Good morning, everyone. Welcome to the Grupo SBF webcast, where we will discuss the Grupo SBF's fourth quarter and the 2022 results. This is Pedro Zemel, CEO of Grupo SBF. I'm here with José Salazar, our CFO and IRO, Danielle Regenstainer, our Corporate Finance Director, and Luna Romeu, our Investor Relations Manager. As you can see on slide two, we'll again separate our presentation into three parts. First, an update on the main highlights of the quarter, then we will comment on the results, and finally, we will proceed to the Q&A. Questions can be sent by this webcast platform and will be answered after the presentation. Let's start with slide number three. We started the year 2022 knowing that we would have a challenging year ahead of us, with important steps to be taken to build the sports ecosystem.
Throughout the year, we advanced on structuring and fundamental fronts to sustain the company's growth, such as the completion of much of the integration of Fisia, including the full technological internalization, systemic ERP migrations of Centauro and Fisia, and the inauguration of a new logistics hub in São Paulo. We also explore the synergism between the group's companies and partner brands in the sports market to carry out actions to stimulate the practice of physical activity and get closer and better know the consumers of the sport. The performance of the last quarter of 2022 repeated what we observed throughout the year. Centauro dealing with challenges that impacted profitability, and Fisia opening new market spaces with revenue growth. Although Fisia partly offset Centauro's performance, the annual result did not reach what we initially planned.
Still, as a group, we reached our sales record, 23% higher than the previous year, and growth margin of 47%, the highest margin since 2019 after the pandemic and the incorporation of Fisia. Now moving on to slide number four. Fisia's main growth and profitability thesis, the growth of DTC channels, has proven to be a success. Last quarter, we opened nine more stores, three Nike Direct Inline and six Nike Value Stores. We observed that results continue giving us confidence in this growth lever. The NVS monetization strategy has been effective. The stores continue to have significant sales volume and an attractive profitability, despite the lower prices due to discount nature of the store model.
The NDIS has proved to be a good channel for the sale of higher value-added products within the collection, especially in the lifestyle and female categories, performing the best margin among all the sales channels of the Grupo SBF. We ended 2022 with 32 Nike stores in Brazil and will continue the expansion in 2023 selectively. Slide five. Fisia's digital operation is another lever that continues to demonstrate growth potential. In addition to the growth of nike.com.br, the migration of 1P wholesale sales to the 3P modality within the marketplace channels resulted in an increase in Fisia's margin. This channel has the potential to continue growing, generating margin gains. Even with the migration of part of sales to digital, the wholesale channel showed growth in the fourth quarter.
We believe that standardization in the global supply chain can generate additional growth, which could offset the further migration of sales to the digital expected to occur in 2023. Next slide. We believe that a number of factors impacted Centauro's performance. Despite sales 19% above what we delivered in 2021, we had planned greater growth for the year, expecting that the global supply chain was already normalized and that the structural investments made in marketing, logistics, and technology would bring a greater return in 2022 itself. With revenue growth lower than planned, in addition to the greater need for markdown that pressured the growth margin, we were also only able to dilute part of the structural investments and semi-variable expenses contracted to support a higher level of revenue than observed, which ended up impacting the company's profitability.
In 2023, we will have an absolute focus on Centauro's profitability with a pragmatism in revenue projection and a rationalization of expenses and margins. With this focus for the year, we believe there is room to reduce markdowns, reduce marketing investments, especially in lower profitability performance channels, and reduce less efficient sales modality. In our plans for 2023, we found opportunity to improve the quality of our store park to start the year already adjusted, and this is going to be done in January. Centauro has enormous potential.
Now in slide seven, in parallel, we continue to explore the expertise of our business units to increase customer preference as well as purchase recurrence across our physical and digital channels. In 2022, we act together with market players to promote sport in the country, deepen contact with the public of the best-selling categories, and reach audiences in categories that are gaining relevance, such as skateboarding, dance, and basketball. We act in actions such as the Centauro Fit Festival, a dance event organized by X3M in partnership with Centauro and FitDance, and sponsored by PUMA. Centauro Reveza Adidas, a racing circuit developed by X3M, and ASICS Movimenta by Centauro, a series of training and street races focused on female audience. Now, in the next slide, Salazar will comment on the financial results. Before giving him the floor, I will make a few comments.
