Good morning, ladies and gentlemen. Welcome to the Panvel Group video conference to discuss the results for the first quarter of 2024. This video conference is being recorded, and the replay can be accessed on the company's investor relations website. The presentation is also available for download. Please be advised that all participants will only be watching the video conference during the presentation. Then we will start the Q&A session when further instructions will be provided. Translations are available both for English and the Brazilian Sign Language. To activate, just click on the interpretation button and select the desired option. Before proceeding, I would like to reinforce that future perspectives are based on the beliefs of the Panvel Group and information currently available for the company.
These statements may involve risks and uncertainties in view of the fact that they relate to future events, and therefore, depend on circumstances that may or may not occur. It is important that you take into account the macroeconomic environment, the segment, and other factors that may cause the results to be materially different from those expressed in the respected forward-looking statements. In this video conference, we have Mr. Antonio Napp, CFO and DRI, and Mr. Julio Neto, CEO of the company. I would now like to turn over to Mr. Julio Neto, who will start the presentation. Please proceed.
Good morning, everyone. Thank you for being here with us today. Even though we had an exceptional quarter, we decided to start our presentation by bringing some comfort regarding the situation here in the state of Rio Grande do Sul. As you all know, and it has been thoroughly disseminated in the media, we have an unprecedented tragedy in terms of community, social, and the cities that have been affected. We would like to share with you a little bit of the company's situation. Then in the Q&A, we are available to clarify any questions you may have. This company is actually a company that has been around for 55 years, and whose mission is to provide health and well-being to all. After a tragedy like the one we went through very recently, there is nothing else that we could have done other than giving back to our employees and our clients.
I understand that this will strengthen us in terms of organization culture, and we will definitely come out of this with an even stronger brand after this tragedy, which has devastated the state. For you to have an idea, in Rio Grande do Sul, we have a little bit over 7,000 employees. A large number of people were harmed. From the very beginning, we proposed to support each and every one of these individuals. The impact in terms of stores in Rio Grande do Sul was something to be expected, and it is relatively small in face of the tragedy. 18 stores were impacted by the floods. Out of 480 stores, it represents 4% of the total, and therefore, this is not our main problem.
We do not have any water in our CD. It was constructed by engineers who are really aware of the characteristics of the region, and therefore, we were above the level where water could have reached. We do have some operational challenges coming out and getting in. But we have been able to get around. We have another CD in Curitiba and have received the support of different wholesalers who have supplied our stores. As I said in the very beginning, we focused a lot on helping our employees. A company is nothing more than a group of people who believe in the same mission with the same culture. A company is nothing but the people who work for it, and therefore, we were deeply moved by the situation of these people and have supported them from the very beginning.
We used our stores to make hygiene kits available free of charge to all of the employees. They would just get to the store and get a kit with us. About BRL 150 per employee. We have anticipated the end-of-the-year bonus to all of our employees. We know that all of them will have at least one family member impacted by the flood. We also distributed basic food baskets for the affected employees and also provided mattress vouchers for all of them. Moving on with the client. Even in face of a consumption spree in grocery stores, drugstores in the first week, our sales. This is not only for Panvel, but in all of the drugstores. People went shopping. We did not have enough products available, but the company made a public commitment to freeze the price for all of the medication.
All of the business policies that were enforced then remained in force, and people could buy their products as if nothing had happened. We also donated hygiene and first aid items through our stores. We gave discounts. We have a budget of up to BRL 1,000 per store to donate hygiene and first aid items in the communities. We have a very large capillarity in the city of Rio Grande do Sul , and we understood that using it to make it reach people very quickly was something important to do. We also have the Panvel Kit. We distributed hygiene kits and basic first aid kits. We also donated 5,000 box of preventive drugs for leptospirosis, which is something that is common at times like this. We also donated 200,000 diapers to the children in the shelters.
We also triggered our Troco Amigo campaign, where the company commits to doubling the amounts donated by our customers. Yesterday, we delivered BRL 1 million using the Troco Amigo campaign. We gave our part as products and also gave BRL 500,000 that were donated through Panvel. This is something that Panvel can do right now. It is a strategic advantage. This is what we have done thus far. We will not stop now. We will continue providing support. These are actions that strengthen our brand, create a team spirit and union in the company. This is essential. Later on, we will share with you our market perspectives from now on. We understand that we will come out of this crisis better than when we started.
