Afternoon, ladies and gentlemen. Welcome to Portobello's earnings call to discuss the results for the fourth quarter of 2021. This video conference is being recorded, and a replay can be accessed on the company's website, ri.portobello.com.br. The presentation is also available for download. To hear the audio in English, please click on Interpretation and then select English. Please be advised that all participants can only watch the video conference during the presentation, which will be followed by the question and answer session when further instructions will be provided. The presentation will be held in Portuguese with simultaneous interpretation into English. We also inform you that the broadcast is being held simultaneously on the TC Traders Club platform, honoring the more than 100,000 TC subscribers and the 25,000 PTBL3 investors.
Before proceeding, I take this opportunity to reinforce that the forward-looking statements are based on the beliefs and assumptions of Portobello's management and on the current information available to the company. These statements may involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists should note that events related to the macroeconomic environment, the industry, and other factors may cause results to differ materially from those expressed in the forward-looking statements. With us at this video conference today, we have Mr. Mauro do Valle, CEO, Mr. Ronei Gomes, VP of Finance and Investor Relations, and Mr. Roger Nickhorn, Senior Manager of Financial Planning and RI. I would now like to give the floor to Mr. Mauro do Valle, who will start his presentation. Please, Mr. do Valle, you may proceed.
Good afternoon, everyone. On behalf of the whole Portobello team, it is a pleasure to be in direct contact with you to disclose our performance last year, focusing more on the fourth quarter of the year. We would also like to present our strategic perspectives for the business. Here, you see a summary of today's presentation. We are going to make a summary, then Mr. Ronei Gomes is going to provide details on the operational and financial performance, as well as the perspectives for 2022. Finally, I will come back to give you an overview of the main projects that are being developed today. Let's move on. In this chart, we give you the figures that will be then drilled down later related to our performance.
It was a positive year where we witnessed a significant growth above 40% after a year that despite the pandemic in 2020, we also experienced growth. That is a relevant point. We had grown by 29% in 2020, and now we have grown more than 43%. Also following that growth, we see growth in margin, EBITDA, and also in net income. Not only because of the operational results, we have also seen an improvement in the company's leverage, and that was very significant related to the end of last year. Before we move deeper into the company's financial figures, I would like to give you more information about the performance we had in the market where we operate in Brazil. We see that Portobello also has a share of the foreign market. Let me start by sharing two relevant indicators of the Brazilian market.
One has to do with the volume in our market, the ceramic tile market, and also the Brazilian Association of the Main Companies of Construction Materials. Here you see without the effect of the inflation. You will see a significant difference. Although the curve see the same behavior at Abramat, the figures are more significant, and that includes data for inflation, which was significant for every company in the industry last year. The calculation basis is different because the finishing market, which is followed up by Anfacer, picked up in 2020 quicker than the other parts of the industry. In the second half of 2020, there was stronger market. Comparison is not fair between the two associations. You see last year in the third quarter and fourth quarter, they did not have the same type of behavior when compared to the previous year.
Here, even in the third or fourth quarter of 2020, was still significantly affected by the pandemic. It's important to make this comparison, taking into account medium and long-term, and not one quarter specifically. Regarding retail indices such as the Cielo Index by ICVA, when it comes to construction material, again, also nominal amounts, you can see how this reflects the market. In the third and fourth quarter, this industry felt some differences. Again, as I mentioned, this is the behavior for the industry, which is different from the behavior of our own company. Again, in the third and in the fourth quarter of 2020, we have had a very strong behavior. Indeed, there was a drop in the comparison with 2021. In the dark blue bar, you see the performance of Portobello as a group, not the isolated unit, along the year.
Let me start by explaining the left-hand side of the chart 2020. As I mentioned, we had almost 20% evolution in our company. In all quarters, we had an evolution, a little bit superior to the industry. At the end of the year, we had a significant performance and gains in market share. This is the overall perspective. Later on, I'm going to give you more details about the performance of our company. I thought it would be interesting to see the performance of the market in the last months, because probably this helps in the assessment and the projections for 2022. Now, Ronei is going to give us more details about the figures that I have presented very broadly.
