Good morning to everybody, and thank you for holding. Welcome to the second quarter 2022 GPA results call. For those who require simultaneous translation, we have that tool on the platform. For this, please press on the interpretation button represented by the globe icon at the bottom right corner of the screen.
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All the information offered during this presentation and statements that may be made during the call referring to business outlook, projection and operational goals are based on the beliefs and assumptions of the company management as well as on information currently available. These forward-looking statements are no guarantee of performance. They are based on assumptions and they involve risks. Therefore, they may or may not occur. Investors should understand that general economic conditions, market conditions and other operating factors could impact the future performance of GPA and lead to results that differ materially from those expressed here. We have with us the CEO of GPA, Marcelo Pimentel, the CFO and IRO, Guillaume Gras, the CEO of Grupo Éxito, Carlos Mario Giraldo Moreno, and the CFO of the Éxito Group, Ruy Souza. I give the floor to Marcelo Pimentel.
Good morning and thank you for your interest in participating in our second quarter 2022 results call. This meeting is happening at an important moment because I have just completed a little more than 100 days at GPA. During this period, we have worked on defining a clear diagnosis, we have adjusted the strategy and reviewed our priorities. Based on this work, we have been able to set forth strategic pillars and priority projects of the new management and the work plan for the short and medium term. I have had the opportunity of talking to you personally over the last few months in greater detail about the mandala that you now see on the screen, which shows us the six strategic pillars of the new GPA. The basic goal is to maintain the focus on operations, improve execution, and pursue growth in a profitable and sustainable manner.
In total, we have listed 25 projects that are part of these pillars. Each pillar has an executive director as a sponsor, responsible for following the progress of the KPIs of each project and ensuring its development. The top line is led by our new CEO, Joaquim Souza, who arrived at the company a little over a month and will lead the entire commercial strategy. The goal of this pillar is the sustainable growth of revenue, and I usually say that sales are our obsession. Therefore, we have set forth growth levels such as the on-shelf availability project for different banners, and we will guarantee assortment. In the second quarter, we were able to have the stock out of products with a greater turnover, and we have reduced the total rupture by 1.7%.
In terms of the NPS pillar, we improve the customer experience and service level in stores. This quarter, we have already been able to register an evolution of approximately 15% in the indicator vis-à-vis the fourth quarter 2021, an advance that we have also noticed in the digital channel. The multi-channel initiatives are concentrated on the digital pillar. I would like to take the opportunity to announce the arrival of Marcelo Rissi, our new CTO, who took over in June and is the sponsor of this pillar. His priority is to offer a truly omni-channel experience to the customer. In this quarter, we recorded an important increase in the digital sales, reaching 15% growth comparatively. Among the drivers for this evolution, I can cite the launch of the hub stores that create a synergy so that the Pão de Açúcar and Extra markets serve both sides.
The availability of evening hours on weekends and the express sales coming out of our proximity stores. Other highlights are the beginning of WhatsApp sales already available in all the Pão de Açúcar stores integrated to e-commerce. We are the only retailer in the country with this 100% automated process. Finally, this quarter, we had the opening of the dark store in Morumbi, focused on the sales of ultra convenience and an operation that encompasses James, Pão de Açúcar, Clube Extra platforms, and our last mile partners. The expansion pillar has allowed us to continue on with our plan of openings, conversions and renovations. Until the first half of July, we carried out 12 conversions of hypermarket supermarkets into Pão de Açúcar, Mercado Extra and Compre Bem stores. At the end of the third quarter, we will double this number.
We also opened a new Minuto store in the city of Sorocaba, in the hinterlands of São Paulo. Another 21 units were remodeled based on the G7 Pão de Açúcar model. These G7 stores account for 35% of the current park and register higher sales and margins than the unrefurbished stores. The profitability pillar led by our CFO. Well, there the goal is to improve profitability by focusing on operational efficiency to drive margin expansion. We have identified opportunities to improve shrink management and reduced expenses and have done important work with our suppliers to adjust and improve commercial conditions now without the hypermarkets. In short, we have a lot of work and process and structure review to leverage results on this front.
Now to close this slide, and by close my opening, we have the ESG and culture pillar responsible for the social, environmental and governance agenda and for monitoring the progress of indicators such as the number of women in leadership and gas emissions. Guillaume will show you in greater detail our strides during his speech. As we're speaking about culture, I would like to take the opportunity to mention that GPA was certified for the second consecutive year with a Great Place to Work. Still, we were highlighted as an excellent place to work. Additionally, we were highlighted in the eighth edition of the Merco Responsibility, which acknowledges companies for their work in environmental, social and governance issues. GPA reached the second position in the retail sector ESG ranking and the ninth position in the category of the most environmentally responsible companies.
