To the second quarter of 2022. Welcome to Panvel's conference call. This facility is being recorded and the replay can be accessed at the company's IR URL. The presentation is also available for download. We would like to inform you that all participants will be connected only by watching the teleconference during the presentation. After that, we will start the Q&A session when further instructions will be provided. Before moving on, I would like to stress that forward-looking statements are based on assumptions and beliefs on the part of Panvel's group's management, and also based on current information. Those forward-looking statements might involve risks and uncertainties as they refer to future events, and therefore depend on circumstances that may or may not materialize.
Investors, analysts, and journalists should have in mind that events related to the macroeconomic scenario, to the industry, and other operating factors might lead results to be materially different from those expressed in these forward-looking statements. Here with us, we have Mr. Júlio Mottin Neto, CEO, and Mr. Antonio Napp, CFO and IRO. I would like to turn the floor over to Mr. Júlio Mottin Neto, who will start the presentation. Over to you, Mr. Júlio , and may carry on.
Well, first of all, good morning. My mic was muted. I will start again. I apologize. Good morning, everyone. It is with great satisfaction that I am here once again to share results for Q2. This has been a very interesting quarter for us. It brought about a strong belief that we are on the right track. Of course, there are characteristics which are typical of second quarter, which is a price readjustment for the pharma sector. But we see several structuring initiatives being put in place, which we have been working on for the past two years, and which brought about significant results.
Again, it was a quarter in which we solidified, if I may, the strategies I have put in place. We grew sales in more than 25.9% in retail, a gross margin in retail also quite solid, of over 31%, and an EBITDA growth of more than 40% vis-à-vis 2021. Reminding you that our base for 2021 was good at the start. Over BRL 1 billion in gross revenues for the first time, the second quarter, which reflects that this will be a year where we will achieve more than BRL 4 billion in sales in 2022. Digital also going full steam.
We have been continuously improving all digital platforms. Consumer experience has been very fluid, very seamless. Our delivery has been increasingly fast and agile. Our project now is to deliver in less than 30 minutes for some SKUs in certain places. So convenience, for us, is an increasingly important component. Last year, we launched our marketplace, as promised, and the marketplace is already leading to sales. And we had an opening of 17 stores in the quarter, which shows that our expansion plan moves on. For the past 12 months, we are talking about 65 new stores being opened. In the first half of this year, we closed at 32 stores. A robust level of growth, quite strong, but without leaving aside quality, which is in our DNA. Panvel has always been a place where consumers and clients have good service. They find what they are looking for.
Throughout the period, we also were concerned in investing both in people and in culture and maintaining our culture. We invested also in logistics, and those investments take our NPS to a level of 80 points. 80 points in a company which is growing, expanding. Strong expansion, but expansion with quality. Antonio Napp, our CFO, will carry on with the presentation. He will give you the highlights of Q2, and then we will be available with our cameras open to address questions and comments that you may have. Thank you very much. Over to you, Napp.
Thank you, Júlio . Good morning, everyone. Thank you for being here. Taking up the baton and moving on with the presentation, I would like to share with you a recurring topic for us, which is consistency in growth. Those of you who have been following us, that is a standard that we have. The gross margin for gross revenue has been growing compoundly at 40% until 2021, way above inflation. For 2022, led that average upwards. In the first half, we grew by more than 22% in CAGR terms.
A performance in a shorter period for 2019, a year which was pre-pandemic and pre-follow-on. If we take the second half of 2019 and compare to the second half of 2019, our CAGR is close to 70%, as the slide shows. Strong number. Our company has never presented losses in its history. We are proud to say that consistency, solidity, innovation are trademarks of Panvel. Speaking of sales on slide number four, we would like to reinforce the strong performance in sales in the second quarter. As mentioned, Panvel grew by 25.9%.
