Good morning, ladies and gentlemen. Welcome to the conference call of Grupo Panvel to announce the results of the third quarter of 2023. This conference call is being recorded and the replay will be available at the company's Investor Relations website. The slide deck is also available for download. All participants will be only watching this conference call. Then we are going to start a questions and answer session when further instructions will be provided. This event is being simultaneously translated into English. Before continuing, forward-looking statements are based on the beliefs and assumptions of Grupo Panvel management and information currently available to company. Such statements may involve risk and uncertainties considering that they regard future events and depend on circumstances that may or may not occur.
Investors, analysts, and journalists should consider that events related to the macroeconomic scenario, this industry, and other factors may lead the results to be materially different from those expressed in such forward-looking statements. Today, in our conference call, we have Mr. Antonio Napp, CFO and IRO. Now I would like to give the floor to Mr. Antonio Napp. You may continue.
Good morning, everyone. Thank you very much for being here. Thank you for attending our meeting to announce the results of Grupo Panvel. We always like to start our presentation talking a little bit about what has brought us so far. So when we look at our mission, vision, and values, they are all related to providing health and wellbeing. This makes it very clear that Panvel has this vision of having quality in everything it does.
Now, the third quarter that has just ended has brought through its numbers and accomplishments. It has brought this thing of quality. Looking into the future, it is very clear that in Q3, we have had a very good performance in all our business pillars. Number one, our group sales have grown almost 12%, reaching BRL 1.2 billion . Panvel sales grew in the same period, reaching BRL 1.1 billion in retail. Number one is the very strong comparison basis of last year, because in the third quarter last year, we still had a very strong benefit for the sale of medications in terms of prices, in addition to very strong sales of products for flu. Number two, it is important to stress, and we are going to talk about that further on.
There have been very strong sales here in the south of the country, especially in Rio Grande do Sul, which have definitely affected our sales potential. Regardless of that, when we analyze the sales numbers, considering historical numbers with our average growth since 2021, it is very clear that Panvel has kept a strong sales pace with an average growth of 18% per year. This was accompanied by another consecutive quarter of the market share gain, thanks to same-store sales and expansion. We delivered all of that increasing our share in digital, which has reached a record of almost 21% penetration, the highest in all pharmaceutical retail, increasing our base of customers, which is very important. It has exceeded 21 million taxpayer numbers that have been registered.
This aquarium of customers, as I like to call it, that we have been building month after month, is one of our main strengths. One of the other highlights is the capacity to dilute expenses, especially in stores and logistics, thereby accelerating a trend that we had been seeing in previous quarters. This work more than offset the seasonal compensation in our gross margin with an EBITDA of BRL 56.5 million, equivalent to 4.7% of the revenue. We can say for sure, without any mistake, that we are getting the results of the investments that we have made so far.
Despite all investments that we made and continuous growth, we have a low leverage of 0.8 x the EBITDA and a very robust balance sheet, which makes it possible for us to navigate with great confidence through the high interest rate times and with an economy that still shows some signs of slowdown. Once again, we have improved our cash cycle by seven days. This is one of the main strengths of Panvel in pharmaceutical retail. Looking at all these elements with good operational and cash results, we have delivered a net income that has grown more than 15% in Q3 once again, making Panvel stand out in the Brazilian reality. Looking at all our deliverables, we are very proud of the fact that all commitments that we expressed in 2020 are being delivered either in the form of sales results and governance.
This reinforces our commitment and also increases our responsibility for future quarters. Now, moving further on, and those of you who have been watching our conference calls, just know that we like to insist on this. I am going to tell you about what is the main strength in terms of consistency of Panvel. This is our pattern. If we look at this over 10-year history, our company is more than 50 years old. You can see that we have a CAGR of 14.6% until 2022, very robust. More recent years drive this average up. If we look the nine months of 2021 to the first nine months of 2023, you can see that the year to date CAGR is reaching 17.5%. This average is going up. This is going to eliminate base oscillations that really took place between 2022 and 2023.
