Good morning. Welcome to the video conference of M. Dias Branco, referring to the results of the third quarter of 2023. We have with us today, Gustavo Lopes Theodozio, Vice President of Investment and Controllership, and Fábio Cefaly, Director of New Business and Relations with Investors. We inform that this event will be recorded, and that during the presentation of the company, all participating participants will be only listening to the video conference. Afterwards, we will initiate the session of questions and answers just for analysts and investors. The translation is available clicking on the button Interpretation. For those of you who would like to hear in English, the original audio in Portuguese can be silenced, clicking on Mute Original Audio on the bottom of the page. The transmission is also being made simultaneously on YouTube at the address www.youtube.com/rimdias.
We would like to clarify also, that any declarations that may be made during this, video conference, relatively to the perspective of the business of M. Dias Branco, projections and operational goals and financial goals, are beliefs and premises of the directors of the company, as well as information, based on information currently available. They involve risks and uncertainties and premises, for as they may refer to future events which depend on circumstances which may or may not occur. Investors should understand that general economic conditions and other fact, other operational factors, can affect the future performance of M. Dias Branco and bring us to results which are materially different than those expressed in our future considerations. I would now like to pass the word to Gustavo, who will begin our presentation. Gustavo, please go ahead.
Thank you all. Welcome. Well, another quarter of revolution of profitability, showing coherence in what the company has been saying in our discourse, in our presentations, and also consistency with a high level of profitability. This is all maintains the discipline and the management of expenses, level of SG&A within which the company has promised. In this quarter, we had record cash generation of almost BRL 1 billion. The fruit of the results of the company adjusting its working capital for some time, which brought us to a level of leverage even lower than that recorded in the previous quarter, of 0.3x, 3.3x the EBITDA, generating comfort to the company to change its payout policy.
Improving a little bit both the payout, the percentage payout that will be distributed, as well as the amount of advances, of fixed advances for each quarter. In this period, we had 33% growth compared to the same period last year. EBITDA in the quarter of record EBITDA and the history of M. Dias, looking back, getting back to our historic margarines since, as we mentioned, close to BRL 1 billion in cash, which is a record. And we look at the accumulated, the company improved almost every line. Revenue, volume, costs, rate and margarines, and cash generation.
We're gonna explain this all going forward, but it also brought us to a great higher level of confidence for 60%-80% of the profit, which will be distributed, and also the payment of a fixed quarterly payment of BRL 0.06-BRL 0.08 per share to BRL 0.06 from BRL 0.05 per share. Also, a little more detail about this quarter, and we're going to further ahead, we'll bring in the Q&A section to talk a little bit more about the results. Thank you again, once again for your presence. Fábio, please take over.
Thank you, Gustavo. I'm gonna continue here with the presentation. On the line of what Gustavo was saying, of the consistency and coherence, we see in the results an accumulated growth of net revenue of 9.6%.
The variable costs, stable in the cumulative of the year. SG&A of approximately 20%, which when we analyze the market, it's, as we've done for a while, based on two important projects, which we have been able to deliver productivity and efficiency, which was Multiplica in 2020, and the organizational redesign in 2021. We reduced SG&A from approximately 25% down to closer to 20%. BRL 920 million in the accumulated EBITDA. Looking at the quarter, we had a reduction of net revenue of 8% compared to the same period last year, and 4% in relation to the second quarter, due to several market conditions, which I will detail to you going forward.
It's important to explain the situation of net revenue, and the variable costs continued falling, especially due to the fall of the price of wheat and palm oil, which are the principal inputs used by M. Dias Branco in the production of our flours and cookies and snacks. And we estimate is approximately 20%, the record EBITDA of almost BRL 1 billion of cash generation in the period. Here, as Gustavo mentioned, the question of the payout, we maintain the five annual payments, four fixed and one variable, with the fixed payment being went from 5 cents per share per quarter to 6 cents per share per quarter. And the payout, which is important to mention, a little bit higher. Until 2020, our payout was only 40%.
In 2021, we raised it to 60%, and which was valid for the entire year of 2021 and 2022. Starting now, our new policy, we're having, assuming a payout of 80%. So we want to, before getting into the results, the details of the results in the quarter, I want to open up a parentheses to bring you a horizon, a little bit longer horizon, and also publish our vision of the results, the most recent results of M. Dias Branco, looking at the evolution of 2021 to 2023. Starting with the net revenue, the numbers show the exercise of 2021, 2022, and 2023 is the last 12 months to have a reasonable comparison, annualized results.
We have growth of revenue of net revenue of 21%-23% from 28%, which has grown from 1.7 to 1.75 million tons, which is a growth of 2.7% in volume. And the average price, which due to the renewal and launches, and acquisitions, and price readjustments, the average price went up 35% in this period. The cost went up greatly, mainly due to the war in Ukraine and Russia, which caused an explosion in the prices of wheat and palm oil. Our CPV in this period was 3.3%-4.2%, which is an increase of 32%, which impacted unfavorably our margins in that period, especially in 2021 and 2022.