That growth was above the market average, and it is driven not only by our expansion in stores, but also an expansion in average sales per store above other players. On the right-hand side of the chart, you can see comparative data vis-a-vis other drugstore chains in the quarter. We continue to increase average sales per store. In the second quarter, we reached the level of BRL 600,000 per month, a growth of 16% when compared to Q2 2021. In June alone, we reached BRL 620,000 in average sales per store. In practice, we are already anticipating a target which we expected for the next periods. We cannot forget, we have reached that level of average sales even amidst a growth in our number of physical stores.
When we look on the next slide, the growth of same-store sales and mature sales growth on slide number five, numbers are also very robust. Once again, sets us apart in the pharma market. A growth of 19.2% for same store and 15.8% for mature stores in Q2. Way above inflation across all categories we sell in our stores. In terms of expansion and moving on, we have opened 17 stores in Q2, and we broke a record of 32 stores in the first half of the year. Unlike previous years, we now find a more constant pace of opening new stores every quarter, which makes our lives easier and allows us to reap better results from our assets.
We are quite happy with the ramp-up of the open stores, and that leaves us very comfortable to say that we do have the capacity to execute our expansion plan. In this quarter, we received three mature stores and transferred three old stores to new stores. We are optimizing the return of our stores. Down the road here, we will look at the results and returns per state. I can anticipate they are all strong, robust numbers. As a direct consequence of an increase in average sales and success in expansion, on slide number seven, we can see that the company's market share continued to grow, reaching 11.9% in Q2. An evolution of 0.4% when compared to Q2 2021, growing across all states in the southern region of Brazil. Once again, Panvel shows consistency in execution with yet another quarter where we gain market share consecutively.
A strong growth in medications in the south. A special highlight for generics that speaks directly to providing health and wellbeing to the population, which is totally in line with our strategy. As we continue to invest in following up the journey of our chronic patients and generic meds, and also corporate Panvel plans. Moving on and talking about digital on slide eight, our numbers make it clear that Panvel continues to be a benchmark for the pharma market. In the second quarter, penetration in sales reached 60%, a growth of 0.2% when compared to Q1. A very good position when we take into account that in this period, we had a strong growth in the client flow at physical stores. That share we are showing, we are not taking into account WhatsApp sales, which are quite relevant at this point.
That sales level is directly linked to two things. The quality of experience in our channels and with our last mile delivery. We continue to have the fastest pharma delivery time in Brazil, and we are investing in technology to deliver even faster. I have a chart here that shows clearly the evolution of the share of sales in up to 60 minutes, in our case. We moved from a participation of something close to 20% in January this year to a share of something close to 40% in June. Deliveries under 60 minutes. Nobody in the sector can do that at that level. One of our objectives is to maintain that competitive advantage. Soon, as Júlio said, we will be launching an option of 30 minutes for some SKUs and some locations. For those patients who need that level of agility.
We do all that at a 97% level of service. Another important indicator. To do that, we have 130 delivery stores and nine mini DCs, our dark stores. Not to mention the click and collect in 90% of the stores. We continue to grow our download numbers for our app, 2.6 million downloads at the end of the second quarter.
To close the digital chapter, another important point I would like to reinforce that all that growth, in the case of Panvel, is not offending margins. Using our existing structure for the stores, we are able to accelerate sales and improve productivity.
That is important. We are not using digital to convert in-store sales. That is a characteristic of the sector, as we have noticed. Our digital does not have a commercial policy, which is quite different from that of the stores. So there are digital platforms which are inflated because of that conversion at the point of sale. That is not our case. It is much more sustainable to develop a digital strategy for the long run, where convenience, service levels are the decision-making factors.
Perfect, Júlio . Thank you. Now, moving on to services and talking about the Panvel Clinic, which is another strategic pillar that we have. It is a fundamental key for all our health ecosystem, and we continue to position ourselves as leaders in service delivery for the southern region. in the second quarter, we expanded our rooms, and today we have 328 clinic stores with 42 rooms. 85% are able to sell vaccination. We have reached 44% of market share in vaccines in the southern region. I can assure you that there is room to grow on that front.
