Good morning, ladies and gentlemen. At this time, we'd like to welcome everyone to RD People, Health and Wellbeing conference call to discuss its 2Q 2023 results. The presentation can be found on RD's Investor Relations website, ir.rd.com.br, where the audio for this conference will later be made available. We inform that all participants will only be able to listen to the conference during the company's presentation. After the company's remarks are over, there will be a Q&A period. At that time, further instructions will be given. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of RD management and on information currently available to the company. Forward-looking statements are not guarantees of performance.
They involve risks, uncertainties, and assumptions because they relate to future events, and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of RD and could cause results to differ materially from those expressed in such forward-looking statements. Today with us are Mr. Eugenio de Zagottis, IR, Corporate Planning and M&A Vice President, and Flavio de Moraes Correia, Director of IR, Corporate and Strategy. Now I'll turn the conference over to Mr. Eugenio de Zagottis. Sir, you may begin your presentation.
Hello, everybody. Welcome to the Raia Drogasil's second quarter 2023 conference call. I would like to start by saying that this was a really strong quarter for the company. This is a quarter that really made us happy and proud, because we had a huge challenge to overcome from many different reasons. The main challenge, obviously, the, it's the one that everybody knows about, is the fact that we had a CMED price increase this year, way below what we had last year. This obviously is a big headwind in gross margin, and we knew that the gross margin will suffer.
On top of that, this is a quarter in which we had to cope with a very tough comp base in terms of revenues, because second quarter last year was a peak of Omicron variant in Brazil. So we had a loss of 2.2 percentage points in sales in the quarter only because of Omicron, and on top of that, a negative calendar effect of 40 basis points. On top of that, we have 4Bio, which is our specialty pharmacy, growing 81%, which is amazing, unbelievable, staggering. This is becoming a BRL 3 billion business. Eight, nine years ago, when we bought it, it was selling BRL 220 million, so it's a huge success story. But specialty has a structural gross margin that is lower, and overall margin as well, that is lower versus the retail margin.
The fact that 4Bio's grown so much also helps in terms of revenues, helps in overall profitability, value creation, but margin-wise, this is another headwind that we had to cope. Still, we were able to post a quarter with 8.5% of EBITDA margin. We were able to mitigate all these pressures, and only gross margin was 1.4 percentage point in pressure. We were able to mitigate it with efficiency gains in mature stores, operating leverage gains that reduced, that resulted in expense dilution. In all, in all, we posted an amazing quarter with 8.5% of EBITDA. If we look the first semester of the year, we were able to maintain a flat EBITDA margin of 7.6%, with growing margins on the retail side.
If you take out 4Bio and look only our retail margin, we did 7.9% in the first semester. It's a very successful quarter and ending a very successful semester as well. Let's talk about the numbers here. We ended the period with 2,800 pharmacies. We opened 64 units and closed three. BRL 9 billion in gross revenues in the quarter, 18% top line growth with 7.6% of mature stores, 15.1% of market share, 70 basis points gain by growing market share in every single region where we operate. Another very strong figure here. Digital reached BRL 1.2 billion. We're talking an annualized gross revenue running rate of BRL 4.8 billion already.
This would turn us, if digital were a separate company, into the number five player in Brazil. RD Digital on its own would be the fifth largest chain in Brazil, with BRL 4.8 billion running rate. 56% of growth on top of very significant growth that we posted the same quarter last year, with a record retail penetration of 14.3%. Contribution margin of 12%, an increase of 10%. Here we start seeing the headwind from the CMED lower price increase this year. Same with EBITDA, very healthy 8.5%, but obviously 100 basis points lower than last year, where we had this huge price increase, and 5.5% still growth in EBITDA in absolute terms.
Net income, BRL 300 million, close to BRL 350 million, 3.9 net margin, again, very strong, with an increase of 1.6% net, net profitability. Cash flow, it was negative in the quarter, BRL 487 million in negative free cash flow, total cash consumption of BRL 763 million. As we will see in the coming charts, not only this is a seasonal peak, but the main issue here was not this quarter, it's the fact that the previous quarter, we had an abnormally low number in cash cycle. This quarter, which is normal for the seasonality compared to that, produces this kind of pressure. If you look on the semester, it's the same kind of pressure we had seen in the first semester last year, which is normal for the seasonality of the year.
Talking about our expansion, we ended the quarter with 2,807 stores. We opened in the quarter, 64 stores and closed three stores. All three stores closed were mature, this is a store portfolio optimization. Generally, these are stores that have even positive EBITDA, but because we have a busy presence in the neighborhood, sometimes by shutting down the store, we will transfer sales, we will redeploy assets like inventory, some fixed assets, and overall, the company will have a higher EBITDA with less capital employment, all in all, more efficient. Obviously, we haven't been able to do in recent quarters, the same level of optimizations that we were able to do until the third quarter 2022.