Another point that I like to remember. We have never reported a loss, and we are very proud of that to say that we are consistent, solid, and we are very innovative. This is all the brand mark of Panvel. Now, moving on. In Panvel, so on slide number five, you can see Panvel has grown 10.7% in this period over a very strong comparison basis in the third quarter of 2022. We had grown 26% over 2021. Also, as a reminder, this revenue last year was driven by a repricing of more than 10%, and the sale of tests and products related to flu, cold, allergies, and infections, something that did not happen in 2023. The CAGR of the third quarter of 2021 to the Q3 2023 was 18.3%, very much in line with the CAGR that we showed in the previous slide.
I'm sure it was not easy to get to these numbers because, as I said, we have had very strong rain in our region. But even so, we could exceed our goals and keep a very strong pace of growth. Another important thing is that the growth was once again above the average of the market. This combines the average sales per store as compared to the other players in the region. The chart on the right-hand side brings the numbers from IQVIA comparing Panvel to other drugstore chains in our region. Something else that we always like to tell and to share with you, one of our most important indicators is the increase of average sales per store. So it's above BRL 600,000 . To be more exact, BRL 628,000 , despite all store openings.
We mustn't forget the fact, which is very important, we are still keeping and increasing average sales per store. Now, here we have same-store sales and mature same-store sales. We must remember the comparison basis. We grew 7.1% in same-store sales and 3.8% in mature stores in Q3. Now, when we see the average growth of the past three quarters, which is something that we like to show you can see that we have an average higher than 12% in terms of same-store sales average growth and more than 8%. These two numbers are well above the inflation and just reinforce the productivity gains, something that is also present in this quarter. Now, going to slide seven, talking about expansion. In Q3, we opened 12 stores.
Since 2022, we have a much more consistent pace of openings every quarter, which makes it possible for us to make the most of each asset. We are very happy with the ramp-up of the stores that we opened more recently, and this makes us confident with our execution capacity and to move on with our expansion plan. I would also like to draw your attention that we have the highest market share in terms of our maturing stores. On one hand, obviously, this puts pressure on short-term results. On the other hand, it's a guarantee of growth in the mid and long term. This quarter, and this is also variable, we transferred one point that was old for a new point, according to what we've been doing in terms of optimizing the return of our assets.
We think that these movements are necessary, and they are very healthy for our business. Further on in the presentation, we'll talk about the return of the stores, but numbers are very robust in Q3. As a consequence of the good sales performance and also our expansion, on slide eight, you can see that the company's market share is still growing, has reached 12.1% in Q3, an evolution of 0.1% over the third quarter last year. Respecting all our competitors and each one is competing here in the south of Brazil, Panvel once again shows execution consistency above average. It's the fourth quarter in a row that we win market share in our region. We've been gaining market share both in medications and non-medications. It's a consistent, well-balanced gain.
Of course, we are more focused on the states of Paraná and Rio Grande do Sul, but Panvel has always been adding value in its brand. One of the main pillars that we have for everything that we are executing in terms of growth of sales and customer base, for sure, this has to do with our digital. Numbers are very clear. Panvel is the benchmark of the entire pharma retail. In the third quarter, we had a record of almost 21% of total sales, a growth of 43% over last year. Growing over such strong basis indicates that we are effectively making the most of it time and each opportunity to make our customers increasingly more digital. The sales level is very much related to the customer experience in our channels and our last-mile delivery strategy.
We are the fastest in pharma retail in Brazil, and we are still investing in processes and technologies to deliver things even faster. We like to share with you and talk about the evolution, but we have more than 45% of all our deliveries have been made within up to 60 minutes. As a reminder, this number doesn't include click and collect. This is just deliveries made to people's homes. To make this even better, after October, we have made it available in the capitals, the option of Turbo Panvel deliveries. This is an absolute success, and we'll be able to talk a little bit more about this further on. To give space and support all of this, we have 161 delivery stores, nine mini DCs, and we keep our service levels in terms of on time capacity, on time deliveries capacity is also very high at 97%.
This is not related to the increase in the download of our app. We have increased our base by 56% as compared to last year. This is a major effort that the company is making. The best of all here, is the best indicator, the MAU. Today, we have 1.6 million active users in our app and in our website. Our MAU has a great number of 43% of the bases. It's growing faster than our download bases. Here, it's been a while that we've been going through a virtual cycle when we have more revenues and more customers. I'll give you more details about this. Moving on, we mustn't fail to speak about our Panvel Clinic. It's a space in our virtual and physical stores with many clinical services or medical services.
