Good morning to everyone. Welcome to the SBF Group webcast where we will discuss the earnings results of the Q1 of 20 21 of SBF Group. This is Pedro Zemo's CEO and I have Jose Salazar, CFO Daniel Regensteiner, our Corporate Finance Director and Luma Romeo, our IR Manager. As you can see on Slide 2, today, we will then we will comment on our results and at last, we will have a Q and A session. Questions can be sent through this platform and they will be answered after our presentation.
So we will start on Slide number 3. During the Q1 of 2021, our financial result was impacted by the increased restrictions of retail opening hours because of the pandemic in 2020. This impacted that our operations in the first half of March. We have been impacted during the entire quarter. This scenario affected our store sales.
And like in 2020, the drop in our brick and mortar stores caused deleveraging, and this damaged our EBITDA. On the other side, the GMV online of Centauro is growing and it offsets partially. As stores go back to normality, something that we have been seeing, we expect a recovery of EBITDA margin to levels prepended. We do have some interesting figures to share. Number 1 is that the SBF Group grew 50 percent in revenue driven by the acquisition of Knight.
But this is the business that we have right now. And 1, we have a challenging quarter and the seasonality of the year, we have $1,000,000,000 in revenue. We believe what we will be able to deliver when we open our stores and our margins go back to normal. In addition to this, our online sales continue growing soundly. And during the Q1, they grew 138%, and this represents 30% of total sales, driven mainly by the result of knight.com.brl that in this quarter represented 25% of Physio's revenue.
In addition to the migration to the DTC channel direct consumer online And now we already have put into practice initiatives that give us results. We've broadened our portfolio to sell through the nice sites, and we've optimized our online marketing to create more conversions. The gain of shares of Editel Direct Official contributed for is to reach an EBITDA margin of almost 10%, 9.8%. We are highly satisfied with the speed of the implementation of the projects that will leverage the value of this acquisition during the Q1 the 1st months with positive results of fees. And well, this shows you the opportunity that we have to broaden the profitability and penetration of Nike, especially with an assertive online strategy in addition to have new initiatives allow us to drop costs and optimize the profitability through our direct contact with our consumer.
Another important point, although with the worsening of the pandemic, the omnichannel sales of omni of Centauro grew. And when the stores were open, we observed sound and healthy sales. During the last weeks of April May, we continued observing good signals of recovery for the open stores, and we already seen a growth of same store sales, especially in the G5 stores that continue showing performance above the traditional stores and even above what we had projected when we created the store model. This behavior confirms that the customer is omnichannel and the store experience are essential for the purchase process when you buy sports goods. This is why we continue with our long term plans to expand our stores in new cities to broaden our national presence.
Although it's still fragmented, we evolved in our ecosystem so that all the business units work in an integrated format. This year, we are prepared to face the pandemic without deviating our focus on the projects that will give us value. In the long term, our technology team will give agility to these projects that will give us new value, and we will be able to give more functionality and a better experience. We are also integrating with NWB that is part of the group, and it started on March 1st As a first integration experiment between the business channels, we transferred the Brazilian soccer championship, the female soccer championship. And last year, when we faced the great uncertainty because of the effects of the pandemic, we adopted restrictions and also measures to protect our cash flow.
Now we are prepared to face a second wave, and we are focused on the projects that will add value in the long term. We believe that the reopening of brick and mortar stores in the middle of a even in the middle of a pandemic will allow us to grow the sales in our stores and to have more profit. We will not change our investment plan and our growth plan focused on the building of a new ecosystem and increase of capillarity and an improvement in the sports experience purchase, but we're paying attention to the short term to react quickly to any change in this scenario. Now I give the floor to Salazar that will give you details regarding the financial highlights of the quarter. Thank you, Pedro, and good morning to everyone.
Let's go to slide number 4. During this quarter, we had in our release, we present a table with all of these effects. The results that I will present in the upcoming slides are adjusted by the nonrecurring effect. And we will comment in the effects of RF as this is complete where we include Fisia in 2020 figures are only Centaur figures. We will go to Slide number 4 and our main highlights of the quarter.
We totaled $1,000,000,000 in gross revenue, an increase of 59% when we compare it to Q1 of 2020. We had an increase of 45% of GMV online sent out and BRL126,000,000 in the digital platform of Faizia. At the end of the quarter, we have a cash position of BRL 412 million. We can go to Slide 5 of the presentation. When we see the total revenue, we grew 61% during the quarter.