We closed a lot of stores after the pandemic, and I think this was a really good thing because this created value. Still, we're also looking for opportunities, and we'll close stores that we think will be better without them. The best news is that we have no mature maturing store closure. If you look on the last 12 months, 263 openings, closed 37, 34 mature. Again, this is optimization, this is accretive for the business, and only three maturing stores, which in this case is expansion mistakes, were closed. This means only 1% of mistakes were made over the last 12 months. Of the 263 stores opened, only three were closed. This is a very, very assertive expansion here. Finally, we have 27% of stores still undergoing maturation.
We have a guidance of 260 stores per year from 2023 to 2025 that is confirmed, a total of 780 openings during this cycle. As I said before, 99% last 12 months, assertiveness of the new stores, and a huge geographic and demographic diversification, as we'll show in the coming slides. Today, we have a true national presence in Brazil. Not only we operate in every single state in Brazil, but we are the only chain to make money in every state in Brazil. We are the only chain to have similar level of profitabilities wherever we go. We're the only player to invest with similar returns wherever we go. In this sense, we are the only true national player in Brazil.
On top of this huge portfolio, we have a supply chain made of 12 distribution centers in almost every region of Brazil. This is why this is important, not only because being closer to the stores means less expenses, but it means that we are able to replenish our stores six days a week. We have a just-in-time logistics that results in an efficient cash cycle with the lowest stock out level in the industry. We are opening, in the coming quarters, two new DCs. Previous quarter, we opened a DC here in the Midwest, in Cuiabá, and now we have two DCs coming in the coming quarters.
We have Belém do Pará, which is already a major market for us with 50 stores, and then we have in Manaus, a small DC, that to be very important to support an operation that today can only receive merchandise by airplane, which is very expensive, because Manaus cannot be easily accessible by road. We are opening a DC here to support our expansion into this area, where we are performing really well. Finally, in terms of market share, we finished the quarter with 15.1 basis points, 70 basis points improvement, 26.8% of share in São Paulo, which is our native market, a very high penetration. Midwest is the second main market for the company in terms of share.
Just like São Paulo, we are the leaders in every, in every state of the Midwest, even though we are not a native chain from there, but we have 18.5% of share, a lot of growth. Then in the other three main markets, Southeast, South, and Northeast, we reach double-digit market shares in each and every of those regions. In the North, which is our recent expansion frontier, we have 8.3, but we believe same time next year, we'll be probably reaching the double-digit threshold also in the North, which shows how, how well penetrated Raia Drogasil is becoming all over Brazil, not only in more developed or more affluent regions. Talking about that, the level of capillarity that we're building and the diversification of the footprint we are, we have, is absolutely unique in Brazilian retailing.
We have 554 cities that are served by at least one Raia Drogasil store. We are present already in 306 stores, out of 309. Sorry, 306 cities, out of 319 Brazilian markets with more than 100,000 inhabitants. Obviously, this includes stores, which are signed, but in the process of opening, as well as those that are open. This is a very unique capillarity. I don't believe any other retailer has this kind of access within the small cities of Brazil. Finally, when you look at the, the segmentation of the expansion, São Paulo, our native state, represent only 25% of all our last 12 month opening, and only 42% of the full store portfolio.
This shows that we're really a national player who's growing profitably everywhere, and that is well-positioned all over the country. Finally, format-wise, we have 84% of stores open in the last 12 months in the standard or popular formats, which serve the emerging middle class. Even if you consider the full portfolio, we have 61% of stores within these formats. Talking here about consolidated gross revenue. We reached BRL 9 billion in total gross revenues for the company, and we grew 18% in the quarter. Couple highlights here. The retail operation, it grew in the quarter 14.9%, while 4Bio grew 81% in the quarter. This is a specialty retailing company. We bought the company in 2015.
Previous year, it had sold BRL 120 million. This year, it's trending towards something like BRL 3 billion in revenues, we are the, the largest specialty pharmacy in Brazil, servicing health operators, but delivering to each and every consumer customer. This is not a distribution business, this is a specialty pharmacy business that touches the final the patient, and services the last mile for those people. It's important to mention also that we had a meaningful headwind in terms of top line growth because of COVID. Last year, in the same quarter, we had significant COVID testing revenues. The effect on top line growth, by the fact that this is trending very low right now, is 2.2% loss in growth. Then there's another 40 basis points due to negative calendar effect.
All in all, our retailing operation that grew 14.9%, if we take out the COVID effect, and if we normalize the calendar effect, we'll be talking 17.5% growth, which is a very healthy growth, especially in an environment that now has low inflation and with a recent price increase that was around 5.5%-5.6%, if I'm not mistaken. Finally, when you look at the mix, this was also impacted by the COVID peak of last year. The OTC, this is where the tests are booked, it grew only 3.4%. Branded grew 13.8%, it was below the 14.9% retail growth.