When we talk about COVID testing, we have reached over 32% of market share. With that, we have almost 1/3 of the market for the service market in the south, 3x our share in the region. As expected, the reduction in testing reduced the share of services in our sales, which reached 2.9% of participation of penetration. Still, we remained as the best service share in the retail, confirming our mission of providing health and wellbeing. When people talk about the future of health hub, we are already making a difference in the present. We are monetizing all our projects and sowing the seeds to be reaped down the road.
Moving to slide number 10. Let us go back to the pictures. Yes. Yeah. It is only numbers for the rest, right? Let us make the most of the pictures. So those are Panvel products. This is another fundamental pillar of our strategy. For margins and for brand, Panvel continues to be the only network, the only chain, where consumers may take the brand home. In Q2, the share of Panvel products reached 6% of the total sales and 17.9% of share in cosmetics. Products that compete with any other brand in the industry.
Our own brand, which competes eye to eye with other brands. It is a quality, it is not a cheap, inexpensive, or seen as popular. Good margin, good prices, and good competitive advantages. For this quarter, we have observed a drop in some items that are linked to the COVID basket, especially masks, face masks. If you remove face masks from the base, sales of Panvel products grows by 22% in the quarter. That seasonal dynamic should be the same for the remaining of the year.
To illustrate that effect, in Q2, over 20% of sales of our Panvel brand are made up of products launched in the past 12 months. In other words, we are always launching and renovating our inventory. So today, we have over 950 active SKUs. We remain as a strong brand from the point of view of loyalty of clients. That is a very important loyalty tool on brand. Gross margins also, our margin sits around 6% above the average. Also, we like to reinforce that approximately 30% of the items which are Panvel products are made by our industry. So with our verticalized strategy, we can assure quality and superior margins across all our private label operation. Let us move on . And talk about NPS, customer experience. A virtual cycle of all that strategy, digital and physical, closes or comes to a close when we analyze customer satisfaction.
Here, there is a summary of the main criteria. Our NPS closed Q2 at 80 points, maintaining the high level of the previous quarter, even amidst an increase of client flows in our stores. We continue to have the best evaluation from the pharma retail here with 8.8 at Reclame Aqui, and we remain as the best app for App Store and Google Play. Best ranked. That makes us all very proud. That is our focus on the client being translated into numbers. Let us go a little deeper in numbers and talk about our gross margin on slide number 13.
Gross margin was one of the highlights of the quarter. In retail, it reached 31.1%, a growth of 0.9 percentage points when compared to Q2 2021. That performance brings about some seasonal factors as price adjustments, but also embeds other structural factors relative to a more efficient management of pricing and products. Product mix with a growth in generics, OTCs, and of non-drug categories with healthier margins. The growth in gross margin exceeded our expectations by far and was important to overcome inflationary pressures on our expenses.
That defensive characteristic of our sector when it comes to inflation, it is something that needs to be highlighted so that all investors and analysts understand throughout time, we are able to offset inflation through a mechanism of readjusting prices. This should also be taken into account in mathematical models and results projections in the long term, both for Panvel and for the industry. How do we analyze our expenses now on slide number 14? The strong operational leverage allows us to mitigate the inflation.
Factors and the expansion of stores. It grew 0.6% on expenses when compared to 2021 Q2, in line with what expected given inflationary pressures and expansion. In addition, we had non-recurring pressures of maturity of some merchandise because of investment in inventory in the past quarters. At the same time, in case of G&A expenses, the financial discipline was strong. We reduced expenses by 0.1%, even our strategic themes. We executed the best percentage G&A in the sector. It is important to reinforce that expense control and high productivity continue to be part of our DNA. When we analyze KPIs for productivity, for example, employees per store, we continue to be a benchmark for pharma retail. We have maintained that historical level of productivity in the quarter with a lot of focus on quality of service in a scenario where we have more people coming to the stores.