Our focus in 2023 will be to increase profitability of our business because we know that today's results is what sustains the growth of the future. What we have built in recent years leaves us with a company that has a turnover close to BRL 8 billion, 2.5x higher than the 2019 turnover, with a new business, Fisia, that in two years has already I'm sorry, delivered profitability levels higher than anticipated and closer to that of Centauro 2019. Today, we have more resources. A larger audience in our digital channels together already concentrate 21% of online traffic when we consider the online flow of fashion, apparel, and footwear e-commerce. I now turn over to Salazar, who will go into greater detail about the results for the fourth quarter of 2022.
Thank you, Pedro.
Before we begin, I would like to remind you that this quarter we had both positive and negative non-recurring effects that are demonstrated in our release. The results I will present in the next slides are adjusted by these non-recurring effects. One change we've made here over the last few quarters is that we've decided to move on to explaining the numbers in the IFRS view. We understand this view by considering occupancy costs as expenses, and it is a better way to analyze our results. As Pedro has already commented, we reached our sales record with a gross revenue of BRL 7.9 billion, an increase of 22.9% compared to 2021. Centauro's growth revenue reached BRL 4.3 billion in the year, an increase of 19% when compared to 2021.
Fisia's gross margin in the quarter reached 42.6%, an increase of 6.2 percentage points compared to the fourth quarter of 2021. Sales in Fisia's direct-to-consumer channels in 2022, which corresponded to 52.6% of total sales, an increase of 10.7 percentage points compared to 2021. Slide number 10. In 2022, Grupo SBF achieved net revenue of BRL 6.3 billion, an increase of 23%. In the quarter, growth was 18%, totaling BRL 1.9 billion in revenue. Looking at each business unit on the right side of the slide, we can see that Centauro achieved BRL 1.1 billion in revenue in this fourth quarter, 8% growth compared to the fourth quarter of 2021. In 2022, revenue grew 19%, totaling BRL 3.5 billion.
The Centauro physical stores channel grew 9.6% in the fourth quarter as a result of the opening of six G5 stores and the renovation of another 10 stores for the G5 model carried out in the last 12 months, in addition to a higher level of markdowns in the period and incorporation of marketplace products in our extended inventory. The sale of the World Cup products also contributed to the growth. However, unlike past World Cups, we believe that other categories were partially cannibalized during the quarter due to the sales of these products. We also believe that sales were negatively impacted by a more challenging macro scenario with greater population indebtedness and inflationary pressure by a more aggressive competitive market and by shortages of best sellers from brands caused by the global supply chain crisis.
In the year, store revenue grew 20.2%, reaching BRL 2.6 billion as a result from the 17 openings and 19 renovations of G5 stores during 2021. Sales of World Cup products during the third quarter of 2022 and a 2021 comparison base is still impacted by the effects of the pandemic. The effects of the pandemic during the first quarter of 2022 and the impacts of our European migration during the third quarter of 2022 contributed negatively to Centauro's annual result. We emphasize that this migration was completely finalized during the third quarter and did not impact in any way the result of the fourth quarter. The GMV of Centauro's digital platform grew 14.4% in the quarter and 26.6% in the year.
Net revenue grew 5.5% in the quarter and 15.3% in the year. As mentioned in the latest disclosures, the difference between revenue growth and GMV is mainly explained by the end of defaults benefit and Fisia's strategy of migration to 3P, which caused part of Nike's products to be sold on Centauro's marketplace, which together with the strategy of including new sellers, grew 125.7% this year. Black Friday's performance, 29% higher than in 2021 and the highest level of markdowns, contributed positively to the growth of online sales. The negative impacts, as well as in physical stores, came from a more competitive market and a more challenging macro scenario.
