...Good morning, ladies and gentlemen. Welcome to the video conference of results for Sequoia Logística, with reference to the results of the second quarter of 2024. We have with us Armando, Armando Marchesan, CEO, and Leopoldo Bruggen, CFO and Director of Investor Relations. We inform that the presentation is being recorded and translated simultaneously. Translation is available clicking on the button Interpretation. For those listening to the video conference in English, there is the option of silencing the original audio in Portuguese, clicking on the mute original audio option. During the presentation of the company, all participants will be with their microphones turned off. Afterwards, we will start the questions and answer session. To make a question, please click on the Q&A icon and type your name and company.
Once your question is announced, you will receive a request to open your microphone, and you should then turn on your microphone to make your question. We clarify that any declarations that may be made during this teleconference, relative to the business perspectives of Sequoia, operational goals and financial goals, constitute projections of the directors of the company, which may or may not occur. Investors should understand that political factors, macroeconomic factors, and other factors, operational factors, can affect the future of the company and lead to results that are materially different than those expressed in these future considerations. To open the video conference of results for the second quarter of 2024, I will now pass the word to Armando Marchesan. Sir Armando?
Good morning, everyone. I'd like to announce today the publishing of our results reference to the second quarter of 2024. Starting on page 4, being the principal highlights of the quarter. As we announced in the previous quarter, we have started the integration between Sequoia and Move3, and with the synergies that were mapped out, we've realized BRL 100 million of annualized savings, which is by the end of July, we have already reached 77% of this goal. The impact on the economic savings was more than BRL 40 million, and we are at an annualized rate of BRL 80 million.
In this way, in the second quarter, in order to be possible to capture part of this savings in the results, we created a project office under the leadership of one of our operations directors, to follow these synergies, and maintain periodic reports to the directors and the board of directors. 48% of the group, of the Sequoia and Move3 group, along with the lengthening of the payment periods. But beyond that, with this, beyond this step of the restructuring, financial restructuring, the group is following the plan, which is restructuring with the non-financial creditors and renegotiating the debts, the tax debts, which we will present with more...
One of the phases of the restructuring is we're gonna add more details, that we're focusing on the agenda of synergies and growth, taking advantage of its competitive advantage in a market which is still in consolidation and very demanding. In the near future, we're thinking about our ESG agenda, following the agenda of becoming one of the best logistics integrators within a socio and bio-environmental impact, and positive and financially sustainable. Going on to slide five, I'm gonna pass it over to Leo, our CFO and our Director of IR, who will give you more information about the process of integration between Sequoia and MOVE3. Good morning, everyone.
Thank you, Armando. On slide six, we have the stakeholder structure of our group, considering the combination of Sequoia and MOVE3. We are realizing these studies to simplify these, the shareholder structure, to reduce controls, centralize processes, and have greater efficiency in complying with our accounting and fiscal requirements. Our proposal is to consolidate these companies with similar activities without impact on the current brands. In the lower left-hand corner of the presentation, we bring our estimate of the base, of the shareholder base after all of the conversions of debentures and the deliveries of new shares of Sequoia to the debenture holders and the founders of Move Três. On the next slide, slide number 7, we are summarizing the synergies which we have captured until August of 2024. These synergies have been mapped out by a consultancy, together with the leadership of Sequoia and Move Três.
After capturing a commercial bill of BRL 20 million in June, we invested BRL 15 million in disconnections of personnel, and introduction of distribution centers, initiatives that will generate an extra savings in 2024 of BRL 47 million. This, the savings, annualized, becomes, will pass more than BRL 80 million. These savings do not consider the investment of BRL 15 million, which was done, of BRL 15 million. Starting in the second quarter, it will be possible to capture these reductions in costs and expenses. The number of employees of the group was reduced by approximately 20%, generating an economy savings of BRL 42 million on a reduction in the reduction in the area of three distribution centers, one in Minas and two in the state of São Paulo. These reductions in the distribution centers have generated an annualized savings of almost BRL 30 million.