We had a drop in Centauro because of the worsening of the pandemic during the quarter where we had greater restrictions. In March, we had days of 93% of our stores closed. And in 2020, the 2nd week of March was affected. Centauro had 39%, the GMV was 45 percent. This result of the omnichannel investments technology and marketing that we carried out in 2020, even with the drop of markdown level.
The fees also represented good results. 24% of the net revenue, the second wave also went to the digital platform. On Slide 6, we will talk about the gross income and gross margin. Gross income in the Q1 was BRL353 1,000,000, a growth of 43%. When we compare it to the Q1 of 2020, a growth of 3.8 percentage points of gross margin is a consequence of the promotional environment caused by the pandemic.
The price dynamic was normalized, but with the worsening of the pandemic during the Q1, the margin was stable and equal to the Q4 of 2020. Other factors also contributed to this drop. We have the mix of channels and mix of product with the soccer channel below stock fees. They have presented a margin of approximately 38% driven by the gain of nike.com.bronlinephysiachannel that has the greatest gross margin of these three channels. This gain of share, as Pedro explained, is the initial result of the new marketing initiatives and in the assortment since we adopted Faesia.
The margin was also impacted by what we observed in the past quarter when we assume the quarter, the inventory, we assume the operations of these merchandise and now they were acquired in the distribution commercial agreement. And we continue expecting a drop of gross margin as we renew our inventory. Now we go to Slide 7 to talk about operating expenses. The SG and A grew 54% compared to the same period last year. This increase is because of the incorporation of ISIO operations.
And as we mentioned, the growth of Centauru created variable expenses, freight and performance marketing, but the temporary drop of this revenue is not followed by the expenses because of most of the expenses associated to this channel are fixed. By and large, the operating expenses grew 56%. Now going to Slide 8, we will analyze the EBITDA. The EBITDA of the globe totaled BRL37 1,000,000 with a margin of 4.6%, a drop of 4.1 percentage points in comparison to the first quarter of 2020. The EBITDA margin of Centaro was 0.9% and Fizia was 9.8%.
The main factors that allowed this EBITDA margin to drop was the drop of gross margin and the operational deleveraging because of the closing of stores of Centauro during the Q1. On Slide 9, we have the net income. We had a loss of BRL28.1 million. Now going to Slide 10. Cash flow during this was 0.
The seasonality consumes more cash during the Q1 of the year because of the payment of Christmas. But the payments were offset by the physio wholesale. This cash flow was impacted by the acquisition of NWB. And last year, we suspended investments to preserve the cash flow because of the uncertainties of the pandemic. Right now, we have to focus on the long term and maintain our strategic investments.
Now cash flow from financing, we have the same strategy that is the anticipation of accounts receivable to reinforce our cash flows, something that wasn't adopted in the past. We ended the Q1 with over BRL 400,000,000 debt of BRL 200,000,000, a total net debt including anticipation of BRL 343,000,000. Now we open to questions that can be sent through our webcast platform. We have question number 1 from Itau Bebea. I'm going to read the question.
Well, good morning. I have two questions from Itau. One about knight.com. Br, the pandemic could have helped to increase the share of this channel. But do you believe that this accelerated the plan of the DTC of the company, which were the points which were the learning points?
And the second question about the sports platform, you were talking about NWB and Centaoro Broadcasting Female Soccer matches. What was the experience? Well, the first question, we are highly satisfied with the results of knight.com. Br and very reassured regarding the prospects. As you do know, this is an important part of the value generation.
We expect this channel to give us better margin, and the prospect of growth is very interesting in addition to a direct relationship with I don't have to prove this. Everybody realizes this. And this is an important factor for people to use the direct channel of nike.com.br. So this relationship with the consumer that is strong is an element that will drive the growth. In addition to this, this is a channel that is underpenetrated.
So the participation of e commerce in knight.com was lower. It was 10% when we compare it to other countries and other businesses. So we do believe that there is a possibility to grow quickly. And of course, this event helped us. I think that the purchase that was created by an exceptional occasion.
Well, this is not the biggest factor. So regarding what we have seen in reports from the banks is that as stores open, there will be a greater e commerce penetration. Not if but we believe that dotcom is going to drive sales, but I believe that what is important is what our team is doing. And we are focusing on this part of the business. That is an integration of our technology platforms and also analyzing the logistic network.