Drug stores are a reference in services, especially for vaccinations and tests. It's been a while that we're dealing with this challenge very seriously. As you can see here, we've been keeping the absolute leadership in this market in the south region. In terms of pharma services, we have almost 22% of market share in the south of Brazil. In vaccines only, we have almost 50% market share. We've been growing. We have lots of space to grow. RDC 786, the resolution by the ANVISA, the Brazilian Health Surveillance, helps us to regulate the performance of clinical tests in the pharmacies and opens an avenue of growth that is even clearer in terms of services. We are sure that drug stores have all conditions of being a key piece in the system, either because of convenience or capillarity.
And the other health chains do not have this, and we have such robust numbers in all this leadership. This is a competitive advantage for Panvel as services become an increasingly more tangible reality for all our customers. On next slide, in ending our conversation about sales, this is another pillar we are very proud of, which are the Panvel products. This is related to brand and margin, and Panvel is the only drugstore chain in Brazil where customers take our brands to their homes. in Q3, we have reached 7% of the total sales of Panvel sales, including medications, a growth that is higher than 18% as compared to last year, and a share of 17 % just in hygiene and beauty products. We are the absolute leaders in the Brazilian drugstore market when we talk about private label.
You will see that previous quarters were affected by a strong comparison basis in products related to COVID, such as, for example, masks. We are still growing. We are growing with Panvel product, but the basis did not make it so clear. We still have many launches. There are many new things to launch with our brand. And 27% of Panvel product sales in this quarter are related to products that were launched in the last 12 months. So our launch strategy is very effective and very successful. Another very important piece of information, and we like to stress this market dominance and leadership. When we look at the market share of Panvel products with all private label products sold in the pharma industry, we have a 45% share. So we are completely over share as compared to our natural share.
This is an illustration of our success, and we have been increasing this market share year after year. So Panvel products are still leaders and expand their leadership in the private label pharma market. And in closing on this topic, we should remind you that we have more than 1,000 SKUs. This is a very important strategy for our gross margin, and we have at least 6 percentage points above our normal share in terms of hygiene and beauty products. And about one-third of Panvel brand products are manufactured by our industry, Lifar. So this verticalized strategy assures quality and a higher margin in the entire chain in the company. On this slide, when you have more time and you want, you can see some pictures of Panvel products, some new products, some lines that are already well-known.
This is just a snapshot of the very successful products that we have. In closing the entire virtuous cycle, talking about the physical and digital strategy and sales growth. Every quarter, we saw customer satisfaction levels. Here we gather the main service KPIs that we monitor. Our NPS closed the third quarter at a very high level of 82 points. It has grown as compared to the last quarter, and we still have the best assessment in pharma retail in Reclame Aqui, with a score of 9.1. And we are also the best-assessed app, both in Apple and Google stores. So these indicators make us very proud, and we monitor them closely, always with an eye at the customer. We will talk about gross margin. When we look at slide 14, you can see that in retail, gross margin reached BRL 330 million in Q3 2023.
The pressure on gross margin has a direct relationship with the comparison basis, because as we had a medication adjustment that was lower than last year, we have also invested less in the medication account. The price-changing effects in 2023 are limited to the second quarter of this year. On the other hand, we accelerate the sales of some very important categories in hygiene and beauty. Hygiene and beauty is one of the highlights this quarter, but there are some categories with these lower margins, such as it is the case of products for children. Panvel margin is still at very healthy levels, and in the future, we have great growth levers for the share. Can be hygiene and beauty, generic drugs, Panvel products.
The levers are there, and Panvel will pursue keeping or increasing the gross margin that we think it's very healthy already in our industry. Now moving on, looking at expenses. This is one of the main highlights this quarter. We can see in sales expenses the results of all actions and investments that we made in previous quarters. Following the already observed trend in other quarters, expenses account for 21% of the group's gross revenue. Expenses in stores have contributed to this, and also logistic expenses have contributed. We're going to continue to capture this gain. This is here to stay after many years of investment. Sometimes because of productivity gains and a lower inflation over an inflation base that was high in 2022. As to administrative expenses, we keep our financial discipline.