Fisia totaled BRL 969 billion in the fourth quarter, an increase of 30%, and BRL 3.2 billion in the year, an increase of 26% compared to 2021. Revenue growth in the quarter benefited from the World Cup sales, the opening of nine new stores, the resumption of sales revenue for the wholesale channel after the conclusion of the systemic migration, the migration of wholesale's 3P digital sales, and the largest Black Friday held on nike.com.br channels, and Nike Value Stores. The negative performance of the SSS of the Nike Value Stores, which was 2.8%- in the quarter, was expected and occurs due to the change in strategy in the operation channel. Now moving on to slide 11.
The group's gross profit in the fourth quarter reached BRL 945 million, an increase of 19%. In the year, we reached BRL 2.9 billion, an increase of 26% compared to 2021. The gross margin of Centauro in the quarter was 46.6%, a decrease of -3.3 percentage points. Part of this is explained by two factors: 0.7 percentage point impact on the margin of the fourth quarter of 2021 due to the end of defaults benefit in the digital channel, and a reduced inventory scenario. We reached the highest gross margin level in the fourth quarter as a consequence of a lower level of markdowns during Black Friday. In addition, this quarter the margin was also impacted by the stock out of bestsellers of the brands and our brands that have higher margins.
By the greater need for markdown and a higher share in the November sales quarter that historically has lower margin levels due to Black Friday. In addition to the impacts mentioned above, throughout the year, we faced more aggressive competition in the online market, implying the need for a markdown level above that practiced in 2021. Defaults impact since the end of the first quarter, and occasionally effects of reducing demand for winter products and bicycles. Thus, we ended 2022 with a gross margin of 47.9%. Fisia's gross margin reached 42.6% in the quarter, a gain of 6.2 percentage points. This quarter, the margin expansion benefited from the new pricing strategy started last quarter that offset the exchange rate pressure still observed in the cost of imported products.
With this, as in the third quarter of 2022, it was possible to observe again the concrete effect of migration to direct-to-consumer channels, which went from 49% to 56% of sales and contributed to the gross margin gain in the quarter. In the year -to -date, in addition to the effects mentioned, we also had an impact of exchange rate pressure and a comparison basis benefited by the acquisition inventory, which were offset by the gain in share of the DTC channels and by the more assertive pricing. In slide 12. In the quarter, operating expenses as a percentage of net revenue were 39.5%, an increase of 5 percentage points, which can be explained by three types of factors: structural increases, discretionary increases, and extraordinary effects.
Moving on to the next slide, we demonstrate how these effects increased the expense level for the quarter compared to 2021. Structural increases justify about 1.9 percentage points of increase and were caused either by the business dynamics itself or by essential investment needs. They include the impact of largest share of Fisia's DTC channel, which has higher expenses than wholesale, increased marketing fees paid to Nike, Inc, increased spending on information security. The discretionary increases justified 2.3 percentage points of increase and reflect investment decisions that were considered necessary for the company's growth. Among them, investments in new areas of the company required to support growth, such as marketing, logistics, ventures, and strategies, increase in marketing investments, and clarification of salaries and benefits of the company.
Extraordinary effects, which justify 0.8 percentage point increase, with the biggest impacts including credit card administration fee that had been charged less by acquirers in the previous quarters of 2022 and that was retroactively adjusted in the fourth quarter of this year, the impact of rent discount in the fourth quarter of 2021, and also the negotiations of the pandemic, which did not replicate in the fourth quarter of 2022. In slide 14, the group's EBITDA reached BRL 161 million in the quarter and a margin of 8%, a decrease of 4.4 percentage points in the year. EBITDA reached BRL 469 million and a margin of 7%, a decrease of 2 percentage points when compared to 2021.
