Good morning, ladies and gentlemen. Welcome everyone to the teleconference of Panvel Group to discuss numbers relative to the fourth quarter 2023. This conference is being recorded and a replay facility may be accessed at the company's IR website. The respective slide deck can also be downloaded. All participants will be only watching and listening to the conference during the company's remarks. After that, we will start a Q&A session when further instructions will be provided. We have translations into English and also in sign language. To activate, click on the interpretation button at the bottom of your Zoom screen. Before moving on, I would like to clarify that any forward-looking statements made here are based on the company's management's beliefs and assumptions, and also on information currently available.
Those forward-looking statements may involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not materialize. Investors should have in mind, along with journalists, analysts, that general economic conditions, industry conditions, and other operating factors might affect future performance of the company and lead results to differ materially from those expressing these forward-looking statements. Here with us today, we have Mr. Antonio Napp, CFO and IRO, and Mr. Julio Neto, the company's CEO. I would like now to turn the floor over to Mr. Julio Neto, who will start the presentation. Over to you, sir.
Good morning, everyone. It is a great pleasure to be here with you today. Today is the day of the consumer, as a coincidence, the day we celebrate Consumer Day here in Brazil. That is a point for us to think about because we have always organized ourselves to touch upon our relationship with the cultural aspects of what we do at the company level. Even though this is a meeting that revolves around numbers, those numbers are a consequence of a higher purpose. In this company, the purpose is to take care of people within the objective of doing it as best as we can. So quality always comes first and foremost. Quality would be the best definition of what we do. We are in constant search for being the best in services and in health services and wellbeing.
We understand that everything we have been doing, all the results we have achieved, they reflect our culture and our search for being the best. Right now, we are going through a process of cultural revisitation. We are quite aware that the company has grown significantly for the past few years. We have opened many new stores with excellent results, and it is only natural that we try to preserve that culture. As we also understand it needs to evolve also. We consume culture within the company, but we are also producing, generating culture within the company. So what we are doing now is we are conducting a cultural checkup, if you will, so that we can play a leading role as we go through this cultural evolution, this cultural change, as we move towards where we think we could be, at the same time preserving the values that have brought us this far.
It is important to think about it because oftentimes we only concentrate on number, on targets, but numbers, targets are a consequence of what drives us. What drives us is to take care of people. Moving on to numbers now. On the next slide, we can see a track record of our investments. Record numbers for the past three years. We have invested BRL 452 million, not to mention working capital. So significant amount of money being invested. In four years, since 2020, have opened 200 new stores. 200. It is a company of 600. We are talking about 30%. It is a new company. 2023 closed with 57 new stores. The target was 60, so we are quite close to the target. 57. We closed the year with a gross revenue, which was record also, BRL 4.8 billion.
Average sales, which has become a constant target for the company because we understand it to be one of the main levers for results for the coming years as we dilute our sales expenses. The objective was, of course, to increase average sales, and we closed Q4 2023 in record levels in terms of average sales at BRL 670,000 per month and more EBITDA margin of 4.9%, a growth vis-a-vis last year of 0.2%. Our digital front, which has become a benchmark across the country, closed Q4 with a share of 20.4% in Q4. Our digital arm is here to solve customers' issues. We see many companies in the industry talking about large digital shares in their business, but in actually what they are doing, they are converting sales within their points of sale.
They use the app and people buy at the store level. As we see it, that is not sustainable throughout time. Panvel does not do that. We have the best delivery, the fastest delivery. We have a click and deliver very, very fast. The objective is to improve services to customers. For the 15th consecutive quarter that we have gained market share, also a very important indicator, 0.4 percentage points in Q4. And once again, have [Lois] finish the year, very healthy in financial terms, which reassures us that we are growing sustainably throughout time. It is also important to emphasize for the past few years, we have maintained the same growth rate, about 60 new stores a year. That is part of our strategy. Do things and do them well and sustainably.