Thank you, Mauro, for this update on the market. You've explained what happened in the quarters of the last year. It's very good to have you back in our meetings. Unfortunately, in some of the latest earnings calls, you could not be here with us, but I'm glad to have you here with us today. You're a partner in our journey of transformation for the Portobello Group. We are transforming to a company that is becoming more international, financially sound, and more oriented to ESG principles and more focused on the retail market.
I am sure that our consumers are also happy to see you here with us. I would like to start my presentation talking about the highlights of the quarter, of the fourth quarter, and also the comparisons with the perspectives that were presented in our guidance when we had the latest earnings call in November. We expected the net revenue to be about BRL 500 million, above that. The actual net revenue was BRL 520 million.
This was the highest level of revenue we've ever had, and our growth in net revenue was about 30%, accelerating our growth. The basis of comparison was already strong. Now it is 5 percentage points higher than the third quarter, especially because of the growing focus on this group and also because of our international business through Portobello America and also our export operations. We expected to keep our gross margin above 40%. In the fourth quarter, we set another record. Our gross margin reached 45%, our best historical level, almost 6 percentage points above the fourth quarter of 2020, due to our work trying to improve our mix, bringing products with more added value, and also working in pricing to be able to cover our costs and also working on the efficiency of our units. We also work very strongly on cash management.
Our leverage was under our guidance. That was 2.5x, and it was 1.6x. 0.7 x reduction vis-à-vis the fourth quarter of 2020 in cash conversion cycle of 32 days. We are presenting our results transparently. We have been very consistent in our deliveries for the past six quarters. We are surpassing people's expectations and also keeping good deliveries. Let me talk about the growth in net revenue. How have we reached the BRL 520 million, so 30% growth, in the fourth quarter vis-à-vis the previous year? Here you see we reached BRL 1.9 billion in a 43% growth year- over- year, very superior to the performance of the market, both in volume and also in billing. Regardless of the comparison, we see a superior performance, superior to the market. Also, this is due to our increase in market share.
Our margin has reached 45% in the fourth quarter of 2021, almost 6 percentage points over the year of the last quarter, and 6.6 percentage point increase year -over- year, confirming our improvement in mix, price, and efficiency. Slide 12 brings our performance broken down based in our units and also divides the external market and domestic market. This is the first time we provide these details and in absolute terms. We're doing that because now we have two years of historic data. We were waiting to go through the audit process to be able to have comparable information, and so that we could present our performance per business unit more consistently and with all the details.
This is going to be very important for analysts who are watching us and investors who are watching us to be able to assess our business and understand the differences between each business unit, what deals with domestic market, what deals with foreign market, retail, and so on. On the left-hand side, you see that all business units have had a strong growth in the fourth quarter and during the year. The Portobello Shop grew 46% in the fourth quarter and 61% in the year because of the accelerated growth in our own stores. We opened also other franchise stores and also variations in the portfolio. Portobello America is also a highlight. Now, being in the U.S., 43% increase in the fourth quarter and 49% increase in the year. This is a growth observed both in real and in dollars.
We didn't have a lot of differences in the exchange rate, so it was an actual gain. It's important also to say about the growth of our industry business unit, Portobello, the largest business unit we have, that grew 23%, especially for exports, but also had a very strong performance in our engineering business for retails. Also 45% increase in the year of Pointer. It is now a leader in the market in the North and Northeastern regions of Brazil. On the right-hand side, you see the distribution between domestic market and foreign market. You see that in the foreign market, it was even stronger. You see the performance of Portobello America and the performance in exports determine that. We also increased our market share in the foreign market, so Portobello America plus exports accounting for half of that result each.
Now it accounts for 21% of our revenue, which is in line with our strategy of being a more international company. On slide 13, let me talk about the drivers of net revenue. These are the main factors that affected our performance in the fourth quarter. There was a positive impact here related to our attempts to defend our margins and to defend our costs. We also had a significant improvement in mix using more value-added products. In the fourth quarter, as in the rest of the market, we also had a temporary reduction in volumes, especially in Portobello and Pointer, because of a trade-off between price and volume we needed to use to be able to keep our margins and make changes to prices.
