Good morning and thank you for waiting. Welcome to Magazeni Luiza's conference call to discuss the results of the 1st quarter of 2015. We would like to inform you that this event is being recorded and all participants will be in listen only mode during the company's presentation. Afterwards, we will have a question and answer session and further instructions will be given. The replay of this event will be available soon after it ends for a week.
We would like to mention that forward looking statements that might be made during this call related to Magadine Luiza's business perspective, operating and financial projections and targets, our beliefs and assumptions of the company's management as well as information currently available. Forward looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions as they refer to future events, and therefore they depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors may affect the future performance of Magazim de Luiza and may lead to results that differ materially from those expressed in such forward looking statements. In order to open this call, we would like to give the floor over to Mr.
Marcelo Silva, CEO, who will make the presentation. Mr. Silva, you may begin. Good morning, everyone. Thank you very much for participating in our call to discuss about the highlights of the Q1 of 2015.
You can see that the net revenue was practically stable, BRL2.25 with a reduction in same store sales. Physical stores in the Southeast, as the Northeast continues to be positive, growing same store sales and e commerce growing by 9.2% visavisecommerce. The share that last year in the same period was 16%. Now it's almost 18% or 17.9%. Another highlight is the participation of operating expenses of the company growing only 1.6% in spite of all the cost components that suffered effects such as collective bargaining, energy prices and fuel prices, etcetera.
We grew only 1.6% because and then the rep will be talking about these figures in more detail. As a consequence, we got an improvement in our EBITDA growing by 5x5 visavis the same period in the last year and this represents 5.7 in the first half. I would like to mention that we will be talking about Visa Credit later on, but I would like to say that the equity income increased to BRL23 1,000,000. And you will see one thing that is of great concern to everybody, which is delinquency is under control. And we will be giving you details about that later on as well.
So our net income was 2,900,000 dollars net margin close to 0. But it was reasonable within the circumstances, especially when we observed the participation of sales and lower traffic, a more challenging scenario. And in spite of all that, we were able to keep our margins and a very small growth in our expenses in spite of all the factors and the lower sales and an increase in financial expenses mainly due to the increase of the interest rate that has been happening consistently by the Central Bank. These were the main reasons not to have an increase in our net or more satisfactory net income. So this is a bird's eye view.
And now I would like to ask Roberto Bellissimo to get into details about our figures. Good morning, everyone. On Page number 3, we show the evolution of Denver of stores in Q1. We opened 3 stores in the last 12 months, 15. On the right, you see our investments from $17,000,000 to $33,000,000 in Q1, including investments in many stores that will be inaugurated in the 2nd and the third quarters.
The average age of the stores is shown here. Approximately 40% are still maturing. On the next page, we show the evolution of our sales quarter on quarter. And here we show that we had 26.6% in Q1 last year. So the comparison basis for Q1 was very high.
Internet, it was BRL44,000,000 and we grew 9%, reaching almost $500,000,000 in sales in our e commerce in this quarter, increasing their participation in the total sales of the company and same store sales, we compare minus 3% to more 25%. As you can see last year, as you can see the base is very high. And if it were not this category we would have had 5% positive growth compared to last year's and very much influenced by the World Cup. We are talking about the image category here. So excluding TV sales growth, sales growth would have been almost 5% increase.
So in the Q1, you don't have this kind of sale of image products and this is the reason why. So on the next page, we measure the evolution of gross profit and the maintenance of the gross margin at the same level, 27.3% basically unchanged. Operating expenses, as you can see, selling expenses practically stable, dollars 4.21 $1,000,000 as G and A with a slight increase due to collective bargaining and an increase in other revenues. The total of operating expenses was around 22.8%, slightly lower than last year that was 23%. As you can see here from 1.2% increase, equity income mainly due to the performance of Luiz de Peregris, which has a return of over 50%.
On the next page, we have the EBITDA quarter on quarter $127,000,000 this year compared to BRL121 1,000,000 in the Q1 last year. And on the chart, a variation in expenses and that were offset by equity income as you can see here and other reaching 5.7%. On the next page, the variation of our financial results. 1st on the upper part, there was an increase in the CDI of almost 20% quarter on quarter. And the variation of the working capital as well, which also affected the variation of our net debt in this quarter.
Net debt varied RMB378 1,000,000 dollars and the suppliers versus inventory accounts varied 476,000,000 dollars If you remove the variation of these two line items, it would have reduced. And as you know, this is very cyclical and very seasonal. And it should vary over the next few quarters and actually the Q1 is the worst quarter because of working capital due to the payment of all the bills of the previous year and over the years. The trend of retail as a whole and ours as well is to get a drop in working capital especially in the second half of the year. On the next page, we show our net income and it was practically BRL3 1,000,000 with a higher financial expense.