After talking about sales and margin and expenses, we get to the results. Our adjusted EBITDA closed the quarter at BRL 56 million, equivalent for 5.3% of gross revenue, and a growth of 40.7% vis-a-vis last year. That is strong results across this inflationary scenario, and growth in technology and in stores is yet another indicator that we are in line with our long-term planning, becoming a stronger, more profitable, and bigger company. How do we talk about, on slide 16, retail EBITDA, which is the contribution margin from stores minus depreciation. The consistency of execution becomes even clearer. The result was 11.3%, a growth of 0.9% when compared to Q2 last year. To be accelerating the opening of new stores in the last eight quarters and also growing results are clear indicators of the success of our mature stores, and the ramp-up of new stores also performing well.
In line with all that has been said, we reach to adjusted net income on slide 17. Net income reached BRL 28 million, or 2.6% of revenues, a growth of 16% vis-a-vis last year. We had a strong operational group result and an impact on financial expenses in the period, an effect which was already expected. In any event, Panvel Group continued to position itself as one of the most profitable operations in pharma retail, with a net margin that reinforces our excellence in operation. I'd like to take the opportunity to thank our team, who worked hard to deliver all those strong numbers with a focus on the client. On slide 18, we can see an improvement in our cash cycle. We have evolved in the process of normalizing our inventory after a peak in the first half of 2021. We are also improving our average debt term.
With that, we have improved our cycle by seven days in the quarter when compared to 2021. There is room to grow, both in inventory days and in supplier terms for 2022. We continue to have that positive view in terms of our cash cycle. Also important to highlight is our solid capital structure. We closed the quarter with a leverage level of 0.7x our EBITDA, which will be the peak of the year. We understand that cash position is very conservative, but brings us assurance to continue to invest in growth going forward. It makes a difference in a scenario where we have high interest rates, as is the case today. Lastly, as we finalize this phase, as we analyze our indicators, both financially and operational, we'd like to share some of our strategic pillars on slide number 19.
You have seen this slide before, but we like to take the opportunity to reinforce some of those concepts and deep dive in some of those which we think are more important. Let's start with the expansion of physical stores on slide number 20. It's not new that physical stores is, and continue to be, the core of our business. It's the main pillar of them all, be it because it's convenient, because it provides support to last mile delivery, or be it because of lower CAC. Growing geographically is important to support all the other pillars. Our expansion plan is in line with our 2025 plan, with a focus in the south, a focus on a popular hybrid format, and in the countryside of the three states. For 2023, we have already reached half of our locales, localizations, prospected.
We have been working carefully, working based on data, as we open new stores in the south. Today, we're present in 136 cities, and from 2020 to here, over 29 new cities. That's very interesting. As we work to have our brand recognized in all regions, we now see that the performance in sales in stores open in new cities, in the cities across the three states, those sales are close to the sales performance of stores opened in existing cities. That's a strong indicator that we are on the right track. As we analyze the numbers on slide 21, we can safely say that we are delivering great results across all states, especially when we analyze performance of Paraná and Santa Catarina, which are regions that have a great footprint of maturing stores.
We are closing the gap year-on-year with the stores in Rio Grande do Sul as well. The operation in São Paulo, even with fewer stores, is improving significantly and fast. When we analyze the performance of our stores per year, as you can see on the left-hand side of the slide, when we look from 2018 through 2021, the numbers speak for themselves. We have returns on invested capital, which are quite robust and very much in line with our strategy for every stage of the stores. Starting with more than 90% return in the first year of life, and reaching more than 40% of return after the third year. The maturation of EBITDA also shows, year- after- year, a trend to improve our results throughout time, as those vintage years will help us push the average up.
All that care with the return also is reflected in the decisions when we transfer stores. We are constantly revisiting our base stores who have been around for decades, but looking for opportunities to optimize those assets and optimize sales through new locations. That's a very healthy renewal trend, which we have been working on for a long time as you know, and whose results are quite tangible. As important as that, when we analyze our market share in those states, the opportunity continues to be obvious. We have space to grow with good results and very low level of cannibalization. That's also go for the Rio Grande do Sul state, which continues to offer opportunities for us. Panvel has crossed all frontiers in the southern region, and we are ready to advance across all the other states.