On the next slide, we have the highlights, and it shows that whereas most players in the industry in Q4, they slowed down, Panvel sped up, accelerated. We grew more in Q4 than we had been growing in the remainder of the year. So in the fourth quarter, instead of stepping on the brakes, we actually did the opposite. We moved forward further. We have grown sales 2.2% in the year ending for, in Q4, 12.9%. Retail, 12.7% to 12.6%, a significant change in growth. Our EBITDA throughout the year, 4.9%. In Q4 was 5.2% margin, a growth of 17% vis-a-vis a growth of 15% when you compare the quarter with the year. In digital, once again, growing share more than had been growing throughout the year, which was already a good number, 38%, but we closed the year at 44% of growth in share in digital.
Once again, that shows how we have accelerated in terms of a net income, also a growth of 36% vis-a-vis an income that had been growing by 8%. And as in market share, as I mentioned before, and that already had been covered. The chart on the next slide is quite interesting. When I realized myself and Antonio, our CFO, showed me that, the first word that came to mind was new Panvel. It is actually a new company, a new Panvel. in 2020, we committed to change the market. We had a follow-on at the time, and we were committed to grow more for the coming years. We had a track record of a CAGR of 14%, and we said, "Now we're going to be growing more. Let's challenge ourselves to grow more."
In the first year, 2021, we already had the ambition of growing 60 stores a year, and that happened. That's no easy task for a company to make such a leap in growth, because there's several factors that need to be taken into account and managed. Logistics is one, personnel. For that to be sustainable, that needs to be well executed. Looking at the past four years, I can say we're very proud. We did a great job for this new Panvel to emerge. An important growth in CAGR, 14%. That was a track record from 2011. It is an important track record back to 2011. A company that never went through ups and downs, as you can see. We have been growing consistently upwards. Elon Musk is now challenging the concept of rockets that do not backtrack, but we do not backtrack just as a rocket does not.
Anyway, we moved from a company that had an EBITDA in 2020 at BRL 128 million at the follow-on time. Now in 2023, BRL 233 million in EBITDA. So it is an important level of growth. We have doubled company's figures. Year -on -year, we've had BRL 500 million in sales for every year, year -on -year. So that's our new level. That's the new Panvel. Now over to Antonio, if I may, for him to describe in more detail some of the other figures, and then we will remain available for questions or remarks you may have.
Thank you, Julio. Let's move forward. Let's go into a bit more detail of the numbers. Julio gave us an overview of the business. We're now closing a very good year, and we are accelerating. I'm going to start talking about sales, our main driver, looking at Panvel. Panvel sales has grown 11.7% and closed Q4 at 12.6%, as I mentioned, accelerating. It's important to highlight, when we look back at 2022, which is our comparison basis, that basis was quite strong. Let's remember that back then, we had a readjustment for drugs above 10%, especially in the first half, we still had a strong sales across all services and products related to COVID.
That effect, of course, was not the same in 2023, but still we grew. That's why we like to talk about the CAGR for 2021 through 2023. The CAGR is the same. The same trend we saw in the previous slide. Panvel has maintained a healthy growth pace at around 17% consistently. This is not just the result of a store expansion footprint, it is also the result of an increase in productivity and an increase in same-store sales. We have broken our record of average sales per store, BRL 670,000. We have to go further, of course. When we look at the southern region of the country, on the right-hand side of the chart, Panvel has been consistent as the largest average sale in the region. Opening 60 new stores, 20 stores were opened in Q4 alone.
Very challenging, but still, we managed to overcome our average sales target per store. We like to look at same-store performance and mature stores as well. When we look at the fourth quarter, the same acceleration move. We closed the fourth quarter growing 8.7% in same-store sales and 5.3% in mature stores, both above inflation, maintaining a high average and accelerating. This is where we show the healthy levels where we operate. When we look at our expansion plans, as mentioned, this was a very important year where we have reached, at the end of the year, 600 stores. That's a landmark for the company. We opened 57 new stores, as I mentioned, 20 in Q4 alone. We have broken our record of net stores, 44 stores. This was a year that we closed fewer stores than previously.
