Ladies and gentlemen, Welcome to the Bang & Olufsen Interim Report, third quarter 2020 to 2021. For the first part of this call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session. Today, I'm pleased to present Kristian Teär. Speaker, please begin.
Hello everybody. Also welcome from my side and thank you for joining today's call. Just like in our Q2 call in January, we are not sitting together due to the COVID pandemic and the restrictions surrounded by it. Today I will start by going through the highlights of the quarter and give an update on how we are progressing on our strategy execution. Nikolaj Wendelboe, our CFO, will take you through our financials more in detail. After that, we will go through the outlook for 2021 before we open up for questions as always. Our head of marketing and digital and customer experience, Christian Birk, will also be joining us today as part of the Q&A session. If we move to the next slide. With a revenue growth of 16% in local currencies, it was the strongest quarter so far this fiscal year.
Overall, we are pleased with the results, not least as Q3 was expected to be the quarter with the hardest comparable figures to beat. If you remember, Q3 last year, we delivered positive EBIT before special items driven by the first cost initiative we initiated immediately after our December 2019 profit warning. The growth in this quarter was driven by strong execution in our eight core markets in Europe and Asia. We saw strong performance across all key distribution channels, reflecting our work to improve channel execution. We have continued to focus on demand creation through our targeted marketing initiatives, as well as strengthening our digital focus. We have seen this pay off as the revenue from our e-commerce platform grew by 129% compared to last year.
All of our initiatives resulted in a positive EBIT before special items and free cash flow for the second quarter in a row. The improvements were supported by the progress with our cost-reduction program, where we delivered DKK 42 million in Q2. EBIT before special items was DKK 34 million, which was DKK 32 million better than last year, and year to date, our EBIT is positive DKK 23 million, an improvement of DKK 212 million compared to last year. Free cash flow was positive by DKK 8 million, which was lower than Q3 last year, but driven by the development in working capital, which was as planned and expected.
Year to date, we have improved our free cash flow by DKK 220 million, delivering DKK 35 million in positive free cash flow. This is a significant improvement from last year. I will talk more in detail about our outlook at the end of this presentation. Our outlook reflects increased price risks and challenges with component supplies, which will have an adverse impact on our Q4 results.
For that reason, we maintain our outlook for revenue and EBIT before special items. However, with the development in our free cash flow, we have decided to narrow the free cash flow outlook to the upper end of the range and now expect it to be between zero and DKK 100 million. If we go to the next page. Component scarcity has been a recurrent theme this fiscal due to a combination of higher demand in consumer electronics, car industry, as well as component supply constraints. Adding to this, component supply was impacted by multiple external events ranging from power outages in Texas, drought in Taiwan, and fires in Japan. As a consequence of the component scarcity, we experienced further increases in prices on components. In March, we decided to increase our prices on several products to mitigate for the increased cost of goods sold.
The challenge of getting components impacted our ability to meet demand, which means that we again have a larger backlog going out of Q3 than we would prefer. Logistics remained a challenge like in the previous quarters. Due to the supply chain pressures, we still ship the largest part of our products by air to meet demand. We have increased the use of rail freight for some bulky products during the quarter. Q3 was impacted by lockdowns in several markets in Europe. Around 40% of our mono-brand stores were closed during Q3. We did see some markets reopen again, though around 20% of the stores are still temporarily closed. Many of stores could transact and run installations despite the lockdowns. It did of course impact daily operations and highlighted the importance of digital demand creation. If we move to the next page.
As always, I will take the opportunity to show our strategy house and outline how we are executing on our strategy. We are still in the first phase, where our focus is on fixing the basics and becoming profitable again. However, much of our strategy work is also laying the ground for the next phase where we start to build robustness. We still have a lot of work ahead of us, but I am encouraged by the progress we have made both financially and in the underlying business despite the challenges related to COVID-19. We have made significant improvements in many areas so far this year and this quarter, and we are really starting to reap the benefits of this work. I will give you an update on some of those focus areas on the next couple of slides. Move to page seven.