Through this careful work, we have made the brand known and respected across the region, and not only in its original state. Moving on slide 22, I'd like to update you on our ecosystem view, which is also a very recurring topic for us and for the sector. For us, the health ecosystem is a natural evolution of Panvel's business. If our mission is to provide health and wellbeing, and if we have clients and customers at the core, it's only natural to deliver increasingly more services and products digitally and physically. It's not a promise or a view of the future. Panvel already has a health system with real initiatives, which are already leading to results, more flow at the stores, and which already makes clients' lives a lot easier.
The first pillar of that ecosystem, I've talked about that early on in the presentation, is our Panvel Clinic, gathering all our services. Pharmacies have become service providers, especially for vaccination and testing, and we are taking that very seriously. We move on and trying to offer increasingly more options for clients going way beyond vaccination and COVID testing, and we already lead the pack in the south. In our mind, drugstores is the ideal place for primary care and for preventive care. With that in mind, lots of good things to come ahead. We'll go deep in our lab, remote test labs, or TLAs, and work with data intensively. That's an important frontier to be conquered.
Think about a unified health portfolio, an electronic medical record where clients have all their data at the palm of their hand, making their lives easier in terms of recurrence, of treatment, and follow-up. We are sure that the way to speed up that process are establishing partnerships. Several regulatory advances being discussed and drugstores can play a fundamental role in the ecosystem because it has a good footprint and it is convenient, something that the other links in the chain do not have. When you talk about partnerships, you cannot forget our Panvel Saúde Empresarial, which encompasses all the specific and special medications, patient management, and public markets. That relationship, which is B2B2C, is a strength of Panvel, and it is important to remind you that over 40% of our sales already goes through those partnerships based on companies and based on health operators.
We are investing heavily in digitalizing all those relationships through websites and exclusive apps and seeking out more partners. Panvel Saúde Empresarial is unique in the market to offer an integrated set of services, including monitoring, follow-up, and the sales of products directly to the health operator through our wholesale front. That structure already brings about concrete results, and it was a key component of our growth in sales observed in the quarter. In this last period, this last quarter, the sales of drugs, special drugs, grew by more than 60%, and Panvel already has a fourth of that market in the south, according to official data. It continued to establish new partnerships, which will further increase our client base in the coming periods. Speaking of clients, you cannot forget another fundamental pillar, which we call CRM.
Following up the client journey for patients who are chronic patients with continuous use medications. We have invested heavily in the past years in data science and data analytics with the objective of understanding and increase loyalty on the part of those customers. Always, of course, respecting data protection laws. The results are clear. A base of over 13 million individuals, duly identified, duly clusterized within a database, which is truly unified. That is one of our main differentials. With this unified base, we are in place to follow up customers' journey and to end especially for those who are chronic patients. As for the chronic journey, we launched in 2021 a series of projects that continue to mature with the objective of creating loyalty and provide savings to clients, as you can see on slide 24. For thus, we launched our continued use program, which is the PBM.
In our partnership with labs, today we have more than six SKUs where we provide special conditions, special terms for something like 400,000 clients with a very high conversion level, 90% of conversion in those first few months. We can clearly see a growth in market share across all those products which are participating of our PBM, indicating the success of that loyalty program and of increasing customers' basket. It is still under the health ecosystem. We need to talk about innovation, which in Panvel Labs has a very important landmark. Four years down the road, Panvel Labs has mapped out hundreds of startups, has connected hundreds of them. Several of the solutions we have been seeing throughout the presentation today have been touched upon by those.
We are in the final stretch of our first acceleration program, through which we are working with six companies whose apps will be used by our businesses, with the possibility of investment also coming from Panvel. Speaking of which, I would like to share a new thing with you. We have just structured and will soon launch our corporate venture capital, which we call Panvel Ventures. We are now officially prepared to take yet another step in this ecosystem, always looking for solutions that dialogue with our core businesses, with a pragmatic view towards generating profits. We want to be leading the pack of health techs to understand the new demands coming from that market. Soon, we will be able to share some more news with you on that front.