It's been some time, as you know, that we have been working to closing lower performance stores, and that has been bringing all the numbers you see now. Other important points to highlight is that since our IPO, we have brought over 221 stores for a 600 total. That's a lot. We have about 30% of all our bases still under maturation. That base has two meanings. In the short run, of course, it brings about some pressure for results, but for the mid to the long run, it's a clear signal that I have room to grow, room to develop. When I look at the performance, both for new stores and for existing stores, we see our market share performance.
We are at the 15th consecutive quarter of market share gain in the southern region across all states of the region, with a special highlight for Santa Catarina and Paraná, those two states. In addition, we have been growing well in drugs, medications, providing, as we said before, health and wellbeing. When we talk about the strategy, we expect to continue on that track, but we're quite satisfied because quarter on quarter, we are delivering that level of performance, growing market share and delivering all those numbers. Also driving that move, we have our digital front. Panvel remains a benchmark in digital for a pharma retail for several reasons. Number one, we are the network with the highest share, the highest footprint of digital sales when compared to retail.
We were the leaders before, we continue to be leaders today, and we have grown that bases to a tune of 44% when compared to the previous fourth quarter, growing on top of a mature bases. In addition, we have been very successful in our strategy for downloading the app. Our app download numbers grew by 45% quarter on quarter, increasing digital channels usage. A number which makes us very proud is the percentage of active users per month, MAU. We do not know other retail chains that have such a high number for MAU. Close to 42% of our bases, they really use the app. It's not a payment means. It is a relationship channel. People download the app and use it, and then use it again, searches it not only to pay a bill, but to have a relationship with the chain.
Why do we have all that? Because for a long time, way before the pandemic hit, we were already thinking about serving our customers better. Because of that, we have developed a delivery method which has transformed Panvel into the fastest delivery in retail in Brazil. We are the only chain to deliver everything up to 30 minutes in the capital cities, Porto Alegre, Curitiba, and Florianópolis. Deliveries in up to an hour already account for 50% of all deliveries we make. We are not including click and pick up, click and collect. This is delivery to the customer's home. We are proud to say we continue to expand our market share for digital in the southern region of the country. We were leaders before.
We have a share of above 50% of all the market share in the southern region, and we continue to expand that advantage driven by all the dedication we provide to this channel. Also important for us is the services channel, another competitive advantage that we have. The Panvel Clinic is an arm of the company. It materializes the idea of providing health and well-being. When we remove the COVID effect from that basis, it's interesting to note that all that array of services driven by vaccinations is still growing at high rates. Last year alone, we grew by more than 27%. Vaccinations grew by 30%. An important data here is that we have a leadership which is unquestioned in this market, just as we do in digital. In terms of vaccination, close to 50% of the market share in the southern region for drugstores belongs to us.
When we look across all services, we are close to 21%, an overshare when compared to what we have overall. It's also important to note that this also reflects what we have ahead of us in the future. Why make an effort in something that accounts for only 1% of sales? What we see is that we understand there is a revolution in place in the health market. We can say that there is an important opportunity here, and we want to be part of it. Moving on and closing the sales cycle, we like to talk about Panvel products. The sales cycle is very important, and we like to say that these are the only products, which are our own brand products that we really carry the name of your store out to the home of the customers, creating recurrence.
We are leaders, have been leader for some time. We are the network with the highest share of sales of private label within the total sales. We have closed Q4 with 7.9% of all sales of the Panvel related to our private label. Twice as much as the competition or just about twice as much. They have 9%- 10%. We have much more. It's a significant difference, and it's important to note that the highest market share of private label also for retail in the southern region at something close to 50% of market share also here in private label. That market share continues to expand. All the work we do carefully to launch new products, we have over 1,000 active SKUs, that is bringing back a lot of results, a lot of return. It is a competitive edge, ensures us better numbers.