In our eight core markets, 15 million consumers, we delivered 13% and 12% respectively of growth in local currency. If we adjust for End-of-Life products last year, those eight markets delivered more than 20% revenue growth. The growth in the six core European markets was driven by strong sales in the Staged and Flexible Living categories, the latter delivering high double-digit growth rates compared to last year. From a channel perspective, all core channels performed with multi-brand retail and own e-commerce platform as the major growth drivers. The work we completed in H1, the revamp and strengthening our multi-brand channel is now showing results as multi-brand and e-tail grew by 152% in Q3. Our mono-brand channel was on par with last year, with more than 60% of our mono-brand stores being temporarily closed due to the pandemic, and with the supply constraints on especially Beolab speakers.
I'm really pleased with this performance. Our retail partners continue to show resilience and find creative ways to service consumers, supported by our sales and marketing initiatives. In the Asian market, we continue to see high demand for home entertainment, which was driving demand for our Flexible Living product, which grew by 70% compared to Q2 last year, which also allowed us to maintain our momentum from Q2 as we achieved 75% year-on-year growth in that quarter. In the quarter, we also ran a successful campaign in connection with the Chinese New Year as we pre-launched our new headphone, Beoplay HX, as part of our Chinese New Year collection. Finally, we've made changes in the management team in Asia in December. We have since been working on onboarding several other very seasoned professionals with commercial experience within digital technology, marketing, and distribution.
We expect this will help to realize the growth potential we see in China and South Korea, both short and long term. If we move to the next page. With the launch of Beosound Level and the second generation of Beovision Eclipse 65 inch, we have launched nine products this financial year and we plan to launch more than three products in Q4. With these additions, we have a strong and diverse portfolio of products fit for the future. Beosound Level is our last Flexible Living speaker and the second speaker to be launched on our new product platform first introduced in the Beosound Balance last year. We are reusing the majority part of the platform from Beosound Balance, which underlines the improved product creation and scalability benefits without new platforms often.
One of our key differentiators, our ability to make special editions in new color materials or finishes, both in collaboration with other like-minded brands. In quarter three, we launched our earphones, Beoplay E8, together with Saint Laurent. Saint Laurent has been a Brand Partnering for several years. We expect this latest collaboration to help us drive product differentiation and brand reach. As mentioned in the previous slide, we launched a product collection in connection with the Chinese New Year. The range features five of our core products, some shown here in this page, including our new Beosound and headphone Beoplay HX. If we move to the next slide. Our recent products have received very good reviews. Beosound Level is no exception.
The product has been praised for its design, sound performance, and not least the introduction of the new modular build, which enable us to upgrade the technology in the speaker over time. The core brand strength of Bang & Olufsen has always been the longevity of our products, and with this new innovation, our aim is to future-proof the technology within all our future home speakers. The modular design approach will also enable easy maintenance, service, and repair and make us even more relevant to the growing number of consumers looking for more sustainable products. The launch of Beogram 4002 in Q2 as part of the classic program underlined the long lifespan of our product and longevity will be a key brand asset going forward. If we move to the next slide. During the pandemic, in-store footfall has been limited and consumers have to a large extent moved purchases online.
We have continuously been strengthening our digital efforts, and in Q3 we further increased the volume of customers for consumer communications to improve targeting and media effectiveness. Our efforts are directly translated into our e-commerce growth as we increased our revenues from e-commerce by 127%. We were pleased to see the impact of our recent marketing efforts and new campaigns on demand creation. For the holiday season in December, we launched a campaign, Share Moments That Last. This campaign featured a range of products, including the relaunch of the classic Beogram 4002. The second campaign, Your Sound, Your Space, catered to the working from home trend, and it was launched with a particular appeal to a younger female audience. Finally, we have focused on our connected speaker proposition with speaker sets.
We have historically not been good enough to explain our multi-room offers to consumers, and the growth from our Flexible Living category shows that we are getting that message across to consumers much more effectively today. With that, I would like to turn over to Nikolaj, who will take you through the financial developments.