Speaking of new things, Júlio mentioned early on in the presentation, on slide 26, I would like to share with you the delivery of yet another important project for Panvel. We did a go live of our marketplace just now in June 2022, just as we had scheduled. It is already on our site. It is running on our app as well. Hundreds of exclusive SKUs and another thousands of products expected to join the app until the end of the year.
We are already doing sales organically, and we will soon start actively announcing that platform. Everything that Panvel does is focused on a very curatorship, very careful curatorship, and we are responsible for the whole client journey. You do not simply call the companies' SAC, and they will direct you to the seller. Our experience needs to be preserved. That is our brand, and that is what touches upon clients' perceptions.
We are quite pragmatic, which is to implement the basket case or the basket cart, the shopping cart of customers. I would like to take the opportunity to reinforce our gratitude to all the squads dedicated to this project, and that allows us to have an important and quality platform delivered within the scheduled timing. Lastly, getting close to the end of the presentation, I would like to reinforce the message that we are quite satisfied with the numbers we have reached. We are maintaining a very optimistic view for 2022. Panvel has been doing its homework and reaping the benefits. Growth in sales that we have observed in this quarter comes from that. We have seen that when I talked about CRM. But just to reinforce, our active client base has not stopped growing.
Only in the last quarter, we grew by 70%, with an increasing recurrence of 3% in the period. In other words, we have new clients in our base, a base which will not stop growing, and our older clients are recurring or coming back more often to our stores. We are also evolving in digitalizing stores and clients, as we have on the right-hand side, the omni clients, those who buy both physically and virtually. They have reached 10.5% of our total base. Our strategy of focusing on meds has also brought more recurrence and more sales. The special care that we have with our inventory has allowed us to navigate consistently with a very good level of inventory. That is a virtuous cycle that feeds back in itself, and our expectation is that this movement will continue.
We are in this half of the second quarter now, and sales pace continues as we had in the previous quarter. Third quarter now, sorry. This was yet another quarter where we managed to balance growth, investment, innovation, and a solid capital structure. We carry on our planning for 2025 with the objective of doubling sales until 2025 and improving our margins. I would like to thank you all once again. I would like to turn the floor back to your Operator, and we remain available for your questions or comments. Thank you very much.
We will now start the Q&A session for investors and analysts. Participants may send their questions in writing using the Q&A tool at the bottom part of your Zoom screen. To make questions using the audio, just click on the Raise Hand button. When your name is called, you will be notified for you to unmute your mic. Our first question comes from Gabriela Morais from Itaú BBA.
Good morning, everyone. Thank you for taking my questions, and congratulations on your results. We have two questions, if I may. First one about profitability. You saw a significant increase in gross margins and EBITDA margin in the quarter, driven by the readjustment in prices of medication. We would like to have some more color of how much of that growth is sustainable, structural, and that we can expect to see in the coming quarters. Along the same lines, our second question about sales. We saw an important increase in sales this quarter. You recorded the highest growth rates in the pharma sector. Again, how much of that is sustainable going forward? Thank you.
Thank you, Gabriela. Let us talk about the structuring components of your question, and then we will talk about sales. As for our results, what do we see going forward, looking to the second half of the year? When we look at gross margin, a good portion of what we have been working on in the second quarter was structural. Removing the readjustment effect, we believe we are in a position to maintain our gross margins at levels above 30% throughout the second half. Generics grew by 50% in the second quarter. This was a plan we had put in place starting last year and has been bringing good results. This sales mix going forward will sustain very good levels of profitability above 30%. That is the first element, and we are quite optimistic in maintaining a high level of gross margins.
When we look at operations expenses and linking to the sales comment, the sales question, we are now in the mid of Q3, and we see increase in sales still. It is worth reinforcing, which was also observed in the first quarter, our sales growth was closely linked to a growth in the number of clients. Almost our growth coming from a growth in clients. We believe that there is room, an inflationary room, about the ticket, which needs to be explored in the second half. But the client flow continues to be strong, and that seems to be an structural movement, and we will continue to reap the benefits of that. For sure, that makes our business different from the others. But that is something we do constantly, turning clients loyal. Continuous investment in inventory management, that is key in this business to manage stocks well.
