Good morning. Welcome to the teleconference of M. Dias Branco, reference to the results of the second quarter of 2024. We have with us today Gustavo Lopes Theodozio, Vice President of Investments and Controllership, and Fabio Cefaly, Director of New Business and Investor Relations, and Mauro Alarcon, Executive Director of Information Technology. We inform that this event is being recorded, and during the presentation, all participation will be only hearing the teleconference. Afterwards, we will start the question- and- answer session only for analysts and investors. The translation is available clicking on the button Interpretation. For those of you listening in English, the original audio in Portuguese can be silenced and mute original audio. The transmission is also being made simultaneously on YouTube. On barra M Dias, slash M Dias.
If any declarations that may have been done during this teleconference relative to the perspectives of business of M. Dias Branco, projections and operational goals constitute beliefs and of the company, director of the company, as well as based on information currently available. They involve risks, uncertainties and premises, since they refer to future events and should depend on circumstances which may or may not happen. Investors should understand that economic conditions of the industry and other operational factors can affect the, future operation of M. Dias Branco and lead to results that are materially different than those expressed in these future considerations. I would like to pass the microphone to to Fabio, who will start the presentation.
Fabio, please go ahead. Good morning. This is Ted. This is Gustavo Theodozio.
I want to welcome you, and I'm going to pass over to Cefaly to make the presentation. Good morning to everyone. I would like to welcome you all. Our best results with reference to the second quarter of 2024. Before entering into the highlights and passing the microphone to Fabio Cefaly, who will make the presentation, I would like to express our thankfulness to our workers and employees for their dedication and performance demonstrated in this first half of 2024. When we look at the cumulative of the year, the volume grew by 5%, net revenue by 19.4, and EBITDA 11.4%. Even in a year, which was quite challenging, with lots of oscillations in commodity prices and exchange rates, the company has been able to follow its trajectory with profitability.
Looking at the second quarter of 2024, we delivered BRL 2.6 billion in net revenue, a volume sold of 506 thousand tons, 11.6% bigger than the second semester of the previous year. We had a gain in market share and volume, both in pasta as well as in flours, and the cookies and crackers area was stable, with 32% market share. Still has a very relevant market share. We increased our production capacity, reaching 71.2% in the second quarter. We delivered a gross margin of 34.9%, growing in relation to the previous year by almost two percentage points.
The EBITDA of BRL 336 million, and EBITDA margin of 12.5%-12.8%, and with a strong generation of cash, delivering BRL 38.5 million. Ending the second quarter in a net cash position of 0.2x EBITDA of the last twelve months. I'm gonna be back for the question and answer session together with Cefaly, and after the presentation. Cefaly, please take over. Good morning to everyone.
Thank you, Gustavo, for your introduction. Let me put the presentation up here. So as Gustavo passed through the big numbers, the principles, the highlights of the quarter on the year to date, in net revenue, volume, EBITDA, net income, and cash generation.
So I'm gonna start my presentation, putting everybody on the same page about what was the context of this quarter and the context of the first half of the year as well. The objective here of this slide is to show you that what was the trajectory of the primary commodity prices of wheat, which is our principal item we consume, the dollar, and the two variables together. They oscillated a great deal over this period and over the first half of the year, and consequently, the respective impact on the average price. So the first line, the blue line, is the price of wheat in dollars in the market. The green line is the price of wheat flour in reais, and the red line is the exchange rate from reais to dollars.
The lower column shows the average price of MDs in each one of those quarters. So from July until late last year, until the middle of March or April, what we saw here was the price of wheat falling during these months. So it was a long period of falling wheat prices, and in reais, the same tendency. If we start in July of 2020, it is in 1,600 BRL/ ton, dropping to 1,060 BRL/ ton, and the exchange rate was practically stable during this period. Starting in April, we see the price of wheat flour going up due to a series of factors, the most important which was the drought in Russia, which is a large wheat producer. So this influences international prices, and the price of wheat, also in reais, also went up.
In reais, it went up more than in dollars because the exchange rate was depreciated from 5%- 5.4% in June. So while wheat prices fell both in dollars as well as in reais, we saw the prices of our products also falling 6.1, 5.8, and here, with the BRL per kilo in the second quarter of this year, an average price of 5.2, June of this year. And these prices here are consolidated, but the fall, the price decrease was more accentuated in the lower value products such as wheat flour and pasta, and less in cookies and crackers. So as the price of commodities has gone up, we made some readjustments in price.
