Thank you and welcome to Pandora's conference call following the release of our second quarter 2013 results distributed through the wires this morning at 8:00 A.M. The presentation for this call, as well as the full version of Pandora's Q2 release is available on pandoragroup.com/investor. My name is Morten Eismark from Pandora Investor Relations, and with me here today is CEO Allan Leighton and CFO Henrik Holmark. In accordance with the agenda on slide two, Allan will go through the highlights for the quarter followed by Henrik, who will talk you through the numbers in more detail. Finally, Allan will conclude the presentation. We'll be happy to take your questions. Before handing over to Allan, I kindly ask you to pay close attention to the disclaimer on page three. Allan, please.
Thank you, Morten. Please turn to slide 4. By releasing our preliminary financial data on the 30th of July as part of raising full-year expectations, we may reduce some of the novelty of today's release. However, we are, of course, happy to have so many investors and analysts listening in on this call. It gives us the opportunity to add a little bit of color to the results, and that also gives you the opportunity to ask any questions you may have. As most of you already know by now, the solid performance we reported for Q1 2013 continued into the second quarter, with continued significant revenue growth across all the major regions. Q2 2013 revenue was DKK 1.931 billion, an increase of more than 50%, and pretty close to our Q1 revenue growth.
The main drivers of growth were and continue to be the strong sales of newly launched products, high replenishment rates, and the effect from three new, very strong product drops, Mother's Day, High Summer, and Pre-Autumn. However, as a qualifier to the strong revenue numbers, it's still important to remember that last year's Stock Balancing Campaign, even though it's difficult to quantify, obviously has an impact on the comparable figures. The refreshed product assortment and our improved store executions continue to pay off, and we still see strong end-customer demand, which is evident from our Sales Out data, where all major markets saw the continued positive development in Concept Stores like-for-like. EBITDA for the quarter was DKK 530 million, corresponding to a margin of 27.4% compared to a margin of 17.5% for the same quarter a year ago.
This despite the fact that our gross margin declined by a couple of percentage points compared to Q2 last year, and that's primarily due to some revenue mix and remember the suspension of the duty relief in the U.S. that we've mentioned in the past. Free cash flow was DKK 102 million, negatively impacted by increases in inventory level as well as other receivables. And this is primarily due to a phasing of a VAT refund, related to our European Distribution Center (EDC), and we expect this refund to be made over the next six to nine months. Finally, as part of our DKK 700 million share buyback program, we bought back shares worth DKK 210 million during the quarter, and as of Friday last week, we have bought back for around DKK 381 million. Please turn to slide 5. This looks at the regional revenue development in Q2.
As you can see, we've seen very strong growth in all three geographic regions for the quarter, but also our four major reported markets, the U.S., the U.K., Germany, and Australia, delivered encouraging growth. All markets were positively impacted by the new product drops, and please, as always, we have to remember all the time the comparable figures for Q2 2012 were impacted by the stock balancing campaign. Americas continues to be our largest region with 54.1% of total sales, and Americas increased by 52.1% for the quarter measured in Danish kroner. In the U.S., our largest single country, revenue was up 55.6% in local currency versus Q2 2012. It continues to be encouraging to see growth in our largest single market, especially as the growth is mainly driven by the newer product launches but with little or no cannibalization of the older core products in our portfolio.
Other Americas sales were up 46.4% in kroner, and the growth was driven by significant growth in a number of the smaller markets in the region as well as continuous strong development in the important Canadian market. Revenue from Europe increased 59.3% in Danish kroner. Growth was driven by the U.K., which was up 81.8% in local currency and now accounts for 9.2% total group revenue, as well as other Europe, which increased by more than 70%. Again, this growth was primarily driven by our new markets, Italy, France, and Russia. German revenue increased almost 12% compared to Q2 2012. This is positive, but we also recognize that there's still plenty of work to be done to reposition the brand and to establish the most optimal store network and also improve in-store execution. In Asia Pacific, revenue increased 43.5% in Danish kroner compared to Q2 2012.
The positive revenue development was driven by strong performance in Australia as well as a number of smaller markets in the region. Revenue in Australia was up 18.2% in local currency, while other Asia Pacific was up more, but by more than 130%. Other Asia was driven by strong growth in markets like Hong Kong, Malaysia, South Korea, Singapore, and Taiwan. Now please turn to slide 6. As mentioned, our 4 major markets continue to show positive development in like-for-like sales out. We believe the refreshed assortment, helped by new product drops and the drop structure, improved marketing and, again, better in-store execution has caused the consumers to buy more in our concept stores. The U.S. continued the very strong momentum with like-for-like sales out growth of 9% for the quarter.