When we analyze the revenue in the year, we can see that despite capacity restrictions, our business grew by 9% in volume, and the price mix was increased at level 34%, and the exchange rate did not account for a lot of growth in the year, just less than 1%. So this 44% growth, 43% growth was just related to the constant currency. In the fourth quarter, there was a 31% increase. Now talking about gross margin and now giving you more details about our growth there, we gained 6 percentage points in gross margin. Based on business units, you see that Portobello and Portobello Shop have a gross margin superior to the average of the group because of the mix of products they use.
Pointer has a margin a little bit lower than the average of the group, but that was the unit that had the best growth in margin in the year because of cost management, basically, and maybe there is less cost price pressure than other business units. Portobello America is below the average, but it's improving consistently quarter after quarter. So we are maintaining our strategy of building demand even before the end of the construction of the factory. This is why we say that this is a temporary impact. So Portobello America, any other business, was impacted by the increased costs in BRL and also increase of cost of credit internationally. That hasn't been reflected on the margins yet. We increased the prices in the U.S., and this margin is expected to go back to regular levels in the first half of this year.
Once the factory is operational in 2023, Portobello America is going to work with even better margins. What about the drivers in gross margin? What are the main factors that influence that? We talk a lot about our net price of cost. We increased prices to cover cost increase, but we also work on improving the mix. Productivity initiatives in the fourth quarter and in the year made industrial efficiencies help the company to have an effect that was not so negative on cost. Pressure on cost was a little bit lower when compared to the industry because of our efficiencies and also because the plants were operational throughout the year. But the decisive factor for improvement in margins was our management in price and mix that has led to these levels you see on the slide. Moving to operational expenses.
We have had a good performance and expenses grew at a lower level when compared to revenue because of our discipline. We've had a significant reduction in sales expenses and also efficiency in sales investments. But in the short term, we have had some significant impacts on the first quarter, especially related to the investments we made there for future benefit. Here you see some of the work streams that have led us to make higher expenses in the first quarter, such as the investments we've made in logistics to improve our logistics operations and to improve the services we provide to our customers. That was an important point. Along the first quarter, we also had our strategic planning process for five years, supported by McKinsey & Company. That has also involved significant investment. We keep investing in our business units.
There were some significant investments related to balance and also involving taxes and labor issues. Part of that were investments and part of that, investments for the future other expenses. But ultimately, at the end of the year, expenses were well diluted when compared to our net revenue. On slide 17, you see EBITDA. You see that there is room for improvement. The main factor that has led to improvement in EBITDA was the gross margin. We've had reduction in expenses, but our good results in EBITDA had to do with the improvements we've had in gross margin. So now we reach 19.1% of EBITDA margin in the year. This represents BRL 365 million, or more than double the EBITDA we generated in 2020, BRL 174 million. There was a significant growth in the fourth quarter and 29% increase vis-à-vis the same quarter of the previous year.
The margin was maintained at 19%. Net income was very strong, more than double when compared to the previous year, and has reached BRL 188 million, a 10% margin over net revenue, a 3 percentage point improvement over the previous year because of EBITDA. It wasn't higher because we still had some impact related to financial expenses because of interest rates. But the major driver of net income has to do with the higher generation of EBITDA. In the fourt quarter, we have BRL 49 million in net profit, 41% increase vis-à-vis the previous year. Because of that, the company could distribute dividends during 2021. Moving to working capital. In our journey in the fourth quarter, we've also had a significant progress. We had a 10-day improvement in the cash conversion cycle. It's important not only to look at the snapshot, but the whole journey.