In almost all categories, the average price was going up during the quarter, but the readjustments also really started to impact on our results starting in June. So the average price in June, consolidated here, was BRL 5.55, which was higher than in the first quarter and also above the average of the second quarter. So it's important to leave everybody here on the same page. What was the context of this quarter, which has the impact on the falloff of costs, reduction of costs in recent months, but at the same time, we saw costs going up at the end of the quarter.
So it was a quarter which showed this transition from a commodity, whose price was dropping, to a commodity price increase and the respective impacts on our average price, which we say increases starting in the month of June. Starting passing through the section of revenue and market share, starting with the information, market information. It's important to say that in this slide here, we're talking about the markets for cookies and crackers, and not the M. Dias Branco numbers. So the first information in terms of units sold, both in the comparison year-on-year as well as in the quarter-on-quarter, the two markets, both cookies and crackers and pasta, had growth in number of units sold.
In the pasta market, it grew faster, and in terms of volume, year-on-year, the market for cookies and crackers was stable, and the pasta market had a growth of almost two digits. In terms of average price, and this information converses with the previous slide, which showed the tendency of falloff prices of commodity prices until March. We also saw a lowering of average price, both in the cookies market as well as in the pasta market, because this category is more related to the price of the commodity. However, the conclusion here, looking at this information, is that these markets which have a demand which is at least stable in the case of cookies and crackers, as well as a more overheated market in the case of pasta.
Now, looking at the M. Dias Branco numbers, as Gustavo mentioned at the beginning of the presentation, the net revenue of M. Dias Branco in the quarter was 8% below last year. The accumulated year-to-date was 11% below last year. Volumes year-on-year grew by double digits, from 454,000 tons- 507,000 tons this year. And in the middle, year-on-year, we saw an increase of 6% in volume sold, while average prices fell 17% in a quarter and 15% a year for the year. What explains this, of the net revenue, the decrease in net revenue as well as in the year-to-date, was the lowering of average prices, because as volumes grew, even as volumes grew, in the category, by category, we see two volumes.
We had 11.6% increase year-on-year and 27% quarter-over-quarter. I'm gonna talk more about the year-over-year because we and this annuls any seasonal effects in the first quarter when we had the implementation of the SAP, which impacted unfavorably the results of the volumes in the month of January. The category of wheat and flour, flour and 200,000 tons and brand. Here we see the highlight is in the wheat flour, industrialized flour, which is the wheat the flour that we sell in large volumes for bakeries, pizzeria, pizzerias, and other industries, principally in the area, on the attack area, and which covers the center-south and southeast sections. We've been able to leverage the potential of the Bento Gonçalves Mills.
The cookie and crackers had a growth of 133,000-134,000. Pasta went for more faster growth, from 90,000 tons- 98,000 tons. We're more than accompanying the growth of the market in that, in the pasta market, and margin is shortening in the same direction. The others, which are snacks, healthy snacks, such as the Jasmine brand, had growth of 7,000 tons-8,000 tons. Average price, putting everything on the same page, year-on-year, prices have fallen due to the reduction of commodity prices, as we saw in the previous slides, from BRL 6.2-BRL 5.55. The average price at the end of the first quarter and the end of the second quarter, and we see an expansion.
And from the average in the second quarter to the month of June, an expansion of 6.9%, which shows that the increases that have been practiced during the second quarter are actually showing up on our results only in the last month of that quarter. While in the month of April and May, the average price was still impacted by the tendency of the lowering of prices in the commodities market, which began last year. Looking at our market share, we have a market share of value in the upper part of this, and also then market share volume. In the area of cookies and crackers, we see a small retraction in market share, in the value of market share, and a retraction in the volume.
What happened here, which we can look at, which we'll talk more about in questions and answer, was much more, much more the reduction of prices, but this is still an adequate level for M. Dias, something close to 32%. In pastas, quarter-over-quarter, we saw stability in market share value, in value, and a growth in market share in volume. In wheat flour, we had growth both in share value, in value and in volume share. So these two categories of pastas and flours, and in cookies and crackers have small retractions. The behavior by region was similar. A fall in revenue of 9% in the defense area and of 7% in the attack areas. The behavior of prices and volumes followed basically the same tendency. Leaving the chapter about revenue and share and looking at the cost and expenses area.