The UK continued its positive performance, had a very strong sales out in the quarter with like-for-like sales being up 12%. Even on easier comparables, remember this market was down 4% a year ago, we're pleased with the performance in the UK. Germany was, again, positive with an increase of 2% compared to Q2 last year, and it had a slightly tougher comparable. Australia had a very strong quarter, 22% like-for-like growth, again, slightly easier comparable, but actually in Australia we're now beginning to see the fruits of the hard work and the distribution cleanup that the team have been doing out there. The like-for-like figures on this slide measure about 80% of the Concept Stores in the four countries, and remember that a store has to be open for more than 12 months to be included in like-for-like sales.
We believe that the current trend confirms that our new products and price structure is being well received by the end customer, that our marketing in-store execution is improved, and that we in a generally unpredictable retail environment continue to perform well. Please turn to slide 7. This deals with the performance of the newly launched products. In our business, newness and freshness in the product assortment and keeping focus on the right commercial price points, Affordable Luxury, is one of the major drivers of our growth today and our future growth. It's therefore encouraging to see that a lot of our growth is coming from these new product launches. Every drop since Spring/Summer 2012 has sold in and sold out very well.
This is also the case for the products launched in 2013, and it's good to see that our older products, these core carry-forward products, are also still selling well. Mother's Day, partially delivered in Q2 2013, sold well, and High Summer and Pre-Autumn has been well received by the retailers. This, again, is confirmation of the fact that our 2012/13 focus on refreshed assortment, more product drops, going from 2 to 7 annual drops, and getting the right price architecture continues to pay off. And finally, silver bangles, that some of you've seen, we introduced globally in the quarter and are doing well. Please turn to slide 8. This is about our financial expectations. As I said in my introduction and, and you're all aware of it, we upgraded our financial expectations to the market on the 30th of July.
We expect revenue to be approximately DKK 8 billion and an EBITDA margin to be approximately 27%, up from the earlier DKK 7.2 billion and above 25% respective guidance we gave. We also made a slight adjustment to our CAPEX guidance in order to expand our production facilities in Thailand to meet our future demands, and now we expect to invest around DKK 400 million, excluding the DKK 190 million extraordinary investment related to Trollbeads IP rights, that you know about that we did in the first quarter. And finally, we expect to open approximately 175 Concept Stores in 2013, up from the 150 stores, and expect an unchanged tax rate of approximately 19%. Before leaving our financial expectations and handing over to our CFO Henrik Holmark, for a more detailed run-through of the numbers, I've just got a few comments to make on the financial expectations.
The way we think about it is the first half of the year had some really helpful tailwinds. We had significant backorders, as we entered the year. We got a completely new drop structure with many more drops in the first half of the year. Our marketing programs and particularly our local marketing programs are much stronger than they were the prior year, and clearly we had some lower comparables. The second half of the year has some potential headwinds. We clearly have tougher comparisons. We're up against much stronger comparable product drops, and we've got the launch of a new bracelet concept, which we've not yet seen in full production, and there's a lot of development work in our production facilities in Thailand. Therefore, with all this happening, prudence is important. With those few comments, I'd like to hand over to Henrik. Henrik, please.
Thank you, Allen. Please turn to slide 9. Our total revenue increased by 53.3% to DKK 1,931 million in Q1 2013 from DKK 1,260 million in Q2 sorry, Q1 Q2 2013, that was DKK 1,931 million from DKK 1,260 million in Q2 2012, whereas you know in Q2 2012, we were impacted by the stock balancing campaign. Excluding FX movements, revenue increased by 54.4%. Volumes increased by approximately 40%, and the average sales price increased from DKK 123 to DKK 134. However, please note that the increase in the average sales price is an effect of our of a change in our revenue mix, so product, channel, and markets, and not a consequence of an increase in the individual price of each individual product. Our average sales out price was virtually unchanged.
Provisions for returns at the end of Q2 2013 were in revenue value corresponding to approximately 9% of 12 months' rolling revenue, which is unchanged, and in Q2, 84% of our revenue was from branded distribution. Please turn to slide 10, which looks at the development in our distribution network. Total number of points of sale increased by 94 in Q2 2013 compared to Q1 2013 to a total of 10,3 37 points of sale globally. In the same period, we added 35 new concept stores and a net total of 151 branded points of sale. The majority of the concept store openings were in Europe and the Americas. Please turn to slide 11. When comparing the revenue mix to last year, please consider, as Alan mentioned initially, that last year's data was impacted by the stock balancing campaign, which makes comparison to last year difficult.