This is a logistics and stocks business. At the end of the day, clients want to be at the store and find what they are looking for. The ramp-up of new stores has also been positively surprising me. As we saw on that chart, that scale of growth is quite healthy in terms of results. We have been very efficient in expanding the network, the chain. That assures us all in terms of results going forward. Lastly, we continue to look carefully at inflation impacts on expenses. We had a positive signal right now at the end of June. Also, in the second half, the comparison basis for expenses is more balanced because in the second half of last year, we were already having high inflation rates. That should also be a positive driver vis-a-vis expenses. We believe that the worst of the inflation pressures is past.
Thank you. Thank you for your answers.
Thank you for your questions.
Once again, to ask a question, please click on raise your hand at the bottom part of your Zoom screen. Our next question comes from Danniela Eiger from XP.
Hello, everyone. Thank you for taking my question. I have three questions. Number one, about the sales dynamics. You have reinforced the fact that you have already reached and actually exceeded BRL 600,000 in sales per month. I would like to know if you have the same dynamic in July, and what do you target as a normalized average sale per store going forward?
Number two, in terms of market share, you have shown expansion across all states vis-a-vis a very fierce competitive scenario. So where is that share gain coming from? From smaller players or arriving at new cities? I would like to understand where that share is coming from, and if you expect to see that happening also in your original state. Number three, cash cycle. You did say you continue to improve. So what are the main drivers behind that improvement in the cash cycle?
Starting on the average sale question, in July, we still observe high levels above BRL 600,000 , and we believe that we will close the year with an average sale between BRL 630,000 and BRL 650,000 , which anticipates one of our targets. Targets we were going after for 2023. We are anticipating that goal. That is an important landmark. As you know, a higher average sale allows us to unlock important gains in productivity, and that, of course, affects expenses positively.
In terms of competition and market share, this is probably the ninth consecutive quarter in gaining market share, and that has to do with quality in service, quality in execution. It is a very distinct operation, and that allows us to reach new cities, new areas, new states, and even our own stores in São Paulo, where, in my opinion, there is no competition as fierce as we have in São Paulo. Our average sale has reached 1 million reais per store. The execution quality of the stores, that is what makes a difference, that is what is unique in the business, is unique in the brand, in our own brands also. The way we manage stocks digitally, very little attrition. It is a whole combination of things, right? As I said, pharmacy and drug stores can be found in any corner. But good drug stores, not so much.
Danniela, when we break IQVIA data, we are growing market share both in relation to the sell-out concept and also in sell-in. Sell-out and sell-in. Our market share is not only happening on smaller operations, but also on chains. That has been happening consistently because of the factors mentioned by Júlio . As for the cash cycle, we still have something to do in-house. We are improving that cycle and what are the levers we understand we still need to activate to gain more. From the stock point of view, all that strong performance in sales, it will help us improve our inventory turnover. As we go through all those transition movements as we went through last year, we have now reached the other side of the curve. Expansion has been going well.
Expansion, of course, imposes pressures on stock levels, and this will help us improve our turnover as well. In terms of suppliers, we have been working in a very effective manner in negotiating terms, payment terms. Also for generics. A growth in generics, of course, improves our cash cycle naturally, right? Because generics terms are much longer, as you know. So there are more days to seek until the end of the year in terms of cash cycle. We are confident that we will reach December in a much more comfortable position yet.
Great. Thank you.
The Q&A session is now over. I would like to turn the floor back over to Mr. Júlio Mott in Neto for his final comments.
Well, my role here is to thank all of you here for high-quality questions which were sent. It is a pity we have no more time, but we remain available. Our IR team is totally available to address any question or respond to any comments you may have. We will soon be present in São Paulo in an event promoted by Itaú, and it will be a pleasure to meet you all in person to exchange more ideas, and we will see you at the very least at the next meetings, next earnings call. Thank you all, and as he said, we remain available. Have a nice day