Recently, going through the average price, we've been not able to attenuate this increase in costs. Our margins have had an evolution, a gradual evolution. 8.8% was the bottom of this period in 2021, 8.9% in 2022, and in the last 12 months, we have reached an EBITDA of BRL 1.13 billion, added up with a margin of 10.3%. Now, going back to the results of the quarter, we had the most difficult moment in costs and margins between the fourth quarter of 2022 and the first quarter of 2023, and since then, our margins have been gradually improving.
The third quarter of 2023, we delivered 32% margin, EBITDA margin, which is within the historical average of 16.1% since the IPO in 2006 and the full year 2020. Remembering our strategy is a strategy of growth with profitability. Looking at what we talk about, the current business, which is the core business, which is the growth in the regions of the South, Southeast, Brazil, and defending our position of dominance in the North and Northeast. The other categories, and within their most recent acquisitions, Latinex with snacks, with healthy snacks, and Jasmine with granolas, again, gluten-free products, as well as healthy biscuits, healthy cookies.
So internationally, beyond exports, we also made our first acquisition outside of Brazil, which was Las Acacias, which has given us results quite in line with our business plan, with an EBITDA margin of 12%-14%. So now we're gonna start the first chapter of the presentation of the quarterly results, which is revenue and market share. Here, we would like to, first of all, share with you our vision of the context of the market. And I think here, and the first message is in relation to demand, that when we talk about demand, we're talking about the sell-out and the sale from the retailers to the, to the consumers. Consumers are buying more or whether they're buying more or less. And starting from the market numbers and the Nielsen numbers, I'm looking here at the table on the left-hand side, which is for cookies.
In terms of value, year-on-year, the market grew 9% for cookies, and in terms of volume, it went down by 1%, which is basically stable. The market for pastas, on the right-hand side, in terms of value, it has similar performance with the biscuit cookie, cracker market grew by 9%. In volume, it grew by 1%, and number of units sold grew by 4%. When we look at these numbers, our conclusion from the standpoint of demand is that the demand is strong, firm. The volumes are pretty stable year-on-year, and the market, and in value, the markets grew by almost double digits.
The short term vision from the second quarter to the third quarter is similar in both markets, in cookies and crackers, with growth in value, volume, and units sold, and in pastas, the same thing. The market in volume sold, it went up by 2, and in units sold by 4%. So we don't see any unfavorable situation in relation to demand. On the other hand, the sell-in, the sales from the manufacturers to the retailers, was unfavorably impacted. Principally in the third quarter, we observed that with some clients, something that was widely noticed broadcast in the media.
And here are a few examples of those articles, that retailers reduced their stocks due to very high financial costs, higher interest rates, and thus had an impact, unfavorable impact, on our revenue, which is our sell-in, which is the revenue of M. Dias Branco with retailers, from retailers. Looking at this situation for the numbers of M. Dias Branco, here we bring our stock, our retail stock, measured on the new grid for the two principal categories, which are cookies and crackers, and pastas. And we observed that last year, we had 42 days of stock in retailers in the biscuit, cookie and crackers area. It went up a little bit in the second quarter, but year-on-year, it had a heavy falloff from 42 to 34 days. Which is together with the macro vision of the market in pastas, the same reality.
44 days at the beginning of last year and 39 days this year. So no problem with demand. Retailing is buying less from the manufacturers, and this impacted our sales, which is the revenue of M. Dias Branco together with the retailers. Looking at our market share in the three principal categories, cookies, wheat flour, and pasta. On the top line, which is always the market share value, and in the bottom line, it's market share volume. For cookies and crackers, we gained share year-over-year in value, year-over-year in volume. A small falloff in value and volume, quarter-over-quarter, but this is within the margin of error. Wheat flour, we gained in all of the comparisons, year-over-year in value and volume, year-over-year, and also sequentially in volume and value.
In pasta, we closed the third quarter with our market share lower than last year's, which is, which goes together with two situations. We did, as we mentioned in the beginning of the quarter last year, a reduction in the size of our packaging for an important part of our portfolio of pastas, which caused a falloff, at least temporarily falloff in market share from the second to the third quarter. But now, from the second to the third quarter, we observed a stability. In terms of growth, value, we grew our market share a bit, and in terms of volume, we went down 0.2%, but this represents basically stability. Now, looking at the numbers of revenue. The revenue numbers, which wind up being explained by the fact, the previous factors that we mentioned.
Looking at the third quarter of 2022 compared to 2023, there was a falloff in net revenue. Volumes fell by 6.6% and the average price by 1.6%. The drop in average prices is connected with our lowest value products, such as wheat flour, and margins, and fats, whose prices have accompanied the price of commodities. And so for the recent quarters, the price of wheat went down, palm oil went down, and so the market, in fact, our portfolio, the average price has been contracted together with the price of these commodities. Cookies and crackers prices have gone up year-on-year, and in this quarter, we've had a falloff in volume above 10%, which was principally due to the situation at the with retailers.