A second fact is that we have an industry within the group that produces 30% of that basis. That basis, produced within Lifar, helps us ensure quality and ensures delivery also. That screen is very telling. Panvel is also a brand, a label. Not only a drugstore, it is a label, a brand, as you can see. That is a different level of operation, as you can see. It is difficult to compare with what you have in the market out there. Focus on quality, once again. Many only focus on the margins. We focus on quality. Margin comes as a consequence of that. Closing that growth cycle you have seen in terms of physical stores, digital stores, services, private label, and so on, we had to have the best NPS in the pharma retail, of course. This is the NPS methodology from Bain & Company.
We have 81 points at Panvel. We have grown compared to last year. That is not easy to grow stores, expand sales, expand footprint, and still increase NPS. That is no easy task. It is a huge challenge that we have embraced, and we have met. The same goes for when we look at the Reclame Aqui basis. We are the best retail position, a bit the same in the best scores within App Store and Play Store. Those numbers are a source of pride to all of us, and we are committed to deliver results, deliver sales. Always with an eye at quality. NPS today has become a management tool for store managers. Each manager of each store needs to know their NPS. They know their NPS.
They read the comments about their store, and of course, that has been very useful for them to manage their operations and to correct potential issues. Moving on, speaking a bit about gross margin. Gross margin in retail in the fourth quarter saw a slight pressure close at 29.8%, a pressure of 0.2 percentage points, similar to what we had in the year, 0.2 percentage points. So we closed 2023 with a margin of 30.2%. It is important to reinforce that we are quite happy with these margins because when you look back at the comparison basis in 2022, margin was favored by the readjustment of 10% of all medications and because of all the sales of products and services related to the COVID basket. A lot of tests, so masks and so on.
Having had such a small pressure on margins, even with such a huge change in our product mix, really shows that that is a clear sign of success of our strategy of working strong with a product mix, move forward with non-medications to offset potential losses, and also work well around pricing. So we are quite happy with the result, and we look at 2024 as a challenge of maintaining those margins, but I am going to be talking about that more in a moment. When you look at expenses, this is one of our main highlights for the year. After having gone through a few years of heavy investments, it is only natural that we start to reap the results and that is happening fast as we manage to dilute sales expenses across stores as they mature, and also at the mature stores level. Several medication calculations here, personnel, material, inventory, and so on.
That trend that we saw in terms of selling expenses is a trend that we are trying to maintain in 2024. When you look at SG&A, they have a certain pressure given our new structure, but we remain very competitive with a great number, the best one in the pharma retail space. Well, now we get to EBITDA. Our margin EBITDA has grown faster in the fourth quarter. We grew 17.1% in Q4 because of all the factors I've mentioned, all those productivity gains we enjoyed. It shows that the expansion has been efficient. We see a growth in margin not only compared to what happened before, but when we compare that to Q4 2022 as well. Exactly. When you compare similar bases, similar products, you see an important growth, 0.2% growth in margin when compared to Q4 2022.
That's key, and that's reinforced by retail. Retail only deals with the stores, the mature and new stores. We also saw an expansion in retail. That's a clear sign that we are really maturing well our new bases and the mature stores are also performing well. With all of that, we reach net income and our net income, which in this last quarter grew by 36%. It has accelerated significantly because of all those operating gains. As I said before, coming from a very efficient cash management, which allowed us to grow fast, and also grow results. In other words, a very healthy business. Health also measured by cash. Here, we have been doing this since 2022, have been focusing on our cash cycle, improve the cycle. We have an inventory level which is quite balanced, very small fluctuations quarter on quarter.
We have been concentrating on getting better terms from suppliers, and the results are coming very clear. We close 2023 with the leverage level very low for retail, 0.6 x the EBITDA. We have the commitment in 2024, a commitment of maintain low leverage levels. Our commitment is to consume zero cash. Everything we invest in 2024, everything we use to grow, will be financed by our own resources being generated. I'd like to thank all our employees at this point. Without them, we would not have reached these results. Our teams are key for that. We cannot do anything alone. Now I'm going to move on to our strategic pillars. I'd like to share with you some news and tell you where we stand across each of those pillars, and also comment how happy we are with all those deliverables. I like to show this slide.