Great achievements for all of us that make me very proud and very proud of the team. I would now like to give the floor to our CFO, Guillaume, who will continue on with the presentation.
Thank you, Marcelo, and a good morning to one and all. Thank you for participating in the GPA Group results call. I will start the presentation speaking about our financial performance and our ESG highlights. Ensuing this, I will return the floor to Marcelo, who will conclude the presentation. On slide seven, we present the consolidated performance numbers which consider all of the operations of GPA Brazil, excluding the discontinued operation of the hypermarket, drug stores and stores under conversion, and the results of the Grupo Éxito. Consolidated sales represented BRL 10.1 billion sales in the second quarter, up 9.3% vis-à-vis last year.
As a result of the growth in Brazil and the strong performance in Colombia, which represented 44.1% of sales in the period. In the quarter, we recorded an adjusted EBITDA margin of 7% with a drop of 1.4 percentage points versus the second quarter 2021, mainly explained by impacts in Brazil that I will explain later on. On slide number seven, we see that the company continues with a solid cash position of BRL 3.9 billion, 1.4 x short-term debt, and maintains a low leverage level of 1.9 x net debt EBITDA. When we consider a pro forma version, including Assaí's receivables up to January 2024 of BRL 2.9 billion, the pro forma net debt adjusted EBITDA ratio is 0.7 x.
On slide number eight, we present the financial performance of the new GPA Brazil on the pro forma view that considers the apportionment of certain expenses that cannot be reclassified to net income from discontinued operations in accounting as they are only partially related to discontinued operations. The new GPA Brazil had total sales of BRL 4.4 billion with same-store growth of 5.8%.
In Pão de Açúcar, the 4.2% growth was driven by higher customer flow in stores, consistent increase in premium assortment at the banner, and a gain in market share vis-à-vis the premium market. In the mainstream banners, Mercado Extra and Compre Bem, same store sales growth was 4.8%, the result of growth in e-commerce sales and acceleration of the loyalty program. In the proximity format, the strong growth of 13.6% is explained by the excellent execution of the plan to increase the share of perishables, mainly bakery, fruit and vegetables, growth in the flow of passing stores, and a higher number of stores serving the last mile partners.
Our digital channel grew 15% vis-à-vis the second quarter of 2021, when we excluded the hypermarket sales, and totaled BRL 408 million in the quarter, with a penetration of approximately 11% of total sales. This performance confirms GPA's leadership in e-commerce in food retail. Selling, general and administrative expenses totaled BRL 804 million in the quarter, accounting for 19.3% of net revenue, improving 0.2 BP compared to the first quarter of 2022. Our adjusted EBITDA amounted to BRL 325 million in the quarter, with a margin of 7.8%, down 2.7 BP year-on-year. This downturn is mainly explained by two factors, both relative to the gross margin. One, not passing on all the inflation to our customers. Two, increase in the cost of transfers in our stores.
For the future, with a focus on the most profitable formats in our expansion and conversion plan, we expect to have a dilution of fixed costs and consequently, an increase in our profit margin. We now move on to slide nine, with the results of Grupo Éxito, which presented significant sales growth with a same-store sales growth of 27.7% versus the second quarter of 2022, reaching BRL 6.6 billion in total sales in the period, with sales growth of 12.5%. This growth was driven by the growth in the three countries in which we operate, but mainly in Colombia, which continues with an excellent trend towards innovative formats. Omnichannel sales reached a share of 9.9% in the quarter. Selling, general, and administrative expenses.
Expenses totaled BRL 1.1 billion in the second quarter of 2022, accounting for 17.8% of net revenue. A decrease of 0.3 BP compared to the same period of 2021, reflecting the operational efficiencies in all units of businesses that favored the growth of expenses below the performance of sales. This results in an adjusted EBITDA of BRL 466 million in the second quarter, 2022, with a margin of 7.9%, 0.8 PP better than in the second quarter of 2021. Now, moving on to slide 11, I will now address our sustainability agenda. In this chart, we describe some of our initiatives and highlights of Q2 2020 in Brazil and in Éxito. In the fight against climate change, I highlight the sustainability week we had in Brazil.
During the week, we had seven events with a participation of 1,800 employees, where topics such as climate change, leftover food, waste, sustainable supply chains, ethics and compliance, and social impact were all addressed. At Éxito, I highlight the volume of 408 tons of consumer recycled waste in the first half of 2022, 39% more than in the same period of 2021. This waste, in addition to being recycled, is a source of funds for Fundación Éxito projects. On the promotion of diversity front, I would like to highlight the conclusion of the development program for Blacks with a participation of 130 employees and the beginning of a new exclusive training program for Black women, which has 70 employees involved.