Still, some, some therapeutic classes, like antibiotics, respiratory products, they were affected by the high comp base from the pandemic. The bright side here was generics, 23%. We are very competitive in generics price. This is a big agenda for us. Finally, hygiene personal care, which grew 23.6% in the quarter. Okay? When we look at our comps, it's clear. We have highlighted here the effect of the inflation deceleration as, as reflected by the CMED price increase. We were previously talking. The previous quarters were influenced by the latest price increase of 10.9, but that reflected on a higher inflation environment, and we were suffering on the expenses as well. Now, it's a lower inflation environment.
We have more leeway on the expense side, but also the, the, the price increase was only 5.6%. Here we can see what's the real growth, and we had real top-line growth of 12, consolidated, of 12.5% in this quarter. A lot because of 4Bio, because. It was slightly bigger than the previous quarter, because the 4Bio effect helped a lot on the top line. Going straight to the mature store sales, what happens here? Lower inflation, 5.6, but still, we had real growth at mature stores of 2%, reaching 7.6, despite 2.6 percentage points headwind from COVID and from the calendar effect. On a normalized basis, we would have done this quarter something like 4.5% mature store growth.
It's easy to see here in the second quarter, 2022, how strong the quarter was because of the pandemic. The second quarter was affected here, and also the first quarter was also affected here. Overall, we are seeing a trend in terms of real growth in the mature store, which is very, very strong and very encouraging for the future. This is a function of digitalization of the company, as I show here. We reached nearly BRL 1.2 billion in digital sales, so BRL 4.8 billion annualized sales, which would turn RD Digital, were it a separate company, into the number five chain in Brazil. We grew in the quarter 56%, and we reached a record penetration of 14.3%.
This is a very unique level of growth that we're seeing here, with a very unique operation. Why this operation is unique? Because this operation is based on modern, proprietary, and mobile channels. App is 62%. If you put together app, the, the, the mobile site, and social, which are modern and proprietary, it's 81% of the sales. If we, then, you add, for example, desktop, we're talking 92% modern proprietary. What is not proprietary but is modern, is 7% of super apps. Finally, we have the call center, which is proprietary, but is a Jurassic channel that shouldn't even qualify as a digital channel. The difference is call center for o- for us is 1%, call center for our competitors who publish their numbers, is 25%.
It shows how different our digital infrastructure really is. Nobody comes even close of having 62% app penetration like we have. Flavio will talk in the end about some of the highlights, but the Net Promoter Score of our app is increasing at a very fast pace, and our app today is a very good, very robust app, and this is driving an even better execution and even better experience for the customers. Finally, when we talk about delivery mix, 93% is fulfilled by the pharmacies, of which 2/3, 61, is Click & Collect. The customer is coming to us and picking it up with zero delivery cost. Then when we do deliveries, we are doing every time quicker. We're delivering 21% in up to two hours, and we are reducing very fast this number.
We used to talk about four hours, now two hours, but in practice, a big chunk of our delivery is already below one hour, and at some point, we may commit to a one-hour delivery overall. Continue here. Now talking about the gross margin. The gross margin was the main headwind of the quarter, 28.9 versus 30.3, 140 basis points gross margin loss, which was obviously expected, first and foremost, because of lower CMED price increase, that generates lower inflationary gain on inventory. This was a certainty, and it's a normal number. Still, this is seasonally a very good quarter, with a gross margin higher than normal, but not as high as the second quarter last year, when we had a 10.9% price increase.
This is the first thing. The second thing is that with 4Bio growing 81% and having structurally lower gross margin and EBITDA margin levels, even if the ROIC is very good, and not that far from our ROIC, it's another source of pressure for the gross margin. We, we saw this 140 basis points pressure in the gross margin in the quarter, as I'll show in the coming slides, it was mitigated by this, this, one time. Not, not one time, because when you say one time, it looks like we're adjusting, but this non-structural, gross margin pressure is being mitigated by structural execution gains at mature stores. When you look at the cash cycle, obviously, we have a pressure here, 67.8.
This is 2.5 days higher than in the second quarter, 2022, and 10 days higher than the first quarter. If you look at our cash, free cash flow and total cash flow, it looks like a big pressure in the second quarter. If you compare to the first quarter, this is true. The main point here is that this first quarter was abnormally low. It was four days lower than the first quarter of last year, which is not here. When you look over the semester, yes, this is a seasonal peak, but the cash consumption in this first semester is very similar to the cash consumption with the first semester of last year, peak versus peak. This number will normalize it very quickly.
What happens here is the forward buying this year, and we can see this in the first quarter here, where we had 110 days of inventory, was very strong and was 5.6 days stronger than the forward buy we did last year. This is important. The thing is, when you look at the second quarter, we do a lot of buys, but then we have a huge, everything still to be paid, so we have a huge balance of suppliers. As this inventory start going down, and as we pay the suppliers, we get to a transitory pressure here. What happens here is that we're reducing the inventories, and we're actually reducing the inventories faster than last year, where it has gone down already by seven days.
