of March, it would be important for us to hold prices down a little bit, and then starting in April, we would adjust prices according to the new FX level. For us, in terms of costs, although we have a hedge policy in place, we would not have any problems when it comes to our margins. Now with the recent instability, we are not talking about any price changes. Yes. Usually, the market says that we are the first one to increase prices and the last ones to decrease prices.
But I think this is our role as market leaders. We have to spearhead the price increase efforts and really monitor and take a close look at the needs of decreasing prices. Since we have a hedge policy, our inventory costs are protected at an average dollar cost of $5.38, $5.40 as of last month. Now, with the new inventory levels, we received many products at 5 or 5.05, so the average is dropping.
I believe that we are reaching the end of our conference, but we still have some questions to address. There is one by Ricardo with Motinvest. He is asking about the EBITDA margin year-on-year. He would like to know more details about that.
I believe that many analysts are concerned about that, so I believe it would be interesting for us to talk about what happened in 2020 and 2021 and our expectations for 2022 for the EBITDA margin. Rafael can jump in if he believes we need more comments about this. But with the increase in our inventories, which was the result of a reaction from our side, in order for us to put together the kits that we need. So that caused our inventory level to go up a little bit. We also decreased the financing term for our suppliers because we put in place a hedge policy in the second half of 2020, I believe. 2020, yes. It happened in the fourth quarter 2020.
So we knew that we would have a slight loss, but right now we started to recover again in our suppliers' negotiations. I believe that with the decrease in our inventory level, things should improve a little bit.
Yes. I believe you would also like to know that in 2020, our EBITDA was a little bit higher in accounting terms because the FX went up and we adjusted prices, and the average cost of inventories were a little bit delayed. So when you look at 2020 and 2021, you can see that there was an increase in 2020, but that was related to the price increase. Also, in 2020, we had a decrease in costs in relation to travels and participation in trade fairs. So the expense level was much lower than expected, and that drove our EBITDA up. It is important when we do our analysis that that was not a normal operation. It was a phenomenon that favored our results, but now we are at the operations level that we expect to be healthy for our business.
We still have a few questions here in the line about our profit and future opportunities. I believe that we can take a last one here from Matheus with Miles Capital about the future opportunities in the solar market, for example, with batteries and smart meters, electric car chargers, and if Renovigi will contribute to Intelbras' participation in those lines.
Well, I believe that it is an opportunity. Yes, we are already working on those projects. We are already developing products that should be launched soon. Batteries, of course, it is in our radar. It's a different expertise, and we are looking at some partnerships that could help us, but it is a very important item for off-grid solar systems and hybrid systems as well when it is approved. Batteries are becoming very strategic in many senses, so we are being careful and taking a close look at the battery market. Renovigi was very much focused on markets that we are already present in, but it is more specialized, and it's bringing great synergies, as I told you. As a complement, we already had studies in place for batteries and for electric car chargers, and Renovigi has a whole IT structure to address those markets.
The things that the two teams were doing are very complementary, and by putting the two teams together, I believe that we can accelerate that movement.
We also have a question from Daniela. There are many questions from her, actually. Daniela from Valor Econômico. She's asking about the slight drop in our net profit year-on-year and the forecasts for net profit for 2022. So if you could make some comments about net profit, that would be great.
Okay, Rafael, would you like to take that one?
Well, 4Q 2021 had that impact about the ICMS tax being excluded from the PIS/COFINS tax calculation base. If we discount that, you can see an increase in our net profit. The trend is to continue to grow with good profitability as we have been delivering over the quarters. Our expectation is that we're going to continue to deliver good numbers. Yes. What we expect for 2022 is a growth in net profit and we're not going to have all of those issues that happened in the past. If you exclude all of those effects that happened last year, you are going to see that it grew more or less in line with the revenues.
Okay. With that, we would like to finish our Q&A session. I would like to turn it over to Mr. Altair for his closing remarks. Mr. Altair, over to you.
I would just like to thank you all very much for your time. The fourth quarter was very important. We advanced as we had planned. We are very confident about 2022, despite all difficulties. As we said, we are always very cautious. Since we are always very cautious, we always have measures and actions in place to protect us. We work with multiple scenarios, multiple possibilities. In the worst case scenarios, we are still going to grow significantly over 20%. If the best scenario materializes, then things will be even better. We are moving forward in a very cautious way. We are always concerned, and concerns are good, are positive because they make us put the appropriate actions in place to protect ourselves. We want to grow in crises as we have always done. Thank you very much, everybody.
Thank you, everybody. Thank you very much for being here in the 4Q 2021 earnings call.
Bruno, I said that in the worst case scenario, we would grow north of 20%, but I am not even considering acquisitions here.
Yes, that is right.
Okay, so thank you very much for your time. We are at your disposal. You can contact us on the website or email. Please feel free to contact us if you need any more information. Thank you very much. Have a good day.