As a result, we ended Q2 2022 with 52% of Black employees and 39.3% of Blacks in leadership positions. Grupo Éxito celebrated for the second year in a row the LGBTQIA+ Pride Month. This month, three training programs were held involving about 1,700 people. Finally, in social impact, we raised more than BRL 2 million in partnership with a head on that movement, benefiting 11 partner social institutions that work in the causes of food and education for people in situation of social vulnerability. Through Éxito Foundation, Fundación Éxito, we reached 36,200 children favored by the Zero Malnutrition program, an increase of 51% when compared to Q1 2022, and in line with the year's goal of assisting 60,000 children by the end of 2022.
I end my presentation here, and I would now like to hand over the floor to Marcelo.
Thank you, Guillaume. To wrap up, I move back to the slide addressing our strategic priorities. Here in Brazil, we continue with initiatives to the structural growth of the top line. We have started an effort to leverage the share of perishables in stores, for example, with the shipping via DC. We follow with initiatives to make advances in the indicators of assortment multi-channels. I can mention the initiatives of expanding the client bases using the Stix and Meu Desconto program with an incentive to attract clients with the actions of buy and win, and also redemption of points at the checkout.
We also increase the share of same-day delivery with expansion of service hours, optimization of fleet, and the use of James Delivery personnel. Throughout the second half, we will also begin operations in the BEES platform. We will be the only food retailer to be part of their digital platform. This is a result of a new partnership we entered with Ambev. We will have the implementation of ultra convenience at Lojas do Pão with deliveries of up to 30 minutes, and we have opportunities mapped with potential sales growth with partnerships in 3P as well. In addition to the results of improvements in the digital operations in stores that we have in progress in our stores. As to expansion, we have initiatives in 12 stores, and we plan to open from 25-30 Minuto Pão de Açúcar stores still in the second semester.
Finally, we have a lot of work ahead, a lot of opportunities mapped out and already in progress. The prospects are positive for the business in the next quarters, and I'm convinced that with focus, pragmatism, and with the right levers, we will resume the results level that GPA may reach with this powerful team that we have. At Grupo Éxito, we continue making headway with constant investment in innovative formats, expanding the participation of omnichannel, which is an international benchmark. The ESG initiatives with a solid and significant agenda for the group. Thank you all, and we can now move on to the Q&A session.
Thank you. We will now open the Q&A session. We would like to remind you that to ask a question, you must click on the icon Q&A at the bottom of the screen and write your questions to get in line.
When being announced, a request to activate your microphone will appear on the screen, and then you must unmute your microphone to ask your question. We kindly request that all questions be asked all at once. Let's move on to our first question. Maria Clara Fantozzi, Sell-Side Itaú BBA. You may proceed, ma'am.
Good morning, Marcelo, Guillaume. Thank you very much for answering our questions. We would like to understand the short term perspectives in relation to profitability. In terms of sales, we saw a relevant recovery in this quarter. When we think in the short term, can we expect that the company would show some improvements in terms of profitability from now on? Could you also provide more details in relation to the initiatives focused on gains and efficiency that you commented on during the presentation? Thank you.
Thank you, Maria Clara.
In relation to the first part of the question, considering the context of profitability, our prospect is that it's likely to quarter-over-quarter have some recovery. We have the ambition of reaching an EBITDA of double digits in the next year. However, there's a lot of work to be done in this regard. Here we are talking not only about operational efficiency. In terms of management of offices, stores, and distribution centers. We mentioned that. Since Joaquin started, we have been working intensely with our suppliers as partners, and we're reviewing all the commercial model and all the logistics model as well. Now without the hypermarket, but now we have the opportunity to see Pão de Açúcar go back to the place of innovation, with the place where we launched a new product. The industry is very interested in this movement.
This is our focus. The third pillar related to stock management, which is an area on which we have been working, and we are going to be working on those structural reduction of inventory so that we can have more optimization, so that we can reduce the levels of markdown, that we still have some because of the liabilities of extra inventories that have been decreasing dramatically in the past few months in relation to the previous year. But that affected the margin when we were having to address those inventory levels. The expectation is, yes, we want to be able to show a recovery of the margin in the next quarters. In relation to efficiency, we have been working on this, looking at the opportunity of gaining efficiency in all dimensions.
When we talk about efficiency, we're not referring only to costs. As you saw in the numbers, we continue showing good management of all our expenses. Then what we really need is an efficiency in the operational model to leverage our top line. We have already shown some improvements, and we want to move on gaining more efficiency in the top line so that this can come from the dilution as well, or the results. We have seen opportunities, for example, as I mentioned before, in the digital side, where we are opening inventories for the third shift for deliveries on the same day, and also to include the orders that were made up to 6 P.M., we are going to start delivering those products. We are also going to increase the delivery on Saturdays and Sundays.
