Good morning. This is the Centauro conference call where we will discuss the company's earnings result of the fourth quarter of 2019. At this time, all participants are connected on listen-only mode. Afterwards, we will have a Q&A session when further instructions will be provided. Should you need the help of an operator during the conference call, please press star zero. Please note that this conference call will be recorded. This presentation, followed by slides, will be simultaneously broadcast and available for download on website ri.gruposbf.com.br and will be available for download in the portal. Before proceeding, it is important to clarify that forward-looking statements during this conference call regarding the company's business outlook must be treated as forecasts that depend upon the country's economic conditions, the retail sector's regulation and performance, and other variables. These projections are subject to change.
Here with us, we have Mr. Pedro Zemel, Centauro CEO, José Salazar, CFO and IRO, and Daniel Regensteiner, Treasury and Investor Relations Director, who will discuss Centauro's performance in the fourth quarter of 2019. Subsequently, there will be a Q&A session. Now I give the floor to Mr. Pedro Zemel. Please, you may proceed.
Good morning to everyone. We are very pleased with our year of 2019, our first year as a publicly held company. We have made progress in our omnichannel, in our digital platform, and in the expansion and retrofit of our G5 stores, and we have delivered good results which have been accelerating. We can now go to slide two, and we will talk about our results and achievements.
Before that, we will discuss how the crisis, which is unfortunately taking place in 2020, it is strongly impacting our society, is affecting us, and how we are acting in the face of it. Our first priority is the health of our team. We have been striving to take care of everyone and to support our Brazilian society in flattening the contamination curve. As for the health of our business on our supply side, our suppliers and we have enough inventory to absorb any eventual supply shocks. In addition, historically, exchange rate variations are passed on to the market and do not affect our margins. On the demand side, we are watching the situation unfold.
We will certainly observe a shock in the demand of brick-and-mortar stores, but we have a robust and consolidated digital platform, which is gaining more and more relevance and guarantees us an important advantage at this time. In case of more prolonged shock, we are capitalized thanks to our cash generation and our IPO. Our cash position at the end of the year, including available receivables for prepayment, were BRL 700 million, with almost no debt in our balance sheet. In addition, we have a balance of BRL 577 million in PIS/COFINS credits on ICMS, which were recognized in 2019 and which are already approved and being used to deduct taxes. It is also worth remembering that our refurbishment and opening projects are short-term, about two months each. In a pessimistic scenario, we have the flexibility to postpone these projects if necessary.
In our 39 years of history, we have gone through countless crises, and the current team is the same team that faced the crisis of 2015, a situation in which we overcame a strong economic crisis, even though being extremely leveraged. We are constantly monitoring the national scenario and are prepared to, as in all crises we have through, get out of this stronger. Even more because we entered it stronger than we entered the previous one. Our digital platform sales represented almost 20% of our total sales and have grown over 30% compared to 2018. We have been increasingly able to connect to the real needs of our customers. Our NPS reached 82.6% in the consolidated result, almost 85% in physical stores and 72% in the digital platform. In the last quarter, we accelerated the expansion of our G5 stores, opening 14 new stores.
On slide three, we can see that we reached a total of 210 stores, of which 43 were already G5. This expansion helped us to grow revenue. We grew almost 17% in the last quarter and reached a same-store sales consolidated result, excluding the 2018 World Cup effect of 11.2% in the year, 7.4% in brick-and-mortar stores, and 30.4% growth in the digital platform GMV. This growth generated operational leverage, and our EBITDA margin reached 14.2% in the fourth quarter and 12.2% in the year. With that, I give the floor to Salazar that will go into more details about our financial performance.
Pedro, thank you for your introduction. We had some relevant non-recurrent effects, both positive and negative. In our release, we presented a chart explaining all these effects.
All the explanations I'm going to do in the next slides are referred to the results excluding these non-recurring effects as well as the IFRS 16 effect. Slide four. We will discuss in detail our net revenue in the fourth quarter of 2019. As Pedro just mentioned, we posted 16.7% growth in our quarterly net revenues. Comparing to 2019 with 2018, the growth was 11.9%, driven by both channels, brick-and-mortar stores and digital platform. The brick-and-mortar stores, which grew 15.7% in the quarter, were boosted by the addition of 14 new stores and by the refurbishment of two stores for the G5 model and the Mega Loja sales, our endless aisles, which has been growing consistently. In the digital platform, there was a 21.8% increase in the net revenue in the quarter, which was driven by the continuous growth of omnichannel.