The first information here is that it is relevant. We diluted the fixed cost in the second quarter with growth in volumes. There was growth in volumes and in production, so consequently, there was a higher dilution of costs, fixed costs. Measured per real, per kilo, was at BRL 1 since the beginning of last year and was now. And then the second quarter went to BRL 0.9 , and in the year to date, it's stable. What was the reason of this fall? We sold products and better utilized our capacity. We are now operating. We're operating above 70%, using 71.9% of our production capacity. Here, the consolidated capacity, looking at all of the lines for flours, biscuits, cookies and crackers and pasta, there was an increase of capacity in every category.
Increase of utilization of commodities prices, as we saw previously, the red line shows the prices, spot prices in the market, all in U.S. dollars, and the blue line is the average cost of MDB stock, both for wheat flour as well as for palm oil. The palm oil had a behavior which was more stable over the year, so both in the market as well as in our stocks. Wheat, in the market fell during the year and started to rise starting in April, which opened a gap in relation to the cost of our MDB's, because we have a hedge in wheat, which is executed principally through our stock of three or four months of wheat on hand. So our cost of this stock is more competitive than the spot price in the market in that during that period.
Now, looking at gross margins, these are percentages in the lower part of the slide. We had a gross margin of 33% last year. This year, in the quarter, 34.9, and here's a few highlights. The favorable effects for our gross margins, the lowering of variable costs, principally the costs of wheat and palm oil in this period, which brought us to 30.7, and the fixed costs, which I brought from 1.7- 0.9, was more than enough to compensate the lowering of average prices from 6.3- 5.2.
Now, looking in the short term, which looks at CBOT 22, we see there has been a retraction of gross margin because we start to see in our costs, of course in our commodity costs, principally due to devaluation of the real, we saw that it equaled- it annulled our, our gains through the fixed costs at this moment in time, with a reduction of the average price from $5.4-$ 5.2. Remembering that the average price in June was $5.55, but it still wasn't enough to make a relevant contribution in the quarter, but will have a relevant impact starting in July.
The relative effects of the variable costs compared to fixed costs and the reduction in our average prices; however, there was still a margin and a margin improvement to 35.7%, 34.9-35.7%. The administrative and selling expenses here consolidated in SG&A represented 23.6% of net revenue, and in nominal terms, the growth was almost in line with inflation, something similar to 2% above inflation. We also had increase in volumes, which explains in the line of expenses, selling expenses, is also in relative terms, from 20.2%-23.6%, was due to the reduction of the average price. This percentage is the total of administrative expenses and sales. Administered by the net revenue in the period. This net revenue fell due to the fall in average prices.
This was the increase of the year from 2.3- 23.8. Due to this change in context, this change in context, as a whole, and M. Dias as well, is operating with prices below last year because of the relevant reduction in the costs of commodities during the first months of the year. So due to this context, we have structured some actions and initiatives to line up our structure with our expenses. These realignments have started to be executed in the second half, and the expectation is that we'll see the results during the second half of the year. This involves a series of initiatives. The idea is to bring only a few examples. This does not represent all of what we're doing, 100% of what we're doing, just a few examples.
For example, in the standpoint of structure, we're halting requirement, reduced overtime, more rigid control of discretionary expenses, and several initiatives which can offer gains in operational efficiency. Combining the dynamic which we saw of revenue with costs and expenses, we come to an EBITDA, both in nominal terms as well as in relative terms. The margin went from 12.8 or 3.2- 12.8. The nominal result was BRL 337 million for BRL 337. What explains this reduction in margin? And EBITDA, nominal EBITDA, was a reduction of the average price of the product sold.
The net revenue followed the same tendency, both in relative terms as well as in nominal terms, from BRL 218- 190 million, and here we had year-on-year growth in the first half of 2024 versus 2023. The same thing to our EBITDA, which went from BRL 551 million last year to BRL 614 million, with the expansion of this margin, both in EBITDA as well as in net revenue. EBITDA and net revenue. Now, looking at the cash generation and debt and investments. Here we start with the quarter and the year-on-year. We generate cash, BRL 212 million in cash, principally due to the results.