Between the falloff in prices, between biscuits and cookies, they've had an increase in revenue, falloff in revenue. Comparing with the sequential comparison, net revenue falls 4%, volumes are practically stable, and the average price 3.2%. And so in terms of average price, it's similar. With the year-on-year comparison, the principal fall in price happened again in the lowest value-added categories, such as wheat flour, and margins, and fats, and the others were able to increase their volumes. So we gained market share sequentially, but still 3.2% below the previous quarter. And in biscuit, in cookies and crackers, prices are almost stable. Pasta is down a little bit, and volumes between 2%-3% in cookies and crackers. In the accumulated for the year, we grew in all three variables.
Net revenue grew by almost 10%, with sales volume, which grew, and also an average price increase. Cookies and crackers, we had average prices above 10%. This has to do with mix, with launches, the acquisition of Jasmine, especially in cookies and crackers, and a little bit of pass-through, especially from the end of last year and beginning of this year. The result of revenue, region by region, looking at the accumulator for the year, which wants to grow more in the attack area. And this has gone up with the increase in average prices and growth in volumes. In the defense area, we also had growth, in the same period, grew by 8%, with more six percent of average prices and 2% in volumes. And in both regions, we see a falloff in revenue for the same reasons that we explained previously.
In terms of inauguration, we started with the focus of adding to our portfolio items with higher added value. In this quarter, we're bringing, for example, from Jasmine, an item of a corn cookies, which has growth of 31.7 BRL. Snacks, two examples here. Tapioca cookies with an average price of 60.7 BRL, looking at M. Dias as a whole. And now looking at the Piraquê brand, which has had a recurring demand of the market for a while, that we would make an overview of the results of Piraquê since the acquisition, remembering that the acquisition happened in 2018. We brought here the principal numbers from that brand.
These are consolidated numbers which bring all of the categories of the Piraquê brand of cookies, snacks, and pastas, comparing with what happened with the revenue between 2017, one year prior to the acquisition, when M. Dias Branco was not in Piraquê, and in 2023, the last twelve months. Net revenue of Piraquê grew by 78% at this time. It is a brand with net revenue above BRL 1 billion. The attack area, which for Piraquê tends to be a defense area, is very big in Rio and also in the Southeast, but following the rationale of M. Dias Branco as a whole, in the South, Southeast, and Center West, Piraquê went from BRL 170 million to BRL 1 billion. So it's still a BRL 1 billion real brand in our attack area, which is a growth of 58%.
In the North, Northeast, which is our defense area, we multiplied by 10. Piraquê, which practically didn't exist in these two regions, and today it has net sales of BRL 153 million, which is basically the connection of a very strong brand with a good distribution system, which is the M. Dias distribution system in the North and Northeast. In terms of margin, we look at a perspective of gross margin. Piraquê continues with a growth margin structurally above that of M. Dias by five percentage points, very aligned with the pre-acquisition period, since it's a brand of higher added value and higher growth. The results in the short term for Piraquê is also very positive.
There was growth, quarter, year-on-year, third quarter 2023, compared to 3Q 2022, in volume of sales, in net revenue, and the gross margin of Piraquê for the third quarter was 39.6%. In the accumulated for the year, it's also very similar. There was growth in the principal variables. It's a brand which today represents 13% of our net revenue. The second biggest brand of M. Dias, the biggest being Vitarella, and the second is Piraquê. And it was selected by consumers through a research by Kantar, as the second brand most chosen by for consumption outside of the home. So we have this category of snacks, such as these, which you see here on the screen, as an example.
Going now to the revenue and market share for costs and expenses, both in wheat as well as in palm oil. We saw a falloff in prices during recent months, remembering that the red line shows the prices in the market and the blue line shows the price in the M. Dias stock. So starting with wheat, in the last four months, we have a price below the reference price in the market, and in the last three months, the price of wheat below $300, and at the end of the line, $274 a ton, which is a price which is below the pre-war period. Palm oil is a situation which is similar to wheat. It has been falling in recent months.
We had between stock and position hedge positions together with a longer view, but in the final month of the quarter, our price, our stock of our products, of our stock, has gotten almost to the same price as the price in the market. So this is the falloff, both in wheat as well as in palm oil, were factors which were very favorable for our recovering of our margins. If we look at this next graph at the gross margins, the most difficult moment, which was in the 1T 2023, and the quarter with between 23%-26%, and now it's improved in the third quarter, and now we're up to 35.6% in gross margin.
Fixed costs measured by the price, BRL per kilo, were stable between 1 and 1.1 BRL, and the variable costs continued to fall off, going down to as low as 3.2 BRL per kilo. The administrative and selling costs, selling administrative expenses, stayed between 20% and 21%, both in the quarter as well as in the nine months of the year. This combination of costs falling and stable SG&A helped us to get back to a margin of 16% within the historical level, and a record EBITDA of BRL 441 million, which is the biggest in the history of M. Dias.