Additionally, we had initiatives of recovery of repayments, the sale of assets, including, adjustments in administrative cost, expenses, which add up to the annualized savings of almost BRL 9 million. During the second semester, we have had several new initiatives involving principally the integration of systems and our structure of back office structure. We're considered to follow this execution plan with the conduction of our transformation office and accompanying every 15 days, both by the administration as well as members of the board of directors. As we announced in the previous quarter, our goal is to capture annualized savings of approximately BRL 100 million. I will now pass it over to Armando, who will talk about our commercial initiatives.
Thank you, Leo. Going to the next slide, slide number 8, we brought a little bit of our commercial context. A combination of the business of Sequoia with Move Três. We are now focusing on our competitive differential in a market which is still in consolidation and very demanding. The companies offer a complete portfolio of solutions with national coverage and technological information, guaranteeing services with great quality and great speed. The commercial team is working to recover gradually the number of clients and operations in profitable routes. The perspectives of the market are good, with many opportunities mapped out. In the transport and logistics market in Brazil has annual growth of approximately 7%, while certain segments have as much as 14% growth.
We believe that our addressable market, after all of the director, which has already been mentioned in the previous quarter, is above BRL 63 billion per year. We and on the right-hand side of the slide, we see the last mile and deliveries and collections and our principal businesses. On the next slide, number nine, we brought a status about our differentials. We have come from Move Três, Move Três. We have a network of franchisees that's covering all of Brazil, which guarantee capillarity, capacity of attendance of service, quality service, as well as distribution centers strategically located on the principal highways of the country. Beyond that, we have a portfolio of clients with 8 of the 10 largest marketplaces in e-commerce, and with 20 of the 20 largest private banks in Brazil.
We believe that this portfolio guarantees the maintenance and growth in results, as well as proving our capacities to deliver good solutions. Looking at slide 10, I pass this back over to Leo to comment on the results of the quarter.
Thank you, Armando. Looking at slide 11, we have a composition of the results for the second quarter of 2024. It's important to mention that the values of the previous year do not include the results of Move Três. They have not been audited by our independent auditors. In any event, we are presenting an estimate of the net revenue and EBITDA in the text box on the left-hand side of the graph. Since the beginning of the restructuring of Sequoia, we have repeated our principal objective is to have sustainable revenue.
We focus on the profitability and not just on the size of the revenue. In this way, part of the variation in net revenue, it reflects the strategy of maintaining our profitable clients. The consequence of this strategy, together with the combination of Move Três, we present on this quarter a gross margin, a positive gross margin. Fruit of this strategy and of the combination with Move Três, we present a reduction of EBITDA, negative EBITDA of BRL 50 million. It's worth pointing out that the investments to reduce the costs with the payroll and with the distribution centers have occurred only after the closing of this quarter in July and August of this year. In the next slide, number 12, we present the results of the first six months of the year. Variation of the net revenue has two components that are important.
Beyond the revision and the maintenance of our profitable clients, we have initiated the migration of contracts B2C from Sequoia to Move Três. Again, we point out in the text box on the left-hand side of that box, our best estimate of the net revenue and EBITDA of Move Três for the first quarter for the first half of 2023. The EBITDA of the first quarter of 2024 does not include monthly savings of BRL 6 million, with reference to the reduction of payroll and seat and distribution centers, done in July, and August of this year, at the cost of BRL 15 million, which was captured from a commercial commercial paper. This value added to the reduction in the payments of CDs of DCs, totaling BRL 72 million annually, divided by six months.
I'm gonna ask you to pass to slide number 13. On slide 13, we brought the balance between December, and June of 2024. We should mention again that the values I mentioned and combined with them only consider the audited numbers of Sequoia, because this combination with MOVE3 happened at the end of March of 2024. In the cash flow presented growth, even though there is an increase of this cash flow at the end of each month because of the payroll of the beginning of the month. The group always counts on 3,500 employees.
The accounts receivable has presented a level of 83 days of net revenue, and we are operating to create an agile pre-billing sale for payment in a way to reduce this period of time and guarantee our receipts. Another highlight is the level of tax losses classified between the different business, which may be utilized in a transaction, a tax transaction, for the payment of federal tax liabilities. A reduction of debt will be commented on the next slide. On slide 14, we brought a presentation of the evolution of the loans since December 2023, and since we've had it announced in the last quarters, Sequoia concluded in May 2024 a restructuring of financial creditors, which involved banks and debenture holders.