We used to have 90 days of cash conversion. Today is 32, which is almost- 60 day reduction in two years. This has to do with the transformation of the company and also with how we manage working capital. It has grown less than the revenue, so these 10 days have helped us have a shorter investment in working capital. Because we manage our portfolio receivables better, this is why we are able to optimize the CCC, and also because we have an expansion of the deadlines with our suppliers without any financial cost to the company. Let me move to cash flow. You see the performance during the year. There was a cash reduction of BRL 137 million. Overall, the generation of EBITDA of BRL 365 million has covered the investments of BRL 75 million, CapEx at a level of BRL 115, and dividends BRL 360 million.
The actual cash reduction has to do with the investments we made in these two processes of repurchase of shares in 2021. It is part of the dividends and repurchase column you see. BRL 150 from dividends, BRL 164 from repurchase. That has increased the return to the shareholders, at least those who have been with us before the repurchasing process. In terms of investments, we invested BRL 115 million along the same lines we had in 2020. But the change in mix, we invested more on Portobello America and expanding our group of shops and expanding to retail. We also made a technology update that we will briefly talk about later. That had to do with the technology improvement we have made, especially in the Tijucas side and the Marechal Deodoro side. Moving on to leverage.
You see that on the slide we had a focus on the cash conversion cycle reduction. Because of the high levels of EBITDA, we are able to end the year with a leverage of 1.6x, the best ever in the company. But it will be like 1.4x because we have paid dividends earlier last year, and usually dividends are paid in May this year, not November last year as we did it. Since we anticipated the payment of dividends, our leverage is 1.6x below our expectation of 2.5x, but it should be 1.4x comparably speaking, because that was the same as the level of the last quarter of last year. This is done in local currency. Today the average duration is 4.4 years, which has to do with our strategy to lengthen the bank debt profile and also our short-term payments.
Because of that, we just account 13.1% of the short-term debt. That used to be much longer in the levels of 40% in the past. By improving the debt profile, by increasing duration and reducing amortizations in the short-term, combined with improvements in operational development, Fitch Ratings reclassified us and upgraded us by two notches, and now we are A- in the nationals scale with a stable perspective, and that was a major accomplishment last year. Let me talk about the capital market. The company has had an appreciation in the Bovespa level last year. BRL 166 million in dividend distribution, BRL 103 million that was paid in 2021, and BRL 63 million as a complement to 2020. Most of these dividends were paid earlier in September through November. We are distributing BRL 3.5 million that will be paid in April.
Those are complementary because our performance was even better than when we expected that when compared to our expectations for November. This is why there is this addition. Because of that, we have reached a dividend yield of 15%. This is one of the largest dividend payment companies now according to the public information that was disclosed at the end of last year. There are two processes of repurchasing of shares. Last year, we purchased 8.8% of total shares with an investment of 13.5 million and value paid BRL 153 million. That shows that our shareholders trust the management team in their role. We had these returns to our shareholders. In the end, we had about 40% return of free float, much higher than the average of the market. Now completing what I had to tell about 2021.
Now I'd like to share with you the perspectives for 2022, and that's the first time that we are talking about this year in a more structured way. I will also talk about the first quarter. We expect the premium market where we operate, premium market of construction materials, to keep heated up throughout the whole year of 2022, with opportunities for growth in price and also because of our product mix. Of course, there is pressure on cost and there is limitation in the installed capacity, so we cannot grow in volume. We are going to grow in the market, but because of the price mix factor, and this is happening and it was happening already in the third quarter and fourth quarter. We expect to improve our margin through price and mix improvements.
We expect to grow by 20% this year in terms of net revenue to cover for our cost prices. We don't expect a lot of variation throughout the year. We expect quarterly growth and in a stable level. In January and February, we already grew by 25%, and we are ending March at the same level of growth. The company will keep focusing on improvement, the level of service. We expect to keep our gross margins at about 43%, and we've worked a lot to reach this goal. There is still strong pressure on cost, but we expect to improve our prices and mix, and we are going to control our cost and expenses very carefully. Let me tell you why we are so confident about our growth in 2022. In this next slide, you see how a construction cycle works.