Focusing on this, we are excited with the first signals. Now the second part of your question, this was an experiment. Well, no, we've had 7 matches. We had an this was an experiment and we have to see it as an experiment. What excited us, number 1, was that we broadcasted an official match live from the CBF, and this opens doors for the future.
Number 2 was the tone of voice of Desimpigidos allowed the public to be greater in the Internet than it has historically been in terms of female soccer. There was an average of 300,000 views online in these matches. And there were matches with 15,000 people watching it live simultaneously. This is a long period of time in terms of broadcast. So we are excited because that our channels in certain event can also drive the amount of audience that we have, and this can also encourage partnerships.
And also, these are the simplest layers of integration that we can use in order to drive the audience that watches our videos to buy and afterwards, they can buy in our e commerce platforms. And as we already mentioned, during the first stage of our ecosystem, well, this is the main way of monetizing that is to sell product. So we want to connect the audience of the NWB channels and affiliates with Centauro. Now going back to the beginning, well, this is an experiment. Of course, we are happy with the signals, but this is just an experiment.
Now we have a second question. Felipe Casimiro from HSBC. He said in the release, you said same store sale positive in April, May. Do you have a base of comparison from 2019 in May? May is being compared to 2019 and our performance has exceeded the amount.
We do not want to give you the precise figures because this can vary throughout the months. Nonetheless, we do understand that our performance is positive when we compare our figures to 2019. We had been observing this performance in the stores that had been opened During the pandemic in March, we already saw that consumers wanted to go to the stores in April May, we saw a stronger trend. And Faesia was impacted by the restrictions. And what can we expect in the normal scenario?
We always had a target in our mind that was we wanted to have a DTC mix, and this includes e commerce, Nike Factory Store that are the outlets. We wanted to start from a level that was 30%, and we wanted to go to a level between 50% 60%. Our objective is to do this in 3 years. And we believe that, well, unfortunately, with the pandemic, we will be able to anticipate the fulfillment of this target. Because we can radically change the mix, the DTC may be more relevant than wholesale.
And this, of course, will improve our margin and the site, nike.com.br have gains of efficiency of with SBF. Can I help you here? I believe not yet this gain. It's not because an improvement of services from the platform or from logistics. This is something that we are just starting.
Our gains in regard to things that were done during the 5 1st months are mainly of 2 areas. 1 is regarding marketing performance. And yes, this is something that we adopted. And we treat the Nike ecommerce with variable marketing with ROI as you do with ecommerce. And we won't asphyxiate the e commerce when it's growing.
So this was very important. And another thing that was very important was the possibility of focusing and to focus and to expand this channel. Seeing it as a priority for us and that we are going to deal with it that way. And we have to consider it on our daily decisions. In addition to this, the team had been doing an excellent job.
There were things that had already been done, and we surfed on the wave that had already been created. I just wanted to add this. So let's see our next question. Our next question from Alex Tanaca from Alpha Key. Good morning, Pedro.
How can the SPF ecosystem increase the purchase recurrence of your customer? And how is the purchase process of the Knight products? How? I'll answer the first question. First one would be, The retail of 1 category and our category, not only 1 category, is a low frequency retail.
A customer buys in average 2 times a year, and there are customers that, of course, buy more. Now this is one of the main challenges to create an ecosystem. How do we create and make the best journey of sport to increase the frequency that we meet our customers because you can't have a deep relationship with someone that you see twice or 4 times a year. This is why we want to increase the frequency of sent out about when we include other assets and other types of business. Well, with this, we want to increase the frequency.
And this perspective in terms of sports gives us optimism because there's strong engagement with sports. People are frequently connected to sports. A great amount of people watch a match or read an article about sports or use some running app or practice sports or go to the gym every day. And what we have to do is to connect ourselves to our points to increase the recurrence. So this is one point.
There is another point, which is that the Nike brand provides us We are in Numbers Day for those that are members. And these products emerge, and they are all bought. This is for members, and this is an additional purchase. The product that Nike brings to the ecosystem is not that a person bought sneakers because they needed it. They bought sneakers because this the opportunity appeared.
And this is something that they could have bought in another segment like wine. I'm just giving you these examples, but I believe that we are placing assets that help us to have IPs in order to increase the recurrency. Female soccer was an audience that was watching other things. And we brought female soccer and they connected with us. We are really reassured because we're opening channels, and we are creating more sport engagement.
