Morning. Welcome to the Third Quarter 2022 video conference of M. Dias Branco. We have with us today Gustavo Lopes Theodozio, Vice President of Investments and Controllership, and Fabio Cefaly, New Business and Investor Relations Officer. We'd like to inform you that this event is being recorded. Now, during the presentation, all participants will be only in a listening mode of the presentation. After that, we will begin the question and answer session for analysts and investors. This transmission is also being realized simultaneously via YouTube at www.youtube.com/ri.mdiasbranco. We'd like to clarify that any statements that might be made during this teleconference relative to the perspectives of the business of M. Dias Branco, projections and operational goals and financial goals, are beliefs and premises of the management of the company, as well as the information currently available.
They involve risks and premises as they refer to future events, and therefore depend on circumstances which may or may not occur. Investors should understand that general economic conditions, industry and other operational factors may affect the future performance of M. Dias Branco and lead to differences, material differences in the results. Now, I'd like to pass it over to Gustavo, who will begin the presentation. Gustavo, please continue.
Good morning to everyone. Welcome to our presentation of the third quarter 2022 results. Let's start with the third slide. Slide number three, with the highlights of the company. This shows the net revenue of the third quarter, which is another quarterly record. We closed the third quarter with BRL 2.9 billion in net revenue.
Another highlight is our average price of BRL 6.2 per kilo, which is important in the company. Accompanying our model, our pricing model, this price has been growing. This is the fourth consecutive quarter of increased prices. We've been able to price in costs constantly since the beginning of the pandemic and in the Russian-Ukrainian War, and we continue in this trajectory. The volume of sales were also superior to the same quarter of the previous year, 6% higher. Also grew in relation to the previous quarter, second quarter 2022 by 15%. We closed with 482,000 tons. Due to the increase in prices despite the inflationary pressures, the volumes continue to be quite high.
Our SG&A, our continuous expenses continue to be very well controlled, as they have been over all of our history. At 18.4% of our net revenue. 1.2% reduction in relation to the third quarter of 2021. Our EBITDA, BRL 333 million, being 16% growth in relation to the third quarter of 2021. Another important highlight was the acquisition of the company Las Acacias, a Uruguayan company, and we're gonna talk about that a little bit as we go along. The reason why of the acquisition and what this company means and the results. In a few slides we'll talk about that. We continue with the recognitions, important recognition. The Adria brand was named for the third consecutive year, top of mind brand in the spaghetti and pasta area.
M. Dias Branco was listed on the 100 most innovative companies in the IT area. We continue to be part of the Teva Indices Women in Leadership Index, which represents women in leadership. We had the good news recently two weeks ago, that MSCI has upgraded our rating from A to AA. Which shows our commitment with the ESG practices in a very important rhythm, which has been consolidating our journey, our ESG journey. Looking at slide five, just to remind you, I'm gonna go into this theme of Las Acacias, and then Fabio can continue with the presentation. I'll be back at the end for the Q&A session. In Las Acacias, we had a growth plan here in Brazil and several avenues for growth here in Brazil.
We also looked about the entrance into other categories, the acquisitions in that direction, as well with Latinex and Jasmine, and other categories such as granola, Hansen, gluten. Now we've entered into the pillar that we've talked about quite a bit, which we hadn't done as yet, which is the internationalization. We started with exporting. We export to 40 countries— more than 40 countries, an area that has grown greatly. At some point in time, we understood that it was important to start a greenfield or even through an M&A to take better advantage of the competitive position to give us a more competitive position in those countries in which we operate. Whether it be due to local knowledge, questions of tax law, eventually, and the closeness of a much-loved brand by the local consumers.
That's what we've done with this recent acquisition of Las Acacias. The strategy, the growth strategy is, we're gonna grow more and better in the right channels with a portfolio which is more adequate, the revenue management which is more adequate, and all of this supported by programs, productivity programs and efficiency programs, and maintaining our expenses under control. Looking at the Las Acacias question, a recent acquisition, the first outside of Brazil. It's a small acquisition, but very significant for the company, which will mark this first step. It's a company which essentially, in relation to the culture and the age, it's very much like M. Dias Branco. It was founded in 1952 and on the twelfth of October of the last month.