Because we paid the outstanding invoices and we are not buying normally, our days of accounts payable is artificially lower. As we stabilize the cash cycle around or slightly higher than 100 days and resume buying, the accounts payable will inflate again, and this, this cash cycle will normalize, and then we get to the third quarter, seasonality, which is kind of a normal quarter in terms of cash cycle. Not as low as the fourth quarter. The lowest quarter each year is the fourth quarter, so any quarter, year to date, will show a pressure. Again, you, you have to understand the seasonality. My point here is that structurally, there's nothing funny about the cash cycle, and it's normalizing very quickly. Selling expenses, this is the highlight of the quarter.
50 basis points dilution, very, very meaningful, and this is 100% based on operating leverage gains. We have our mature stores growing, 200 basis points ahead of inflation, and we are able to dilute fixed expenses at the store level. This structural gain has mitigated the non-structural pressure from, from the, the, the, the CMED price increase, which was lower this year than last year. Finally, contribution margin, affected by the gross margin pressure and mitigated by this dilution. It's a 90 basis points pressure, the great news is that when you look the, the year to date, when you compare first semester last year of, this year of last year, it's stable at 11.1%. I'll talk more about this. G&A, we have a G&A, slightly larger than last quarter, 0.1 larger.
There is a peak here in market expenses, but it's clear that we have already stabilized the G&A, which was an issue in previous years, and now we believe we'll start diluting the G&A. It will not be a fast, sudden dilution, but I think it will be a gradual dilution that will be very, very welcome. Finally, when you talk about EBITDA, an amazing EBITDA of 8.5, but an even more amazing 9.5 last year because of the 10.9% price increase. When you look at the semester, it's a flat margin at 7.6%, because we are seeing the amazing news of high inflation last year, which is in the second quarter.
We didn't see here the first quarter, which was a very painful quarter because we saw the same inflation hitting our expenses with a price increase that was lagged, that had not recompensated, had not recovered that pressure. Even better than this is, if this is a consolidated EBITDA margin. If you look at the retaining EBITDA margin, which takes out the 4Bio pressure, we are at 7.9, and we are seeing a 20 basis points growth in margin already in the first semester. What this means is that since the, this non-structural pressure only happened in the second quarter, and we are structurally lighter in the stores versus last year, I think the trend in the second semester and for the full year is for us to gain EBITDA margin versus last year.
We never imagined this point in the year to have a higher retail margin, the year to date, and the same consolidated margin despite the second quarter headwinds that we had to face. Finally, net income. We have a pressure also when you look at the quarter, but near stability when you look at the semester. It's important to understand here that we have BRL 21 million of non-recurring gains that were taken out from our EBITDA. We're always, always very careful in how we address gains and losses from previous periods. Generally, it's we have a because I think we are conservative, we have a lot of tax gains. This happens almost every quarter, so we have almost on a recurrent basis, non-recurring gains, but we are taking out from this basis.
Finally, in the cash flow. If you look, I'll go straight to the point here. If you look at the quarterly cash cycle, it shows a much bigger pressure this year than last year. If you look semester, it's very similar. The reason is, this quarterly pressure has more to do with an abnormal efficiency in the first quarter than a problem in the second quarter. We are comparing here the peak of cash cycle demand, which is the second quarter, with the valley of the cash cycle, which is the fourth quarter, it shows a BRL 1 billion pressure. When we end the year, there will be some cash, cash cycle investments, because we, we are growing, et cetera, but nothing of this magnitude. Same happens with leverage.
You have peak leverage of 1.2x EBITDA, which is very low, but higher than normal, and this will fall back in place in the coming quarters. Finally, this is a very interesting message, I think we are entering a Phase 4 of the company history. The first phase, it was all about the merger, initial pains, then synergies and efficiency gains. What happened here? When we merged, we had a combined EBITDA in 2011, 5.7. Just to explain the bars here before, the sum of the bars is contribution margin. You take out the red portion, which is G&A, you get to EBITDA, which is the green portion. We had an EBITDA of 5.7 that went up all the way to 8.4. Where this came from? First, G&A dilution.
We, we were able to generate a lot of synergy gains and dilute G&A very fast here, so 3.3 falling back to 2.5. The gross margin also grew and reached a record level of 10.9% in 2016. A couple of things here: This growth was not based on operating leverage. You can see that mature store growth was in tandem with inflation here. This growth was gross margin gain. Not only inflationary effects like in 2016, which was a year with 15% price increase, but also price increases to the consumer, because initially, we were operating at a much better level than the competitors, but over time, this proved to be a mistake.
we got to, to record margin levels, 10.9 of contribution margin, based on a recipe that proved to be non-sustainable, which was increasing prices. we had the phases of adjustments, and adjustments are always tough because the volume were down and we still had to reduce prices, so the margin, contribution margin dropped from 10.5 to 9.8. G&A was stable then. we started the digital transformation. The main point here was we had to do a huge investment in our structure to support digital transformation. We're talking about squads, going to the cloud, management team, and, and other, other elements of execution. we invested in execution. We bought execution capacity. What happened as a result? A huge increase in gross margins, in, in.