There was also a consumption of BRL 128 million, basically related to the recent increase in costs, which had an impact in the balance of our stock, of our inventories. Same for the accumulated year-to-date numbers. In number of days, looking at our working capital from suppliers, clients, and stocks. Suppliers went through year-on-year from 44- 63 days, and quarter-on-quarter, a reduction of 12 days. This explained mainly because of a favorable impact, a calendar effect, which happened in the first quarter since the last day of the month was not a business day. So several payments wound up being made in the following month, which was April. In terms of clients, practically, stability from 58- 60, but a relevant reduction quarter-by-quarter from 70- 60.
We mentioned in the call from the first quarter, that we're making a great effort for the recomposition of stocks in our clients after the implementation of SAP, which happened in January. In stocks, in inventories, a slight increase compared to last year, but also a reduction in the number of days compared to the previous quarter. In terms of leverage of the company, for the third quarters consecutively, we have a net cash position, which shows that the company has more cash on hand than debt. We wound up with a net position of BRL 91 million in this semester, versus a position of net debt of BRL 1.2 billion at the end of last year.
For this sixth year in, we're rated AAA by Fitch Ratings, with a stable outlook going forward. 70% of our debt is long-term debt, principally starting in 2027, where we have BRL 1.2 billion of debt coming due. We had BRL 61 million invested in this quarter, and a total of BRL 113 million year to date, 4%, which was done last year, with a highlight of machines and equipment. Giving you an example, for non-fried Lámen had a very good performance. Remember, our strategy has three pillars of growth. One, to leverage our current business, especially cookies and pastas in the areas of attack.
Other categories, entering other categories such as snacks and healthy, healthy snacks, and grow internationally through exports, and the company that was acquired in Uruguay, which is Las Acacias. All of this included in the product in the continuing program of productivity and efficiency. The plan for this year is growth, involves levers and habilitators. The levers are these three, these enablers: cross-selling, to leverage these four brands, Jasmine, Piraquê in cookies, with higher Vitarella in the... Which is the biggest brand of of cookies in Brazil, in MGS, and, and the Finna brand of, flour, which is for consumers. Innovation is here with, with the Piraquê brands, and the, the ramen has not yet produced results, and the reduction in the, in the cash and carry exclusive brands.
These are the enablers, and continuous investment in marketing, commercial excellence, especially at the point of sale, which is where things happen. The GPB, the joint business plan with the retailers, which has a horizon of time, a longer horizon, all the process of pricing and improved service levels and a digital transformation, which is underway. Looking at the highlights of ESG, these are the principal indicators for the year, of the year to date and for the quarter, a reduction in the consumption of water, reuse of water, leadership, which women in leadership, which has improved, lowering of the frequencies of labor accidents, and working our accounts, strengthening our relationships with local suppliers. We have all of the explanations for these indicators.
Before going into the question and answer section, we want to talk about the management of ESG. We want to thank the trust and the presence, and the participation of all of our investors in our program of IR, especially this year, when we were positively recognized. So now we can, now go to questions and answers. Thank you.
Thank you. We'll now begin the question- and- answer session for investors and analysts. If you would like to make any questions, please click on the Raise Hand button. If your question has been answered, please leave the line, clicking again on the same button. Please wait one moment while we collect questions. Our first question comes from Gustavo Troyano, Itaú BBA. Gustavo, please go ahead.
Good morning, Gustavo. Thank you for your questions. Two things I wanted to ask you right now.
One is about the cookie and cracker category. You saw that your market share value fell a little more than the volume market share when compared to the first quarter, even though you have increased prices, as you mentioned, the price in June is above the average price of the quarter, and even though we also see a small sequential fall in prices, as Fabio mentioned. I just want to understand from you, if it has a component of mix in these cookie and cracker, which, category, which could explain part of this impact in your performance on the mix quarter-over-quarter? perhaps in the Southeast, the premium brands losing more than the portfolio overall? This dynamic quarter-over-quarter in the biscuit and cookie and cracker area.
As far as the industry, which historically, we have a higher propensity for the pricing when there is an inflation in costs, and the scenario which we're seeing right now, which we have not yet seen happening in the industry. So I want to understand a little bit about the dynamic of the industry, and from June till now, if you could comment a bit, and then afterwards, we can if you've seen any reaction of the market in this sense, and it can compare the magnitude of this, of what you have implemented during the quarter.