The net revenue, the evolution of net revenue, the company year-on-year has grown by 33%, with a net margin of 9.6%, 9.5%, going back to the historical levels of M. Dias. Now, looking at the generation of cash and investments, we also had a generation, operational generation, a record of BRL 973 million, the highest in the history of M. Dias for one quarter. This cash generation came from two sources. Both improvement in results with an EBITDA to BRL 340 million, and the liberation of working capital. While last year we had consumed cash, this year we have generated cash, and in the accumulated division is almost the same.
Looking at the detail of the working capital, we had a positive evolution in the three principal lines for working capital. There was an improvement in the number of days for suppliers, from 44 to 56 days. We had a reduction from clients from 58 to 55 days for clients, and a reduction also in our stocks. Here, it's important to mention in a little bit more detail, suppliers is where we have been very diligent in the management of that area. The project of medium to long term, which started in 2020, when our average period was inferior.
The team of supplying, supplies and production, financial area, everyone, they have a team that is quite a wide-ranging team, set up to improve our, our numbers for the number of days we get from suppliers, which has gradually and consistently freed up working capital in our results. Looking at the scenario results and the generation of cash, the leverage, the level of leverage was 1.2-0.3 times EBITDA in the third quarter of this year. And Fitch also reaffirmed our rating, which was the best possible rating of that agency, AAA, stable outlook for the sixth consecutive year. 70% of our debt is long term, so it went from a gross debt of BRL 2.163 billion.
Only 30%, comes due before September 2024, and the rest, which is another BRL 1 billion, which will come due after 2026, starting in 2026. In terms of CapEx, we invested BRL 223 million over the year. We had a CapEx of maintenance, several initiatives in the factories, and in systems for all the process of digital transformation, which M. Dias Branco is currently undergoing. To close our presentation, looking at ESG, the more detailed information and explanations are all in our earnings release, and are always organized in three basic pillars of our strategy of sustainability, which is caring for the planet, believing in people, and strengthening our alliances.
Some of the principal initiatives in ESG over the third quarter, in fact, including the revision of our strategic plan, which happened here, which was work that was done by the, the statutory directors and the executive committee, and with the support of an outside consultant. And with that, we close this part of our presentation, and we can pass over to questions and answers.
Thank you. We will now start the question and answer sections for investors and analysts. If you would like to make a question, please press the eye icon, Raise Hand button. If your question has already been answered, you may click on it again to remove your question from the line. Our first question comes from Gustavo Troyano, Itaú BBA. Gustavo, your microphone is open.
Thank you, Fábio. Thank you for your questions. Two points I wanted to ask about here. First, in relation to the trade-off of margin for and market share, which we always discuss. Something that calls our attention on this, the market share volume, both in cookies as well as in pasta, where the volume, the value went up. I wanted to see if it's reasonable for us to assume that the industry is perhaps being a little bit more aggressive with prices, and if you're performing better in value than in volume. And try to understand if there's any category within pastas or cookies and crackers, which could push further this aggressive in terms of price than what we have been seeing, if this is a reading that makes sense to you?
The second question is in relation to costs. Here, I wanted to look a little bit more, focused a little bit on sourcing for wheat, Russian wheat. I want to confirm with you the amount of the discount that you're able to get on this wheat compared to market wheat, and also understand how much of this wheat is already going through the results in the third quarter, and if we can expect any more marginal improvement in your costs, looking at the market for the fourth quarter, looking with this Russian wheat coming through your results. If I can start here, and then you can add, please go ahead, Gustavo.
Look, going into the question of market share. First, good morning, and thank you. Let me start the discussion of margin versus market share.
We have been saying this, the company, since this time, a most challenging moment, of the company, and more recently, the war, we have seen that the Brazilian market has an important role to direct the markets. And our option was to put the company, trying to put the market in the direction of recovery of historical margins. With this increase of commodity prices and the difficulty that consumers are having in paying a price, this, recomposition of cost was not-- We did this. It's affected temporarily, the company's volumes, which I think are stable. If you look at 2021 or 2022 and 2023, where the company is between 1 million and 700,000 tons, this year will be a little bit more than that. We have productive capacity. We have cash to advance into new markets and to recover market share.
We've done this year on year. Our market share has been lower, and now it's growing. And so now it's started to drop off a bit, but in our vision, this is not a problem. Why is this happening? To answer your question, part of your question, if we're being more aggressive, yes, we've seen some competitors being more aggressive than us. You're saying what category? Basically, in common pasta in the Northeast, we have this world mapped out. It's a fight. And why do they gain market share with this leverage? It's price. Certainly, what's happening, there was gaining market share, competitors that are practicing lower prices. So we've accompanied this closely. We don't see any difficulty to do that, to recover this market share.