Sorry, a huge increase in contribution margin, which it went back to 10.9% we had before, but with a very different recipe. We have today the same prices we have here. We never looked back, but our mature stores, because of digitalization, they are growing in average 4% ahead of inflation and generating operating leverage. This year specifically is emblematic because we are at a peak of 10.9%, which is the same number of the last year and the same number of 2016. 2016, we had a 15% price increase, last year we had 10.9% price increase, and this year we have 5.6% price increase. Structurally, we have a record contribution margin. We still have a higher G&A.
Now entering this fourth stage, we believe we'll still see digital driving the numbers for us to have mature store growth above inflation. I don't expect 4% for sure, but I expect these numbers to be meaningful and positive, and still drive sales expense dilution. I believe G&A will dilute progressively, not in a major way, not in a fast way, but slightly, step after step, we will start diluting the G&A. What we're talking here is the perspective of increasing EBITDA margin, because we, we may gain contribution margin, we may save in G&A, so EBITDA margin should grow in the coming years. We are entering a very auspicious phase for the company. Finally, our share has performed really well this year. 25% appreciation versus 7.6 for the Ibovespa.
Very healthy daily liquidity, BRL 160 million. Obviously, when you look total shareholder returns over the long time, the long term, they are in low to mid-20s. I'll now pass to Flavio. Flavio will sum up some of the things we presented here and give some more details in terms of our strategy and execution. Flavio?
Good morning. Thank you, Eugenio . Guys, just to back up and emphasize some information that Eugenio just said. We posted a very solid top-line growth of 18% on the company- at company level, with the retail mature stores growing 2 points above CMED inflation, which is super relevant. We have an expansion, which is the usual cash, cash cow for this company, as you know, now focusing the cities and populations of the A, B and C classes, and with an IRR over 20% for some time right now. Also, we now have the digitalization of this business still very relevant. Digital is still growing at a 56% year-on-year growth, and now reach the participation of 14% on the retail sales.
Just to give you an example what, what the digital activity is now. Just yesterday, we were able to deliver 22,000 deliveries, 22,000 tickets for customers, which is the same number we delivered last year, but over August month, not in a single day as this year. This is the relevance of digitalization for this activity. To close this information on sales, we have 4Bio, which is our specialty goods company, growing at 81% year-on-year, tackling new geographies and tackling addressing new and better commercial partners. Okay? As for the EBITDA or for the profitability of this company, we sustained an EBITDA on this half year numbers at 7.6% at the company level, which is the same number we had last year.
Considering retail, we were able to capture an additional 20 basis points growth on retail and digesting lots of pressures we faced on retail related to CMED price inflation deceleration, and also the participation on the digital of the digital on the retail activity, which pressures a little bit our margins. Also with the participation of 4Bio, diluting some of this profitability. Okay? Most of this, most important than our numbers are the way the numbers are built. The important message here is for you to understand that everything we address here, all our strategies based on engaging our consumers, so understanding their behaviors and journeys and optimizing this relationship. Now we count 47 million active customers at the last 12 months, which is roughly one-fourth of the Brazilian population, okay?
We embark these 47 million customers into this engagement fly wheel, which considers every aspect of the company. The benefits we are features and benefits, we are serving the customers. The way we present our operations for the customers in the physical part and in the digital part as well. The experience they have on these different channels, we also consider the profiles those customers have. Considering chronicities or special beauty desires, or things related, journeys related to childcare. Most important, we are now addressing these customers with a customization at scale. We activate those customers, we relate to those customers, considering all these different levels, which is super important.
Working properly in this, flyw heel, we have been able to capture, additional, benefits from this relationship and a really, good. We are improving our NPS. Our NPS at the store level now is at, at a level of 90.
Our NPS on the digital level, considering both the app, so the way people, customers engage to us, but also the way they receive the goods at home or in their office. We are improving those NPS, those digital NPS. We are not there yet compared to where our stores are, but this is a relevant improvement on this activity. An important thing, both, this 90 level on store and this 80 level or 70 level on the digital world, are benchmarks, considering these two different things. Important thing that sustaining this continuous process of improving relationship with the customers is paying back.
Now, we count these 47 million customers, as I told you, this is, we increased our total number of customers, LTM, in 2.3 million over a year, 6.3 million customers out of the 47 million are frequent customers, okay? These frequent customers are improving in a year-by-year base, this is, I would say, the center of our strategy with the consumer. Considering that the customer frequency as an average, we have here at the company, 7x frequency over a year. If we separate casual consumers from the frequent consumers, we see that casual consumers are only purchasing 5x a year, which is a lot already, frequent consumers are engaging with us 22x a year.