It's a company which is run by two brothers currently, one of whom will stay with us until December, which is more an industrial area, and then will leave the company after that. He wasn't doing much in the company, and the president of the company, who will stay with us for one year with the possibility of renewing for an additional year. Las Acacias is a brand for those who know the Uruguayan market, which they know it's a very relevant brand with a good store presence on the supermarket shelves. It's the principal brand with our volume. It's the second brand, similar to Las Acacias, and then you have Las Acacias. It's a factory and a distribution center in Montevideo, the largest market in Uruguay.
All of them have company-owned trucks, 100% company-owned trucks, and the DC is also company-owned. It's a company. Very well-adjusted, has EBITDA margin of 14% the last three years. Different from other companies that we have acquired which have a large gap of scale of possibilities in our distribution center. Here it's a different thesis. It's a mature company with good margins. As part of the M. Dias Branco family, it will leverage greatly both our profitability as well as our sales. Firstly, because it's a company which is focused on pastas, the brand has the capacity to bring along other lines of products.
We have a relevant possibility with the Bento Gonçalves factory from Bento Gonçalves to their headquarters, it's only 800 kilometers. There is a synergy eventually with for our flours and even cookies, which today Las Acacias does not produce. The first acquisition, naturally BRL 120 million in purchase price, and we follow the M. Dias Branco model, which is to look at things pricing things with great conservative very conservatively, one step at a time, without following our strategy. I spoke a lot about pasta, but pasta is the heart of the company, but pasta represents almost 80% of their sales. They also work with different types of flours. It's very significant, almost a co-packaging.
They buy it already processed and packaged by local mills, and they sell it under their brands. One of the first synergies that we see here is that we can have a reserve capacity which is important. We inaugurated the Bento Gonçalves mill, a very modern mill in Bento with more than 40% of reserve capacity. It could be a route for us to use this reserve capacity in Bento Gonçalves to have better prices and leverage the sales of flour with the best margins in Uruguay. They have some types of rice. They have these, they have some condiments as well and oils.
It's a portfolio more diversified than of M. Dias Branco, but they operate in categories in which we do not operate, condiments and rice, but it does not produce them. These are co-packaging which it imports or brings in from other countries, from Italy, as far away as Italy, from Brazil and other European countries. But it does produce the majority product that they produce is pasta in their production units. I'm gonna pass it over to Fabio to talk a little bit about the results, the revenue, market share, expenses, our costs, and then our cash position. After that, I'll be back for the question and answer session. Thank you. Fabio, go ahead.
Thank you, Gustavo. Good morning, everyone. I'm gonna continue the presentation, starting with the revenue and market share chapter. The principal highlight in our revenue, we had, at the same time, growth in volume sold and growth of the average price, which in comparison to year-on-year comparison in between the third quarter of 2021 and the third quarter of 2022, as well as in the quarter, year, half year by half year. This is both in volume as well as in average price. Accumulated for the year, the volumes have grown 1% and the average price 29%, totalizing a record revenue, which Gustavo mentioned, of almost BRL 3 billion in terms of net revenue. Looking at the details of our different categories.
Still in the comparison year-on-year, third quarter 2021 compared to third quarter 2022, the principal highlight is the increase of average price in every category, above 20%, 29% for cookies, 28% for pasta, 25% for flours, margin and fats, 28%. The other category, which is important to point out from a strategic standpoint, this increase of 49%. This increase has a direct relationship with the two acquisitions which we made here in Brazil,. Latinex, which has now consolidated its results in November 2021, and Jasmine, which started to be consolidated in September 2022. These two companies have products which have a higher average price than the MGS average price.
At the same time, we've had this with this increased price increase above 29%, expansion of volumes in cookies, pastas, which are the principal categories, as well as flour had growth as well. Margin and fats had a slight fall. The category of other products had a large growth of volume due to the consolidation of these two acquisitions. In the sequential comparison, third quarter 2022 compared to second quarter 2022, the category of cookies and pasta, these two categories together, have 75% of our sales. We had increase in volume in both categories, 2% in pasta and 3% in cookies. Average price of 2% in pasta and 3% in cookies, with growth in volume of 11% in pasta and 16% in cookies.