The point is that the company is doing it in a way, surgically and carefully, so that we don't lose our margins and go back to the margins of the pandemic era, below two digits. So we've done this with a great deal of care. But something that has already happened in the past, and we know how to manage well this trade-off between market and margin. So you can see, perhaps at the end of this next quarter, an improvement in market share. The second point, something that we cannot say here, Gustavo, is as a percentage, how much wheat has become cheaper or more expensive. This is information which is very confidential and strategic for the purchase of wheat.
The percentage of wheat overall, within our total stocks, has gone up, has increased due to several opportunities which showed up in this year and last year. We didn't buy anything prior to the pandemic, and we started to buy it now. We have more than 20% of stock of a Russian stock, as well as the stock of the Brazilian stock, which has increased due to our increased production. Prior to the pandemic, we produced 6.5 million tons. The Brazilian now needs 12 million tons. It went up close to 10. Everybody had an expectation of 11 million tons of wheat from Rio Grande do Sul this year, from the Center West growing. But with the rains in Paraná and Rio Grande do Sul, we had a reduction in this provision.
Now we're looking at a smaller harvest, but even so, it'll be higher than it has been prior to the pandemic. So we have increased our stock of Brazilian wheat as well as Russian wheat. Finally, the company has... We're close to 20% right now. So we have an opportunity. We've been seeking to take advantage of the opportunities, both in the market, Russian market, as well as in the Brazilian market as well, here in the States, which the regions which I mentioned. Fábio, did you have anything you wanted to add?
I think that's complete, Gustavo. Go ahead.
Next question.
Thank you, Gustavo. Thank you. Very clear.
The next question comes from Leonardo Alencar from XP.
Good morning, Gustavo, Fábio. Thank you for taking my question.
I wanted to see if you could give me a little follow-up in relation to the previous questions. At another moment, we were discussing the situation of the sell-out, which we've been reducing stocks, and you've been trying to negotiate that due to an increased volume. And perhaps we haven't presented these numbers. I wanted to know, how the strategy is going? Is it? Has it worked? Has that a positive impact in the quarter? And beyond that, if you could help see this quarter, fourth quarter might be a little more sensitive. And so if we look at the utilization of capacity, there was an expressive falloff in this semester, as happens in the area of the quarter. The expectation from the fourth quarter, it will decelerate in relation to the fourth quarter and the fourth quarter, and this will be the first point.
The second point is also, if you could speak quickly about, we understand that you're getting way above, below the market, which is very positive, but when you in palm oil, you're not acquiring, what are the expectations with the effects of the market, what do you see for that? And the question of the arbitrage versus soybean oil, how much soybean oil are you using? If you're thinking about consolidating vegetable oil instead of palm oil, if this would lower your costs in the view of the market or no, or not. And if you could please comment on that in relation to stocks, but also thinking in terms of price and volume, the price of commodities, you're also lowering your stocks and at a lower cost. Help me to understand what's making the most difference in this variable.
So these are two principal points, volume and raw materials. Gustavo, do you want to start?
Yeah, I can start. Thank you, Leo, for your question. In fact, the actions that we commented, and first of all, the correct, you're correct, your reading is correct. We see sell-out continues to doing, going very well. No serious increase in terms of market volume, but it continues flat. There's no retraction due to the part of the final consumer, which is the most important part of the chain. What we have seen is a lowering of the volume of the sell-in, due to the strategy of several large companies who have decided to lower their costs, lower their inventories due to the high, very high financing costs in Brazil. We've been trying to help some of these clients, some of our clients.
This effect should happen in the fourth quarter, creating plans together with the clients. There was a timing to do that, so the results should appear in the fourth quarter. The lowering of capacity, in general, the fourth quarter is a quarter more challenging than the third quarter, because if you start to compete with the Christmas items and the parties period, and so it makes it, it hits us a little bit more on volume. This year, we had important actions within our fourth quarter, which will be better than other quarters in the past. However, I still don't believe that it will be the best quarter than the third quarter. Soybean oil today, we use approximately 20% in our composition, our palm oil. If we look at it, it's a price in line with the market.
At some palm moments, it was below market. Soybean oil today has another role, which is very important, because we've started this this requirement to place stamps, to place seals on the packaging of saturated fats, sodium, sugar, et cetera. And the soybean oil helps to eliminate to generate some seals in terms of saturated fats. So we use that not only for cost, but also to diminish a little bit of those, the number of those seals, which have started to become obligatory in the Brazilian market, but still somewhere around 20%. Did I forget anything? Help me if I didn't answer any of your questions.
No? I think that's full, Gustavo. Just to connect the question with Leonardo and Gustavo. Due to the stocks that we have today, the inventory that we have of palm oil and wheat, we have the possibility of having a sequential fall in the cost of these two commodities, which will flow into our results between the third and fourth quarter.
Very well. Very clear. Thank you, Gustavo and Fábio. Very clear.
The next question is from Lucas Ferreira, from JP Morgan. Lucas, your microphone is open.
Hi, everybody. Good morning. About the price of cookies and crackers, the average price of the company was stable during the quarter, but I wanted to know if there was, if this was over the quarter of the, of the half. When we look at the industry, prices have started to fall on average.