Hi, Gustavo, this is Fabio. Thank you for your questions. On your first point, yes, there really was an impact, a mixed impact in the rationale, as you mentioned. In this cookies and crackers, we wound up losing a little more share value compared to share volume.
It was not a question between categories of cookies and crackers or pastas. It was much more due to the result of us having gained some share in the Northeast and lost some, a little bit of share in the Southeast. This was during this, during the price increase period. Remembering that in the Northeast, our market share is above 50%, and in the Southeast, it's something closer to 20%. So this changes the timing of when this repass of prices can be done. So this is by region. Thank you for your question. Looking forward at the competitors, MGS came out with a price ahead of our competitors. The competitors raised their prices with lower price increases than MGS, actually much less in cookies and crackers.
We came in with a 9%, and some came between 6% and 7%-5% and 6%. With this increase in the dollar, it generated a certain concern on the part of the market, and it made a second increase, yes, bringing them closer to us, between 7 and 8%. We saw that in July. This will be even more evident in August. We, the recent IPCA of July, and it becomes very clear, wheat flour went up by 2%, cookies and crackers, 7 point something%, and pasta, which is still stable, with actually a small falloff. But this appears even in the inflation of our categories in July. Part of this protocol happened also. The protocol happened previously, but, but the realization of these things started in July and became totally, fully impacted in August.
So when you see August, you're also able to see a year ahead an inflation of something like some inflation in these categories.
Thank you.
Next question is from Thiago Duarte, BTG Pactual. Thiago, please go ahead.
Good morning, Gustavo, Fabio, everybody. I wanted to examine a little more this information that you've passed along about the average price in June. Trying to stratify what is the effect mix. I'm not thinking about the mix inside of pastas or biscuits-cookies, but in the MGS overall, and how much is passed through, in fact. The reason I'm asking is, we look at the average price in the company during the second quarter, we see an important effect on the growth, relevant growth, in the volumes of flour, which lowered average prices. Wheat flour and bran, which has an effect on the mix effect.
This mix effect between cookies and pasta and flour and bran and margarine, how does that impact the numbers from June, looking at the numbers for the quarter overall? Finally, to know how much is price increases and how much is the mix effect on your prices in June, in the quarter ending in June?
This is Fabio. I'm gonna start here with your answer. We've had two factors. I'm gonna use the rationale that you placed the average price in the second quarter of 2024 compared to the month of June. Remembering that the prices are still rising, as Gustavo mentioned, and we have an expectation in the month of August that even a higher average price.
So we see on the mix side of this question, the category of cookies and crackers gain relevance when we look at the month of June as, as a whole for the second quarter. And which is something positive, because the category in which we have the biggest, highest prices and the highest margins, and there was also an increase in price or expressive price increase in the categories of pasta and flour and bread. These are more closely tied to commodities, and we saw that commodities have gone up substantially starting in the month of April, and especially at the end of the quarter, with the devaluation of the real. When we look at this going forward, instead of back, the mix effect will be responsible for something like one-fourth of our diminishing, lowering average price.
When we started to lose a little bit of representativeness in cookies and cookies and crackers in the overall results. Looking at the comparison in the second quarter of 2024 and with the month of June, there was a recovery of the representativeness of the biscoitos, the cookie, cracker category. At the same time that there was an increase, a more relevant increase in the other categories.
Okay, that was clear. Thank you. If I could ask one more question. When we look at this volume of flour and brand in the second quarter, do you understand that this is a level of volume that is sustainable, looking into the third quarter and fourth quarter? Or is this number, for some reason, a little bit, unaligned? Because actually, it's a much different level than in this quarterly sales in these categories that you have been reporting.
This is Gustavo speaking. Thank you for your question. I think that, yes, it's sustainable, and if you look at the quarter, the biggest problem in our vision here internally was not even the sale of these volumes of flour. It was the... They were relevant, but the biggest point here is the weaker sales of cookies and pastas, because we had seen due to the international transactions for flour, or for wheat, and we expected an increase in wheat, and we took advantage and bought. We had the dollar, an increase in the value of the dollar also, when they started to accompany the change of prices of M. Dias Branco.