If you've been here before, you've seen this slide before also because it translates really well how the Panvel Group sees its strategy and breaks it down across all those small boxes. I like to start talking about our expansion. I'm going to take a step back. It's been some time, we have not talked about this. But it's important to understand why Panvel continues to be so optimistic in relation to its market, to the southern region of Brazil. For that, let's look at the main drivers that help us understand our growth for the coming years. The first driver, which is very important, the pharma retail market in Brazil does not stop growing, and it's always growing at above inflation levels. As you can see on the chart, in the past few years, it has been growing at a pace of 12%.
If you look only at the southern region, it has grown even faster when compared to the country, 13.3%. Let's remember that Panvel, in this period, Panvel has been growing at a pace of about 16%, gaining market share on top of market share. That first driver is very important. We are part of a large market, growing at a fast pace and positioned in a region that grows more than the average, because we have an aging rate in the southern region which is higher than in the rest of the country. Population aging, of course, favors our market. A second driver, the fragmentation of the pharma market. As you can see on the right-hand side, on the top of the slide, that chart talks about the southern region, but Brazil is not very different from the southern region in that respect.
We still have a very fragmented market. The chains belonging to Abrafarma has less than 50% of that market, and the remaining 50% are under other chains, mid-sized, small-sized, associations, and independent. A lot of room to grow. We have been gaining share in that space. We can see an acceleration in the last quarters that's important to share. Again, it's difficult for mid-size, small-size independents to compete with a chain like Panvel, which has a very large capacity to invest in ability and technology, and so that favors it. That's a second important driver. Number three, there is a lot to be done, a lot to happen within the health sector. If we think about services Julio also mentioned before, that cannot be found anywhere, has not been mapped out how big this market can be. New treatments, new products.
So to be part of the health market is good business at the end of the day. So that's why we place our bets. The southern region of Brazil, even more so, right, because of the aging issue. That includes us. We are also growing old, right? I have a bit of a gray hair now. Anyway, that's why we place our bets on expansion. If we get the store wrong, we get everything wrong because all strategic pillars run across the physical stores. For the past few years, we have been focused on the standard and pop formats to cater to all income brackets. We have also focused our growth in the countryside and also in metropolitan areas of the states where we operate, without forgetting the capitals, of course. But it's only natural to go towards the countryside.
We have been working to open more stores in the countryside. We have opened 10 new hubs, and here we have some of the areas where we are located. It's only natural because we are present in larger cities, but there's a lot of room to grow in the smaller areas. It's a whole universe of cities, especially those with 100,000 population on average, population 100,000. Now we have cities where we have 20,000 population, and we now have a store. The numbers are there, they're clear. When we look at the success of our stores, it's obvious why we have been accelerating. On the left-hand side, we look at two indicators which are key to our decision-making process. Number one on the left, EBITDA, the contribution margin from stores without depreciation.
For each vintage year, you can clearly see that year-on-year, our stores vintage year 2021, 2020, and the mature stores, they have been showing increasing returns. We look at the ROIC, return on investment, also growing, all on top of our historical basis. That is the first piece of data, very positive. Number two, also key. If I break our numbers down per state, it is also clear that where we expand in Santa Catarina, Paraná, and São Paulo, we are increasingly improving our EBITDA, getting close to Rio Grande do Sul's numbers. As you can see, we still have stores to mature. When those states become more mature, those margins will only grow, getting closer to what we have in Rio Grande. That includes São Paulo. It is a small base. It is only 10 stores, but with an average sale above BRL 1 million.
We are getting very good results. It is not our focus yet, but we are building a brand in São Paulo, and with stores which have proven to be very successful. Lastly, in terms of expansion, I want to show you these numbers from IQVIA. Where is our growth coming from? Why have we grown more than the average? It is interesting to look at the data, right, to see how that happens. It becomes clear our main drivers when we compare either with the southern market on the left or other chain works, independent and so on. Panvel has been very efficient in expanding and growing its stores to higher levels, which is the dark blue bar, but especially when compared to others, have been gaining in volumes. That fits with my next comment, because volumes have to do with frequency and recurrence.