This is when we engage a consumer, this is an increase of 4x the frequency this customer has. On top of this, when we digitalize consumers, we take out these frequent customers, which already relate with us 22x a year, they now start relating with us 28x a year. This is an improvement of roughly 27%-30% improvement on top of the already frequent and heavy user customers we have here at the company. I'd say all the numbers that we post here are very relevant numbers, but these numbers here on consumers are the real strategy or the story we want to tell here on this on this video. Okay, this is it for my part. Thank you.
Thank you, Flavio. Thank you, Eugenio. Now we'll start the Q&A session. The first question is from Igor Spricigo, from UBS. Igor, please go ahead. Are you there?
Okay. Hi, Eugenio. Hi, Flavio. Thanks for taking our questions. Regarding 4Bio's strong growth in recent quarters, how do you see the competitive environment in the specialty segment right now? When should we expect 4Bio to post more normalized growth rates? That would be my first question. Regarding the marketplace, what is the next milestone for it? When should we expect the rollout of new monetization initiatives, such as the offering of discounting of receivables and fulfillment solutions to sellers? That would be all from our side. Thanks.
We are very happy with what we're seeing 4Bio. The, the, the, the specialty pharmacy market is a more consolidated market. We have, like, Profarma, was recently sold to Viveo. There were other players who consolidated a lot of regional players. For some, more consolidated, and then we have some competitors that have high leverage, one of them, very high leverage, and that also affects their competitivity. Having said that, when we look inside the company, the, the gains have been way more from new accounts, from the growth of existing accounts than anything related to these wholesalers. The bulk of what 4Bio does is serving individual patients, even though it's paid by the health insurance.
When you talk about our competitors, they're mostly serving clinics, which we also serve, but it's a minor portion of what we do. For these other wholesalers, it's the main, the bread and butter, what they do. If the gain was from them, we would expect these categories, like infusion, oncology, for example, and the clinic channel, to be growing way above the rest. That's not what's growing. Those categories are growing in line with the traditional categories that are like oral oncology, immunotherapy, and specialty. Especially when you look at customer segmentation, we're talking about health operators, and not about clinics, for example.
I would say the strength of 4Bio has to do with the execution of the company, with new accounts it has been able to, to achieve, with the, the, the regional growth of 4Bio, something we don't talk a lot, but 4Bio is setting regional facilities. 4Bio is putting sales teams to target a- at local health, health, operators. I mean, we have just to be careful not to treat this as this is a problem. This is an amazing thing, and we cannot expect the company to have the top line we have with 4Bio, but with the EBITDA margin without 4Bio. I mean, you have to look at the whole package. It's accelerating the top line, it's-
adding to the total EBITDA, obviously, it's somewhat dilutive in terms of margin. I would love this growth to go for as long as we can, even though there is a mixed effect. In the end of the day, we have a higher absolute number EBITDA, we have a higher top line growth, we are serving more customers, so I would love this to happen, but I don't expect it to maintain this level of growth forever. I think already in the second semester, it will start looking at a much tougher comp basis. first semester next year, it will be looking at much tougher comp basis, so this number tends to start decelerating, I would believe already in the next quarter or next quarters, so we'll see where this goes. This is a good thing.
Let's not put it as if it were a problem dragging up profitability. It's helping the total profitability, but it pressures the margin. Just like digital. Digital is a drag on margins, but it's a huge driver for value creation because it increases the customer overall loyalty, spending, it's accretive. I mean, it is what it is, and I think we're very happy with how we are performing. In terms of the marketplace, I mean, I think it's important that we see a marketplace today in a different way from when we started. The marketplace for us is a complementation of our 1P execution. The goal here is not to monetize the marketplace on its own. If we look in Brazil, I think there is only one player who monetizes marketplaces, which is MELI.
If you look where the monetization is, it's not on the take rates. The monetization is, first and foremost, financial services, then logistic services, then ads. It's very difficult to make money on the marketplace on its own. I don't think we'll see anytime soon monetization in financial services, for example. We're very far from the scale to make this possible. The focus here on the customer lifetime value, having a marketplace allows us to have a much more compelling digital offering. Being a pharmacy with 200,000 items instead of 10,000 items-15,000 items. We become a destination channel for customers in beauty in way more areas. I'll give an example. Think about haircare. We, we don't have in the store, like, expert haircare, like salon haircare you can find in the app.
We don't have fragrances, we don't have makeup or very little makeup. These are difficult categories to work on the individual store basis, but to work on the marketplace, it's very well. As the customer come to us and they understand that we have a better solution for them, they will become more loyal, and because of the marketplace, they will spend more in the pharmacy. Same with the health platform. Because of the health platform, they will spend more in the marketplace, and they spend more in the pharmacy. Obviously, the solutions that we provide are improving. The Net Promoter Score is improving very fast, but it still train big time our 1P digital Net Promoter Score. It's a much more complicated executions.