Usually in Brazil, it lasts from 24- 30 months, and six months of sales. We work in the finishing part, in the last month. It involves the last stages of construction. If there is a reduction in the number of real estate launches in Brazil, considering that we are in the last stages, the impact on our business, positive or negative, will happen as of the third quarter of 2023 until the fourth quarter of 2024. What we are selling today in 2022 relates to the launches that were made in the end of 2020 or in the beginning of 2021. This is why we're so confident that the demand this year is going to be strong.
We are the only company in this industry that has a very strong business in retail that is growing at a fast pace, and the only company in Brazil that has a B2C business that is well-structured and that accounts for one-third of our business. We are also the Brazilian company that exports the most, and Portobello America is growing very quickly. We also have other businesses that export. Over the years, we have reduced our dependence on the engineering and retail channel, and we are now working with construction companies that work at the highest levels of quality that operate in the premium segment. This is why we are so confident that we are going to have a very strong growth in 2022. The company is not just going to grow.
We will keep our EBITDA margin at the level of 19%, reflecting our focus on gross margin, and maybe with a variation of 1 percentage point up or down. In the first quarter, we are already operating with margins at this level. Another important point related to our prospectus is going to invest more than historically, about BRL 280 million because of the investments made at Portobello America and our growth in retail. I will talk about the acquisitions that we have done in retail.
Part of the capital investment is intended to accelerate the growth of these two business units. We are also making technology investments at Portobello and Pointer. In terms of cash management, our leverage tends to be below 2.5 x, preserving liquidity, and we expect to distribute dividends of 50% of the net income. This is what we expect for 2022. Now I will turn over back to Mauro, who is going to update our strategic projects.
Thank you, Ronei. I think we can talk more about the strategic projects, but before that, I would like to make a connection about the performance we recorded this year and the prospectus that we have for 2022. Of course, you are following up market trends, and you are familiar with the challenges that 2022 will pose, even internationally because of geopolitical factors, the context of war in Europe, inflation pressures all over the world, increase in interest rates. Of course, all these factors are taken into account, and of course, in the map of risks and opportunities, they are part of our day-to-day routine. We are aware that we do have tools, conditions, and structure to be able to hold the impact of such issues.
Of course, there is the international and even domestic context and some indefinition, some insecurities that we face. Still, we are positive regarding 2022. It is important to say that this is all supported by our plans and projects, our strategic projects. Let me start by the governance of the company. It goes beyond the capital market transparency or ESG. Corporate government is based on our culture, on the way we operate, and on the intention of being more professional for our growth. This is a company that grew in a simple way, operating more in the industrial business, and lately in retail and abroad. This is why we need to build a good structure of executives and managers to support the growth of the company. This is why I would like to share this slide again.
A few months ago, when I made a presentation to the market, I showed the same slide showing here the tax board, the board of directors, the committees we have for audit, and also a committee for sustainability. We also strengthened the structure of the four business units that are now led by executives that have shown to be very competent to develop the new generations of leaders in our company. This is the strength of our company and a strategic point for us. In the next slide, you see that all of that is supported by a good integration between the board of directors and the executive team.
I think that the best way of representing this integration is the Committee of Governance and Strategy that César Gomes Júnior is the President and Founder of the company, is the chairman of the board, and is still supporting and participating on the strategic decisions of the company. Because of that, there is a good integration with the executive team. Cláudio Ávila is the Vice President of the board. Edson Stringari is also a member of the board that meets constantly to assess governance and strategy for the development of the company. Because of that, it is easier to ensure continuity, transparency, and conflict and governance of the company. Here are the committees that I mentioned.
They are also strengthened by this new committee, the Committee of Audit, that you have members here, Gláuco Côrte , who is an independent member of the board, very experienced person, who was once president of the Federation of Industries in the state of Santa Catarina. Highly experienced in governance and controllership. Cláudio Ávila da Silva , an expert as a controller, and also supported by the head of compliance that reports to Edson and to the head of internal controls. The company already did that, but now we have professionals that improve our structure and allow a better integration with the formal regulation of the capital market. All are also with our own compliance and internal governance policy. This is very relevant. Of course, ESG issues are relevant to the company. They are indispensable. They are a requirement for our operation.