It's a growth in revenue that's quite balanced between price and volume. In flour and we had a growth in volume and revenue, and in margarine and fats, we had stability in the average price and an expansion in volume of 23%. In the category of others, growth of average price, as well as 21% growth in volume. For the accumulated for the year, net revenue grows by 33%, 1% in volume, and 29% in average price. Average price growing in every category, and our volume growing in cookies, flours, and in the other categories. Innovations. Our launches continue to contribute to the average price increase.
We look at since the first quarter of 2021, launches with prices above the average of M. Dias Branco, 39 in the second quarter, and in this last quarter, a launch of BRL 14, which to show that we have a series of launches, to show us the strategic trajectory which is being executed. Looking at the question of the most recent acquisition, Jasmine, which has an average price of BRL 19.8 per kilo, was consolidated in September. Latinex with a portfolio, very premium level with an average cost of BRL 24.8 per kilo. Other launches which are happening already in the fourth quarter in the various brands of M. Dias Branco. Here are a few examples.
In Piraquê, premium crackers with an average price of BRL 19. Malted milk cookies, which is already a success in sales, with an average price of BRL 20 a kilo. Tortinhas Crostata, which is an Isabela brand, with an average price of BRL 24. Lámen, Adria brand Lámen with a growth of 12.8%. Isabela brand Lámen, BRL 12.8. All of this trajectory, which has been built for several years with a connection, total connection to our strategy, has shown some examples, some concrete examples of those things which have already happened and are still happening. We have a pipeline in this direction for the next quarters, for the coming quarters. Growth has also been very balanced.
What we call our defensive area, commercial area, which represents areas in the North and Northeast, and the attack regions, which represent the Center- West, South and Southeast regions. In comparison, year-on-year, we had a faster growth in the attack area, which is where we have the biggest opportunity for growth and gain of share. We maintained our investments in marketing as we commented every quarter on the different brands of M. Dias Branco, but we have prioritized some brands, especially Vitarella, Adria and Fortaleza, which is the leading brand in several states in Northeast.
Going back to where we started, we returned to fairs outside of Brazil, principally outside of Brazil, SIAL, Expoagas, Supermix, and the Future Trends here in Brazil, where we were principally with the brands of Latinex, Saudabilidade and these brands which are more attached to the pharmacy channel. A question on market share. The general vision is a stabilization and recovery of market share. We present here on these graphs in the above area, the share of value and in the lower part, market share volume. In the market share value in pasta expansion year-over-year with a slight contraction quarter-over-quarter. In wheat flour, a trajectory of expansion of market share, especially outside of the Northeast region.
As Gustavo mentioned, several years ago, we inaugurated a mill, a flour mill in Bento Gonçalves in Rio Grande do Sul, and this mill has been a platform for the growth of this category outside of the Northeast region. We're measuring it in tons. We had a slight contraction in cookies year-on-year, stability in sequence and in pastas again year-on-year, a slight contraction in relation to the previous quarter and in farinha, in flour, both in volume as well as in value. Looking at expenses and costs. Our first message is in relation to the two principal commodities. The red line represents the prices in the market, the spot price for wheat as well as palm oil, and this represents the average cost of our stock, the blue line.
Up until July, for both commodities, we had a price of our stock below the market value. Remembering that we always do hedging. At this period, from January until July, we were consuming the positions which were protected. August and September, we saw in our results the impact of the increase in prices, which happened from January to July. That's why our cost was a little bit higher than the market price at that time. It's important to point out that the price in the market is presenting also another tendency to fall. At some point in time, this tendency will be observed in the M. Dias numbers as well. The price of commodities brought us to a retraction of gross margin in comparison year-on-year and in the quarter-on-quarter.
We had a third quarter with a margin of 28.6%, an impact of this situation of the increase of commodities prices. For the year, we've seen an expansion of gross margin of 29.9% from 28.9%- 29.9%. On the other hand, SG&A is under control and it continues under control. In the third quarter we had an SG&A of 18.4% of net revenue, with a reduction year-over-year and quarter-over-quarter, and an accumulated for the year of 21.6%- 19.7%. This brought us to an expansion of EBITDA year-over-year of BRL 286 million to BRL 331 million and a slight fall off in nominal amounts and margin from the second quarter to the third quarter.