Administrative expenses had a very specific growth, 2.5%, with a lower operational leverage and investment in some important structures. Over time, we are going to go back to our historical levels, and we are still a benchmark in administrative expenses in our industry. Now, when we talk about sales gross margin expenses, now we have the income according to EBITDA. Our adjusted EBITDA closed the quarter at BRL 57 million, equivalent to 7.4% of the revenue, a growth of almost 17% over last year. With good management of the gross margin and also our expenses, we are able to expand our EBITDA margin. In year-to-date numbers, our EBITDA margin went up 0.1%. All these elements in our operation, a good mix and good dilution of expenses, will be present there, and this reinforces our positive vision that we'll continue to expand our margins in 2023 and 2024.
Here there's a highlight that is very important. To increase margin as we've been increasing, either in the quarter or year-to-date numbers with a very strong basis in 2022, this really makes us very confident that we are on the right track in terms of capturing value for all our stakeholders. Complementing the EBITDA vision on slide 17, you can see the retail EBITDA. This is equivalent to the contribution margin of the stores taking out depreciation. Consistency is even clearer here. This is another of the highlights of the quarter. This retail EBITDA metric demonstrates the result that is provided by stores only. In Q3 2023, it was 10.8%, a growth of 0.5 percentage points over the third quarter of last year. In nine months, we evolved 0.2 percentage points, as I said before. We are accelerating store opening.
We've been opening an average of 60 stores every year. Since our follow-on in 2020, we have opened 200 stores, so our base is much bigger. Put all the space in maturations and still improve results. Again, this is a very strong indicator that we are on the right path to unlock value for the company. Lastly, when we look at our DRE and P&L, and considering everything that has been said so far, our net income in the third quarter, the adjusted net income, has exceeded BRL 27 million this quarter, with a growth of more than 15%, which accounts for 2.2% of our gross revenue. The strong operational performance, combined with efficient cash management that you're going to see on the next slide, has made this indicator to grow more than sales.
Panvel Group effectively is positioning itself as one of the most profitable pharma retail agents, which reinforces our operational efficiency. I would like to take the opportunity to thank our entire team that worked so hard to reach all these numbers, always centered on customers. This quarter, I have special thanks because everyone worked hard as ever to offset the strong adverse effects of the strong rains in the south region of Brazil, and all the help to our communities in everything that was possible. Congratulations and thank you to all our team. Now, on the next slide, another highlight of the quarter. We had the opportunity of reducing our cycle by seven days as compared to Q3 last year. In addition to keeping a very well-balanced inventory level with very high service levels, we improve quarter-over-quarter the relationship with our suppliers.
We still have room to get even better in 2023 and 2024. Another highlight is our capital structure that is very solid. We have one of the lowest de-leverages of the market, 0.8 x our EBITDA. We think that low debt makes us stand out in the pharma market and in retail as a whole, and makes us very confident to keep growing in the future. This makes a huge difference in this high interest rate scenario. We think that interest rates will remain high for quite some time. This gives us some breath for us to keep on investing in stores, logistics, technology with a low impact in our bottom line. Because of our financials, all our numbers are very strong. In closing this more numeric phase, now we are going to highlight some of our strategic pillar.
Now, this quarter, we are going to talk about some of those. We like to talk about the quality of our expansion. On slide 20, it's not new that physical stores are and will remain the gravitational center of our business. It's the pillar of everything that we have. It's because of our sales, last mile. Being successful in expansion is key for other pillars to also have success. Our expansion plan is in line with our planning, with a focus in the south region of Brazil, with low income and standard models. From 2021 to 2023, the predominance of standard and low-income formats is absolute, making it possible for us to provide services to classes A, B, and C, too. More than 70% of our openings were distributed between the interior of the state and metropolitan regions.
When we look at the cities, and this is another interesting piece of data, we want to give more visibility of how we are distributed in the cities in the south region. As known, we have a very strong presence in large cities with more than 200,000 inhabitants, but we still have very good opportunities in cities with more than 100,000 inhabitants. The quality is in our numbers. Every quarter, we like to show the numbers, the numbers on the stage so that in order to make very clear for everyone following us, all our shareholders, where we are investing our money. When you look at the numbers on this slide, once again, we can tell you that we have a correct expansion strategy.