Marketplace was also a highlight of the quarter, growing 120% in the quarter. Now, slide five, to discuss our gross profit and gross margin. There was an increase of 15.8% in gross profit, which was BRL 410.4 million in the fourth quarter of 2019 against BRL 354.4 million recorded in the same period last year. In the year, there was a growth of 12.8% compared to 2018, reaching BRL 1,258.6 million. Our gross margin decreased 0.4 percentage points in the quarter and grew by 0.4 percentage point in the yearly comparison, reaching 48.2% and 49.4% respectively. The increase in markdown and a one-time write-off obsolete customization material for soccer shirts in the amount of BRL 4.5 million explain the reduction of the gross margin in the quarter. In the year, the margin increase is explained by the increase in the apparel market share and the withdrawal of ICMS tax from PIS/COFINS calculation basis.
Slide six, we have operating expenses. We can see an increase of 10.7% in the quarter, 10.8% in the year. In the quarter, the increase is explained by around BRL 9 million in expenses with stores open for the quarter or in the pre-operational phase by the write-off of BRL 7 million in fixed assets resulting from renovations by the RFID projects. In the year, we explain the increase mainly due to the cost with new stores and RFID. We have our EBITDA on slide seven. The EBITDA in the fourth quarter was BRL 121 million, 30.2% higher than last year, and the EBITDA margin is 14.2%, 1.5 percentage points higher than the fourth quarter of 2018. In the year, the EBITDA was BRL 310.8 million, 19.2% higher than 2018, with an EBITDA margin of 12.2% and an improvement of 0.8 percentage points.
When we go to slide eight, we will talk about the financial results. The financial result was BRL -1.3 million against BRL -23.9 million during the fourth quarter of 2018, and BRL -52.4 million in 2019 against BRL 91.1 million in 2018. The improvement is explained by the deleveraging of the company after its IPO. When we continue on slide nine, we have our net income. Net income is BRL 63.7 million in the quarter, a drop of 48.2% compared to the BRL 122.9 million in the fourth quarter of 2018. In the year, we observe an increase of 1.4% from BRL 148.7 million-BRL 150.8 million reais. The comparison was impacted by a significant recognition of deferred income tax from previous years in the fourth quarter of 2018. Slide 10, we will discuss our cash flow.
Our operating cash flow came better than 2018 but was impacted by tax and total installments of BRL 30 million, the natural increase in the company's working capital, and by the increase of inventory for new stores. Our cash flow from investment activities. These were impacted by the expansion plan of G5 stores. The cash flow from financing reflects the impact of the net proceeds from the IPO and as planned, reflects its allocation to amortize the bank debt. Moreover, with more availability of cash, there was naturally a decrease in the balance of factoring of receivables. Now we go to slide 11. You can see the first chart here to see the adjusted net debt. Here we see our financing. Our adjusted net debt decreased 81.8%, as illustrated on the second chart of the slide, and it decreased BRL 751.3 million in 2018 to BRL 136.4 million in 2019.
The reduction reflects the positive effect of the IPO proceeds, which allowed a deleveraging and interruption of factoring of receivables. While at tax debt, the company has been meeting the amortization schedule of its tax installment. It is important to highlight here that in addition to cash balance, we ended the year with almost BRL 600 million in receivables available for prepayment. Let's go to our last slide, that would be slide 12. We observe an increase of CapEx both when we compare the quarter and when we see the result year-on-year. Due to the increased pace of store openings and refurbishments to G5 models, we opened 18 new stores and retrofit nine to the G5 model in the year 2019. Well, that concludes our presentation. We can start our Q&A. Ladies and gentlemen, we will start our Q&A session.
To pose a question, please press star one. To remove your question from the list, please press star two. Our first question from Helena Villar is Itaú BBA.
Good morning. My first question is regarding your Nike deal. I would like to know how you see the process in your antitrust agencies and what actions are you taking. My second question regarding your RFID. During the third question, we saw that the rollout was completed, but if you could tell us how your operation is improving in terms of technology rollout. Are you seeing more efficiency? It would be interesting to have your take on this. Working the dilution of SG&A from your EBITDA margin. If you could tell us, could you break out all of these results because sometimes it's difficult to understand where these results come from.
Helena, this is Pedro speaking. Thank you very much for your questions. I'm going to answer your first and second question here. Salazar will answer the third question. Here we have antitrust and the Nike franchise. The third would be about a result. Your first question. The process is ongoing. There was a third party that was interested. With this, the antitrust agency follows the procedures and poses questions to this third party. We're in this stage. We're in the stage of answers. This is a normal flow of approval. Our market is extremely fragmented. Our group, of course, knows that different business units will coexist in a separate fashion. Before the approval, we cannot do anything because we need the approval of the regulating agency in order to proceed with our business.