What was the factor that provoked this fall-off of EBITDA? It was the high price of commodities, as I mentioned. For the year to date, we have an expansion of EBITDA, nominal EBITDA of 55% from 8.9% to 10.6%. We've gone back to double-digit margins for the accumulated number for the year over 21% compared to 21%. Net profit showed a tendency close to the EBITDA stability year-on-year with a slight fall quarter-on-quarter, provoked by this increase in costs and expansion in nominal terms of with a net margin stable of 6.3%. Going to the cash generation debt and investments. I'm gonna concentrate here the explanation of our cash position due to the leveraging.
We left a leveraged position of less than 1%. We had more cash on hand than debt in the third quarter of 2021 to a position of net debt, more debt than cash, 1.7x EBITDA in the third quarter of 2022. What provoked this increase in leverage? Two factors. One, an extraordinary payment of JCP in the first half of 2022, almost BRL 600 million, and the last two acquisitions in Brazil, Latinex in November of last year, and Jasmine in the third quarter of 2022. Those were the principal factors that two principal factors increased our leverage from negative 1%, 0.1%. Remembering that 1.7x the EBITDA is a very comfortable level of leverage.
These other factors here, such as investments in CapEx, especially in systems and manufacturing and others, which we have principally the increase of our working capital in our stocks for the increase in level of service, which is one of our priorities, and also the results of the increased cost for commodities in terms of price in reais per kilo, both for wheat as well as for palm oil. We have maintained for the fifth year in a row the AAA rating, which is issued by Fitch with a stable perspective, the highest rating published by Fitch and a stable perspective. The CapEx accumulated grew by 65%, and the quarter grew by 65%, and it accumulated for the year, 37.6%.
Two highlights, the beginning of the implementation of the SAP, which is should open up in the beginning of 2024, and the allocation of our machines for the reduction in the gramatura, in the size of our packaging and flow pack packaging for certain categories, certain SKUs in the cookie category. MDIA3 went up until Friday, went up by 6% versus a valuation of the index of 7% as of Friday close of business. Looking at sustainability, remembering that since the beginning of this year, we started to publish our sustainability indicators, now organized into three pillars of our strategy of sustainability, which is with our care for the planet, believe in people, and strengthen our partnerships.
This report is available both in the presentation as well as in the results. All of these have sustainability, stability in this quarter. We'll talk about water consumption, solid waste, losses in productive position. Women in leadership is one of our priorities. Frequency of accidents, seriousness of accidents, and purchases from local suppliers. Other events that happened in the last three months, the cleaning of beaches and mangrove swamps on the cleaning day, diversity programs, donation of food, training, health journey, and compliance. The ESG agenda touches on all of these items of sustainability, diversity, social questions, but also has a strong connection with compliance. Those were the highlights of our quarter, and now I can pass it over for the session of questions and answers.
We will now begin the Q&A session for investors and analysts. If you would like to make a question, please press the raise your hand button. If your question has been answered, you can leave the line clicking on that same button. Our first question comes from Thiago Duarte. Thiago, your microphone is open.
Hello. Good morning to everyone, to Gustavo and everyone. I wanted to ask two questions, if possible. The first of all, which is focused on the question of volume. As you mentioned, we're very good during the quarter, and I wanted to understand you, what about the following aspect.
We see the good volumes, but on the other hand, we also see a market share in volume, which is either declining or stable, even when we look at the different windows. I wanted to hear what you would say, why is that the case? Is it the industry which is in fact general consumption in general, when we talk about cookies and pastas, which is very strong, growing very quickly, or is there some type of that the market share is measured by sell-out and the volumes that you report for sell-in, or would there be some kind of a temporary lack of connection between the sell-out and sell-in numbers? If you can tell us about how the share will look going forward. Which of the two hypotheses seem more reasonable for you?
That's the first question. The second question is a discussion that we've been having regarding your margins. After recovery with the costs, at the end of the line dropping, we have a more structural difference. You've been saying that you've been trying to make your EBITDA margin getting back to historical levels in the future. I wanted to know, with this preamble, if you could comment on a little bit on what are the differences between the company in terms of structural margins today compared to what it was in the past. Why am I asking that? Because when we look, for instance, at the changes of channels, we've seen consistently a fall-off in the retail area and other cash and carry type of situations.
This channel, does it cost a small fall-off in the gross margin, even though it's helping a lot in the question of SG&A? I wanted to see how these two questions add up together to result in a dip in a bit of the margin which you consider to be balanced.