And on page number 9, we show the results of Luisa Crede revenue growing practically 10%, mainly in the Luisa card. And we believe this is a very important tool to increase loyalty. As you can see that CTC and personal loans have decreased such as happened already last year, because of conservative policy in terms of credit assignment CDC or direct consumer credit from $316,000,000 to $243,000,000 double S consumer credit. So $70,000,000 less in direct consumer credit. And this explains in part the lower growth in our sales.
It also impacts on the Visa Credit results. But if you look year on year, our portfolio, you can see stability, a very high degree of stability. The delinquency indicators are stable past due over 19 days even improved vis a vis December. And because of that, Liza Crete was able to decrease provisions for bad debt. As a result of laser credit was well, it grew quite a lot, practically 20% with return on equity as you can see.
And I would like to talk about our expectations for this current year. Our focus is our multichannel strategy. Until a while ago, we were seen as a traditional store with brick and mortar stores and selling appliances and now we are working to have a digital company, multichannel company. This is very important, but keeping all the human side and friendly side of Magazine Luisa. So we have been working on the strategy very strongly and our website is fully integrated with the company.
And the website participate to the same marketing actions, the DC distribution and the interrelation of the website with the brick and mortar stores. So this is our fundamental basic strategy for the next 2 years. And we continue to be very confident growing more than the average of the market. We are not comfortable having only almost the same sales as last year. We will continue to consolidate the Northeast.
The Northeast continued to be positive in the Q1 and certainly will continue to be positive as well as e commerce growth. And we maintain our competitiveness and our media visibility is very strong from January December. We have our sponsorship of soccer in the global network. We have a new promotional campaign, a very strong one that balances or tries to balance this reduction in traffic from our consumers as the degree of confidence by consumers has been below in of the last 10 to 12 years. Cost rationalization is a target for every day.
So this is what we do in our DCs, in our stores. And the selling expenses and administrative expenses always having our attention in terms of reducing them. And our focus on profitability of the company quarter on quarter, The Q1 was very, very tough. And we understand that the Q2 will be a little bit less tough maybe. And we believe the third one will be a little bit better and the 4th when we compare on a year on year basis, we see the opposite curve, a very strong Q1 and the 3rd quarter less strong in the 4th quarter already giving signs of a certain decrease in consumption overall.
And now in the Q1, we see this as the worst for this year. The second, not so bad, but it will still be a very difficult one. And with some improvement in the second half of the year, from the external viewpoint internally, our team is very confident, intense communication with the pace of our organization and always trying to make our people be engaged and we track the performance store by store. Each manager is like the owner of his or her store. And as we have been doing in the last 50 or some years, we have gone through crisis before.
This is a year of crisis, but we remain confident that we will overcome this and the company is more robust to grow in 2016, 2017, etcetera. Now all the members of the Executive Committee of Magazione Luisa are available to answer any questions that you might have. Thank you. We will start the question and answer session for investors and analysts. Questions asked through the Internet will be answered afterwards by e mail and we will be available to clarify any doubts that you might have.
Mr. Guillenasidis, Brasil Purell. First question. Thank you for the question. Roberto Macielo, I would like you to talk about the sales performance and try to have some more color regarding the mix.
In the release, you said that there was a Deterioration in one line. What about the other categories? You talked about image. And what about smartphones and white line and furniture so that we may understand from now on? And also I would like to know if a change in the mix in the sales performance could have some impact on your gross margin from now on?
And the second question, I would like to know the situation of inventories. I understand that sales were weaker than expected in spite of a very high comparison base as you said yourself, which led to a slightly higher inventory. So could you talk about the measures being taken regarding your inventory visavis the demand that you believe will come from consumers? Is there the risk of having to decrease your inventory at lower prices with impact on your margins for the next few quarters? So these are my questions.
Thank you very much, Guilherme for your questions. I will start and then Fabrizio, our Commercial Officer will be talking about categories, etcetera. As Beto said, if we do not consider image because of the World Cup last year, which was one of the major drivers of 25% growth in the 1st and the second quarters of 2014, The other categories have grown 4.8% and Magazine Iluiza gained market share both by the IBD and GSK. In absolute terms, there was not a good performance, but in relative terms the performance was good, because practically we showed the same. You can see the figures there.
So it was a good performance anyway. Of course, retail needs to grow same store sales because of the costs that go up. And in spite of that, we made a huge effort in terms of cost reduction just to give an idea. Our personnel expenses were BRL259 1,000,000 and this year in Q1 BRL234 1,000,000. Our payroll expenses lower this year than last year in spite of the collective agreement of 7.8%.
Our SG and A our total SG and A was BRL509 1,000,000 last year and it was BRL503 1,000,000 this year. So it's reasonable. Of course, it's not good, but it's reasonable. And costs go up, energy went up 30%, freight, fuel and the company has been making a very good endeavor in terms of rationalizing costs In order to have a new employee for instance, all the executive committee has to approve that. And we are making many changes in the Q1 as well.
So if we see an improvement in consumer confidence, we will be leaner, much leaner. We will be much better prepared to face this period from now on. This is one part of the question for the answer. And Fabrizio, our Commercial Officer will be talking about expectations regarding margins, etcetera. Thank you for the question, Guilherme.