Now we are going to share the highlights for the quarter. The figures are very good. We had sales growth of over 16%, without including sales of assets, and later on, we will explain in details. Retail grew 16.4%. Digital also had a significant decrease of expenses. It continues growing more than the physical stores, and we also gained share with that. We grew 25.3%. We also had improvement in the cash cycle by means of better stock management, with an eight-day improvement in the first quarter. Also, the gain in market share, which was 0.6 percentage point in the southern region of Brazil. In financial terms, we continue very healthy. Here you can see our evolution history for the last 12 years. The CAGR was 14.3%. We always share this figure, which we call the New Panvel.
As Panvel had its follow-on in 2020 and was determined to grow faster by opening a larger number of stores, we created a new level of CAGR, and this has been demonstrated both in terms of revenue, but above all, in terms of results. This shows undoubtedly, not only in terms of the number of stores, but the assertiveness of the stores that are being opened. Because it is only natural for the companies that have a higher growth rate to have results. But in Panvel, we have been expanding and increasing more than proportionally the results of the company. I will now turn over to Antonio Napp, our CFO, who will share numbers with you, and then we will resume in the Q&A.
Well, thank you very much. We are now sharing the main figures for the quarter. As Julio commented, we had strong results the third consecutive quarter like this. We accelerated our sales in 2023, and this is the format we started with in 2024. Panvel grew 16.4% in total sales this quarter with a strong basis of 14.2%. Interesting information when we analyze it over time is that since 2021, we've grown consistently 16.6% every quarter. This is our natural pace, and we intend to keep it in the long run. Important information as well is the performance of our average sales per store, which will leverage the results of the stores.
Panvel has done wonderful work regarding increasing the average sales in its stores. In a graph here on the right side, we can see a comparison for the first quarter of 2023 to the first quarter of 2024, showing that the stores that sell more than BRL 700,000 are increasing their proportion a lot. They were 13% of our bases in 2023, and today the stores that sell more than BRL 700,000 represent a fourth of the whole network. At the same time, those who sell less are decreasing more and more. This has to do with improvements of all of the indicators, and we are very happy with the results of this project.
Also related to this, we have same-store sales. We can see very strong results this quarter. The same stores grew 18%, and the mature stores grew greater than 8%, much higher than the inflation rates. This growth happened because of the increase in the flow of clients, the number of sales coupons, and not because of increase in the ticket, and therefore, this is the healthiest kind of growth we can have. We'll be seeing in the market share. In the South, we have more clients and more recurrence. When we look at expedition, we have opened 12 stores in the first quarter, very similar to what we've been doing in prior terms.
We have kept the opening of our stores and continue having very good results. At the end of the presentation, we will share that with you. Important information is that we continue having approximately 30% of our store basis is still in maturation, which means that all of this result is obtained with a large maturation basis. Over time, the performance will improve and our results will continue growing. Market share, we have already talked about it, and here I already give you an idea where we grew the most. As you can see, we grew 0.6 percentage points. We grew in these three states of the South region with a highlight to Rio Grande do Sul, which is our largest base in Santa Catarina, which grew almost 1 percentage point.
This growth is based on the medication market share in special brand and generic drugs, which is aligned to our strategy to increase client frequency, focusing on chronic clients or continued medication clients. This is the 16th consecutive quarter, and we expect it to last much longer. When we start looking at our differentials, we always like to talk about our digitals, which remain as one of the strong aspects of the company. We grew over 25% in the quarter. We are the company with the largest share of digital sales in retail, we increased from one year to the other, and we have kept our active client bases in the app. We have 45% of our client bases which downloaded their app.
No other retailer in our sector can do the same, which indicates that our app is functional, focused on the client, and it is not used as a payment delivery only. Those who download our app remain with it. Another good aspect is that we have almost 50% of all of our deliveries done within 60 minutes, one hour. Here we are not including other data. This is only delivery data. If we included other information here, this figure would be much higher. We are growing quickly, and we understand that this is a competitive differential with an efficient app and fast delivery. This is something that makes Panvel grow above the other markets. Another competitive differential was services. We continue as absolute leaders in the South with 25%, and we have almost 50% of the market share of the whole retail in the South of the country.