This is an opportunity that we had not kept on before. We have also seen, as I mentioned, especially in the renovated stores with the G7 model, we can see the perishables have been leveraging and going beyond 50% of the total sales. Again, this will help us increase the margin and also resume this. I believe that in order to summarize an answer, both in profitability and efficiency, they're moving together hand in hand, and we are likely to see a gradual improvement quarter on quarter.
That was very clear. Thank you very much. Thank you.
Our next question comes from João Pedro Soares, sell-side analyst of Citibank. You may proceed, sir.
Good morning, everyone. Thank you very much for answering my question.
Marcelo, I would like to discuss a little bit more the point you talked about the legacy inventory of Extra and also something you mentioned in the release that you're not passing on the total costs. How do we put those two fronts together? What is more related to macro and why you are having some difficulties to pass on costs? We understand the inflation is high, and we would like to understand what is related to legacy and what is macro. I would like to understand what's weighing down more. This is my first question. The second one is related to profitability, because I remember that we had not really a guidance, but some information that EBITDA would be above 9% in the second half.
We would like to understand how you see those dynamics, whether or not we are going to be able to reach those numbers in the second half.
Well, thank you for your question. Okay. The first part regarding the inventory management. Well, it is doubtless that the macroeconomic situation that we're undergoing exerts pressure, especially in comparable items and baskets and commodities, especially in the Extra markets and everything that does not refer to impulse purchases. GPA is somewhat more protected in this sense, despite the fact that we could not ignore the fact that at the beginning of the month, this customer has had the opportunity of having access to different market players in terms of cash and carry. We know that this happens. Our strategy, therefore, is geared towards understanding, and this is the work that we're doing in our partnerships, understanding the ideal assortment and sales.
These are the two important points that underline our SG&A. Once we have the ideal assortment in our stores, we should not have to increase assortment in some of the categories. We have to reduce the assortment for other categories. We will have a greater assortment. Category per category, we will gain an understanding of the ideal assortment and thus guarantee assortment on the shelves. This will help us to have less non-productive inventory and reduce the process. Having said that, we still have some work to do, and however, we're going to reduce this. The remaining inventories of Extra, which nowadays are much lower if we compare the levels to last year, our inventory has already been halved, adjusting to the new model of the new TPL. Categories of wine, for example, this is a category which is a true fortress for us.
We still have a significant inventory that we will be using up in the next months, where we have important commercial dates that we can take advantage of. Now, regarding the EBITDA margin, what we have observed as part of our strategy of a dual axis, Pão de Açúcar, and being the premium point and Minuto Pão de Açúcar stores, proximity stores, and Extra stores, what we have done is carry out important tests that have helped us to deal with our price positioning in a smarter way. For example, if you look at Minuto Pão de Açúcar, we have two models for the location of these stores. We have stores in neighborhoods and stores in pathways. In the pool of the pathway stores, we are able to have greater elasticity in terms of margin.
The audience that we receive is more based on impulse buying, and we have better margins there. Nowadays, we have 15 stores that are on a pilot program, and in August, we will begin to roll them out. In Pão de Açúcar, the great lever here will come from a better share of perishables, especially in bread, in the butcher and FLV categories, as well as on a consolidation of the areas where we stand out, the dairy products, premium dairy products and wines. These are categories that help us strengthen not only the sales, but to stand out online. We believe that in the second half, based on your question, we will continue to see enhancements. The macroeconomic scenario, which is highly competitive, puts us into a conservative mode. We want to achieve our figures this year. This is the direction we are following.
We're going to reach perhaps not the 9% level, but we will have a double-digit vision of EBITDA for the year 2023.
Well, thank you. Thank you very much, Marcelo.
Our next question is from Victor Fuzihari from the sell-side of Santander Bank. You may proceed, Victor.
Good morning, Guillaume, Marcelo. Thank you for taking my questions. I have two. The first question refers to the NPS evolution. I would like to know if you have operational metrics that have made headway in terms of assortment and other categories. Secondly, regarding your results this year, some of them seem to be less relevant vis-à-vis last year. If you could refer to this, please.
Victor, regarding the NPS, and thank you for the question. The NPS ended up being a great surprise.
We began to work strongly in April in all of the banners as well as in our digital channels. During this quarter, we collected 15%, and there is a highlight here for Pão de Açúcar, who is the leader in this. To give you an idea, we're looking at all of the banners and all of the channels, including our gas station operations. We wanna make sure that the customer experience will become ever more better and in the multi-channel environment. I have mentioned this to some of you, 40% of all of the digital sales are carried out on click and pick up. It's very important that this experience become interconnected. It begins in the digital world and ends up in a brick-and-mortar store. Now, when you look at our G7 stores. We already bring all of the digital part to the forefront of the store.