This is the first part of your question, but we're following a natural and normal process here when it comes to approval of business together with the antitrust agency. Now, regarding your second point, the FIP, there's a characteristic in the company. We're very quick when we do things, and we organize things. We started organize our process with labels, with everything. We focused on execution, and we have organized everything that is necessary. Now during the first semester, since February, we started experimenting a lower of the safety margin. Of course, because we have more efficiency in the store and because of our inventory as well, because we have good inventory in the stores for our customers that purchase through the internet.
This shows how our omnichannel is working, and you can see how our safety margins, you can see that they have more elasticity. I believe that this is the timeline of the RFID. I'm going to give the floor to Salazar so that he can answer your third question.
Hi, Helena. I do understand that what we saw in the result was that there was a dilution of fixed expenses by and large because of the growth of the company. There were no recurring impacts on our results in these expenses. We understand that everything was due to the growth of the company. Everything is, of course, connected to the drop in expenses. Thank you very much.
Thanks to you.
Our next question from Irma Sgarz from Goldman Sachs. Good morning, and thank you for taking my question.
Thank you for your comments on the impact of the coronavirus. I would like to ask something. I apologize if you mentioned this in the beginning of the call. There was a bottleneck in the beginning of the call. I believe that this is a brand-new situation for us without precedence. What could you say regarding the closing of shoppings starting in São Paulo, but I believe that this will be expanded to other cities in Brazil. How are your conversations with the shopping mall operators in order to potentially negotiate the price of the lease? According to your programs in the past, I believe that you have a very strong relationship with the shopping malls, and I would like to know what these negotiations are like in this initial moment. The other question also would be regarding your fulfillment channel, delivery channel.
Is there a bottleneck of supply chain here? Sometimes you have products coming from China. I believe that the situation there is already normalizing itself, but it's just to be sure that you will have no backlogs there. I believe that the situation in Brazil is still evolving. Perhaps there is something to say about this region. What about your margins? It is excellent to clarify in the release that you had a conversation with your suppliers with the recommended retail prices to protect the margin. If you could tell us what would happen in a scenario where the exchange rate is totally unfavorable. I would like to know if your suppliers will help you to resolve the problem or if there will be a markup. I believe that we're in the middle of the eye of the hurricane right now.
Thank you, Irma, for your question. This is Pedro. I believe that your question can be divided in three parts. The last one would be the impact on the margin, the second one would be the supply shock, and first would be our relationship with the shopping malls. Okay. Let me start. The situation accelerated very quickly, and on our side, we have made up a committee because we have to see what is happening, right, with our society and our business. Since last year, we have a structure to manage this crisis with a crisis committee, and we have established subcommittees, and we've created some priorities. One would be our personnel. We are responsible for our personnel here. We're responsible for our team.
Number two would be, how could we help through home office to level the curve, to lower the curve, considering the role that all of us have to guarantee that Brazil weathers this the best way possible. The third would be business protection. How do we protect it and to pull out of this crisis stronger? What we're doing now, we are updating our models on a daily basis because things are evolving very rapidly, and preparing a number of actions so that we can react to whatever happens in the market, and so that we can protect and minimize our cash flow and to protect our margin. That is our mission, and it is the mission of everyone currently readapting the company to a current reality that is different from what we have ever imagined.
I believe that all the stakeholders here are going to have to participate so that we can weather this moment and then continue with life as usual, because we know that crises always have beginning, middle, and end. We are talking to all of our stakeholders so that we can work and so that we can guarantee that we will weather this the best way possible. The second question regarding a supply shock. We're living this one day at a time. China, specifically speaking, does not represent the greatest portion of what we import. Specifically because there's an anti-dumping law and for sure is very relevant. Most of our manufacturers and our suppliers generally choose other countries to supply Brazil. Not China because of this anti-dumping law. I believe that these countries were less impacted.
The shock of supply, not only for an industry, but all industries will have an indirect effect. We still don't know what these effects will be like. We don't receive products from China, but perhaps we can receive products from other countries, and we don't know what will be the situation of these countries, and this may affect the supply. From the direct point of view, say now private label. Let's see, direct import and private labels. Well, it's 7% of imports, seven, 8%, and all of these products, as these are private label of low technology, can be replaced by Brazilian products. I believe we haven't been very impacted in the first quarter. I believe the impact will be seen in the second quarter.