This is Fabio. I'm gonna start with your first question, which is the question of market share. I think that you even touched on the principal elements that explain our market share numbers. It could be that there is some delay in the reading of the numbers, so we don't discount that. Another point which I believe is even more concrete, the question of the reduction of the packaging, and as we commented. Now here I'm talking about market share for volume.
To explain the volume market share. Since I looked in recent quarters, M. Dias Branco went through this process a little bit after its competitors did, due to the fact that we've had more factories, more brands, and it's a very complex process. As we have done previously, we had an unfavorable impact on the market share later. We reduced the size of the packaging. You lose a bit of volume or either in kilos or in tons, which winds up becoming reflected in the market share, volume market share. However, we see that the market share value, it was a little bit better than the volume market share. At some point in time, the market share volume will happen to the value as well. Value and volume will catch up.
The question which you also put it between sell-in and sell-out, we do not see today any problem because we monitor the stocks in our clients, and we have a level which is quite a reasonable level of stock. You might remember that in 2018 and 2019, we had a situation, an unfavorable situation of coverage of stocks, a very high level of stocks in the clients, something which was corrected in the beginning of 2019, but it's not what we're seeing now. Today, we see stock levels in our clients which are very adequate, approximately 30 days of stock without volatility. It's quite stable in recent months. Summarizing, yes, there could be some delay in these numbers. The question of the size of the packaging is a factor. It could explain part of the market share of value versus volume, and the stocks in the clients are at a reasonable level.
Thiago, this is Gustavo. As far as your other question, answering your second question, talking about structurally, the company is always seeking profitability. I would say that the company is in a structural, notorious structural moment. The tools which were implemented in recent years comparing to what we had makes a huge difference. Evolution of the market, evolution of the trade, with concept stores, with people looking at the. We have the correct mix at the price, at the correct price, in the right position on the shelf. We're focusing on the questions of added value added, leaving for later the products with less value.
These are questions which qualify better our portfolio seeking this margin. The area of pricing, we had an infinity of prices. Today, we have a culture which is more reasonable for pricing and we don't have that cannibalization between our channels. We now see we have one more director of management who's got his feet in the area, Leonardo, both for the daily numbers for the managers as well as the volume plus the profitability which is in everybody's minds. We think that when we look at the structure and the mindset of the company and the tools which were implemented over time, structurally, the company is much better prepared to capture these better margins going forward.
I'm not afraid of erring, but unfortunately, with all the changes that we have made over these recent years and the implementation of these tools have not yet given us the effect that we expected or hoped for, basically due to this question of the pandemic, the war, and so forth, which are covering the results which we imagined to be able to capture. Basically, because all of this has become a much more volatile market and much more challenging. Every commodity has been going up. The exchange rate in Brazil, Brazilian currency it's difficult to have an increase in commodity prices and a devaluation of the real at the same time. This has been a persistent problem. We have went 10 months of war and two years of pandemic, and so we're in a very challenging situation, not only in Brazil.
The result is still effectively very. But I'm sure that our structures were much better prepared to capture and improve these margins and much more challenging margins. That's basically it.
Very good. Thank you. Very complete. Thank you for your answers.
Our next question is from Pedro Fonseca. Pedro, your microphone is on.
Hi, Gustavo, everybody. Everybody here at M. Dias Branco. I'd like to make two questions. My first is if you could give us a little bit of an update of what you see in the way of consumption in the fourth quarter, whether you'll have a consensus looking at more growth, but look what you're seeing in the way of volume, but also in terms of price and how these two converge with each other with the graph that you showed, which is very interesting, of the costs of the commodities prices. How do you see this competitive scenario with the fall in the price of wheat? I think nobody has such a good hedge as you have. How do you see the competition moving in this question of price? How does this look at your possibilities for readjusting prices? That's my question. Thank you.
I'm gonna answer then, Fabio, if you wanna add in. We're gonna continue going forward, we're doing well. I believe in the last call, we put a price list in in August. It went into effect completely in October. It's a very new, newly instituted. It could be that the volumes continue to grow. We're in the phase of analyzing certain markets due to the prices our competitors, which has not yet come back to us, and is affecting some categories. However, it's a normal movement on our view. It happens every time. We work in a market for a certain time, we go in front with price, and then we suffer and then leading this process of pricing, and the competitors take a little longer to catch up.