This is Fabrice. In relation to sales, Marcelo said it very well. Our smartphones and cellular is helping growing. But besides, we have a very soft performance vis a vis last year. And you could ask about photomutrient as well.
We see growth in this quarter. So I think this is a trend for the year, Smartphones and Furniture. We are making the necessary final adjustments. The interpreter apologizes because Mr. Garcia's speech is not clear.
We are going to have a very important event in retail right now. How do you see demand for Mother's Day, which is this coming Sunday? Could we expect something better than what we saw in the Q1? Any improvement driven by Mother's Day? Or do you think consumers are too cautious in this regard?
This is Federico. Thank you for the question. So the main days for purchases for Mother Day are today and tomorrow. So far we are seeing a good performance. But we have to keep in mind that last year May had the highest image sales ever because of the World Cup.
So if you remove the TV category, the performance of the other categories is very good. But the general figure is affected by the same reasons that we have already mentioned and the same regarding June. But as you asked me about Mother's Day, we had the biggest sale of TVs last year and it was in May. But the other categories are performing well. Thank you.
Alenka Okonza from Goldman Sachs. Good morning, everyone. Let's talk about working capital. I know that there is seasonality regarding working capital and suppliers trade account, but supplier days dropped more than historically had 80% and now we had 70%. Was there any other factor besides seasonality?
Working capital as a whole, we have already talked about it during the presentation in Q1. It was higher and the trend is towards normalization. In terms of suppliers, there are some things that you have to take. Keep in mind, We bought less this quarter than in the Q1 of last year. There are 2 ways you can calculate this.
And the right one, which is the reality is over purchases. And as our inventory dropped from December to March, our purchases were less. And if you calculate this based on the effective purchases, we had 72 days of average, which was in line with the second, the third and the 4th quarters of last year. Comparing this to CMP, it seems that it dropped quite steeply. This is the result from the sales.
So these are the accounts payable for the Q1 because the accounts payable of December matured over the Q1. So what we bought in the Q1 as you sold less, we reduced our inventory from December to March. So we have a lower accounts payable with an average term of 72 days. And we will go back to buy more in the second and the third and the 4th quarters, if they are more favorable. And they should go up again, the supplier's trade account.
And on the other hand, our inventories tend to drop as well, improving by one day inventory days and in the first quarter. The Q1 was slightly affected by lower sales and due to more strategic purchases in the first half and the tranches of cost increases. We would have bought a little bit less, but we bought more because of the strategic purchases. But the trend for the next few quarters is a trend for improvement in trade accounts will also be improving. And we believe that this variation is very seasonal and affected by the factors that we have just mentioned.
I would like to ask another question. Deferred revenues, this quarter vis a vis the last quarter about BRL 23,000,000 if I'm not mistaken. Vis a vis an average a lower average for 2014. In deferred revenue, we had the recognition or part of the money that we received from Cagliifi, which is something that we signed in 2011 and which matures in 2015. And we have practically complied with all the targets already.
And we have just a few months for it to come to an end. And we are about to renew these contracts that mature this year. But the difference of $20,000,000 some to $8,000,000 was basically due to this factor. And by the end of the year, we expect to conclude this process with relation to our partnership with Cardixi that ended in the 10th year and we were very successful and they were very successful as well. And also we have the partnership with Rizal Kegelberg.
Thank you. Mr. Felipe Englaitre from BNP Paribas would like to ask a question. Good morning. You said that your CapEx expectation for 2015 would be around 150,000,000 opening up to 30 stores and you opened 3 stores this quarter.
I would like to understand your CapEx outlook for this year. Thank you. 150,000,000 was estimated 40 to 50 stores, the stores in the Q1. Many of them will be opened now. We're talking about the 10 stores of Yavares that and from CADE and the first contract was last year and 3 other rentals that were signed last year.
And we will be opening them in the Q2. We should have an additional 15 stores, but we will be closing we have 20 stores being closed in the Q1. We are more cautious with the opening of stores in the Q2. We had to close some stores last year, the end of last year in order to make it possible to open new stores in the first quarter. And we have to rent stores at the end of last year and beginning of this year for the second half.
And we are more conscious for the second half of the year. But the stores that were 0.23 and other ones that we closed last year, we will be opening up to turn 30. So this means 20 stores. And I believe that may well, an additional 10 stores will be opened in the second half of this year. And I believe that 30 overall is a figure that we consider as reasonable for this year 2015.
Okay? Thank you. If there are no more questions, I would like to give the floor back to Mr. Marcelo Silva for his closing remarks. Thank you very much everyone for participating in our call.
I would like to finalize saying that when you have a difficult time, we have to be more creative and this is what we are doing right now. Thank you very much. Thank you. Magazine Luisa's conference call about the results of the Q1 of 2015 It's closed. You may disconnect your lines.
Have a good day.