We have been much more successful than the average in terms of bringing new clients, and that ensures more sales. On the next slide, another important pillar, the CRM and customers. It is a key pillar, also focused as a growth driver. How do we see this? We have a client base which is quite big. We have more than 22 million customers in our base, 40% more than last year. That is what I call a fishbowl where we fish, right? What we have to do is we have to activate those clients. An active client is the one that has made at least one purchase in the past six months, and that base has been growing the last quarter, something close to 7.5%, five active millions of growth. The second phase, how can I make that customer become more loyal to our brand?
Those buy once every couple of weeks, and we are focused on that. We have increased that base to more than 1 million clients. You can see the room we still have to grow. Behind all that customization work, a lot happens. There is a great effort in digitalizing customers' data. The omni customer buys across all channels, as you know. 2024 will be a year dedicated to all those chronic customers. That is the customer we want to behave them as loyal, right? It is the most valuable customer for any drugstore. They have a five-fold value because of frequency, ticket level. So we want to dedicate attention to our chronic customers in 2024. That is one of our main growth drivers, which will bring excellent results.
We realize that today, because we have access to more data, we have a lot of tools in hand to manage and make chronic customers more loyal to our brand. We have been training store personnel to do that. Monitoring training, monitoring treatment rather, we have hired a consultancy company to help us on that front, to provide support in making those customers more loyal. A lot of good things to happen in that space. Any small increase in that slice will have a significant impact in the business as a whole. We are talking about millions, tens of millions of BRLs. To help us out in this work of customization, digital plays an important role. In 2023, it is very much in line with our focus on the client approach. We are working to customize services, have created a customized showcase that identifies customers.
Our app, if I may say so, our app is the best app in the industry that provides the best experience by far to customers. They are not linked to higher investments, but to better decisions. The best decisions has been improving and the use of AI has been key for that growth.
The experience, as you said, is increasingly better. I would like to invite you all to download the app and test it for yourself.
In São Paulo, we deliver in up to two hours, actually.
It is working really well in São Paulo, yes.
We have also invested in a faster and faster delivery. We also deliver in up to 30 minutes in capital cities. We are the only chain that can use Rappi and iFood to deliver in São Paulo.
I think we are the only chain in São Paulo that does that, I think.
Yes, that is it, as far as I know. Also important to mention in terms of customization, we have been talking about it for the past few quarters, our social commerce, as we call it, our digital manager or influencers. How can I digitalize a customer if I do not digitalize our managers? We have this challenge. We have over 400 stores creating micro digital influencers across the different communities, offering those customers for those stores what they want. Last year, something very nice that we launched was the vaccination card within the app. When we talk about health and services, we are the only chain that has actually included in its app a complete vaccination card. That is very nice. People will know what vaccines, what shots they should be taking or getting at their age bracket.
You can also include your kids, your sons and daughters, and then you will see what vaccinations are recommended for kids of that age. You have the whole file, the whole registration. The whole story of vaccinations. If there is a second dose to be taken, there is a reminder that the app sends. It is a very nice innovation. Totally integrated to the app. It is not a separate thing. It is within the Panvel app. One final thing, a very nice thing we saw last year, we launched this in 2023, our platform, Panvel Web. Last year, 2023, we were able to have very important revenue levels. We have brought very nice suppliers on board. We have all the pillars up and running, 100% on-site, in-store, omni-trade, off-site, through a light platform, one of the most modern in Brazil. We are 100% self-service.
Our supplier logs into the platform, they are able to check the analytics and do everything by themselves. We are way ahead of the pack in that front, and we believe this is a very important growth avenue. If you are competent in retail, media will make its own space. Panvel has already positioned itself as one of the main players in the market, and there is more to come in 2024. In terms of ESG, we have to talk about ESG. That is also a topic which is close to our hearts. Not because of the acronym, because it is part of our DNA. We have always worried about sustainability, about diversity, about energy uses. I would like to highlight a few things here. There is a program that makes us all very proud. I have more than 15 years, the [Procomim].