Going ahead of time with this pricing gave us an increase in the volume of cookies and crackers, and in March and in May. But we understand should happen now, going forward, with everybody raising prices, that the volumes of cookies and pasta should go up, and importantly, the idea of balancing all of this out with the wheat flour. So this distortion or mix, due to the prices of flour and brands, should not happen again. Not because they're those two items are falling, but because of the growth in volume of cookies and pasta. This is our understanding looking forward.
Very clear. Thank you, Gustavo. This is Thiago. This, pleasure to talk, pleasure to talk to you.
Next question comes from Pedro Fonseca of XP.
Pedro, your microphone is free.
Thank you for taking my questions. I wanted to touch on two questions. One is about channels. Remember, in the last call... that the cash and carry recovered more quickly due to a market question, rather than a plan of the company. These were large closed truckloads, and it was something that the company took advantage of sooner. There was a representative advance in the cash and carry market. And my other question along those lines is, the rationale that we've been looking at in the first quarter, does this still make sense? And in this sense, can we also imagine that there is repressed demand in the other channels? That's my first point.
My second point is, when we look at the question of the flour, we look to talk about market share for cookies and pasta at 1/3, which the company understands is rational. Is there a target we could expect for market share for flour? Those are my questions.
Hi, Pedro, this is Fabio. I'm gonna start with the answer. Let me start off with the cash and carry question. Cash and carry represented 30.4% of the revenue in the first quarter, and 27.1% of revenue in this second quarter. So there's a reduction in the importance of cash and carry in our sales.
But what we commented in the first quarter was that after the month of January, where we had an operational stop to migrate into the SAP, the channel came back quicker due to the large volumes, was cash and carry. Second quarter has already been a quarter that was normalized in terms of the channel's dynamic. So with this reduction of 30.4- 27.1, in comparison with the previous year, there is an increase in participation from 24- 27.1. Here, there are a few factors at work, but it's important to mention two of these factors. One is the faster growth of the channel, not only for MGS Canal, but for the company in general, in the consumption teams, the area that grows the most.
The second factor is we reintroduced brands that are more economical brands in the cash and carry market at the beginning of this year. So Predilleto, Pelaggio, which are these two principal brands. So this also has had an effect. This question is more internal. It's a choice that we made to reintroduce these brands, and a question, a structural question of these channels. In relation to wheat flour, where we have a market share close to 12%, gaining share over the last couple of quarters. When we think about this business, especially in the South and Southeast, it's a new business. It started to happen only a few years ago, especially because of the mill, the Bento Gonçalves Mill, which we inaugurated in between 2016 and 2017. So this structure has a lot of unused volume.
Only represents domestic flours in retail. So if you look at in terms of the imported importance or representativeness, the B2B, the sale of wheat flour to padarias and restaurants, to bakeries and restaurants, is 60% of our business. So this is not, has not been affected. So it's difficult to hit a target for a business of flour as a whole, where we look at it as growth, year-on-year, and capacity and productive capacity. And for now, we're able to grow in relation to our current capacity. It's not a target of market share, because it's difficult to measure, that 60% is B2B, and we don't have really measuring instruments as we do with the retail outlets.
Thank you, Gustavo. Thank you very much. Very clear.
The next question comes from Lucas Ferreira of JP Morgan.
Lucas, please go ahead.
Okay, good morning. My first question is a follow-up about the cost question. The graph that you showed, the first one, shows that the price of wheat in reais is up by 50% from March till now, while your prices has gone up not even 2%. I understand that you still have this increase to be practiced. Part of it has not yet come online. But my first follow-up question is, with the price of wheat on your graph is increasing, the Chicago price did very well, but it came back to closer to $5, and the spot wheat, since you buy more from Argentina, where the prices have been higher.
If the prices drop, and I want to ask you, if this increase of 9% is enough to cover to maintain your margins at the levels of profitability that you were looking at earlier, 15% or more in that range in, for the long term? Do you have this perspective that this margin, you'll be able to deliver this margin again in this, semester? And then the other question, in terms of the question of volume, if you think that the level of SG&A that's happening today, above what we used to see, is that a higher level? Do you think do you still have a, a ratio falls a little bit?
But my question is, if what you've done is working with a mix of volume that's higher, and how these products with average prices slightly lower, you know, that means probably somewhat higher than the 20% that we saw in the past.