The customers don't have to go to the back. We wait for the customer as soon as they come in with this excellent purchasing experience. Another point that we have made strides on in terms of NPS and the digital experience was to simplify the model of Meu Desconto, My Discount in the app. Formerly, you had to release the discount, and doubtlessly, this was a point of friction that we had with some of our customers based on their feedback. Nowadays, we have the one click where you can release all of your offers through a single click, and this has had very good acceptance on the part of our customers. I should also highlight that in terms of experience, we have a partnership with Stix, and through our CRM, we have received new customers.
We put in place the automatic discount for cash payments this year. Nowadays, this represents 90% of the redemption of coins. They are being done with the cash at the cash payment and increase the loyalty of our customers. We're doing very well there. Now when we look at the two main points of NPS, they come from assortment and product availability. Queues, of course. In these two points, we have significant reductions, double-digit reductions, a reduction of queues at the checkout point, and an increase in availability of products on their shelves. We have a pilot program called Top 30 for the 30 top stores of the group. In those stores, the NPS evolution is from 7 - 20 percentage points. All of this learning, once it matures, is being replicated in other stores. Now regarding the discounts.
Okay, this is the time when the online business in Europe is undergoing difficulties. We understand that this is something cyclical. There's very little to do in terms of sales discounts in terms of this, and we do hope that there will be a recovery in the near future so that we can benefit from this. Obviously, this quarter did have a negative impact for us.
If you allow me a last question regarding your reading of sales in the month of July, if you could refer to this, please.
Well, we cannot offer guidance, but July continues at levels that are very similar to what we have observed in the second quarter.
Thank you very much.
Our next question is from Irma, from Goldman. You may proceed, ma'am.
Good morning, and thank you for taking my question. To go back very quickly to your shares, you have already spoken about this, but I would like to know which has been your stock out level, your rupture level at the peak, where it is now, and where it is that you would like it to get to, and which are the main measures, through operational changes that you will put in place. You have already spoken about the work category per category, but perhaps you can work with logistics as well as with vendors. I would like to better understand the cycle of this project. My second question, the G7 model, if I'm not mistaken, has already been in existence since 2017, 2018 as a prototype. Have there been evolutions in this prototype during the years? Does it include all of the modalities?
Is it sufficiently refined at present to deal with everything? Or are you thinking of creating perhaps another prototype? You had spoken at some point about G8 and G9. A subsegment for the remodeling of the Pão de Açúcar stores for consumers who still need more innovation, considering the G7 that has already been around for some time.
Thank you, Irma.
Well, the first part, regarding rupture stock out, as I mentioned, we are being very cautious to carry out important work in this context. We have several points that we have to tackle. First of all, so that we will not increase the number of problems and to guarantee that we know which is the ideal assortment for Pão de Açúcar, Mercado Extra, and the proximity banners. It's very important to work with category management. We're enhancing this area as well as the processes to ensure that when we design a category projection or a project, this will remain stable for some time.
This will enable us to go into phase two, which is the work of the supply team, and this is a chain that we're implementing in the supply chain to guarantee that the chain will have full independence in terms of the inventory and the organization, ensuring that we have what we need so we can have the right product at the right store at the right time. The third pillar of this tripod is the issue of the logistics mesh. Of course, we're going to begin to benefit from the reorganization of our distribution centers, as you know, but there is important work that will still have to be done with the commercial team and supply and our suppliers for direct deliveries to the store.
We have a rupture or stock out here that is almost double the rupture of our own logistics management at the store. We need to understand the logistics capacity of our suppliers to guarantee that at the end, we can obtain a better situation, or a better level compared to the levels we have in our DC, in our internal logistics operation.
As we have mentioned before, we come from an original position of disruption, double-digit disruption, and today, we stand at a high single-digit disruption. Every week, we are making improvements. Last week, for example, we had the best disruption in the last two years of GPA. We are absolutely sure that the team is really into it with a lot of clarity to make this reduction year after year in terms of disruption level. Whatever is core, all the things that cannot be missed, we are below 5%. Once again, this is very important, not only for the perception of availability of products by the client side, but also to our margin, our sales, because these are extremely important products. We are sure that we have the project that is considering all the pains, all the difficulties.