In this way, in this quarter, the net debt of the group was reduced by almost 48%, with a flow of amortization greatly lengthened. As we should note, that a great deal of the payment will only have to be made starting in 2029. On slide number 15, we are going to summarize our negotiation with the financial creditors. On the total, since October of 2023, we have capitalized BRL 582 million in debt, beyond the lengthening of BRL 172 million, with interest rates of CDI+ 2% per year. The company has captured, through debentures, convertible debentures into shares, additional cash of BRL 116 million, which will be utilized for the capital, working capital.
On the next slide, 16, we show the three steps of the restructuring. After the conclusion of the first step of restructuring with our financial creditors, we will now start with the next phases. The first phase, the renegotiation with the non-financial creditors, initiated in the last recent months through meetings with the principal creditors. Personal meetings with the principal creditors, considered essential for the restructuring, with our and even those suppliers which are considered strategic for the Sequoia businesses, and Move3 businesses. The transaction of tax debts, both in the federal sphere as well as in the state sphere, was also undertaken.
With relation to the tax debts, as we mentioned, we have not, we have adjusted these things, but we have maintained the conversations underway with the question of revising the capacity for payment of the group, and to be able to pay it in a reasonable way for the group and its administrators, and also for the to do a transaction with that we cannot comply with. All these creditors, and all of these tax debts are part of the balance presented previously, and the restructuring permits that the generation of cash, current and future, to attend with the restructuring of Sequoia and MOVE3, with these to be able to serve these debts.
Once they are restructured, the credits with the banks and debenture holders, we have not adopted any premises that we consider the increase in the debt level of the group, the current debt level of the group. We bring on slide 17, a timeline about the necessity of adjusting an eventual negotiation with the PGFN, as we mentioned at the end of July, through a note to the market, through a relevant note to market. In May, we received a proposal for reduction of debts and discounts utilized in tax losses, with a period of payment of only 30 months.
Considering the short period of time for payment, the company on 25th of June decided to decline the proposal and enter with a request for revision of the capacity of payment, permitting to ask for longer periods of terms for payment, and more compatible with the cash, operational cash generation of the company. We understand it is our objective to seek a restructuring which is definitive and not just push the problem down the road. Looking at the next slide, number 18, I'm going to give it back to Armando to present a few of our ESG initiatives.
Thank you, Leo. On slide 19, we remind our journey, our ESG journey since 2019, since the beginning of 2019, and over the years, Sequoia has been concerned with socio-environmental questions, and once again, reinforce our commitment with the agenda of this theme.
On slide number 20, we have the pride to announce the beginning of the seventh round of this program, Sementes Sequoia, which was widely published by the company with the Fundação Iochpe, based on the continuous development and commitment of competencies and behavior for the professional training, with the objective of identifying young people, young talents, and preparing them for the professional market or to assume positions in the company itself, where we have had an average of more than 85% of taking advantage of these young people. Since we'd like to thank you all for your participation in our call, and now we're going to open up for the questions and answers. Thank you very much. Thank you.
We'll now begin the questions and answers Q&A session. Remembering that to make questions, please click on the Q&A icon and place your name and company, and once we will give you, we will request for you to open your microphone. You should then turn on your microphone to make your questions. Thank you. Please wait while we collect the first questions. Remembering that to make a question, you can click on the Q&A icon and type your name and your company. Please wait while we receive questions. Our first question comes from Umberto Alum. He asks, "Congratulations by the way in which you have presented this vision, especially the plans for synergies. Please, can you pass us any guidance about in what quarter we may expect to return to EBITDA and net profit positive, net profit and EBITDA?
Can we expect this already for the fourth quarter of 2024?"
Thank you for the comment, Umberto. What we see is that with the capture of these synergies that we have started in a more completely starting in July and August, as I commented, with the capture of BRL 20 million through commercial paper, by including firings and closing of DCs, we started a third and fourth quarter in much better shape.