Throughout that time, we were the first in Brazil, and everybody copied us after that, which is okay. It is all good. ESG is not about competition, it is about collaboration. If a competitor wants to know what we do in terms of ESG, we are totally open to share that knowledge with them.
That is right. We are proud to say that throughout time, we have already delivered BRL 21 million, BRL 4.2 million in 2023 alone. That number is growing and we are now accepting donations via credit card, and that made a whole world of difference, right?
That number tends to grow. We have paid attention to renewable energy. We are pioneers in pharma to do that, the first retail chain to have photovoltaic plants. Our street stores operate with solar energy, and that number only tends to grow. In 2023, for BRL 4 million, it accounts for a new level. That was an important investment that we made last year, and we saw an important transformation in consumers' behavior for that. That is 12%. Most of our sales are through credit cards, and we realized that was an important movement. People now can make donations via credit card. From BRL 19 million to BRL 4 million, it is a great difference.
Yes, you are correct.
I would like to once again invite you all to check our Todos Bem platform. Our QR code is on the screen. At the end of the day, it all has to do with our audience, our public, our external public, and also our internal public. Lastly, to wrap up, we have talked about our numbers, our strategy extensively. This is a wrap-up for 2024, our expectations as we see 2024, and it is the best possible outlook. We closed 2023 at a high pace. We started 2024 at a high pace. January and February sales are quite strong. March is also accelerating. We have this view of having a good revenue growth throughout the whole year of 2024.
Based on the same principles, mature stores will continue to grow above inflation, will continue to expand with the opening of 60 stores. We will focus on digitalization, customization, as drivers to our growth. We have a challenge of maintaining our gross margin level. The idea is to maintain, preserve gross margin in 2024 based on a few drivers. We are working strongly to increase the share of generics we have in our OTCs. That is a category that grew little last year, but a good growth level for this year. Without a doubt, we will continue to distinguish ourselves because of hygiene and cosmetics for expenses or HB.
We will continue to gather economies of scale in stores and logistics. We expect 2024 to be a year of low inflation level. If you look at the track record of Panvel, all the years where we had lower consistent inflation rates were years where we grew margins and we gained productivity. That was very favorable. Our estimate is to continue to grow our EBITDA margin. As I mentioned before, we are focused on further decreasing our debt level, growing sustainably. Lastly, in terms of numbers, that is what we had to share. Thank you all for participating. We now remain available for questions or comments you may have. Thank you.
Thank you. We will now start the Q&A session for investors and analysts. If you have a question, please click on the Raise Your Hand icon. If your question has been answered, you may remove yourself from the queue by clicking on the Lower Your Hand. The first question comes from Kelvin Dechen from Itaú BBA. Over to you, sir. Mr. Dechen, your mic is open. You may carry on, sir. Our next question comes from Laryssa Sumer from XP. Over to you, ma'am.
Good morning, everyone. Thank you for taking my questions, and congratulations on your numbers. You did mention a positive performance in sales throughout January and February. I would like to have a better understanding of how you see these first months of the year, considering the COVID and dengue wave we have seen early in the year. How do you expect that to influence your numbers? Do you expect any impact on profitability? Some color on that front, if you will, please, for the first quarter. Thank you. That is what I had.
Thank you for your question, Laryssa. Yes, we have started the year at a fast pace, both January and February, and also March. When you look at our product mix, as expected, we are trying to maintain a good HB sector and also OTC. In terms of the dengue epidemic, to your point, the sale of vaccines at the store is limited because part of the vaccines are being used by the government. We see people looking for tests more. We also see that within the southern region, an increase in the flu epidemic, and that, of course, helps sales, helps profitability. When we look at the mix as a whole, it remains balanced. Not only OTCs are growing, but also brand medications doing well, HB also doing well. It is a very balanced mix. I mentioned about the fragmentation of the market as well.
We have already looked at the numbers from January, and we continue to gain market share. We also realize that a market for a chain like ours is more favorable as well. We are capturing.