There are much more moving parts involved in this, so we are going along the learning curve, but I don't think the money come from the marketplace on its own. It comes from, from the customer lifetime value as a whole, and the marketplace is one of the engines to make that happen.
Our next and final question is from Joseph Giordano, from JP Morgan.
Hi, Eugenio, Flavio, thanks for taking my question. The, the first one, goes a little bit beyond results, is, is around the tax reform. I'd like to understand from you, to the extent you guys have visibility around it, how should we think about the tax reform impacting the industry? We know you have, like, a, a geographically dispersed distribution structure, so probably this helps, but, more light here, would be great. The second one is that you, you guys always talk about, gross margin, flattish over time. Now with the digital tools and, the strategy to have regional pricing, how can this change going forward? Because probably, like on the digital, prices are much more standardized, and as a customer, we can see that they are also cheaper, than the regular store.
This could be a game changer. Last but not least, if you could share a little bit more on, like, the recent developments around your ads platform, because you have a lot of data. You hired a full-blown team to, to take care of this initiative, so, more color would be great, because it's a very, very high margin business and could really move the needle over the next couple of years. Thank you.
Joseph, I'll start with the tax reform. I mean, I think it obviously depends. The devil is in details. Depends on how the details play out. I think the, the fundamental portion here is that anything that reduces taxes and eliminates incentives, even if it's longer, over longer time, is amazing for us. We- I mean, if you reduce taxes, not only, okay, you make your product cheaper to the consumer, you can stimulate demand, but the most important thing is that there's a lot of tax incentives in, in, in this supply, in this value chain, special, especially with wholesalers, and we take very little advantage from them. We have very small tax incentives in very specific markets.
For example, we don't ship from tax havens to São Paulo, like some of our competitors, and like every wholesaler in Brazil does. Obviously, if you have a DC in the Midwest, and we have to ship to another state, we may have some incidental gain there. The way to think about the end of the tax incentives, even if this will happen over a very long horizon, is not that we lose less than the others, that we gain, because the tax incentives are an important component of the margin of every competitor. Whoever buys from a wholesaler- has huge tax incentives helping with their buying terms, because the wholesaler in some ways passing to them. Some other competitors, they do themselves that, so they have that.
The day the tax incentive cease to exist, I have a tiny loss in one or two markets, but all of my competitors will have to increase a lot their price. We will gain over time as these tax incentives cease to exist. Even the IR benefit, even the IR, meaning the income tax benefit on the tax incentives, which has a lot of discussions that it will finish because of the Supreme Court, I would love that to happen. Yes, we have some little gain of that, but my competitors have a huge gain out of that. Wholesalers cannot support their prices to their smaller customers if they lose that. The tax incentives themselves look like they'll take longer to cease to exist. Okay, there will be a slight benefit every year.
The, the, the effect of the tax incentive on the income taxes, if it happens, it has a much more immediate effect. For us, this is an amazing and very welcome things. Finally, I mean, when I say the devil is in the detail, I'm assuming that we have a, a good, tax compliance, that we have an, a tax compliance that is as good as today. If it improves the tax compliance, that's even. Broadens the base, that's even better, and obviously, this happens as, as the incentives go down. Then, obviously, if you have the taxes being paid directly to the retailer and tax evasion, if by any chance it became easier, there'll be a problem for us.
All we know, I think we are looking for very positive lenses, and we think it's important for the country, and it will be very positive for us and for other players in the sector who do not rely on tax incentives. We actually suffer because the competitors are powered by tax incentives, and we're not. Your second and third questions are related. I mean, take ads aside for a minute, I still believe you'll see a flat gross margin. Yes, there are positive drivers there. There's the regionalization of e-commerce prices, there is private label, there is better commercial terms being negotiated as we get scale, but these things are paying for a higher digital penetration. Everything else constant, if digital goes up, gross margin goes down. Having said that, you don't see the gross margin going down.
You see a constant gross margin because these gains are paying for the gross margin pressure from the digital channel. In the future, I believe these gains, they are happening, they are important, but they have to keep funding the growth of the digital. Then if the gross margin for the company is flat, digital is hugely accretive because it's transforming the loyalty of the customer. It's increasing the spending, the lifetime value, and this is what drives our mature store sales. It's not a coincidence that we're seeing 4% average real growth in mature stores at a moment in which our digital is growing very fast. I mean, these things are obviously interrelated. One, one is driving the other.