Looking specifically, also at the categories, the more premium brands, the price really won't drop, but we do see a fall of prices in the larger quantities or SKUs that we had in the past... I wanted to understand if this makes sense in the, purpose, in the headlines that you placed on the, about your the inventories in retailers, that the retailers also want to stock up at better prices. So if you see whether there is more spread over different regions and SKUs, and if this is a tendency which could, result in a lower prices in cookies in the fourth quarter. And my other question is about costs. You mentioned that, today, oil, palm oil and wheat still have a positive influence, for falling further in the next quarter, have we also produced, a lot less, in the quarter?
So if you understand this to be a normalization of volumes going forward, or if this is dilution of fixed cost, if it's gonna have a positive effect on the fourth quarter results. And finally, the allocation of capital. You've approved an increase in the payout, which has arranged a new dividend policy. However, in this context, would it make sense to repurchase your shares rather than increase your payout?
Gustavo, go ahead, Fábio, and I'll take the last one about the payout.
Okay, Lucas, starting with your first question in relation to the cost, the prices of cookies. What we see in the field, in the market, IPCA of biscuits and cookies and crackers, based on Nielsen's results, the fall in prices of biscuits and cookies and crackers is very low.
We saw it in the IPCA, it was practically 1% in the index that it fell over the last twelve months. The numbers from Nielsen follow the same line, and that's what we've seen also in the market. A very small falloff in prices, which is concentrated principally in the subcategories of cookies and crackers with lower value added, that have a bigger exposure to the commodity prices, such as Maria crackers and Maizena crackers. In the other categories that have a higher value added, we haven't seen reductions in prices. And so there is a reduction, but it's a very small reduction, and the fall in costs, in terms of results, overseas, this takes over this small fall in price and costs.
Differently in the wheat market, looking at another category of MD's, wheat flour is a commodity, and its price follows the wheat prices. The cookies and crackers have other ingredients beyond all the question of the branding. It's a category where the consumer pays more attention to the brands, which is growing in revenue and in volume. The cookies have other ingredients beyond the wheat, there's palm oil, chocolate, Maizena, the packaging, which has a more elaborate packaging than a wheat flour packaging and design. So there is not a direct correlation of cookie prices with commodities prices. And so your second question is in relation to a possible upside of dilution of costs in the next quarter. Yes, that is a possibility.
This will have, this will have to do with what Gustavo mentioned earlier, these negotiations which we've done with retailers to try our balance, our cash, to recompose market share and volumes. This strategy, if it works, naturally, we will increase the volume of production and have a bigger dilution of fixed costs, which could contribute positively to the results in the quarter. So it's important to point out then that looking not just at the quarter, but also looking forward, and the budget which we've been discussing with the board of directors, to have this, an authorization depending on capacity. If we should see a volume, in volume, with a reduction of fixed costs, this is in our mind.
As I mentioned earlier, there's a reserve capacity, which is important, unused capacity, which we could use at any time, and this is our intention to utilize that. So looking at our capital structure, our idea has not been an objective of discussion. We are in spite of the movement in the area being very, very good in CPV, we think that it should include, and it should improve rather than worsen. We're talking about 20% free float. We think that at some point in time, that might improve. So we have the opposite vision, liberate the free float, in the hope that this will allow the stock to become more attractive in that sense, and not to do the opposite direction.
We should use this cash on hand and this capital looking at new opportunities, and that this year was a year of doing our homework. We did three acquisitions, one outside of Brazil, which even though they are small acquisitions, they have a certain amount of complexity to integrate. Just to give you an idea, we put together this year the two factories of Latinex in Paraná, and the Jasmine factory in Paraná, and all of the part that was allocated from the rental part from Latinex, we united them with the production lines of Jasmine, and we united the two companies in the same industrial park, and Jasmine incorporated Latinex. Due to the complexity, operational complexity, these are easy to say, but in practice, in the execution, they generated a great deal of complexity.
So passing this phase and scaling up the volumes of these companies which were acquired, which are doing very well, we're gonna grow in cookies and crackers this year. We gained market share in Uruguay since the beginning of the year. So things are going well. However, next year is a year in which we have more time to look at the opportunities for M&A in the Brazilian market. We believe that at some point in time, this, the market will line up. But there will not be a stock buyback.
Okay, thank you.
The next question comes from Thiago Duarte, from BTG Pactual. Thiago, your microphone is open. Please, go ahead.
Hello, good morning. Thank you for the opportunity. Gustavo and Fábio, good morning. I wanted to touch on three points, if there's time.
The first, I wanted to talk about the discussion of volumes and these different volumes that you brought in terms of, inventories at the retail level and the difference between sell-in and sell-out. With the numbers that you're bringing, these are the numbers that are... What I see, numbers for the stock of M. Dias, products, in stock, in retailer stock. I wanted to understand if this was a practice, this reduction in level of stocks has been a practice more focused on, your portfolio, or do you understand that this has been happening with the entire industry, that retailers are working with lower stocks? And I wanted to hear from you as far as the implication that this has going forward.