Thank you, Kristian, and please turn to page 12. As Kristian said, we have delivered our third consecutive quarter with double-digit growth. Our 16% revenue growth in Q3 was driven by product sales Brand Partnering Group of 1% in local currencies and was positively impacted by PC sales from HP as component shortages affected car manufacturing. Supply challenges related to component shortages impacted our growth in the quarter, but we still achieved 18% growth in revenue from our product sales. We continue to increase our like-for-like sell-out visibility. We can see that our sell-out is aligned with our sell-in in Q3, so close to 20% like-for-like sell-out growth in the quarter. We are very pleased with this development, and it shows that our sell-out is driving our financial performance.
We saw double-digit growth in all regions, with Americas delivering the highest growth of 50% and EMEA and Asia both growing 16% in local currencies. We see all key distribution channels performing, especially driven by multi-brand and online channels. As Kristian mentioned, multi-brand benefited from the changed operating model in the core markets in Europe, where we have added more resources and new distribution partners. In EMEA, E-tail and E-commerce combined accounted for around 8% of revenue. In Americas, the digital channels accounted for 40% of revenue. Globally, our e-commerce platform grew by 127% compared to last year. Online sales are also supported by changed buying behavior during the pandemic, but our growth is also a result of our efforts to drive more online revenue. If you look at our product categories, you see growth driven by both existing and new products.
Product launched during the last 12 months accounted for around 28% of product sales. Our Flexible Living category displayed the highest growth rate, maintaining the momentum from Q2 with an increase of 48% compared to Q3 last year. We saw revenue from all Flexible Living speakers grow, and especially Beoplay A9 continues to be one of our best-selling products. Our Staged category grew by 13%, driven by televisions, especially the Beolab speakers sales was limited by supply challenges we are facing. Finally, our On-the-Go category declined by 1%. The decline was related to our earphones, which last year was supported by sales of End-of-Life products. Excluding End-of-Life products, our On-the-Go category displayed a solid growth driven by Bluetooth speakers and headphones, especially Beosound A1, Beolit 20, and Beoplay H95 drives growth. Please turn to the next page.
Q3 was the second quarter in a row with a positive EBIT. EBIT was DKK 28 million or DKK 34 million before special items, which is equivalent to a margin of 4.9%. This was 4.6 percentage points higher than last year. With our performance in Q2 and Q3, we have delivered positive EBIT year to date with a margin of 1.2%. Higher revenue combined with improved gross margin drove the margin improvement, however, partly offset by higher capacity costs. Special items amounted to DKK 6 million compared to DKK 3 million last year.
Special items were mainly related to the cost reduction program. The gross margin improved by one percentage point to 44.9%, driven by our products. Brand Partnering and other activities impacted gross margin negatively, driven by a lower margin, as well as accounting for a smaller share of gross profit. Our product gross margin improved by 2.2 percentage points to 39.2%.
This was driven by our On-the-Go category, which last year was negatively impacted by sales of End-of-Life products. The Staged category displayed a significant decline in gross margin of 9.3 percentage points. The decline is related to several factors, with the main ones being higher logistics and components costs, impact from Beovision Contour with pass-through of screens, retail partner bonuses, and a product mix shift towards a cheaper portfolio intensified by supply constraints on higher margin Beolab speakers. Pass-through of screens to retail partners is related to the launch of Beovision Contour and impacts in Q4 also. We have now, with the launch of Beovision Eclipse 65 inch in December, concluded our TV strategy transition, where we provide integrated TV solutions by decoupling from the TV screen itself. Please turn to next page. Excluding special items, our capacity cost increased by 4% compared to Q3 last year.
The increase was across all cost lines, mainly related to employee bonus provisions. Last year, bonuses were to a large extent canceled due to our financial performance. With the development we've seen this year, we are provisioning for bonus payments again, which is basically a return to normal. Likewise, it is important to remember that we in Q3 last year had already launched our first cost initiatives. We started to reduce cost already from December 2019 in parallel with defining our Back in Black strategy. We are therefore at full run rate with the first cost initiatives. We're not experiencing the same year-on-year decline we saw in previous quarters. If we instead compared Q3 to Q2, our overall capacity costs are at the same level. Development cost decreased by DKK 4 million. The decline was related to a combination of lower amortization and higher capitalizations.