We see everything that needs to be improved, and the team is committed to those changes. For sure, in the months to come, we are making the structural decisions that will allow us not only to have improvements, specific improvements, but also structural, consistent improvements for the months and years to come. In relation to G7, today we are already at 35% of all the infrastructure of the stores already renovated in the G7 model. Obviously, this model underwent some adjustments when compared to the original model of 2016, 2017. For sure, at this time around, we do not have the ambition, in other words, the distraction to look at other models.
The G7 model that has been implemented in all those stores show performance above 5% of delta of 5% or more in comparison to the non-renovated stores. The share of perishables is above 50%, and this is something that we do not see in the non-renovated stores. We really believe that the model is a winning model. Before attempting anything new, we are going to complete the renovation of 100% of all Pão de Açúcar stores in this model so that we can offer this to the client and so that we can offer the stability of experience of Pão de Açúcar. We are also focusing on the model of proximity. This model of store is very successful. Our expansion shows a level of maturation which is quicker.
It shows an EBITDA margin which is quite healthy when compared to Pão de Açúcar. We also understand that we are also making some adjustments, assortment adjustments. We're also making adjustments to the strategic vision that those models will help us not only with the in-person sales, but especially in express sales, whose delivery will be within 30 minutes. For high population regions, we are making partnerships, and we're doing tests with our partners so that we can make the deliveries within 30 minutes, and we are doing very well in this regard. We believe that for this model, not only will we have the good news that we already see in the physical experience, but we also migrate this to multichannel dimension as well.
Thank you very much. Thank you.
Our next question comes from Vinicius Strano, Sell-Side Analyst of UBS.
You may proceed, sir. Hello, good morning, everyone. Thank you very much for taking my question. Considering the long-term expansion of Pão de Açúcar, you mentioned 100 new stores along the period of three years. I would like to know whether you maintain the strategy or if there was any changes, and if you could tell us what you think in terms of marginal return for the new stores. Just a follow-up in relation to G7 format stores. Could you also compare what you see as margin in this format when you compare to the others, to the other stores, please?
Thank you. Thank you, Vinicius, for the question. In relation to expansion, as I arrived here, I'm reviewing all the models, all the business models and all the CapEx allocated to the models.
I hope in the next quarter, I can give you a more assertive answer in relation to numbers and figures. Without any doubt, we are very committed to the expansion of premium dimension of the business, both considering Pão de Açúcar model and also Minuto and Proximity. What I see is that we have opportunities to strengthen and leverage the PdA banner in both formats. Obviously, in relation to expansion, for sure, for the short term, we have bigger opportunities in the Proximity stores, considering the opportunity that we have in Greenfield, in the field that we see that has not been populated yet, especially in the state of São Paulo. When we compare to an expansion of PdA banner, whose work would be very painstaking to be done.
Considering cost of construction and also a higher interest rate, it's important to validate a model and to ensure that the expansion should be done. However, I reserve myself the right to review all the models and the strategic proposals so that this can be one that would add profitability to the business, not only numbers. We are going to have numbers from model or another model, and I believe we are going to have an aggressive combination of both. In this initial moment, I believe that we will have more alignment in the Proximity models. In relation to the G7 model, I would like to say that we have seen improvements both in top line and margin delta as well.
Considering the higher share of perishables, as I mentioned before, also the share of wines and special cheese, these are highly important for us, and we want those stores to gain a new way of exposure so that they can be connected to the environment of cheese. This has improving the department. This is also an area where we offer special beer, and this is a strength for the group, and it's also connected to the barbecue area. This has provided us with a lot of success, and this has made us successful in the category of beer, and especially special beers that brings us a lot of differentiating factors. We have seen important deltas in terms of improvements in the margins in this model.
Thank you, Pimentel. Thank you.
Our next question comes from Joseph Giordano, Sell-Side Analyst of JP Morgan. You may proceed, sir.
Good morning, Marcelo. Guillaume, good morning. I have two questions, quick questions. The first one is related to the adjustments that we have seen in relation to the structure that you used to have to provide support to Extra. I would like to know, in terms of P&L, what would be the amount. What kind of savings could we have along the second half of the year? The second question goes back to the expansion discussion. Some categories, some cheese and wine. We would like to learn more about the market opportunities. Where can we see them thinking about Brazil at large? Maybe we have more prevalence in this, in São Paulo, more competition in the segment in São Paulo.
I would like to understand what would be the direction of this expansion, and how can we think about the distribution structure, the tripod that you mentioned, and if it's ready to ensure a homogeneous level of service across the areas.
Thank you, Joseph. Let's start talking about expansion, and then Guillaume will talk about the reduction or the supporting structure that we have been experimenting after Extra left the business. Expansion, market opportunities. What we see here is something large. I believe that specifically Pão de Açúcar banner has a very important opportunity in the state of São Paulo. The brand is without any doubt the strongest in the market. We still see opportunities to move into the interior of the state of São Paulo.