Hi, Lucas. Let me start here. Afterwards, I'll mention to you. Afterwards, I'll add on. This. The main thing here was volume, revenue. It's net revenue, I should say. This affected a great deal, the representative in SG&A. It grew a little more than inflation, but nothing relevant. We had some expenses that were not, we were not able to activate due to this quarter, which impacted us, which are non-recurring expenses. So structured, there's nothing here that makes the company think that there's any risk of not going back to these levels of 20%-25%.
It's much more in terms of revenue than in control of costs. So we're not still. We've seen evolution in June and July with prices already in effect, and having a better margin year-on-year, it's better, and the expenses are under control. Even so, since we had an impact on revenue important, more, more than we expected year-on-year, we've already passed through a process of revisions in the last month.
Looking at all the lines, all the packages that we have in a mature process of matrix budgeting and so forth, we revised everything we could to economize and reduce costs for the year to go till December, and brought something close to BRL 200 million entering leaving the industry, until we have the adjustment of the ovens, reduction in the use of chillings, chillers for the cooling of water, hire travel and overtime, and so forth, for the company and work. I have a series of things on this front. So we have, first of all, the revenue, recovering the levels that we consider normal, and so therefore, recover the expenses, which we understand are important for growth.
However, I will return to saying that our results are 21% of SG&A above revenue, net revenue, and something that's in my-- in our vision, is very structural, and we should see this happening by the end of the year. That's our perspective. And the, and the revenue factor also has a great influence over this. So what was the second question, Fabio? Fabio, would you like to answer the second question?
Good morning. I wanted to add a compliment on the SG&A point. This is the principle... The average price for revenue, the mix of products impacts on SG&A. Yes, there is an impact. When we combine flour, when it gains relevance in the mix, you have to deliver the, the flour, you have the freight costs. The freight can be more expensive than any other products. So this affects our SG&A.
When we normalize the mix and get back to the question of Chicago, when we compare what was the month of June compared to the second quarter consolidated, we should have a positive effect on this with the normalization of this mix. In relation to wheat, it's volatile. It fell during the year and then started to recover strongly. We look in Chicago, these are Chicago US dollar prices. However, it's important to look at them in reais, because here we pay in reais, OMDs or our competitors. So the price is still high. So we can't offer any guidance on margins, which is our practice, but all the pricing that's being done is for expansion, margin expansion, to have the best equation possible between price and volume.
One experience that we have here is that the increase in wheat prices winds up helping us, 'cause we usually are in the head. When this happens, this generates a concern on the part of our competitors who are less protected. They wind up pricing together, when they have an increase in wheat, they come with a higher increase. The Chicago prices is not necessarily the price that we have, 'cause we have premiums for freight and other things. We've been buying a lot from Russia as well. The point is that all of the entry of wheat into Brazil, our wheat price is equal to or better than our principal competitors, and even the big trading companies. Compiling of gross margins, we've shown a good level of execution.
Even with the increase of wheat, and exchanges, exchange rates, we have been able to expand our margins. I don't see any risk of losing gross margin. I think, on the contrary, as a reflection of this, what we saw in the beginning, MD is going out first, protecting our margins, our gross margins, and suffering a little bit with the net revenue. With a stable margin growth and recovering volume with prices already at the correct level. SG&A is under control with some plans for reduction, which will take it to a level closer to 20% in this next quarter.
Thank you. Our next question is from Isabella Simonato, from Bank of America. Isabella, please go ahead.
Thank you, Gustavo and Fabio. My questions are still along the lines of top-line growth.
First of all, following up to Fabio's question about the dynamic of volume going forward. When we look at the volume of flour, which is the level that which is above the level that you normally sell, it doesn't seem that the volume of cookies and crackers was sound low, was so low, was pressured downward. Obviously, it recovered sequentially. It has some growth year-on-year, but what would make this contribution of cookies and crackers and pastas be so different going forward than the whole share of the company? So that's what we wanted to ask. What's gonna force these, the volume of cookies and crackers and pastas to go up, to co-compensate for this higher volume of flour? And this is my first point, and the second point, also along this line of price of wheat.