We can also, we can imagine both, that the retailers will rebuild these stocks. We should see in the fourth quarter or next year, an improvement in the sell-in in relation to sell-out. I wanted to see if this is a hypothesis with which you guys are working, or if you understand that this is the new normal, and that when we look at the... For next year, looking forward for next year, we should imagine a worsening performance of sell-out versus sell-in year on year. I wanted to understand how you understand this differential of stock going forward. Second question is, as far as the working capital, which you pointed out very well in your presentation, the improvement on the three lines. However, this improvement is being caused greatly by the line of suppliers.
When we look at the composition of the cost of the company, a relevant part of that in the commodities area, I wanted to understand what is the nature of this improvement of periods of terms from your suppliers. An hypothesis that I was thinking about, that it might be associated with a little bit of the hedge that you had, that you have done, the financial hedge that you have made, along lengthening the period for the suppliers and getting a counterpart part from them. We gotta understand how far you can go in terms of improving this, these terms with your suppliers above this exceptional level that you've arrived at in this quarter. And the third question, I wanted to hear a little bit about your understanding of the portfolio brands.
We see in the past M. Dias Branco Day, in 2018, that you had started to segregate after the acquisition of Piraquê, you started to segregate the priority of the brands, with Piraquê perhaps as a national brand. You had several other local brands, Adria and Vitarella, and you even mentioned in recent quarters about the cleaning, cleanup of this portfolio with several brands that are less important. I wanted to see where we are and where do you think you go in terms of your portfolio of brands? Should it be a leaner portfolio, more focused on certain brands, which you have done? For instance, you pointed out a lot about Piraquê and its recent performance in recent years, or not. If we should understand an extension of your portfolio at some point in the future. These are my three questions. Thank you.
Fábio, I'm going to start here, and then you add on, please. Thank you for your question. Going to the first point, the sell-in is more M. Dias, but sell-out is the market. The sell-in is an M. Dias data, and the sell-out is market data. Looking forward, we think there's a trade-off between reduction of stock, which is natural in retailing. When you have a smaller stock, you're more exposed to lose sales. If you don't. Instead of chocolate, strawberry and vanilla, you only have chocolate and strawberry. So when you have one less brand, the consumer doesn't find it, so they just don't buy it.
However, this we've seen many times. And we work greatly with the sell-ins and photos, helping our people to see the trade-off, that these policies cannot be used to generate in general, for all suppliers and for all visitors. We have SKUs that sell more and others that sell less. There are brands that sell more and some that sell less. So this reduction in stocks and inventories, understand, we understand that at some point in time, it will generate a problem in the stores. It's very probable that they've already seen. They have corrected over time.
So the trade-off here, a very important trade-off here, due to the data of this information in our vision, at some point in time, it's going to recompose these stocks with improvement in the interest rates and the financial costs, which we've seen, and they should operate with stocks with better stocks. That's our reason. In our case, the company understands that it's not the new normal. This is not the new normal. We're gonna go back to what it was earlier. This is very difficult to say. However, that there will be a recomposition of these stocks due to the risk of stockouts on the shelf. This is not the new normal.
We also have a plan, an exposure plan, which is very important, taking more time and going into new categories and internationalization as we did this year. The focus, however, for 2023, as Fábio mentioned in the presentation, expanding in the Brazilian market. So beyond the recomposition of the stock through this trade, we also have this growth foreseen by organic growth range is looking forward. We should have an improvement in volume, more than you've seen over the last 2 years. We understand that at some point in time, at a very specific moment, and we've said this a lot, working capital is basically a negotiation, one-to-one with the suppliers. What they were willing to do for us and what other competitors would practice with us in terms of brand management, category management, and area of supply.
For each area, for each commodity, for each area, each packaging type, is a big group of people looking at not just at the new developments, new suppliers, but also the renegotiation of things that we think are important. We've used an instrument which is in partnership with several Brazilian banks. The use of the forfait, which is crazy, which took over the market, where we lower our periods, our terms, but we offer financing through banks for the supplier to have at a lower cost than he would have if he was borrowing directly from these institutions. It's been one of the levers of renegotiation. However, there was a lot of exchange in suppliers as well. We've changed a lot of suppliers due to these negotiations, substitution of material as well. I think it's a little bit of that.
Going into the brands, this was a year that in the three brands that you mentioned, we continue with the optimization of our portfolio, both the SKUs as well as brands. We have several brands which continue operating, but generally, the brands, the low-price brands of M. Dias, but with no investment, because we continue having this correlation with the consumer in that specific region, and that, for that reason, it continues, but with no investment. But the investments continue being destined to... Especially for the Adria and Piraquê brands. If you look at Adria, the most recent advertising, it's much more directed to a higher, the highest, the most premium brand of the company, which is the hard grains, Grano Duro, né?