Our presence is very concentrated in the capital but we see opportunities to migrate from the capital to other areas. We have already had some experiences with Limeira City. Last week, for example, we opened São Caetano activities. In this expansion model, considering the opportunities to be more present in the state of São Paulo, considering the strength of the brand in the state of São Paulo. Of course, when we have this completed. This can be done in parallel, and we will see opportunities to grow. I believe that the best opportunity that we have at the moment is to grow where we are already present, and we are strong. Also considering the logistics presence so that we can reduce the logistics cost.
We are talking about regions such as Rio de Janeiro and in the northeast of Brazil, which is very concentrated in Fortaleza and Recife. By the way, at the end of this call, I'm going to fly to Fortaleza, where we are going to open a new store in Fortaleza, Iguatemi. In other words, we are going to go for growth wherever we already have the brand with a very strong presence. We believe that in the short term or in the medium term, we are not going to look into new regions where we would have to make a greater, much greater effort to introduce the brand. The logistics cost is going to be much higher.
While we see opportunities in those places where we are already present, we are not going to lose the focus and try to do something different. Yes, we are going to look at the banner, proximity banner, with our focus basically concentrated in São Paulo, in the neighborhoods of AB class level, where we already have a share and a participation and a presence which is very strong. We have already seen in this model, complementarity, where the client would purchase at Pão de Açúcar and would complement the weekly purchases at Minuto, where the experience is very similar with the same banner. I turn the call to Guillaume so that he can talk about cost structure.
Well, when it comes to the structure, it represents 10.5%. 2.5% for the hypermarkets. Now, the size or the dimension of the improvement that we can expect is 1 point.
Well, thank you very much for your answers.
Thank you, Joseph.
The next question from the sell-side of GPA. Thiago, you may proceed.
Good morning, everybody. Thank you for taking our questions, and congratulations for your results. We have three questions, and I promise to be very brief. If you could perhaps give us more details on other revenues and operating expenses. You mentioned that you had labor contingencies and expenses with restructuring. If you could explain this in greater detail and what we can expect from this line item going forward. The second question refers to your working capital dynamic, which I have seen in your balance sheet.
You spoke about a reduction that is happening naturally as you no longer have the impact of procurement for the hypermarkets. I would like to get your feeling on the main lines, the suppliers, inventory and receivables, and which will be their behavior in the new GPA that is more aligned. To end, a question that is geared to Marcelo. During the call, we have spoken about your focus on the six main pillars, your operating challenges, of course. The question is, which is the main challenge now that you have been in the company for some time, and where do you have greater room for improvement? That is all, and thank you for taking our questions once again.
Well, thank you for the question. Now, regarding our expenses, this quarter we had the closing of eight stores.
We do have, of course, those labor contingencies that you mentioned, which are due to the reduction of personnel that we carried out in previous quarters. We also have tax contingencies. We have to focus on this line item contingencies perhaps that are somewhat fragmented. Now, what I can say at present is that this line item will be reduced in the coming quarters.
Thiago, on my behalf and to be highly objective, I believe that this focus arises from putting the entire organization, the board of management, which is also aligned with the six pillars, as well as all of our store personnel. Same message, so that we will not disperse a company of the size of GPA and because of its opportunities can of course become distracted with things that could be opportunities.
For the present time, we will have to say no to them and put all of this into a parking lot so that we can return to growth. When you ask about the main focus, now what the company urgently needs is to have further sales growth. The entire organization has to care for their customers in an obsessive fashion. When I speak about caring for their customer, I refer to do this integrally throughout the organization. First of all, to have a very clean and fully supplied store with the right prices and with the right products. As we deliver the basics in the retail market in a consistent way, we will once again have growth and the opportunities will increase for the multi-channel market. They will be enormous. I'm highly optimistic with this moment.
We have to guarantee the work that is being done to truly invest in quality and to do this carefully to ascertain that issue of the ideal supply. Well, we don't want to reinvent anything at the moment. We don't have outside management. We want to go back to working with consistency in the food retail market, which is what customers expect. Thank you.
Thank you very much for your answers.
The next question is from João Paulo Dias Andrade from the sell-side of Bradesco BBI. You may proceed, sir.
Good morning and thank you for taking my question. While most of the questions have already been answered, I do have a follow-up in terms of sales. July is very similar to the second quarter. If you could remark on Pão de Açúcar vis-à-vis Extra.
Now, your cost, if it comes from inflation, from works or service, revamping of supermarkets. Thank you very much.
Now, regarding growth, proportionally it has been maintained among the different banners. It is very similar to the growth that we observe at GPA, a growth that is gradually better. Now, Éxito has grown quite fast with a very good performance. Regarding cost, I believe Guillaume has already answered this. Anything to add?