I would like to call your attention here that the sales of vaccine alone when comparing one quarter to the other, grew 50%. We are leaders in at least two vaccines, HPV and meningitis B. This is a leadership that we see for the whole market when we include clinics and hospitals as well. This is another competitive differential, which is aligned with our purpose to provide health and well-being. Whenever we provide services to our clients, we are paying attention to this and the clients who are familiar with Panvel Clinic will come back to us. This is something that Panvel really believes in, and it is also a differential. Another very important differential are the Panvel products. We continue as the benchmark in retail, 7.2% share of total sales are Panvel sales.
When we only look at the sales in HB, we have a share of 17.2%. There's nothing like this in the market. What are the other exclusive brands of the Panvel Group that are for sale at Panvel? This is an interesting concept because in addition to Panvel products, we have other assets. We have three active brands which sell really well: the Lifar brand, the Vivaz brand, and Sanitas. If we take into account Panvel products plus all of the other exclusive brands, we're talking about almost 9% of Panvel sales, further increasing Panvel's differentials to its competitors. Here you can see some images that will be available later on. These are products and launches. We have a lot of new launches and we have almost 50% of market share. This is another benchmark for us in the South.
Finally, we talked a lot about the differentiational elements, and we have to talk about the quality of service provided to our clients. We use the NPS methodology. It is true NPS. We maintain a high level, 80. We continue as the company with the best assessment, including App Store, Google Play. All of this effort would be nothing if it did not represent quality care. This is one of our differentials, and this is something that we pay attention to in each and every one of our stores. Now, after having talked about sales, we will talk a little bit about our gross margin, in this case, Panvel's gross margin. In retail in the first quarter, it was under pressure. We had an increase in drugs.
In special brand sales, this growth combined to the growth in the digital channels has a pressure on the gross margin, which was to be expected. We also had a dilution of our sales expenses as we will see in the next slide. It was focused on the stores and it offsets the effect that we can see in the gross margin. When we take into account the main expenses with personnel stock. We have been working and collecting good results. I would like to remind you that we are diluting all of the expenses with 30% of our stores still in maturation. We have started the dilution process when compared to previous quarters, and we are confident that we will be closer to the levels observed in 2023.
Therefore, you can see that the company has had more efficient actions, and we have a very conservative administration, and then you can see the results in these figures. Also, since we're talking about-- We've already talked about gross margin and expenses, but it's only natural that we have an expansion of our operational results. Our EBITDA grew over BRL 600 million, representing almost 20%. This is aligned to the elements that I've already mentioned to you. Increase in average sales, enabling us to dilute our expenses. We are in a virtuous circle, and we expect it to continue for the upcoming quarters. One of the benefits is when we look at the retail EBITDA. This concept of retail EBITDA is the result for our stores. It is generated only by the stores. We have removed depreciation. This indicator grew 15.2%.
Our retail EBITDA is at about 10%, a level which is very similar to the first quarter of last year. This is very positive. Here we have all of our new stores, the maturation bases. We had a pressure on the gross margin, and we have been able to offset it really well. Finally, our net income for the quarter. The adjusted net income grew a little bit over 17%, reaching almost BRL 27 million with an adjusted gross margin of 2%. With this operational result, we have more tax efficiency. In this quarter, we sold an asset, a plot of one of our controlled companies. Here you can see all of the effects of this asset, and that is why we are sharing with you the net income after the adjustments.
Once again, we have a conservative view, and we are showing it to you without any of these effects. Another important highlight, and perhaps one of the most important highlights in the quarter, after each year, we improve our cash management. We have worked hard with the main indicators of stock, suppliers, receivables to improve our profile. We have improved our cash cycle thanks to the work done with negotiations with suppliers. Another important aspect is that cash management has allowed us to obtain improvement as we have some investments so that we can use these opportunities. We have offset adverse events, and we have had the best EBITDA debt ratio we have ever had. With this low leverage, we have another differential for Panvel. We have an ability to invest. We have lower interest rates and have opportunity to continue growing.
We continue analyzing this closely, and our objective for the end of the year is to have cash generation. We always like to talk about the strategic pillars. We will talk about some of them, and this is important so that we can discuss our vision for the third quarter. I will share with you what we can see in the market and what our main aspects are. I think it is always important to repeat why Panvel continues extremely optimistic with its market. First of all, historically speaking, the pharmaceutical retail market grows much higher than inflation rate. It is like this in general. Number two, the market in our region is extremely fragmented. About 50% of the market is very fragmented.