And with this, we create purchases inside our ecosystem. And before I give the floor to Salazar. During the 1st days of May, we're talking about 13 days of same store sales that is nothing relevant. We're going to break out the figures in a structured fashion, but we were excited because we saw a base of stores that were opened. And despite the restriction of opening hours, this is an additional challenge.
We see sales, same store sales at 7 by 7% in stores during the 1st days of May. So this is why we believe that as stores will open, we will see growth. We will be able to sell products which increases the gross margin. And we will go back to the pre pandemic levels in terms of revenue and of course, higher revenue, higher than the Q1? And Salazar, you can answer the second part of this question.
Hello, Tanaka. Well, basically, it's the following. We generally negotiate the collections. There are 4 collections a year. Spring, summer, fall and holiday.
And we negotiate and we prepare these collections and at what price we have to sell them in order to attain the desirable margin. 9 we do this 9 months before just for you to have an idea. In March of 2021, we were ending, not ending, we were starting the calculation process of the sales volume for holiday 2021. And during this moment, we realize the demand, what kind of demand are we going to have. And based on the expected demand, we also see the price of the dollar, What will how much will it cost to buy this product in dollars?
So we price here the different products, and we provide the sales price to our partners, everything is based on the dollar perspective. This would be the future dollar. So what we basically do beforehand is to see the costs or how much it costs to buy this collection based on the market demand. So we start to announce to Nike Inc. What will be our demand.
And also, we already know at what price we have to sell to gain the margin based on the exchange rate of the market. And we do strings 9 months beforehand, and we have 4 collections a year. The next question from Richard. Richard from Bradesco. Good morning.
Now that NWB acquisition have closed, what are your next steps? How are you going to engage with the e commerce customer? Thank you for your question. This year, we have a number of priorities. We are evolving each one of the business units in Centauru.
In the Internet is the preferred destination to buy sports goods for Nike is to grow .com and to open a channel of direct sales through stores so that we can grow in the direct channel to our consumer from here on and to integrate or to bring elements that can support and solidify our ecosystem mainly through the ability to use our audience that we create in AIMWB and to create some type of membership so that our customers come back more frequently. CCAC, you want to increase more frequency. When we see the e commerce consumer, when we're talking about omnichannel consumer has an LTV better than that from e commerce. We have a CAC that in the industry grows, and we are maintaining this relatively low, but the lifetime value but if you see a shorter period of time like 1 year or more than this, it is based on the first purchase because there is low recurrence. So here we have a major challenge of improving the e commerce indexes, but to place elements that will drop the CAG.
We have a proprietary channel of NWB to bring customer and to increase the recurrence and to create articles or to create partnerships to increase or to create advantages so that the consumer buys in other companies of the group. So these are a number of projects, but these are new projects. Therefore, I want things to happen before I share all the ideas broadly. Thank you very much, Richard. Now I will give the floor.
I will go to our next question from Irma from Goldman. And there are 2 questions with the reopening of stores. Do you have you seen a mix of the sold products? Or is it too early? In Centauro, is the gross margin going back to the levels to the historic levels?
Or are there things that will affect you for a longer period of time? So Salazar, I will answer the first question. You will answer the second question. The first question, Irma, it's there are oscillations because there are restriction like soccer products, like soccer shoes is suffering because we have less people playing soccer. Well, individual sports still are a highlight and collective sports are still suffering.
This is the main change that emerges, but we are close to normality than 1 year ago. Last year, we sold a lot of home training equipment. But now things are going back to normal, of course, with a caveat of collective sports because we have different profiles and people that play soccer are suffering and this is a business that is important for us. Salazar? To give you context.
And the answer is yes. Yes, we see that margins are going back to margins close to 2019, but there is a context. Well, this had already been observed since October last year. In quotes, actually, when we had a slowdown of the pandemic in September and in quotes, we lived a more normal life in October November with open stores and things were working or people were circulating more freely during this period, we saw margins recovering. So this was reassuring because we saw people things come back to normal, people go back to normal.
In December, before the Christmas period until 15th, we also observed a gradual recovery of margins. Things were resuming month on month and the margins were improving in both channels. Then the December came with the beginning of the 3rd wave before Christmas, and we started we started seeing opening our restrictions and the movement of margin resumption was more restrictive. But on the other side, during the 2nd wave, we didn't see what we saw in the first wave that was a significant margin drop in a certain way everybody was prepared. Our inventories weren't as high as in February before the 1st wave because people were optimistic.