When you look at retail EBITDA, then you see a stair of seasons, it's continuing improvement of year after year when we are improving the efficiency of our stores. Naturally, in the long term, this will drive up the contribution margin, the EBITDA of the company up. This is one of our main objectives. When we look at ROIC, same conclusion. The basis for us is always the year of 2019. This is when we defined our return goals for each one of the stairs. As you can see here, each season, we exceed the goals that we have established more and more. Just as I said that we were very happy to see that every retail EBITDA has been growing and improving despite the record number of sales in maturation, same thing applies to ROIC.
We have more than 200 stores that were added to our basis recently, and we still have an average ROIC greater than 40%. Now, in closing this vision of our physical stores on the right-hand side of the slide, you can see, and we always show this, you can see the results that we've been obtaining for each state where we operate. If you look our previous presentations, you can see that these numbers have been growing up. The states of Paraná and Santa Catarina gradually closed the gap as compared to Rio Grande do Sul, which is the main benchmark, most mature base, and São Paulo, too. We have very high average sales, and quarter after quarter, our margins improve. We are on a very good track.
Now in closing this part, we would like to show you an IQVIA chart, which is very interesting, that reinforces the message of the healthiness of this season. You can see Panvel sales performance compared to other players in our region for each year of life. Look at all our average store sales, regardless of their maturity level, have sales and mature faster than the stores of the competition. Just reinforcing the message that the previous numbers conveyed. Question is, what does Panvel do with quality that has assured all of this? I am sure, and there is no shadow of a doubt, that when we talk about expansion and market share gain, we are talking about our customer strategy, capture and loyalty of customers. Our base is increasingly richer. Results are clear and clear.
We have a base of 21 million taxpayer numbers that have been identified and clusterized. This is a unified base or database. This has grown more than 46% last year, and this factor really reinforces our confidence in our long-term results. Panvel right now is very much focused on increasing our customer base. This customer base is a pool where our tools make it possible to activate and make them loyal at increasingly lower costs. Look how successful we are. When we look at our active customer base, which are the customers who have bought at least once in the last six months, this base has grown more than 8% this quarter as compared to last year. The active customer base was accompanied by an increase in frequency, which is very important for our business. Having more customers more frequently creates a basis of loyal customers.
Loyal customers are the people who buy with us at least once every two weeks. They come to our stores at least 3x more than our regular customers. The loyal customer base has grown almost 7% year-on-year. Something that lies behind this building of loyalty, this is related to the customer digitalization. We monitor closely the omni customers. They are the definition of digitalized customers. They buy from more than one channel. They have the app. Look that the space has increased. When we have digitalization, good work at the stores, that we increase the recurrence of customers, increase our asset base, increase our loyal base, omni customers base, in order to increase our sales more and more. This is very much related to our digital agenda, which is an agenda that talks more and more about customization.
This is a way that there is no going back. This is one of the most important things for Panvel. Many investments have already been made, but we still have quite a few to do. All this digitalization journey that did not start yesterday. We have more than a 20% share of the digital sales. I would like to draw your attention to some very important projects that are part of this entire ecosystem that we have been preparing to make customers more loyal. For example, we have evolved greatly in our customized shop windows in the website that we have navigation purchase and the navigation patterns of each user. We have more than 10 window shops. In order to make them more loyal and increase sales, there is another project that we have been talking about for a few quarters, is our digital manager project.
This is an initiative to digitalize our employees. By using the platform, we transform store managers into digital influencers. This has a direct influence on community. We have more than 400 stores, more than 1,000 posts, more than 61 million impressions. This is related to our capacity and how much we have been growing with very interesting configuration. The digital manager is an aspect of customization related to the regional work. Each store will be able to talk directly with their customer base, the ones that are closest to the store. Another aspect of a customization that are many phases, this is a very long journey and very well thought of in terms of customer experience, goes through delivery modality.