Regarding the evolution of ESG at the Portobello Group, I should highlight that we are signatory of the Global Compact sponsored by the United Nations, that determines policies and rules and indicators that will allow Portobello to compare with similar companies and to compare itself with the international markets. Also show to stakeholders and other participants of the market about our performances with direct indicators. Now moving towards the end of my presentation, I would like to show you about the evolution of our plant in the U.S. We keep telling about that quarter after quarter. In the past three months, as you can see, there has been a significant evolution in the construction work. So first it was earth-moving stage. Now we are completing the paving phase for this site, and we are going to start building in April. So it is moving fast and aligned with our schedule.
In the beginning of 2023, we expect to start operating that site. Finally, I would like to tell you about Portobello Shop, our operations in retail. This is a challenge in the retail market. We are no longer an industry that has retail, but now a retail company that also has industry operations. We started expanding our roadmap. We hired also the CPN CEO of the company that once worked at Petrobras and in Chicago. His name is Roberto Nunes, and he is focused on the growth of the company in the omnichannel experience. We want to improve the journey of our consumers. We want to improve their experience, not just to go and buy a product. This is the experience that could take weeks, months between the project specification, sales, delivery, and sometimes even installation of our materials.
This is why the journey of our consumers need to be improved so that we can have a better relationship with our consumers. That is very relevant. You see the growth we have had, how much we have grown in large cities and also in smaller cities. We have our stores in some of those cities. Now even as part of Portobello Shop, we also have a significant number of our own stores, 18 stores of our own. It is not part of our strategic perspective to only have our own stores. We are based on franchisees, so we have worked with more than 20 markets, and now we have the second generation of franchisees working with us all over Brazil.
But of course, we want to have our own stores in some strategic areas, such as the case of these two examples, the Pacaembu store and Gabriel Monteiro da Silva store. We have recently acquired this one. This was a communication we made to the market this week. That reinforces our participation in terms of our own stores. With that, we improve our expertise, our participation in the game here for retail. Ronei mentioned during his presentation saying that the results of the company has to do with the management of price and mix. This has to do with mix. This is the DNA of the company. This is the development we have made at Portobello. We are an innovative company, which is reflected at Pointer and I am sure it is going to be reflected in our operations in the U.S.
This can be measured by the presentation we made during the Revestir exhibit of 2022, conducted in São Paulo. Here you see some slides with the pictures of the exhibit. We had several visitors and we presented this very sustainably. These materials can be reused in stores. All the wooden parts are going to be reused in the showroom of our industrial unit. We should be concerned with that. We should follow up innovation and sustainability and have those aspects in mind. This was a very positive impact, and you see the launch of new products. Let us move on. Also, our integration with digital was shown during this exhibit. I would like to wrap up by the new launch of the 160 by 160 format, up to 3 m in terms of a rectangular shape.
Not many companies in the world have this technology and that have products launched in the market in this format, in this shape, that can cover both the floor or wall. That is what Ronei mentioned, that we want to bring more profits to the company, even in a context of inflation, international uncertainty, and other challenges. With that, we complete our presentation, and now we will open to entertain questions that you may have.
Thank you very much. We will now start the Q&A session for investors and analysts. If you want to ask a question, please press the Raise Your Hand button. If your question is answered, you can exit the queue by clicking on Lower Hand. Your question can also be made using the Q&A button. Please wait while we collect the questions. Our first question comes from Carlos Herrera with Condor Insider. Good afternoon. Congratulations on your results. With the latest price readjustment, are you feeling any pressure on the first half of 2022? What is the percentage capacity that we are talking about for the first quarter? Second question: Has the retail store growth plan undergone any change given the current level of interest rates and inflation?
Okay, Ronei, may I help me. Of course, this is a concern we have. We are operating with 100% of our installed capacity, answering your first question. Of course, the integration of logistics channels and also the operations of the industrial operations needs to be done to minimize the impact of inflation and to maintain our current profitability levels. This is our expectation for the first quarter, and we imagine that we can follow the rest of the year with 100% of installed capacity.