Our expectation is that the fourth quarter, with some benefits due to the seasonality in the sector, and since it is a more demanding quarter in the generation of revenue, we also feel that Move Três, when it goes into production, which could benefit us at the end of this year with an increase in revenue, clients and volume, and a growth in scale, as well as other effects that we work with here in our management premises. The financial expense, which will be accounted in the results with the capitalization of certain loans, and these expenses stop draining our cash and profits from the company, which will then be... Because they will be capitalized and treated as part of our permanent capital. Important, this demands working capital for growth and to promote our profitability.
Once this has been done, the restructuring with the banks and the debenture holders, it's normal that there will be several months of adaptation, publication, conversations with the financial markets until the effective recovery of the capacity to generate receivables, raise working capital, to be able to do the ramp-up of certain operations. But, summarizing the things that take us to believe that the fourth quarter of this year is the quarter in which we will present more solid results than those presented in the first quarter and second quarter, which are periods in which we were still working on the restructuring with the banks, the merger with Move Três.
And now, at the end of this second quarter and the beginning of the third quarter, we have begun to invest in a better, in a bit more complete way in capturing these synergies. So I believe that now, by the fourth quarter, will be a much more favorable quarter than the previous quarters. Now, I think they're also addressing this; this also answers the question of Elias. Thank you for your question, which is already—your answer has already been addressed here. Remembering that to make a question, all you have to do is click on the Q&A button and type your name and your company, and when you'll be solicited to turn on your microphone and make your question. You can then activate your microphone to make these questions. Please wait while we collect these questions.
Our next question comes from Paulo José. Can you give us, please, an estimate of the growth per segment of operation? Thank you.
This is Armando. Thank you for your question. In general, the company, with this, we don't pass guidance, but we can say based on estimates of growth of the market itself, and our business, which we have, as we presented in the slide about the commercial context, we have almost two-thirds of our business is in a certain way tied to the sector of E-commerce, with marketplaces, companies that are specialized in selling via internet. And so this is a sector that grows at an annual rate above the average of the market, of the logistics and transport market, with an average of approximately 14% per year of growth.
So it is a sector that leads, obviously, our growth in an upward direction. In the other markets in which we operate, whether they be B2B or so forth, and the businesses of credit cards and other modes as express and transport of transfers, the FTL market follows the average of the market, with growth of approximately 7%-8%. Obviously, depending on the GDP and the market, and the economy in general. Remembering that to make questions, all you have to do is click on the Q&A button and type your name and your company. When the... You'll be asked to open your microphone, and then you should activate your microphone to make your questions. Please wait while we collect your questions. Please wait while we collect any further questions.
Remembering that to make a question, you click on the Q&A icon and type your name and the name of your company, when you will be asked to turn on your microphone. At that point, you may turn on your microphone and make your question. Thank you. Please wait while we collect any further questions. Our next question comes from Mauricio Senalich, who asks: "I would like to know if you have a partnership with any the logistics market, for example, Americanas?" Good morning.
Thank you for your question. We have, in truth, partnerships with the current clients, as we mentioned, in the sector which you cited, where Americanas is inserted in the retail in e-commerce and electronic retailing. We attend eight of the 10 largest marketplaces in Brazil.
Specifically, we do not attend Americanas, and also, we did not attend them either in previous years as well. However, as we mentioned, we have a partnership, a long-term partnership, with Naspers. This is the birth of Sequoia in 2011, which was exactly to attend the e-commerce market, and we continue to attend these principal clients in marketplaces in several modes. Since the collection of products, which is the first mile, where we have a very large coverage in the interior of the country, doing all the processing, bringing it to our hubs, and then doing the final delivery. Beyond that, we attend these marketplaces with specific products, such as the transfer, full truckloads and various services, which we do.
But it's a model of attending our clients, both in, partnerships or joint ventures, if I understood your question correctly. Thank you.
The questions and answer sessions is now closed, and we'd ask, Armando to make his final comments.
I want to thank you all for your participation, for this calls, and to thank all the Sequoia and Move3 team, who will continue working intensively in the reorganization and the recover, recovery of these. A hug to all. Thank you. The call is now closed. If you have any questions, please send your questions to the investor relations team through the email, ir@sequoialogistica.com.br. We thank you for your participation, and have a good day.