The debt level of some of our competitors is important. We came from years where we had interest rates which were quite high. Throughout the period, if you were not disciplined, financially speaking, you will suffer a bit more. I believe this space is being created. There is no new fact. It is more related to a consistent delivery. Of course, customers are now back on the streets, to the stores, physical stores, shopping malls, downtown in large cities also seeing more people going around. Retail is back on track. That is the summary.
That is good for everyone, right?
Thank you.
Our next question comes from Kelvin Dechen from Itaú BBA. Over to you, sir.
Good morning, everyone. Can you hear me? Thank you for taking my questions. Good morning. I have two questions. Number one, as H&B grew, we expected a positive effect on gross margin. If you could comment, please, about the evolution within each category of the mix and the reasons for that pressure. Number two, you said a seven-day cash cycle in Q4. What can we expect going forward? Can we see improvements in that line?
Okay. I'll start by gross margin and H&B, Health and Beauty. You are referring to Q4, correct? The share of H&B has grown. It grew by 18% in the last quarter, health and beauty. But the gross margin for Q4 ended up being pressured by two factors when compared to Q4 of 2022. Number one, within health and beauty, we have a very strong growth in categories with slightly lower margins. Children's products, for example. H&B grew, but margins grew less because of some categories. Digital plays an important role from the fourth quarter to the other fourth quarter. It was a leap of 40% in digital. Digital, of course, pressures gross margins. A third element is the OTCs, the over-the-counter medications. The OTC base for 2022 was also very strong, including the fourth quarter.
Unfortunately, the OTC sales were not that strong last quarter. What we see as drivers going forward, how can we balance that? 2024 is a year where we will continue to grow health and beauty. That's already happening. OTCs will resume growth. That has already happened. That improves margins. We will also focus on increasing the share of generics and private label as well. Private label is budgeted for at a high above health and beauty. Yes, that's correct. All of that will help us at a moment where we'll grow in brand medications. When we combine all that's something we have ahead of us for 2024 to maintain healthy levels of gross margins.
Now, talking about the cash cycle, we do expect to improve our cash cycle, and we're looking at two different points of view. Number one, there are opportunities to explore when you talk about deadlines for suppliers. When you look for the market, that's the main driver. Payment terms with suppliers have already closed part of that gap in 2023, and there are a couple more days, maybe not seven, fewer than seven days, but there are days to be explored with suppliers in terms of payment terms. Also, receivables. We're looking closely at receivables. That's an interesting bit of information. Last year, we realized that there was a strong migration of our customers to payments made in installments. Customers that paid cash are now paying in installments. We are monitoring that across the different payment terms so that we can keep that under control, receivables.
When we combine those two lines, inventory level days will vary just a little bit. We have an outlook of improving our cash cycle.
The maturity of our expansion process will help. In the next years, we will not have a new DC. In 2021, we opened a new distribution center, so the growth rate for stores will be the same, in line with what we had in the past few years. The trend is to have the pressure on cash will be lower, summarizing it.
Thank you.
Ladies and gentlemen, the other questions will be answered by our IR team at a later moment. They remain available. I would like now to turn the floor back over to our speakers for them to provide their final remarks.
Well, thank you for participating in our call. Panvel continues at the same pace of growth, of expansion, and we are quite motivated, and we are in a market which is quite privileged, I can say. This will be a challenge for health plans, insurance companies. That is an important driver for our growth, which is population is getting older. We remain confident in our ability to generate competitive edges, to gain market share. We are, of course, aware of the importance of having good people. So I would like to leave this final message, which is a message of optimism for this year, for the coming years. I am quite optimistic, and we continue, as I said, working towards our objective, which is to provide health and wellbeing to everyone with the best quality in mind. I think that is what characterizes us. Thank you.
Thank you, everyone. I agree with Julio. Thank you all for participating. We remain available for other questions or comments you may have. Our IR team is here available, and I wish you all a very good weekend. Thank you, everyone. See you next time.
Grupo Panvel's video conference is now over. Thank you all for participating, and have a nice day.