The incurred development cost increased by DKK 16 million, mainly related to upcoming and future product launches. Distribution and marketing costs increased by DKK 18 million in the quarter. The increase was related to the before-mentioned bonus provisions, as well as higher warranty costs. Last year, we only had marginal effects from COVID-19, so marketing and travel costs have declined compared to last year. Finally, we are also benefiting from the cost reduction program. Our administration costs were at the same level as last year. However, excluding special items, administration costs decreased by DKK 1 million. This was driven by lower salaries and our cost reduction program, again, partly offset by bonus provisions. Our cost reduction program is progressing well. We booked DKK 42 million in Q3, bringing us to DKK 105 million year to date.
With the cost reductions achieved in Q3, our annual run rate is at DKK 168 million. We are close to our target of DKK 175 million. The savings realized in Q3 were related to a reorganization we made in December, where we simplified and consolidated minor support functions and also improved obsolescence costs in the supply chain. Please turn to the next page. Free cash flow was positive by DKK 8 million. This is DKK 31 million lower than last year, which was as planned and related to the net working capital development. Our EBITDA was DKK 20 million higher than last year. We have in all three quarters this year delivered a positive EBITDA. Our net working capital was in line with Q2 at DKK 247 million.
Compared to Q3 last year, net working capital declined by close to DKK 120 million, reflecting all the work we have done in our managing of the net working capital. CapEx was at the same level as Q3 last year. The investment composition was however different, and our CapEx is proportionally higher on intangible assets. The investment was related to our product roadmap and continued investments in our platforms. Tangible assets are on the other hand, lower than last year, which as we saw in Q2, is related to the lower retail investments due to the pandemic. The increase compared to Q1 and Q2 was related to investments in our Factory 5 in Struer, including new machinery. Our available liquidity was stable in Q3 at DKK 573 million. Please turn to the next page. Since the pandemic outbreak, managing our working capital has been a key priority for us.
Our inventories decreased slightly in Q3 compared to the first half of the year. Compared to a year ago, we have reduced our inventories with DKK 100 million. We maintain a strong focus on managing our production against demand, but inventories are further reduced due to supply constraints. Trade payables decreased by DKK 45 million. The decline had to do with the timing of payments to our manufacturing partners. The production ramp-up in Q2 was not to be paid until Q3, and decline was therefore as expected. Finally, our trade receivables declined by DKK 26 million, driven by phasing of revenue in the quarter and lower overages. Sales for extended credit related to in-store display units in Q3 accounted for 7% of revenue and was also driven by Beovision Contour, which was launched late in Q2. With that, I would like to hand it back to Kristian.
Thanks, Nikolaj. Before opening for questions, we'll just briefly like to go through the outlook and highlights. If we go to page 18. With one quarter left, we maintain our outlook for revenue and EBIT before special items. However, we have decided to narrow the outlook for free cash flow to the upper end of the range and now expect free cash flow to be positive up to DKK 100 million. Looking at the outlook, we can conclude that we expect a more challenged Q4 in terms of results. This is to a large extent related to the component situation where we see significantly higher prices. We have therefore amended some of the key assumptions in our outlook. I will highlight the main ones here.
Our revenue forecast assumes that the effects of COVID-19 and component scarcity will not impact demand on product supply materially different in Q4 than what we experienced in Q3. On licensing income, we expect a worsening for car manufacturing due to the component scarcity. Several car manufacturers have, as you know, shut down production plants. The situation in component scarcity also has an adverse impact on our costs of goods sold. We therefore assume component costs to be higher in Q4 than we have experienced in the first nine months. Finally, logistic costs have in both Q2 and Q3 been elevated compared to normal levels, and we don't expect this to change for quarter four. If we move to page 19. To summarize, our strategy works and it yields results despite the COVID-19 challenges we face.
We see good progress on strategy execution with high growth rates in all core markets and with strong performance across all key distribution channels. Especially multi-brand was positively impacted by the changes we made in the first half of the year. We launched two products which have been well received by the market, and we continue to see strong demand. Our accelerated efforts within digital and e-commerce are also progressing very well. Despite all the positive results from our strategy, our performance was adversely impacted by component scarcity, which again have led to product supply challenges.
A year ago, liquidity was a critical theme. It's a pleasure that we have a sound liquidity position of DKK 573 million at the quarter three. At this point, I would also like to thank all our employees and partners who are doing an amazing job to implement the strategy while we keep the operations running. With that, I would like to open up for questions.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from the line of Benjamin Silverstone from ABG. Please go ahead.