We commented in past quarters that we have seen a more benign competition in the last two or three quarters, and we start consolidating faster with some local clients, losing some speed, which is an advantage for us. Number three, because we are in the South, we are at a region where the population is older and aging is faster. When we analyze all of this, we see the opportunities for growth. We continue with the same strategy, which is quite important. As I commented before, we will maintain our goal of 60 openings this year. This is our guidance. We continue focused on the southern region and the countryside with our standard and models. Panvel, as you know, is present in all of the municipalities with over 200,000 inhabitants. There is a lot of opportunities still for municipalities with 50,000 and 60,000 inhabitants.
Our prospection for 2024 has been concluded, and it is now only a matter of time for us to be able to conclude it. The numbers you can see here only reinforce our confidence. We also like to share the results we obtain for each one of these periods and in the different states. The first quarter in 2024 was not different from the previous quarters. We continue showing increasing retail EBITDA, pushing our average upwards, which is very important. The return over the investment. Here it is always important to clarify this concept. This ROIC is divided by the CapEx and stock. You can see that investments remain very strong and higher than our historical base. On the right side, you can see it clearly in our states. We have results that are superior quarter after quarter.
In Santa Catarina and Paraná at every quarter are closer to Rio Grande do Sul, which is our most mature base, and this brings good results for the company. At the same time, São Paulo, our newest base, we already have an EBITDA of 6.2%, and we are growing and gaining 0.5 percentage points or 1 percentage point. In other words, increasing our confidence in our expansion capacity. Now here we will see where this growth has come from. In the presentation, we talked about market share increase. Here you can see the IQVIA data where we have increased our market share in the South. The left side bar is for the region as a whole. We grew 9.6% according to IQVIA. Panvel grew 15.6%.
As you can see, Panvel has grown more than any other player, be it in networks. You can see the comparison here on the slide. This is well-balanced on three pillars. Our ability to expand our stores in darker blue. In our average price with our products and above all, with sales volumes, which have a lot to do with frequency and recurrence of clients. You can see that when compared to all others, Panvel has been a lot more efficient when it decides to close its stores because the impact is much lower in Panvel than with other competitors. In other words, we continue operating better, and we intend to continue this pathway. Now, I have some messages. We had an opportunity, Julio and I, to tell you what Panvel is doing for the community.
We have talked a little bit of what we did in the first quarter, which was very strong, and we intend to reinforce our vision, the Panvel vision for 2024, and we have shared some important pillars. The first one that I would like to reinforce is that Panvel's stock was not affected. Everything has been protected, and in the next 15 days, we will start moving the stock. The waters are going down, and I think that this is a first aspect. Our objective for 2024 does not change. We started with an accelerated quarter, but nothing really significant, and we will continue the next quarters doing so. The people in Rio Grande do Sul needs a network. The store sales remain healthy. We grew 18% in April. Our sales grew 10%, which is robust.
In addition to this, we have probably been able to follow this in the news. Rio Grande do Sul has an expectation to receive a lot of resources, and it needs to do so for the population, for our infrastructure. This is when the public and private sector need to provide more. We need them to support the state, and we are confident they will do so and help the state into a quick recovery. We are working in that direction. This is where we were born, and we are right now in the city of Porto Alegre talking to you, and we would like to leave you with this message. The community in Rio Grande do Sul has been united with a very strong movement to support the people in Rio Grande do Sul. You should continue drinking wine from Rio Grande do Sul.
This is a noble and respectful attitude. We have very strong products and brands, and we will get out of this situation. Those who live here can see that people have really mobilized in an amazing way, and we will get out of this.
We will now start the Q&A session for investors and analysts. In case you wish to ask any questions, please click the raise hand button. If your question is answered, you can lower your hand. Our first question comes from Mr. Kelvin from Itaú BBA. Please proceed, Mr. Kelvin.
Good morning. Thank you for taking my questions. I have two questions. The first one is regarding the gross margin with the participation of the brands causing some pressure on the gross margin. How can we see the behavior for the future? The next, second question is regarding the sales performance. As you said, you had strong sales outperforming your competitors, looking at more mature stores. Could you tell us the main drivers of this performance?