Obviously, ad is a different story, and we're trying to keep it internally separate as possible from the gross margin. If ads become big and relevant, then, yes, because of ads, you could see the gross margin grow, but not the structural gross margin. It's the ads portion, but when you consolidate, it will show on that line. We have now a separate company. We have named a CEO this year, which was the previous marketing executive director for Raia Drogasil, who is deployed. He has a team. We're starting to engage with manufacturers. We are starting to build the learning curve. We're building the infrastructure, so it's going well. I mean, this, this is already a good year, but still, we are not at a transformational level. We have to see how this evolves over the coming, the coming years.
I think this is very, very promising, and we're very excited by that.
The Q&A session is over. Now Mr. Eugenio will present the final messages.
First, thank you all for the presence in the call. This was, by any means, a very, very good and very strong quarter by the company, and actually, this was one of the strongest quarters I, I, I remember publishing for you guys. If you look, if you forget what second quarter last year was and look what this quarter, 8.5% of consolidated EBITDA, 8.9% of retail EBITDA, very strong numbers overall. Not to mention that mature stores growing 2% ahead of inflation, in spite of a 2%, 2.6 percentage point headwind from COVID and from the calendar effect. That are not structural things, that will disappear. On a structural basis, our stores, our mature stores are pointing right now at 4.5.
I'm not saying we'll sustain this number, we'll see how it plays out, but I believe we can go on with a very, very good execution, very good profitability gain and, and sales expense dilution at the mature stores. This quarter, when you compare to last year, there is a 100 basis points pressure, for sure, but it's 140 basis points non-structural pressure, mitigated by a 50 basis points structural gain that is here to stay. This shows the structural robustness of, of what we're doing. In the end of the day, if you look at the semester, we had a flat margin in the semester and a growing retail margin in the semester.
If you ask me one year ago, couple months ago, if I ever expected to pay the bill of the second quarter that we know we had to pay in the same semester, I never expected to be doing that. I would expect to pay that over the year, maybe even generating some, some positive balance in the form of margin expansion, but I wouldn't imagine to see a first semester with consolidated margin stability and retail margin growth. This is amazing. This points us in the right direction to have margin expansion in the second semester, and therefore, in the year as a whole, which was something very difficult to do in a year, giving the bill to be paid, that we had to be paid in the second quarter.
This shows, in my view, the strength of the execution and the deployment and success of our digital strategy. We reach BRL 4.8 billion in annualized digital revenues. RD Digital, as a standalone company, will be the number five retailer in Brazil, and very soon, the number four. We are growing a lot. We reach 14.3% record penetration over retail sales. We have a channel mix that is different from everybody else. Nobody has an app as powerful as us. If you look at our competitors, call center is 25%. For us, it's 1%. Call center shouldn't even be considered as digital, even though we consider ourselves. It's a Jurassic channel.
It's a channel from, from, from the Stone Age, we almost have nothing of that, and our competitors have one-fourth of their digital sales, most of them coming out of that. If you look at our app, you see that the flywheel is turning, because we invested a lot in, in the execution, in the squads, in moving our IT infrastructure to the cloud, in redeveloping our systems into micro, microservices. Obviously, when we start the productivity, the, the, these things are not complete were not completed. The productivity of the squads was very low. The number of releases was very low and infrequent. Now we start to see the same team, because of the, the infrastructure is in place, releasing way more frequently.
The new releases are the fuel for the, for the app to improve, for the functionalities to expand, for, for it to become more reliable and robust. We are now reaching 70 Net Promoter Score in the app, and the pace of releases is coming up every time more, and I think we are now in a very virtuous cycle in terms of improving the app, improving the experience, and capturing benefits. I think our app is by far the benchmarking in, in pharma retailing in Brazil, and I think it's already a very compelling app when you look overall in Brazil. I don't think we're state-of-the-art. I don't think we are Nubank, I don't think we're Mercado Libre.
Maybe we are not Magalu, but our aspiration is getting there, and I think, I think, as this flywheel keeps turning, and we get more and more productivity from, from the squads because of the digital structure, infrastructure being fully deployed, I think we're moving in that direction. Obviously, they're not stopping there, waiting for us, but, but I think we, we, we want to have a state-of-the-art app. I'm not saying we have the best app in the country, but we will have a state-of-the-art app. Today, we have a very good, a good to very good app. One year ago, it was an okay app. Two years ago, it was a bad app. Three years ago, it was a terrible app. We are absolutely getting there.
This is all, this is driving the business through a virtual cycle as well, with mature stores growing ahead of inflation, with the dilution in sales expenses. G&A is already stable and should start to slowly decline. All in all, I think we're going towards this new stage, we're calling the fourth stage of the company, which a stage of fast growth and mature stores, G&A dilution, value, margin expansion, and even more, even more value, value creation. This is all we have for today. I'd like to thank you again for attending this call. Actually, it's not a call, it's a video conference right now. We're becoming very modern, right, Flavio? More than that, I'd like to thank all our long-term shareholders for the support and for the belief in the company. Thank you very much.
Thank you.
RD's conference call is now over. We thank you all for participating and wish everyone a good day.