Thank you very much. Hi, Kristian, Nikolaj, and Christian. Firstly, I hope you're all well, and congratulations on the good quarter. I have three questions, if I may. The first one is in regards to your On-the-Go segment and the margin, the gross margins are off. We do see a very nice development year-on-year. You also do mention that the margin has been diluted due to End-of-Life products. Could you give us just a sort of guidance as to where you are in terms of phasing out as much as possible of the End-of-Life product negative impacts? How should we see the On-the-Go margin a year from now? Do you still have some more momentum to gain from further optimizing the outsourcing of End-of-Life products? How should we see this? My second question is regards to online sales.
As you also highlight, we do see a very strong growth in this segment in your own online sales. In total volume, how should we see your own online sales, online direct sales, if I may? Is this becoming quite a significant channel for B&O in actual volume terms and in revenue terms? My last question is in regard to e-gaming. With your recent launch of the Portal product, could you speak a little bit about how your future outlook is of B&O in the e-gaming space? Thank you very much.
Yeah, thank you, Benjamin. All good questions. Maybe I start, and then I'll pass on to Nikolaj and then to Birk as well to give part of the answer. If you look at last year, and if you look at comparable numbers for On-the-Go category, we did quite a lot of End-of-Life clearance last year that obviously affects the margins. We also had a much more, I would say, instable price situation in the market on our On-the-Go products, and we had much more distribution channels and reseller channels that created a lot of price instability. That has completely changed. That is not the case anymore today. We have, I would say, balanced supply and demand situation On-the-Go. We also have very little, if any, products that we're going to have to liquidate. I think that's positive from that point of view.
With the strategy of good, better, best, we also intend to bring the On-the-Go category up to more premium price increment in good, better and best, and therefore also increase the margins. On the line sales or our online sales, I will have to refer to Nikolaj as well on specific numbers. What we're doing and what we started to do in terms of driving digital demand has clearly paid off. I don't think we are where we could be just yet, because we are putting more e-tail channels in place, and we are putting the partnerships to work with the bigger e-tail partners. Of course, that will also help to create awareness about our products, and that will also drive footfall into our own e-commerce platform. Many of these players, as you know, have a much bigger and wider reach than we would have alone.
We continue to see good development on our online platform. Also here, as we have stated before, we do have with many of our mono-brand partners, an operating model in place to help them to grow stores where we actually have a revenue share model that is also impacting our margins a bit On-the-Go. On the e-gaming side, I actually forgot to write down the question, Benjamin, so you have to repeat that one.
Got you. It's regarding your e-gaming segment, sorry, the launch of the Portal product. If you just could speak a little bit about your future outlook of B&O in the e-gaming space. You already have partnerships with Xbox and Astralis, so how should we think about where B&O is going to be in terms of e-gaming down the road? Thank you.
Yeah, good. Thank you for reminding me. On the e-gaming, of course, this is our entry into this space, and we are not just going to go in with one partner. We will continue to expand in the e-gaming sector. I will not be able to give you any more news on that, but it is a strategic segment. It is a fast-growing segment. It is a segment where we believe we can add value, and we can create different experiences, and we have received good news and the reception that Portal got. I think the market is clearly ready to buy in to our propositions, and also, which I think is amazing, is that people recognize that you get three products in one.
You get one that you can listen to music on, you can work with, and then you can actually game with as well, and you only need to have one headset going forward. We expect to grow in that category and continue to work in that category. I'll pass on to Nikolaj and Birk if they want to add anything, and maybe take the answer to the End-of-Life.
Yes. This is Nikolaj, and thanks for the questions, Benjamin. On End-of-Life and On-the-Go, just to clarify, what we're saying in this announcement is that we had more on the End-of-Life and our On-the-Go segments product category in Q3 last year than what we've had this year. If we take a look at the On-the-Go category and adjust for End-of-Life products sold in Q3 last year, we're actually seeing a significant growth this year of 50%, as also stated in the quarterly report. There's, of course, a question on how End-of-Life is developing. I think, first of all, it's important to note that we will always have End-of-Life products. That's the nature of the business and something that we will have going forward as well.