Well, thank you for your question. First of all, regarding the gross margin. We will have superior performance. We are focusing on this. Also with more loyal clients. Having said that, we try to offset this by selling more generics, which have a good performance. We grew a little bit more than the average, so we have a little bit of the gross margin and our HB continues being very important, but we expect to have some pressure. On the other hand, this operational leverage that we obtained are giving us the required basis points by reducing our expenses with sales. It has been more than enough to offset them.
When we look at the end of 2024, our scenario remains present because even if the gross margin has some more pressure, we can offset it with the dilution of expenses.
Now, unfortunately, we believe that the consumption of drugs will be further accelerated. We will have some diseases that we did not use to have normally.
Yes, the area of drugs will have the same impact indeed. When we look at the sales in the first quarter, and I think that this will be repeated in the rest of the year, the same strong partners have gone through this work with continued clients. It has to do with our digits, and our digits are still growing and at a faster pace than we even expected. We usually say that we do not have a specific participation figure, but the digital area remains growing, and it is here to stay. In the area of drugs, where we work very closely to clients and all of the digital area, these are differentials. Services is still not very significant. We have some room for vaccines, and I think that vaccines will surprise us in the rest of the year and also because of what Julio mentioned about the situation here in Rio Grande do Sul.
It is important to know that this is well-balanced. When we look at our strategic pillars, none of them are weaker, be it in the health area, digital stores, they are all doing well. The stores are opening with good sales, and that is why we remain confident with our performance a nd we continue investing in improvements.
This is a longstanding habit. We continue investing in consumer experience with constant investments in logistics, in the app experience, and we have used artificial intelligence for the website and the app. We have developed areas where we gain relevance. It has become almost like a business here because of the volume we have in the digital sector. Therefore, we are very confident with our strategy. We have a good differential in the digital area, especially in terms of logistics, because we see a lot of competitors that have a digital experience, but it happens inside the store.
Perfect.
Thank you, Kelvin.
Well, thank you.
Our next question is from Laryssa Sumer from XP. Please proceed, Mrs. Laryssa.
The first question, a follow-up about the mix in the previous question, this gain and the share of brand products. I wanted to know what the impact is, and then the second question about Panvel products and other exclusive brands you have. You have 30% of your own production. I wanted to know what this share is like now and what opportunities you see for your own brands within the mix. Thank you very much.
Well, Laryssa, thank you for the questions. In the sales of Ozempic, this is an extraordinary market. Some people ask us when this market will stop growing, and we still do not know how to answer it.
This is due to the limitation of the production in face of the demand. Ozempic, not only for Panvel, but in every network, is almost like an exclusive product, and it has a very broad basket, and it has to do also with loyalty.
We have a very positive scenario for Ozempic and for the competitors that will come in because this market is huge, and we do not see any limitations for growth in 2024. I do not even know if in 2025. Regarding our own brand, part of them are produced by Unipharm. Another part is produced abroad. Our process is very competitive with our internal industry and external suppliers because at the end of the day, when we say Panvel products and we are the only ones who put our brand in our products, we have quality because sometimes you have brands with huge profits, but when you have a very high gross margin, it means that your product was very simple.
We have a very large support network for almost all of our SKUs.
Here at Panvel, we are always trying to obtain new providers or renovating these lines with a lot of launches.
Perfect. It is very clear. Thank you very much. Congratulations for the results and all of the initiatives in Rio Grande do Sul .
The Q&A session is now over. Other questions can be answered by the Investor Relations team of the company. Now I turn over to Mr. Julio Neto for the final considerations of the company.
Well, I thank you all for your audience. I invite and I have used every opportunity I have, both in the radial, in the digital area, to ask people to support Rio Grande do Sul. We are all Brazilians, and that is very important. We reinforce an optimistic view of the company for the upcoming months. We will really have a significant incoming revenue. This is the opposite of what happened during the pandemic. We will have a lot of construction as well in the state. We remain, and I think that we will soon have excellent news to share with you. We believe in the state of Rio Grande do Sul, we believe in Panvel, and above all, we believe in our people who are coming out of this event even stronger.
Well, thank you very much. I would also like to thank you all for your presence today, and we remain available to answer your questions and wish you all a good day.
The Panvel Group video conference is now over, and we thank you all for your participation and wish you an excellent day.