Imported products, if we see one of our great suppliers, I don't want to mention it, the name, less than 3% of the units come from China. They come from other countries. This doesn't mean that we're not going to have an impact. I believe that we are going to need a rearrangement, but I believe that this won't impact us directly. This being said, there was also an impact in the demand. In reality, is that we do have inventory and our suppliers have inventory to supply orders. Moreover, of course, sales are suffering because the shopping malls are closing. The demand has dropped, and so our suppliers and our inventories are more than what we need in order to face the situation and to meet the demand.
We're going to have to see what is going to happen until the shopping malls open again and we go back to life as usual. This would be my answer regarding the impact on the supply chain. Your third question. I have a suboptimal structure here in my office. It was shopping malls, right? It was the impact on your demand and the margin.
Yes, on your margin.
Yes. Thank you. Regarding the margin, it's the following. We are going through a moment where this is an extreme situation from the exchange point of view, everything. I believe that when we think in the long term, not in the short term, when we think in the long term, I believe that we have to see what the new balance is. Perhaps it's not exactly what we're living right now.
What I can say is that the company has a history of 39 years, and there have been other shocks in Brazil that are different, not like this one. By and large, in this industry, there is a markup agreement. We still don't know what the prices are going to be like. Our purchase prices, if there will be a markup, depending on the level of imports, this may happen, but the margin agreement is a markup agreement. This is how things have always worked. I can't say anything about the future, but what I can say, yes, is that in 39 years, we've never had a different situation. For us, this is a totally different crisis. This is a crisis that impacts everyone. This is not a crisis that impacts A or B.
We are going to have to hold hands. No, not literally, right? We are going to have create good terms so that we can overcome this crisis. I believe that one day things will come back to normal.
Thank you. If I could ask you, I saw from the filings of the third quarter that you didn't have a hedge. There's an open moment from the moment of the order when you receive the merchandise. Are you going to hedge this in the future to try to balance this potential exposure? It's not even worthwhile thinking about this in the current moment?
Irma, in reality, we are not exposed because we have prices in BRL. Our suppliers import and we buy in BRL. We put the markup and we sell it to the consumer in BRL.
Our exposure would be when it comes to indirect imports of private label. Depending on the dollar, we can also replace it for domestic production. This is the hedge. We're talking about simple products with available technology. The decision is to buy imported or domestic products, depending on the price.
Of course, always bearing in mind that this product has to present quality, and there are domestic plants that are good. Centauro is not directly exposed to the dollar. I would just like to add something to what Pedro says. The direct exposure of Centauro vis-a-vis the dollar based on the purchase of 2019 was 100 million BRL. This is what we buy directly. We import directly. Within this scenario, we do not consider this a very relevant exposure.
Perfect. Thank you very much.
Ladies and gentlemen, to pose a question, please press star one. Should you wish to pose a question, please press star one. We would like to remind you that to pose a question, please press star one. Our next question from Irma Sgarz from Goldman Sachs.
I have another question. Could you talk about your e-commerce, its performance in the beginning of the year and the current situation of the e-commerce? I believe that it is still normal, but perhaps this brings a certain opportunity, in quotes, because it will receive part of the sales that you cannot see in brick-and-mortar stores. Could you make a comment on this, about your e-commerce? Thank you,
Irma, for your question. There are two things. There is one thing, the accessibility of the product, and e-commerce resolved this. To be very transparent, we don't have a prospect of offsetting the lack of sales in brick-and-mortar stores.
It's because people currently are more concerned with other things, precisely. We believe that the performance of our e-commerce will overtake the performance of brick-and-mortar stores because those stores are closing, right? We're going to be very transparent. We don't believe that e-commerce will offset the closing of brick-and-mortar stores and their sales because this is a different moment. This is our perspective. It is good to have a channel. We maintain the flow, and there is a possibility of maintaining a good relationship with our consumers and to serve them. This is also an area of revenue. This perhaps is valid for other industries, but we don't believe that this will represent an offset. The performance will be better in the e-commerce. There's no doubt about this.
Thank you very much and very good luck.
Thank you, Irma.
We are currently bringing to an end our Q&A sessions. I give the floor back to our speakers for their final remarks.
Thank you. I thank the entire team for the efforts carried out during the fourth quarter and the year 2019. I would like to reiterate what I said in the beginning. Throughout our 39 years of history, we've undergone a number of crises, and the current team is the same team of 2015 where we had a crisis. This will be a difficult moment, but I'm absolutely sure that we will end this crisis stronger. I and the Centauro team is at your disposal to answer any questions you should have. Thank you very much for your participation, and have a very good day.
The Centauro conference call has come to an end. We would like to thank all of you for your participation, and have an excellent.