It's also fair to say that especially last year, we had a significantly higher amount of End-of-Life products than what we would ideally have, based on previous years' production of a number of products where sales didn't follow. That's a thing that we were cleaning up in last year, as you're all aware of. We will see impact from End-of-Life products also in the future, but to a lesser extent than what we saw last year. On online sales, just briefly, total online sales, e-com, own e-com, E-tails, e-tailer, and other third-party online sales is growing at the moment. In EMEA, it was 8% of revenue e-com, and own e-com and e-tail combined, 8% of revenue in the quarter, which was a growth compared to last year.
In Americas, it was 14%, actually, of total revenue in that region that was online-driven. In APAC, especially in China, actually the majority of the sale is online driven because that is actually sold on JD.com and Tmall. When we look at the real online sales performance, it's actually a quite significant share of our revenue. Birk, do you have anything to comment?
Maybe the only thing to add is that our target segment, our focus is how do we serve our customers the best possible way. We see a shift, of course, with our target audience also shifting to online. We're still a retail business, so we are trying to find a balance between online and retail and optimizing that because we know for TVs and our Beolab speakers, that retail experience is still critical for consumers despite them researching online. To answer your question, Benjamin, on how do we see this moving forward, we definitely see it growing and it is a strategic priority for us.
We do see, as Nikolaj pointed to, online sales more broadly than our own e-com because consumer behaviors in places like China and U.S. are very different, you could say, to some of the maybe core European markets that we see. Growth and opportunity definitely still in front of us, and we see this as a strategic priority, but where we start is really making sure we serve our target customers the best possible way at their convenience.
Sorry. Thank you very much, Christian, Nikolaj and Kristian, for the good answers.
The next question comes from the line of Poul Jessen from Danske Bank. Please go ahead.
Hi. Actually, it's Poul. I have two questions as well. First question is on the comment you made about price increases in March to compensate for, I think, or excuse me, I heard it was you having been out increasing prices. If so, can you talk about how much on average? Second question on the direct pass-through of the panels model you have now. Can you give an indication on how much that has reduced the revenue in the Staged division if you compare prior to after that you have done that change in the strategy, just to give an indication of how much revenue is moving outside your business. On the gross margin, you made a comment on retail partner bonuses. Is that a one-off or is something we should expect looking forward as well on the gross margin of the States? Thank you.
Yeah. Thank you, Poul. Maybe I start and I start with the last question and then I'll pass over to Nikolaj for the other question. The mono-brand partner model that they've had and always have had, has included bonus set up for volume-based, and that is the case this year as well. Obviously as we're starting to sell more, they tap into the volume brackets in a different way. We'll continue to have it also going forward into next year. But we will probably rebuild it a little bit compared to this year. That's something we have to come back to. I'll pass on to Nikolaj for the other question.
Thank you, Kristian. Thank you, Poul, for the questions. On price increases, what we've done is we increased prices on a selected number of products in the Staged and Flexible Living category. Those products, the price increase actually varies from product to product, but as a rule of thumb, you could say around 10% increase in the prices of those products. I think the second question was related to revenue on screen sales, and in the quarter, it's around DKK 20 million that is impacting this. It's actually in this quarter offset more or less by screen sales on the Contour product, where we are passing the screen through our books as a part of launching this product, where screen supply was in shortage.
We had to go in and take some of those screens over our book to ensure we could actually supply for the launch of this product. Finally, on retail partner bonuses, is this a one-off or not? This is relating, of course, to the good performance in the mono-brand retail network where they reach a higher threshold on bonuses. Part of these bonuses is reset every year. Part of it is based on how they grow from year to year. There will be a good performance in the mono-brand channel in the future, also increasing margins, of course, to our partners.
Okay. Just to be clear about the panels. If we take out the Contour temporary impact, the change in business model has had an impact of about DKK 20 million on the quarter or being less than 10% on revenue for the Staged.
Yeah. That's not correct. Yes. That's around DKK 20 million.
Okay. The final one, on the guidance, you have a huge spread between high and low here. You must already have the August numbers. It's not August, March, of course. Does that impact, or do you see the impact already hitting in March or is this something where you have uncertainty versus a point in May?