In fact, it seems that the highest part was at the end of May, the increase, when we look at the future curve, I know that Chicago's prices are not necessarily the best number to use, but the future curve is for lower prices. The real has different prices, has different opinions, but it doesn't seem that you're gonna have a big effect to increase prices going forward. So we've seen more erratic movements in the sector as a whole. You've come out ahead, but the sector doesn't necessarily accompany you. This volatility shows that. So I wanted to understand, what's your strategy to protect your gross margins at a moment when you don't have the help of inflation to support your price increases? How do you think about that for the company as a whole?
Because we have a lot of price volatility with the products, with your products, a little bit above what we expected and consequently, gross margins as well. So these two questions.
Thank you. Who's speaking is Fabio. Your two questions actually flow together, but let me start with your initial point in relation to mix, with the highlight to cookies and crackers. Quarter-on-quarter, all of our categories had growth, expressive growth, above 20% in volume sales. But it's important to remember that we still have a effect of seasonality, with the first quarter being a little weaker due to holidays, and it comes back online in February and March. In the first quarter, we had a slowdown due to the migration of our system to SAP. In terms of volume, the quarters are comparable.
When you look in relation to the second quarter of 2024 compared to the second quarter of 2023, these are more comparable. The total volumes grew 12%, wheat flour grew by 20%, and cookies grew by 1%. However, 1% growth seems like not much, but it's still within what we expected. All of our growth plans of the company, from the standpoint of investments in marketing, innovation, higher levels of service, pricing, were designed so that we could have superior growth above 15%. What we saw in the first quarter, the company came out in front with price increases. This is normal. Yeah, it has an unfavorable impact on volume when you come out at first, but at some point in time, things start to fall into place.
And this coming out first, we see how the impact slightly unfavorable in market share. Starting right now, our expectations as the prices will be more equalized in the market, and that our plan will be able to deliver a volume growth which is higher, even, better than we delivered in the second half. So this should help us to... 'cause the gross margin in cookies is higher than in pasta and flours, and also the average price. We don't want to sell less flour, we wanna sell more flour, but we wanna sell more cookies and, cookies and crackers. Looking at both, this, the mix effects could be favorable or unfavorable. However, it's important that we look for growth of cookies and crackers, which are our principal category above 1%.
Let's raise one point, Luisa, Isabel. Cookies represents 50% of our revenue.
It's by far the category in which we have most invested with the, as far as added value. If you look at the launches, and Fabio can talk to you about these numbers, I'm gonna tell you that the majority of our launches in the recent years have been in the cookies and crackers category. We talk about the expansion into the South, Southeast and Central West, which we still haven't seen important growth. We have a team set up for that. We're growing at a slower rhythm than we would like to, but it's part, majority of it is due to, is to sell more cookies and crackers. It makes sense to improve our operation there, but that's not the level of work that we need for our future, our future growth.
In the category of cookies and crackers, we look for bigger growth in the cookies and crackers categories.
This is Fabio again. The question of the wheat, which you mentioned, this winds up being a challenge every day for us. We see the Chicago price goes up or down, exchange rates. We'd like to know where it's going, but it's a challenge. So every new process for manufacturing has been set up to answer this question of volatility in the market. So I can't tell you where will we be at the end of the year, where will be exchange rates at the end of this year, but I can. It is possible to affirm that the structure today for classification should explain this volatility of the market, arriving, optimizing the optimization of price and volume.
So you don't have an answer to that, and it's prices have stabilized at a slightly higher level than at the beginning of the year. At the same time, costs have been more competitive. We suffered again in July, and now we're going forward in a new life. I don't see this. We don't see this risk on the horizon, at least for now. And so understanding, so July is the reflection of the price increases that you implemented in June, not a new attempt?
No, it was a carry, it was a carry forward of those price increases.
Very clear. Thank you very much.
The question of questions- and- answers is now closed. We'd like to pass the word to Gustavo for him to make his final considerations.
Just want to thank you all for your participation, let you know that our IR team is at your disposal for any questions you might have. Fabio Cefaly, for any additional information, and the company continues on its trajectory of growth with profitability, even though we've had a very challenging year with variations in exchange rates, and the $5.80. We're still here in the execution with the higher levels, highest level of services, launching products with higher added value and a great deal of optimism in relation to the future, continuing a trajectory of our strategic plan, and we continue to be at your service. Thank you all very much. The video conference of M. Dias Branco is now closed. We thank you for your participation. Have a good day.