Panvel customers have available to them the most wide-ranging menu of deliveries in the pharma retail, and they can change it and use it depending on what they need. In August, we have very successfully launched the new modality of Turbo Panvel delivery within 30 minutes. This is very clear. There is a demand from customers for increasingly more faster and urgent deliveries. This is another fundamental project to keep customers at the center of our decisions, and has been bearing very good results. Last but not least, this is related to Panvel Ads. This is our media platform, bringing together suppliers with our customers. The first phase of Panvel Ads has been going on since 2023, and many campaigns have been conducted. We have agreed on many campaigns with our suppliers to make good use of our base with more than 21 million customers.
I would like to share a very nice piece of news. We have launched the second part of the project, opening our platform so that suppliers can be directly in the tool, the products that are most relevant in the organic search. This is innovation. This makes Panvel equal to the leading benchmarks in the marketplace in general. We are well ahead of the pharma retail, and the first feedback of our suppliers has been very positive. Once again, Panvel has innovated, being the leader, starting first, but everything that Panvel does needs to have very good quality. We want to make our suppliers loyal and provide the best platform possible to generate gains. This is, for sure, another avenue of growth that started its journey in 2023 and has a very long way to go from 2024 onwards.
Now, changing a little bit the theme, but something that we always like to talk about, it is important to talk about our ESG initiatives. This quarter, we should highlight two very important factors. Number one, we had announced this in a previous call. We have launched in August, and we published our first sustainability report. This refers to the year of 2022, and it is helping us to make tangible everything that we have been saying and practicing for a long time. We can read, interact, and we hope that this material will also serve as an example for people, community, and other companies in order to assure sustainability. I like to say that the sustainability model should be much more related to collaboration than competition between companies. This is our spirit.
Another very relevant theme that we need to reinforce and thank once again our whole team, was the mobilization that the company had because of the weather events that affected the south of the country, especially Rio Grande do Sul and Santa Catarina. In addition to the many donations that we, Panvel, made directly in terms of products, resources, and services to many entities, including stores of the competition that were affected in the community. We were able, and we are very proud of that, we were able to mobilize the population of all the states, even in São Paulo, to a special issue of our Troco Amigo, the friendly change. We have collected more than BRL 1 million in cash donations in slightly more than 40 days. This is an absolute record. With these funds, we bought directly products and equipment to benefit the affected cities.
Once again, this would not have been possible if it weren't for the engagement of all our teams that felt the problems of all their communities and had the empathy and the energy to try and help them and to help the population that needed the most basic things. This is also a help. Let's remember our mission and vision. I am happy that Panvel, once again, could make a difference in the lives of many people. Now, going towards the end, we would like to share with you a little bit of our prospects. 2023 is now closer to the end, but we should share with you and try to summarize everything that we have said in this meeting and also gives you an idea about 2024.
Number one, as we get closer to the end of the year, we have been delivering very good results, even higher than we had expected. Many of the projects that we mentioned and the track record in strategic pillars makes us very confident looking into the future. The main points looking at 2023, we have kept a strong base in store opening, and we have a good prospects for same-store sales towards the end of the year. This is related to good digital CRM. All the work that we have been doing, all of this is in our center of our focus. When we look into categories also in 2023, we did very good work in a product mix with a highlight to generic drugs and non-medication products.
These non-medication products, for example, hygiene and beauty, convenience, they have always been Panvel's differential, and they will be increasingly more important from now on, just because of sales, but also to keep the gross margin. Here in expenses, this was very clear this quarter and was already present, not so clearly in previous quarters. We are still being able to benefit from the results of our strategy, and this will remain with us in the future. When we look at everything and see the increase in revenue that is very good quality, gross margin that is controlled at a high margin and expense dilution, obviously, this is going to have a positive effect in our EBITDA, whether it is the retail EBITDA or the company's EBITDA. This has been widely proved, and we will keep continuing to do this in our minds.
We will keep working on this level and also working to seek dilution of our debt level throughout the year, and our prospects remain the same. We expect to end 2023 with a lower leverage than we started the year. All of these elements that I have just mentioned to you, they are still present when we look at 2024. This is a very important message. All strategic pillar are still up to date. They indicate a good path, and all of them are being fully executed. This increases our confidence that we will continue to grow, to have productivity gains, and we still have the expectation of increase and expand our EBITDA margin from 2024 on. Now, in closing, I would just like to reinforce that everything that we have done and Panvel's execution capacity make Panvel a unique asset, both for us and for our shareholders.