As to the plan of growth of our retail stores, we need to monitor that quarter after quarter. As I mentioned, the growth in our own stores is not the growth that is going to change the level of operations of the company. We are more concerned with strengthening the flagship stores of the company and our franchisees improve our operations to improve the journey of the consumer and our competitive differentials. But at first, we do not see any change in our investment plan.
I would just like to add related to the interest rates you mentioned. We just talked about 20% in terms of expectations, and we are considering interest rates that were very high in our expectations. We had already captured that in our projections. Even with a possible increase we have just had, it was already considered in our projections.
We constantly update this information in our growth plan. This 20% we disclosed already considers growth in retail. As to price readjustments, of course, we have pressure on costs. This year, we increased our prices based on our contract. We usually have price readjustments in gas in January and July, so we usually increase our prices together with our costs. We have already transferred this price increase, and there will be probably a second price increase in June or July when we already have an increase in costs.
Our second question comes from Tito Ávila with LIS Capital. Good afternoon. Regarding the BRL 60 million regarding the purchase of the two stores with related parties, has this amount been accounted for in the CapEx for 2021 as a part of the BRL 280 million projected for 2022? What is the rationale behind this purchase and the price paid?
I would like to start. Yes, this is part of the BRL 280 million that is forecast for 2022. Retail is about BRL 80 million that it already takes into account investment in these 2 stores. We communicated this market that the BRL 60 million will not be paid only in 2022, a little bit less than two-thirds this year and the rest next year. This amount is also taken into account. The rationale for the total amount, well, we hired an external company to make valuation of retail. Because it was a related party business, we needed to validate that by the audit committee. We also needed to work with a Big Four company for due diligence and also a specialized company for valuation. These BRL 60 million are very similar to the valuation of the company based on our trading levels.
We are paying above our amount. Strategically, those stores are flagship stores. Those stores have invoicing level, sales levels above the industry average. The one located at Gabriel Monteiro da Silva store is the one that sells best. There is a strategic point of operating the store as our own. Of course, the fact that it's a flagship store is something that is crucial for the company and its growth. Anyway, the amounts that were considered were financial, that were determined by the consulting companies and also by the analysis that was made, and also multiples based on the averages of the market and based on previous acquisitions. We are very comfortable with the conversations we had and the board that we have met all the requirements, financially speaking, and also in terms of governance. I think this was a great acquisition for the company.
Let me remind you that to ask questions, just click raise your hand or send your question in the Q&A box. Our next question comes from Andrés Garbi. Good morning, and thank you for taking my call. I would like to understand if these sales was made by the industry to franchises are considered revenue of the Portobello unit, of the Portobello Shop unit. When sales are made by the industry to Portobello Shop, they are not considered, right? Does the Portobello Shop revenue include sales of their own stores and royalties paid by outsourced companies? Could you please explain how this happens?
The revenues of Portobello Shop is the revenue from our own shop. It's considered sell-out in our own stores and sell-in when it's a franchisee. Of course, there is also the margin of the franchisee. When we report the segment, we consider the sales at the end, whether it's an own stores or a franchisee stores. But the transfer from industry to retail is an intercompany transaction. Of course, everything is transferred at cost plus markup, and this transfer is eliminated not to have it being counted twice.
There is an adjustment made because of that. It's important to make it clear that the sell-out of franchisees, so they purchase for a given price and sell for another price, and this difference is not considered in our invoicing, in our billing. Of course, it's considered in the billing of our franchisees because it's a different company. We just consider sell-in and not sell-out. I think we made this point clear.
If you want to ask question, click on raise hand, or you can send your question using the Q&A box. Our next question comes from Tiago Cascalho de Lima. Thank you for your excellent result. What is your expectation for the gross margin for Portobello America once the factory operates the first of the two ovens expected to be built? There is a second question. Do you believe you can keep changing prices to make up for costs without harming demand?
Ronei will answer the first one.