The decrease in EBITDA margin in the quarter and in the year is justified by the drop in Centauro's gross margin, increase in expenses focused on the growth of Grupo SBF, and increase in Centauro expenses aiming at revenue growth above what was realized. In slide 15, in this quarter we presented net income of BRL 70 million, BRL 206 million in 2022, a decrease of 56% that can be explained by the increase in operating expenses, the increase in financial expenses, and a comparison basis in 2021 income tax benefited by the recognition of the BRL 185.9 million in deferred income tax that was off balance sheet. In slide 16, we ended the year with BRL 418 million in cash. Our financial leverage position is at 1.14x EBITDA.
Operating cash flow was positive at BRL 412.8 million this quarter, mainly impacted by the company's natural cash generation in the fourth quarter, an effect that occurs due to the low rate of payments to suppliers in the period given the company's average payment term. Looking at the basis of comparison, we have the other line of the fourth quarter of 2021 that was mainly impacted by the transfer of ICMS credits from short to long term Fisia due to the expectation of consumption after access to the import area. In this fourth quarter of 2022, there was a partial return of the long to short term of these tax assets impacting the others line. Cash flow from investments is mainly explained by the other line in the fourth quarter of 2021. Cash flow from investments is mainly explained by the M&As made and investments in technology and stores.
Now, in slide 17, we're going to open for the Q&A that are being submitted to us using this webcast platform. Thank you very much.
Good morning. I'm going to start with some questions. I have a question by Ruben Couto and Maria Clara from BBA. We have a block here. I would like to understand a little bit about the expectations for the year and the impact of this growth rate in the upcoming years.
We already expect to have results and margins over the quarters starting with 2023. This is the timeline. In 2023, aiming at profitability, the main objective is to have better growth. Decisions are going to be made in this direction. If we have any short-term impact, it won't be a problem, we'll have a higher gross margin.
In the long term, we do not see this limiting the company's potential. The market still has the same perspectives of growth, and there's absolutely nothing that we make in terms of decision that will hinder our expectations to grow. Also, somebody asked for an update on the potential of the stores. This has not changed. During the pandemic, rentals were indexed to inflation rates, and then we had some contracts which were unbalanced. We're always analyzing our portfolio the whole time, and we will continue doing so in good and bad times. Therefore, we have to make very specific adjustments. There is no limitations to the number of stores we can have because of this dynamics. There is another block.
Our markdown strategy, which should be seen in the first quarter and some in the second quarter, we have a more aggressive competitive environment, especially with Centauro, and so we're going to do something about it in the first quarter. If that has any impact in any areas of the company that has no profitability, that won't be a problem. We deal with competition as we can. We try to develop a differentiation, and we believe that we are well- positioned. We have differentials. We also have our brand partners. We hope to have a different segmentation, encouraging customers as the market normalizes, and it's a little bit more complex because of the pandemic and the supply chain. We believe that Centauro will regain this, the space that it always had, and this is how we're going to compete.
This is already in force. Thank you very much, Ruben and Maria Clara, for your questions.
There is a question by Victória Minosso from Eleven.
It's related to the wholesale market, and you asked about the expectation to invoice BRL 150 million. However, you also commented that migration had an impact. Could you better explain that, if these sales were included in the fourth quarter?
Well, it's important that we separate two different aspects here. When you migrate SAP, part of the sales is lost, especially in e-commerce. When you migrated the system, Centauro system in July, you lost approximately BRL 50 million in sales because you stopped invoicing. The same thing happened in Fisia.
In Centauro, more specifically because of the migration and different product niches, in terms of what should have been adequate, because we had to make adjustments, we lost BRL 20 million. Of these BRL 150 million, BRL 60 million in the third quarter were, in fact, sales that were lost because of the pandemic. In the third quarter, from September to October, we were not able to invoice about BRL 160 million. When we say that there was no impact on the fourth quarter is because the migrations were concluded, the operation is working normally, and everything that should have been sold in the previous quarters was sold in the fourth quarter, and therefore everything is normalized to explain the dynamic in the wholesales. What we didn't sell in the third quarter was sold in the fourth quarter.