Now I would like to take a break. I would like to thank you all once again for your presence. Now I and Roberto Coimbra are available to answer your questions. Thank you so much for your attention.
Thank you. We are now going to start the questions and answer session for investors and analysts. If you want to ask a question, please press raise hand. Then if your question has been answered, click on the same button again to take your question from the list. Wait while we collect questions. Our first question comes from Kelvin Dechen from Itaú BBA. Mr. Dechen, please.
Good morning, everyone. Thank you for taking my question. I have two. Number one, this year we had profitability pressures because of a weaker medication price adjustment. Next year will be impacted by the same adjustments. What are your plans to offset this problem next year? There is a good penetration of your Panvel products. So what do you think about this category? What can we think about the performance of the whole mix?
When we look at gross margin in 2024, in fact, our expectation is to have a price adjustment that is in line with inflation, and it will be similar to what we saw in 2023. But obviously the comparison basis will be healthier, so to speak. Panvel has done its homework with a mix involving both working with generic drugs and non-medications. Even though price changes were low in 2023, we were able to keep the level of our gross margin excess to 30% in year-to-date numbers. We are not seeing any changes in those lines next year. Much to the opposite, there will be some elements that will help us.
For example, we are going to recover OTC sales. As a reminder, OTC is a category that suffered a lot in 2023, also because of the comparison basis, because in 2022 there was the flu and many other factors. We are going to grow again next year, and this is positive for the margin. In generic drugs, we still have space in generics. We are still investing in generic drugs. We are going to increase participation, and we are going to see better results in the gross margin in the future. Now what you said about Panvel products, which are another important element. As part of our plan, Panvel products, we should see more participation in terms of hygiene and beauty. The share was higher than it was today. It was closer to 19%. Today, it is 17.4%. We reinforce this as we are going to have many launches.
This is a pillar which is key to us. We have been working a lot on the mini floor in stores, making Panvel products increasingly more evident with specific furniture, and we are sure that this is already leveraging it today. You can see that Panvel products is again growing more than the sales of the average, and this will still happen in the future. We have lots of space for that.
Thank you very much for your answer.
Thank you.
Our next question comes from Laryssa Sumer from XP. Ms. Sumer, please, you may ask your question.
Hello. Thank you very much for taking my question. I would like to talk more about competition. We saw a drop in share in Rio Grande do Sul for the second quarter in a row, and we would like to understand what has caused this. Are you going to do anything to defend the share in that region?
Great, Laryssa. Thank you for the question. Yes. This is kind of a natural movement. We already have a very relevant share in Rio Grande do Sul, and we have more space to grow in Santa Catarina and Paraná. We are really defending our space in Rio Grande do Sul. We have many stores to open. Our stores have a very good performance, and the competition, in fact, as they did before, are still opening stores in our region. Our expectation is to resume market share gain in Rio Grande do Sul in future quarters. The numbers that we have seen even now in Q4, in October, that has just ended, are an evidence of that. We are very optimistic that this is just a seasonal movement.
The fact is, in terms of market share, the main opportunities are in the states of Santa Catarina and Paraná. But I repeat, we still have lots of opportunity, especially in interior of the state of Rio Grande do Sul.
Thank you. Your answer was very clear. Thank you very much.
We have no further questions. We are now ending our questions and answer session. I am going to turn it over back to Mr. Antonio Napp for his closing remarks. Mr. Napp, please.
Once again, I would like to thank you all for your presence in the third quarter. As I said, I think that we have had an excellent execution of all our pillars. All our indicators have improved, and we are doing very well in Q4, and we are very optimistic with what we have from 2024 onwards. We are at an industry that is very positive, and Panvel really stands out in this industry because of its position and because of the strength of its brand. We are working in a good market, and we are very competent, so we believe we have lots of opportunity to grow.
Grupo Panvel conference call has ended. We thank you very much for your attendance, and we wish you an excellent day.