We're looking at Adria, and we should see an investment, a higher investment than we had this year, which was very low in these new brands, especially Jasmine, which is a brand leader in the sector of health, healthy snacks, and completely integrated with the distribution network of M. Dias. And shortly, should have a huge capacity for expansion, and this will have to be supported by investments in marketing. So that's about the answer for that.
Thank you, Gustavo.
Next question comes from Isabella Simonato from Bank of America. Isabella, please go ahead.
Good morning, Gustavo and Fábio. Thank you for the call. I wanted to go back a little to the allocation of capital, discussion of the allocation of capital. You mentioned a few interesting points, and I think the question of M&A, there are several factors. The sector as a whole, when we look at it, it's suffered a fall-off in valuations, they've suffered quite a bit. But when we look at the deals in the sector, they're still coming out with multiples that are quite high.
So I'd like to understand a little bit, what's your vision, when you look at a strategy of growth beyond the question of the category and the value added, looking a little bit at this trade-off between your stock price, between an M&A, which has a multiple that's higher, and the capacity to return to give a return to your stockholders, not on the repurchase, not only through repurchases, but also with cash generation. So I wanted to hear from you a little bit, how you guys are looking at this strategy in this new world of valuations and high capital costs.
Isabel, thank you for your question. Truly, we've seen multiples that are quite high this year. I'm not sure if it's something that will continue or not.
We still have the capacity to do a big M&A in some regions, and there are regions where the company does not have a good coverage, an ideal coverage. We have the region where we were, we were born, in the Northeast, North and Northeast, but we've always had experiences in buying companies with multiples that we would say are a little bit higher than the market. But with the synergies and expansion, this multiple at the end of the, the day, looking internally, it, it reduced very greatly, such as the case of Piraquê.
When you look at the data that Fábio said, and the history of this acquisition, and plugging it in to the company, and what this company has become, where we not only the states close to São Paulo and the Southeast, but you can see the difference in what was Piraquê in 2018 and what it is now. The same thing is true if you look at the Northeast. It's a brutal difference in the exposure and presence of Piraquê here in the North, Northeast. So it's a market. So the market is sovereign. We hope to always pay the lowest possible margins. However, the company cannot let go of good opportunities. High multiples or opportunities which aren't that great, we're not gonna do, we're not gonna look. We're gonna look.
However, multiples for good opportunities and with this capacity of synergies with M. Dias, we'll be looking at those carefully within the Brazilian market. So that's a little bit our vision. As far as the rest, due to the generation of cash and with the leverage of the company very low, we're looking at the payout structure, which is something that, but which has been being asked of the company for some time, and we are now evolving over this question year on year. It went from 40% to 60%, and we've increased the fixed advances every quarter. Well, now it's gone up to 80%. It's a journey.
We can't, we have to remember that the company made a distribution of BRL 600 million of extraordinary payouts, and I think it's evolved greatly as a company in this sense, trying to attend the demand of our minority investors. So this is the route we're taking and a little bit of our vision.
Very clear. Thank you very much.
The next question comes from Lucas Ferreira of JP Morgan. Lucas, please go ahead.
Thank you for the follow-up question. Just a specific question about the fall off in prices of margarine, if that's something specific for the market or if that's due to the dropping, drop of prices in oil, of oil prices, and which has caused this reduction in prices. Lucas, yes, there was a price adjustment. Principally, we operate with margarine, we must have three brands, basically in the North and Northeast.
Not so much, not an important product in the South, Southeast, and Center West. Here in the North, Northeast, we have... Hello? I'm sorry, we've lost our sound here. Hello? The slow prices down. A major player in the Northeast, better than what we've seen. But we have recomposed these prices, is more focused on, on the buckets, margin buckets, the restaurant style, food service style packaging. Well, I'm not sure what you saw or didn't see.
Yes, there was some, some of the audio was dropped out. We missed half of the question, half of your answer, but the competitive question and focused on food service, the mix.
What I'm saying here is that the prices went down slightly due to the commodity prices, but it's also very concentrated in the margins, what we call bucket size, above five kilo packages, which are food service packages. I also wanted to mention, because of my—if you, if you want to repeat the question, due to my sound, we saw a fall of average prices in the food service sector, differently from the retailers, which are the smaller packages. Thank you all very much.
The question and answer session is now closed. We'd like to pass this over to Gustavo for his final comments. Thank you for your presence. We'll continue at your, at your disposal. Once again, the name of the game is consistency, margin expansion, consistent margin expansion, coherence with our costs, not doing anything crazy.
We're operating in a market very surgically in each region, and we're gonna continue following in this direction. The question of volumes and margins, cash generation, this has been our mantra, and something that's very, very, very, very important for our SG&A. Maintaining the relation of net with a great deal of discipline, and this is the result of these levers, which we continue, and we'll be continuing this direction. Thank you all for your presentation, and we continue at your disposal.
The video conference of M. Dias Branco is now closed. Thank you all, and we thank you for your participation. Please have a great day.