We have the gross margin for the first oven and the second oven. We have conducted a study that was very thorough. That study was conducted in 2018, supported by Bain, and then we validated that internally, and once again, we validated that with Marti. Now that we are. Then we approved the project in September.
We have expectations about the gross margin for Portobello America. We decided to build the demand, and we are selling that in United States in dollars. Of course, product comes from Brazil right now. We have increased costs in logistics, so the margins will not be the same as in Brazil. But once the plant is operating with the first oven, it is going to have margins that are very similar to the margins we see in Brazil. Once two ovens are operating, we expect to have better gross margins than in Brazil because we are working with the latest technology in this new plant, and therefore it is going to be more efficient.
In addition to that, raw materials are cheaper in the U.S., especially gas. About your second question, of course, it is challenging. We are concerned with that, and we are concerned in using our operations to minimize the impact of inflation. Unfortunately, in a more realistic scenario, we are still going to have readjustments in fuels, such as natural gas, and also in other inputs internationally and other commodities that are used by the company. Yes, it involves risk. How can we make up for that?
Thinking about a very simplistic way, just by transferring costs to consumers should not be, and it is not our main guidance. We want to gain productivity. That is our first focus. At some point, we are going to do that, but maybe in other areas, we need to improve our mix of products. As I have mentioned recently at my presentation related to Expo Revestir. Also like what happened in the last 18 months, maybe we can transfer that for price transfers.
But we are working on minimizing that. If the market becomes more restricted, we can face difficulty. The company needs to prepare in a realistic way, not in an optimistic way, to face our challenges. That will ensure investors, the company and its employees more confidence in our day-to-day management. I think we answered both questions.
Our next question comes from Tito Ávila from LIS Capital. There was a strong increase in natural gas in Europe and this can become an important window because Portobello can increase exports to Europe and Latin America. Actually, that is a question. Could you tell us what you are doing to that end?
What we have seen is not just related to gas. The price of gas has increased significantly in Europe. We were talking to several manufacturers. Clay is the main raw material for our business, and it is supplied by Ukraine. You are having a lot of difficulties and some companies are building stock to face this price pressure. Yes, there is a window of opportunity and also for those that aim at exports, such is the case in Portobello. As I mentioned, we are the company that exports the most in our industry. We export to more than 60 countries.
We are opening an office in Europe. We are going to have not only Portobello America, but also Portobello Europe with a dedicated team. At the Expo Revestir, we saw a lot of interest in our products because of that, because of this contingency. The fact that we are going to have a factory in the U.S. can also allow us to serve countries not only from Brazil, but also other countries in other continents from the U.S. Yes, we do have a significant window of opportunity for us because of the problems faced in Europe.
If you want to ask a question, just press raise hand or type your question in the Q&A field. Please wait while we collect your questions. Next question comes from Pierre Gomez Sales with BTG. I would like to know the value of corporate EBITDA.
It is BRL 365 million . That is for the group. This is what we delivered in 2021. As I mentioned, this is about 19% of our revenue, and we expect to keep at least the same EBITDA margin for 2022, 19% on the new margin of revenue that we expect to grow by 20%. Probably our company is going to be close to BRL 2.3 billion .
If you want to ask a question, press the raise hand button or publish in the Q&A field. Our next question is Jose Renato dos Santos. What Selic rate did you use for your projections for 2022, considering the impact on debt?
Let me answer that. We work with 12.2 or 12.25. That was the projection for Selic, but we also run other scenarios with corporate domestic scenarios. I think our budget is 12.25, but if we have increase in interest rates, we are working with higher levels. Our financial expenses are going to increase this year. This is already budgeted. It is going to reduce our net income, but the projected EBITDA is higher. At the end of the year, we expect to have a good level of increase in net income.
The Q&A session is now closed. We would like to give the floor back to Mr. Mauro do Valle for his final remarks.
I would like to thank everyone for attending. It was a pleasure to share the performance of our company with you and our enthusiasm with you and with the evolution of the company for the coming years. Greetings to everyone.
Portobello's video conference is now adjourned. We thank you all for participating, and have a good day.