I'd like to mention that in 2021 we had a 3.3% or BRL 1.9 billion. In fact, this growth is higher if we imagine that part of the wholesale which used to be sold to digital platforms, 50% of these sales was migrated and was directly invoiced by Fisia and no longer by the digital platforms. Therefore, we believe that the wholesale in the year, even though it is a channel whose share is decreasing within Fisia's sales, had a very good performance actually. In general, Fisia in 2022, in all of its channels, had a very good performance, both in terms of growth and profitability. Okay, let's see the next one now.
Next one is from Gabriela Ferrante from Safra.
What is the expectation for 2023 in the first quarter, taking into account that in 2022 there was an increase, and also in Centauro with CapEx, the inauguration of stores?
Well, regarding the SG&A, the first thing is that it is important to understand that in the specific case of Fisia, there is an issue with the dynamics. The margin expands, but it expands with a gross margin growth. This is very positive. It promotes an SG&A growth in the company. The SG&A actions for 2023 will continue. We will have a performance throughout the year, and we'll work with a very pragmatic revenue so that we are not at risk of projecting a higher revenue than we can really obtain.
In terms of CapEx, we're going to invest in technology and in our stores, we have a perspective for the year, and we're going to close 2022 with a reference of how much we're going to invest.
Thank you for the question, Gabriela. Well, we have a question from Dannie here.
Actually, we have three questions. On the dynamic, since this is a strategic announcement and it is returning, we can understand that this can be negative in the long term.
No, Danniela, we don't think so. We think that we had an adjustment in the mix of NVS last year. We believe that this adjustment was executed, with a mix of rebuy. After 2023, we believe that we will have a growth which is compatible with the market growth.
You commented that we have a high stock in Centauro. Can we expect the growth margin to be impacted by markdowns?
No, we don't think so. I think that the whole plan is that, throughout 2023, we should go back to levels that are closer to normal levels. We believe that there are some components that will help us. We think that the normalization in the supply chain, which was observed in the second quarter of 2022, will make our product mix to be more adequate. We will have an adequate amount of bestsellers, and that improves our capacity to reduce markdowns. We also think that Fisia's strategy to go 100% to 3P will be beneficial from the point of view of competition. We also have other actions that are being taken in the company. This is what Pedro had already commented in terms of profitability and making sure that we work with more profitable channels.
We do believe that we're going to start, throughout 2023, to resume this profitability. Another important factor. I'm talking about the group more specifically, we see a very clear profitability pathway for Fisia in the sense that we will be growing in more profitable channels. If we stop to think about it, we have different channels and levels of channels. We start in the lower area with wholesalers, and then we go to NVS. I'm sorry, 3P, and then NVS, and then you go to Fisia, and then NDIS. As we open NDIS and as we no longer sell 3P in the digital channels and migrate that to 3P with growth that we believe to be very good for Fisia, we believe that there will be a natural increment in profitability and gross margin.
In the first year and in the first quarter, we have what we did last year. This helps us improve our gross margin and therefore our contribution margin of these channels. We believe that this scenario for 2023, because of everything that has been done, is of a recovery of the gross margin in Centauro and eventually better gross margins in Fisia because of the last strategy that I explained to you.
We have a third question. You talked about higher expenses. Are you going to have any adjustments in the stores or just in branding?
Well, Dannie, the answer here is the following. Number one, as Pedro mentioned, we've already made adjustments to our stores. Eventually, we had stores that were not what we had planned. This is the first aspect. Number two, we did a lot last year. We did a lot at the same time.
We increased Centauro's branding. We opened three new centers to improve the quality of the delivery of our logistics. We invested in training to provide a better understanding of the market. We believe that simply because we're not going to make new investments, and our baseline for the last quarter is not going to grow except for the indexation, this will help us throughout the quarters, and also with the growth of the company, we expect these expenses to be diluted. Especially in marketing branding, we will in fact reduce some of it when compared to what we did last year. In the case of Fisia, we will maintain the same amounts we had last year. We believe that we will be able to deliver the expected growth. Thank you very much.