We're in the phase now of waiting a little bit, waiting for the appearance of these competitors to give you a more effective answer. However, in principle, looking at the volumes in general, no yellow lights have come on as yet. What I want to talk to Fabio about, when you look at the market, the demand for cookies, pasta, and flours, we see stability year-on-year, which is normal for these markets. These are very highly penetrated markets in Brazil. They're present in almost every house in Brazil, every household, and are really due to a perception of value, due to the readjustments being practiced by the majority of the players in these markets. It's a scenario of demand, which is a good demand, strong demand, and we have a perspective, a positive perspective for the coming quarters.
Thank you. Understood.
Our next question comes from Rodrigo Almeida. Rodrigo, your microphone is open.
Well, Thiago, Fabio. Two questions, more specific questions temporarily about the current moment. At this point, first of all, to understand in a few points some financial effects this quarter, I think that in relation to the accounts for accounts which are reserved accounts. I want to ask you about the nature of this effect on the cash flow in the quarter and the behavior of the working capital behavior, and how we should be thinking about this going forward in relation to how we...
In the fourth quarter scenario, the fourth quarter for stabilization of costs and our average price as well, how can we look at the working capital and as we see in this quarter, it would be interesting. The second question is in relation to exchange rates. If you could give us an idea, it would be very interesting for us to be able to model this. What do you see in the rate of the dollar, the hedge that you've done in the company? What can we expect for exchange rates with the dollar in the coming months to have a cost basis beyond the data which you already shared with us, which is already very interesting. That's all I have on my side.
Rodrigo, Gustavo here. In terms of hedge, we don't give too much guidance to not upset the people in this commercial area from their pricing with their competitors. Up until December, we have an exchange- rate hedge close to BRL 5 . Going forward, I'd rather not give a clear answer, not give internal information to our competitors. As far as the financial questions, the increase of our net debt, I would say that majority of this are—it's not a question of capital that could just move around. The first is the distribution. Almost BRL 600 million , which was spent on acquisitions. The Jasmine brand, as well as the JCP, were the big offenders in our net debt. Since the company generated enough cash, it should have been replaced over the next few months.
This gave us an increase in debt. That's what we're seeing here. We see that this effect, the debt is a little higher, of course, higher cost. Fabio can also open up a little more for you. The exchange rate variation has an effect, looking at the hedges for palm oil, so sugar and other commodities, and in our accounts receivable. The principle is excellent. In working capital, we don't see a more relevant increase in the consumption. There's an important adjustment in the last quarter, which we've been talking about. We're investing a great deal in the level of services. We understand that there's lots of opportunities there, we contracted a supply chain director, and we're doing some changes, including the definition of the minimum stock for each of our units. I was talking about—I'm talking about products that are ready to sell. We increased our stocks a little bit, but looking forward, we see no provision of great consumption of the stock.
Thank you, Gustavo. Thank you very much. Have a good day.
Our next question is from Victor Romano. Victor, go ahead.
Good morning, everybody. Good morning, Gustavo, Fabio. Two questions. First is a quick question. I wanted to understand, especially in your market share in flour, it did a good recovery from the 5% that you were at in 2021, and I wanted to understand that dynamic. What to what do you owe this recovery in share? Is it a question of price or what? If you can give us a little bit of that dynamic. Thank you.
The question after that is the pass-through of prices. When we look at it carefully, we see 34% year-on-year, which is quite robust. My question is: Do you think we still have space to increase prices? When we look at 2023, we believe that prices should continue at the same levels. That's from my side, that's what we have. My side is oriented.
As our share of flour is, it's a sector that we've decided to look at very closely under the microscope. We have two segments, which is industrial flour, which is a B2B business. We sell to industries and bakeries. In those cases, the margins are lower, but there is the flour coming from Mexico. Our wheat mills, with all of this confusion of costs and exchange rates, had their reserve capacity.
When you have reserve capacity, you don't lower your fixed costs. We've taken some actions at the point of sale, not in question of price, but in execution, so that we can advance in that, in the sales of flour. It says execution at the point of sale. In relation to price, if we didn't have this inflation, our will would be not to add to the prices. Going forward, we have inflationary pressures. What we've seen is that we have placed this in a very tangible way, and we have advanced. We haven't given any big, relevant, specific problem. Things have been growing month-on-month, semester after semester, and we're foreseeing one time increase.