Want to say that we will not comment on the quarter that we are in at the moment other than saying the outlook is reflecting the uncertainty that we are facing on several fronts at this point in time, especially on supply. Timing on supply is still subject to very low visibility given the global scarcity and components.
No, it's just to get an indication if you've already seen the impact.
I don't think we can comment on that one.
No.
Unfortunately.
Okay.
But it is-
Okay.
Uncertainty basically, i t is the pandemic at large. I mean, who knows what will happen tomorrow in that market. Also supply, there is constraints. I think we have managed it, and like I say, our teams and our employees and partners have managed it really well. It's getting increasingly difficult with supply, and it's also unpredictable in many ways. That's why we maintain the guidance for now.
Okay. Thank you. I'll step back.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. The next question comes from the line of Niels Leth from Carnegie. Please go ahead.
Yes. Hi. I have two or three questions as well. Since you don't want to talk about the momentum going into fiscal Q4, could you talk about your current order backlog compared with the end of the previous quarter? Secondly, amortizations went down quite a lot in this quarter. How should you think about amortizations going into quarter four? Thirdly, you have a net cash position of more than DKK 500,000 billion . Still, you obtained a new loan in this quarter. Why did you do that, and how are you thinking about this cash position that you're building? Thank you.
Thanks, Niels. Nikolaj, maybe you start?
Yeah. On the order backlog, we went into Q3 with a higher-than-normal order backlog, and we're also going into Q4 with a higher-than-normal order backlog. It is a special situation from a order backlog perspective, given supply and given longer lead times from our manufacturing partners. Resulting in orders not being able to be fulfilled as fast as we've normally done. From that perspective, we can say we are on par and actually a little bit better with a higher order backlog going into Q4 than we did in Q3. I didn't really catch your second question. Let me just go to this third one on net cash and the loan.
We did, a couple of quarters ago, especially after the rights issue, decided that we had to place the extra liquidity we got in some Danish mortgage bonds to make sure we wouldn't have them standing in a bank account with negative interest rates. We have a significant amount of mortgage bonds bought. In order to manage the day-to-day liquidity, we went into what's called a repo arrangement with our bank, allowing us to draw on liquidity when needed.
Due to the interest rate environment in Denmark at the moment, when we are making use of the repo facility, we're actually getting paid an interest rate to do it at the moment. There's a temporary higher draw on that facility in the quarter, but it's only part of day-to-day liquidity management. It's not really a traditional loan agreement, just to make that clear.
Okay, good. My second question was about your amortizations and depreciations. We saw total depreciation, amortizations going down to DKK 35 million in this quarter, down from close to DKK 50 million in the previous quarters. I guess that most of this decline is explained by lower amortizations. How should we think about this line going into the next quarter?
In general, we've had a long period of time with amortizations declining, as we've been gradually writing off on some of the major, especially TV platform investments that have been done in the past. I think we should start to expect to see this level stabilize. Also in some instances, starting to increase a little bit again, based on our incurred development costs starting to increase again as well. I think that's as specific as I will be at this point in time.
You would expect depreciation and amortization to be higher than DKK 35 million in the next quarter?
Yeah. That's at least the direction it will take over time. I think the turning point is about where we are now. You can make that assumption.
Great. Just a final clarification about the sell-through of flat panels. Did you mention that the sell-through has been ended, or would it continue into the fourth quarter?
The sell-through will continue also in the fourth quarter. We bought a rather large quantity of screens from LG when we launched the product in order to secure supply to the markets. We're selling that screen through, but basically zero margin. We have still some screens on inventory for Q4 as well.
We should expect the same effect in Q4?
Yeah. You should expect it to have a margin impact in Q4 as well.
Okay. Thank you.
As there are no further questions, I'll hand it back for any closing remarks.
Thank you very much everybody for joining today's call, and we appreciate your interest in us, and as always, we're looking forward to meeting you next quarter again. I wish you a good end of the week, and if you have any further questions, please go back to Martin in our IR department. Thank you very much for joining. Have a good day.
This concludes our conference call. Thank you all for attending. You may now disconnect your lines.