Irma, how are you doing?
What are the perspectives for the leverage of debts due in the short term?
Well, the way we see it is that we have a leverage of 1.76%, including tax debts. If we exclude that, it will be 1.6x . Unfortunately, we believe that we had the Americanas problem, which had an impact on the market. The debenture market closed. We believe that it won't be difficult for us to renew our debts because the market is open and we don't see any major problems in that. Our objective, along with reducing the leverage and at the same time increase the profitability of the company, I have no questions, no doubts that this will be a year where we'll be focusing on reducing this leverage. Of course, we are already working with banks so that we can roll our debts for this year.
In case of a very unlikely scenario, this market also closes. We don't think this is going to happen. We have BRL 1.5 billion of receivables. Another important aspect is that, of course, when we have a transaction with the banks, in addition to being a transaction in the short term, it's not going to be as long as we would have liked it to. As soon as the debenture market reopens, because it will reopen, we will finance this debt. You asked a question.
Could you talk a little bit more about changes in Nike?
We came to the conclusion that some products could have a price increase. Others had to have a price decrease, but that led to a 10% increase. This was a scientific work done. I think that this is done every year. We go there.
We see where we have opportunities. Initially, it has to do with what we did in July, the changes done in July.
Pedro Pinto, could you better explain the increase in the suppliers' prices? What were these negotiations like? Are they sustainable in 2023?
Well, I think that the first aspect here is that there is a seasonality in this, an important part of purchases happen at the end of the year, and then we have a normal cash cycle where suppliers are paid for in the first quarter. Pedro, we're not doing anything different from what we've done in any other year. Okay?
Hello, Vinicius. Danny, I was complaining because I was going to answer the question without reading the question. Well, how are you doing, Vinicius? Let's see where the question is, 'cause you removed it from my table.
After the SAP migration, could you talk a little bit more about the amount you intend to use in 2023 and 2024?
Yes, I can talk about that. Fisia's operation, when it was a Nike subsidiary, especially here in Brazil, it always accumulated credit. I'm not going to get into details of why this happened. It doesn't make any sense. The fact is that this credit has always been accumulated. As we implement the import corridor, instead of accumulating credit, we're going to use these credits. We're going to download them because of our logistics, our tax logistics, but of course we also have true logistics behind it. We're trying to include the tax benefit in the import channel, but we're also going to have the benefit of using this credit. Having said that, we do not see an impact until the second quarter.
When we bought Fisia, we paid operating cash, tax cash, and the credits with ICMS that were in Fisia before the acquisition have to be paid for, number one. That's why we will see a reduction of the tax credit. We will also see a reduction in the payment price that we owe to Fisia as I use the tax credit. Later on, we will see our own credit, and that's why it will be seen more in the second half of the year than in the first half of the year. Another important aspect, with this logistics structure that we have assembled, we no longer accumulate, we only deduct.
Thank you very much. What are the metrics? Are they going to vary?
We always maintain a balance. They're always related to results. The difference for 2023 is that it's going to be more important for the company's results.
We have another question from Irma.
If we see migration to brands with a lower mean cost or price...
No. We don't see any significant migration to other brands or to brands with a lower cost. No, we don't see anything in that direction.
We have a question from Nicholas.
Good morning. Could you comment a little bit about the sales performance in the beginning of 2023 in Fisia and Centauro? Is it below expectations?
Well, within the scenario Pedro mentioned, trying to look for leverage and so on and so forth, in the first two months results are aligned to what had been anticipated in November. Thank you very much.
We've answered all of the questions. We are going to end our Q&A.
Our IR team remains available to answer any questions that you may have, any additional questions. I would like to thank our almost 10,000 employees, shareholders, and the thousands of people who have been somehow connected to our company in 2022. We are always looking at the long term, but we are totally committed to the short term. This has not changed. We want to have today's results to sustain the future results.