Right now, I can't talk about it too much, but it will depend on the scenario, on the global scenario. We should diminish a bit the intensity of price increases in any event. There is space. We understand that we can continue at least rebuilding our margins so that our costs. We don't wanna recover this through prices. I'm talking about our table. I'm talking about our tables, our price lists, downsizing, promotional packaging, portfolio. The company has to find alternatives to minimize the effects of these costs. If they continue to go up, we're gonna continue on this trajectory of improvement of price overall.
What I can say is that looking at this year, this last quarter, which was starting out in the fourth quarter and the quarter that it just ended, that prices have continued to rise. That's because costs have started to come down. We see lower price on commodities in this quarter. So we should have a better relationship. But the world is still quite obsessed with all these political questions. However, for now, we still see space for a recovery, an increase in costs and the recovery of margins.
Our next question is from Gustavo Troyano. Gustavo, please go ahead.
Good morning to everyone. Thank you for your question. I wanted to explore the theme of market share volume versus value. Talk about the performance in the value. I wanted to understand if this justifies all of this performance of the share value above volume, or if there's another factor related to the mix. 'Cause the performance of the value can be attributed only to mix. I want to understand price and mix so we can make an analysis in terms of the expansion of Piraquê or in the attack zone or region comparing price increases compared to the downsizing. That's the first question. The second one, I wanted to explore a little bit more about pricing, more related to the question of prices of our competitors and rational pricing of the industry, especially in the pasta and cookie areas. I wanted to understand if this market share value has gone up more than the industry. In this case, can that be attributed to a reduction of price of the competitors in these categories?
If you think that there's more space to do a downsizing in M. Dias Branco. Do you think that your portfolio today is at the right size, or if you see margin to be able to reduce and pass this price to this dynamic?
This is me again. Talking about the downsizing, it explains part of this. It doesn't explain everything, but it explains part, both in biscuits and cookies as well as in pasta. Another question are the readjustments, which we saw in 2022, is that the majority of our competitors made adjustments, price adjustments. However, since M. Dias Branco took off first, this brought an unfavorable impact on our volume. However, it is an impact which has a temporary impact. That's why we see the behavior of market share value compared to market share volume.
The other question that you said of the mix also explains this. There's not just one explanation. It can be a It's a mix of several factors. The fact that Piraquê is growing more than the other brands of M. Dias Branco is due to the behavior of the value market share rather than a volume market share. The market has a price which is 60% or 70% above the average of the market in the cookie market. The more this brand grows in the mix of M. Dias Branco, the better is our average price and the better is our market, our value market share compared to the volume market share. It winds up being a mixture of these factors.
We prefer not to open it, which one is more important than the other, but it is possible to say these are the impacts that are similar between the two. The other question you asked is, there's more reduction in the size of packaging. No, this agenda is basically concluded in both categories, as well as cookies as well as pastas. It's a process since we started to observe in the market the middle of last year. We did this shortly after that. I was looking at this, the first question of the call. The fact that we have a lot of factories and more than 100 production lines and more than 20 brands, it was a process it took longer for M. Dias Branco. However, it is now practically concluded.
We could be a little something here and there, but for cookies, the majority of this process is concluded. Another point that you asked about is if the competitor is lowering prices. No, we haven't seen that movement. Last year, we saw some competitors who did not increase their prices or didn't increase their prices enough to compensate the increase in prices. However, during 2022, we saw the market following a trajectory which is very similar. Costs still high, and the market had to make some readjustments. However, for M. Dias Branco, the readjustment of price is important. Yes, it's important. However, it's not the only lever to increase our average prices. There's price readjustments, there's the mix, work on our packaging, the Piraquê brand, our acquisitions, the launches. The average price went up due to all of these factors. I think that I hit all of your points. If anything's missing, please let me know.
No, that's good. Fabio, it's very clear. Thank you for your answers.
Thank you. The question and answer session is now closed. We would like to pass the word over to Gustavo to make his final comments.
Thank you for that participation. Once again, Fabio, Rodrigo, Eveline, Fernando, Gustavo Theodozio, we're always at your service. You know our day-to-day and you can contact us on our day-to-day, speak with us any other information that you might need, any doubts or questions related to these results. We're always at your service. Thank you very much, and I wish you all a good week.
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