Nobody thought about a pandemic. So everybody was and also and within this aspect, although we didn't recover our margins, we didn't record a significant drop visavis the last quarter. And we changed a couple of things because as the stores operation resumed, well, we became more selective and perhaps more intelligent in pricing, in markup. We focused the pricing and this aspect of the markup. We believe that people that were visiting the store were going to buy if they left their house after a second wave, and this person went to the store to buy.
And we realized that we could be more conservative in the price marking. So we started to mark less. And with this, our margins, mainly in brick and mortar stores, started to recover. The e commerce margin are recovering slower because the market is more competitive. This is a market online.
But we can also see the same margin recovery that we see in brick and mortar stores. So the answer is, are we recovering our margins? Yes. But I wanted to give you a background so that you could see what we did during this period and why this movement. Well, when stores go back to the normal opening hours and as we see that customers want to go to the stores to buy, And this is something that is going to happen.
And when stores go back to normal and e commerce goes back to normal, well, we will see everything reflected on e commerce as well. Thank you very much. Thank you, Salazar. Now our next question, Marcelo from Perfic. Regarding Nike, and how much does Nike represent on the online?
This consumption in terms of inventory depends varies according to the channel. There is a part. There is a part of NFS that will be expanded until the Q3 and the 3rd part that is online. We believe that we are in a place where we doubled Even with the reopening of stores, we are reaching this point. So we are very happy.
And accelerated With the capacity of adding value with this acquisition. Thank you. In addition to Marcelo, there are investors that ask questions about the share. So this I think that my answer answers your question. Yes, we have already doubled.
We have a question from Victor Fusiaro from Santander. Good morning regarding the sales of Centauro. Can you give us your prospects for the future? Victor, we do not have a target here or an objective. The growth of this number depends on the growth of Centauro and it also depends on the growth of the NICE share in Syntauro.
And we basically let the market resolve this. The Centauro team has their objectives, and they benefit themselves with the growth of Centauro. And they will buy Nike more or less according to the benefit that this of how or how this will benefit them. So we don't have an idea how much they will buy. We have a next question from Cristiano from Orema.
Well, what about the remodeling plan for your G5 stores, has there been a change because of the current situation? We continue doing this. We have not changed our plans. We continue remodeling stores. Here we have around 60 something stores following the G5 model.
And what happened was that due to movement restrictions and additional care with the circulation of people. We didn't sell we didn't send teams or IVMs to cities that where hospitals were overwhelmed. And during this quarter, we have opened. I'm going to ask Salazar to give you the figures. I can't find these figures right now.
I believe that Salazar has these figures and he can give them to you. We have not changed our plans in terms of cash. It wasn't necessary, we replanned things because of the circumstances. We're talking about 65 G5 stores. And it's important to say that these stores present good performance with a performance index that is better proportionally to the normal stores.
It's better than what we expected. So we believe that this is an important avenue. And there is another question from Wagner Salabei from restriction of Faesia in the marketplace? Thank you for the question, Wagner. We believe that we have a number of avenues of growth and all channels can develop themselves.
Our ambition here is to grow the Nike business in Brazil. And this is a possibility because we can work with products that or that have a margin that don't allow you to sell it wholesale. There are players of the market that define themselves and are successful as a marketplace and there is a growth priority in this channel. These are technology platforms and they are not necessarily interested in holding inventories. And of course, we can follow this model.
Yes, there is an avenue of growth. So this basically concludes our Q and A session. These are all the questions that we received through our platform. So we will now bring to an end our Q and A session. Our IR team is at your disposal to clarify any questions that may emerge.
Or if by any chance we didn't answer a question, I would like to thank all of you for participating in our earnings results conference call and to thank our team, our employees of SBF. Everybody has been working strongly and has been totally dedicated to this bold mission that is to build an ecosystem. And in the middle of a pandemic, well, the dedication of this team is moving. We will pay attention to the short term and we are prepared to react quickly, but without losing sight of the future in order to evolve our sports ecosystem. As we mentioned in our last call, our ecosystem is growing and this is a challenge.
We believe that in this quarter, we placed an additional brick on the building of this ecosystem. We will continue with our investment and growth plan focused on delivering the best sport experience. I hope that you continue following us. Thank you for your time, for your participation, and have a good morning.