Well, we do have the cost of promoters. They are people who promote the merchandise in the stores but also service the customers. We also have the cost of inflation for the salaries of these people, which are part of the line item for the group. All of this comes hand in hand with a strategy of strengthening the perishables. These are categories that are of the utmost importance for us.
We have invested heavily in terms of the training of our professionals so that they can ensure a return and leverage what we have observed, not only at the G7 stores, but also at the Top 30 stores, and that will consequently be replicated to other stores that have not undergone this transition so far.
Thank you. Thank you very much.
Our next question is from Andrew Ruben, Sell-Side from Morgan Stanley. You may proceed, sir.
Hi. Thanks for the question. Most of mine have been asked as well. Just one follow-up on the digital strategy. You mentioned the use of or the addition of BEES as a partner this quarter. How do you think about, in general, which partners, how many to work with, and then how to ensure a good customer experience when using this partner strategy? Thanks very much.
Thanks, Andrew. Our digital strategy is made up of two parts: 50% of our digital sales through the James platform or directly at the Pão de Açúcar and Extra markets. Now, this platform has become revitalized, and we plan to continue to grow it as we increase the use of technology at the stores and as we open up slots for evening service and services on weekends. Now, beginning in August, when it comes to technology, we will be launching the operation for express delivery, which is a same-day delivery for 100% of our connected stores. This will represent 50% of what we do when we speak about our partnerships, and I would like to speak about our B2C partnerships initially.
We have had significant growth with three platforms: iFood, that has grown and has more than doubled its share vis-à-vis one year; Mercado Livre, with whom we have expanded, and we foresee opportunities for a further expansion to the Northeast and to the South. Once again, this has been a very successful partnership for us. Minor groups, shopping and other groups that have also gained in terms of share in our sales. Together, they correspond to the other 50% of our multi-channel sales. Now, the launch of BEES will be very interesting for all of us because we have exclusivity of food retail on that platform. They have more than 1 million customers registered, and they deliver beverages. We can complement that order with grocery items, and this brings about opportunities for new sales.
We're quite optimistic of being able to service these customers and evidently benefit Pão de Açúcar through this new delivery model in partnership with BEES. This will reduce the logistics cost of the delivery and making it a highly profitable delivery for GPA.
Our next question, Mr. Vinicius from the Bank of America sell-side. You may proceed, Vinicius.
Good morning, Marcelo, Guillaume. Thank you for taking our question. In the release, you mentioned an improvement in the customer flow in GPA. How much of the sales have increased, and which was the increase in ticket? And if you could speak about the initiatives to enhance the customer flow at stores.
Vinicius, thank you for the question. Yes, we have had a very positive impact. We have seen a resumption of customers, as well as a growth in number of customers.
There is an increase in customer flow, an absolute enhancement in the number of visits, more frequent visits, but with a lower ticket. Customers visit the store more often, purchasing less. What we would like to do is include more products in their shopping basket.
We're working with CRM in obtaining new customers and seeking out customers based on the customer data platform, where we not only offer generic promotions or offers, but through discounts, we're also able to make more customized offers for the customers.
The second point is that we are looking to the future with a lot of optimism. I mentioned about expansion, and we have a partnership with Stix coalition, where GPA has a majority share, and we have access to the pool of clients of Drogasil and Raia Drogasil, and we can filter clients, qualified clients according to Mercado Extra profile, and we have access to them, and we can bring those clients to the base and with expressive benefits into the program. This is what we are trying to do. We have a team which is highly focused on this process, and we have identified more than 1 million people who have not purchased at GPA.
We can see a very good opportunity to go after those clients that already have Stix, and these clients can be offered a discount in our stores. This is something that we are looking at so that we can increase the base. From the commercial side, as I mentioned, we want to bring in more clients. Once the clients are with us, we want them to purchase more. Part of this buying more will come from an initiative of making headway in the work that we have been doing with this customer data platform. We customize even more the offers to our clients.
Excellent. Thank you, Marcelo. Thank you.
We would like to inform you that the Q&A session has come to an end. I would like to turn the call back to Mr. Marcelo Pimentel for his final remarks.
Thank you very much. I would like to thank you once again for attending this conference call. I want to give a special thanks to the team. We continue to focus. We have a lot of work ahead of us, and we are confident that we are gradually advancing. The macro scenario is still very tough, very challenging. We are in a moment of an important structural transition for GPA. Adjustments take time, but I'm convinced that we have the right plan and the best positioning and the right team so that the new GPA will continuously move towards more consistent and sustainable results. Have a nice day, everyone, and thank you again.
The conference call has come to an end.