Generally, as Allan's also mentioned, products launched in 2013 are selling well, both in sales in and sales out. It's also very encouraging to see that the products launched in 2012 continue to sell well, and our bestseller lists are dominated by products released within the past 12 months. In Q2 2013, revenue from charms increased by 44.3% compared to the same period last year, while revenue from silver and gold charm bracelets was up 31%. These categories together represent 83.2% of revenue versus 89.5% in Q2 2012. Rings increased by 18.2% and represented 4.7% of total revenue in Q2 2013. The growth in other jewelry is mainly from the successful launch of our new silver bangle as well as leather bracelets. None of these two products are included in the traditional gold and silver charm bracelet category. Please turn to slide 12.
Our gross profit was DKK 1,274 million in Q2 2013 compared to DKK 856 million in the same period last year, resulting in a gross margin of 66% in Q2 2013 compared to 67.9% last year. The decrease in gross margin for the quarter compared to Q2 2012 was primarily due to the expiration of the suspension of import duties on goods manufactured in Thailand imported into the U.S. The increase from Q1 2013 is driven by lower commodity hedge prices. Excluding our hedging and the time lag effect from our inventory, the underlying gross margin in Q2 2013 would have been approximately 71% based on average gold and silver prices for the quarter. Those are the market prices for the quarter. Under the same assumptions, a 10% deviation in quarterly average gold and silver prices would impact our gross margin by 1 to 2 percentage points.
Please turn to slide 13. The OpEx ratio for the quarter was 41% compared to 54.2% for Q2 2012. The decrease was primarily driven by a higher revenue. Sales and distribution expenses increased to DKK 356 million in Q2 2013 compared to DKK 295 million in Q2 2012, which is mainly driven by a higher share of, owned and operated, but in line with what we have previously indicated around our distribution expenses. Marketing cost increased to DKK 203 million compared to DKK 171 million in Q2 2012. The increase was mainly driven by higher marketing costs in Germany, including a write-down of points of sale material in Germany of approximately DKK 15 million and one-off in the quarter. Administrative expenses increased to DKK 232 million from DKK 217 million last year, however adjusted for an additional charge n Q2 2013 of approximately DKK 20 million related to organizational changes.
Admin costs were virtually flat, and actually, as you may note, administrative expenses have been relatively stable in the past five quarters. Please turn to slide 14. EBITDA for Q2 2013 increased by 140.9% to DKK 530 million resulting in an EBITDA margin of 27.4% compared to 17.5% in Q2 last year, which is despite a lower gross margin. The improvement in EBITDA margin is primarily related to the increasing revenue. Looking at the regions, the Americas continue to show strong performance with EBITDA margin increasing slightly both in Q2 2012 and Q1 2013. The increase from Q2 2012 is despite the impact of the reintroduction of import duties in the U.S., as previously mentioned. The EBITDA margin in Europe increased to 23.1%, which is up from last year but down from Q1 2013.
The drop from Q1 2013 is primarily driven by extraordinary returns from Spain with a revenue value of DKK 55 million as well as the one-offs mentioned around Germany. The margin in Asia-Pacific increased to 36.1%, mainly driven by an increase in revenue. Finally, unallocated costs were 9% of revenue in Q2 2013 compared to 9.9% in Q2 2012, where Q2 2013 included the previously mentioned one-offs related to organizational changes. Please turn to slide 15. In Q2 2013, net financial income amounted to DKK 49 million, significantly impacted by FX. The corresponding figure last year was negatively impacted by FX. Income tax expenses were DKK 101 million in Q2 2013, implying an effective tax rate of 19%, which is in line with our expectations for the full year. Reported net profit increased by 584% to DKK 431 million in Q2 2013 compared to a net profit of DKK 63 million in Q2 2012.
Please turn to slide 16. Operating working capital at the end of Q2 2013 was 24.9% of last 12 months' revenue compared to 36.8% at the end of Q2 2012 and 26.9% at the end of Q1 2013, primarily due to higher revenue. In Q2 2013, we generated a free cash flow of DKK 102 million, corresponding to a cash conversion of 23.7% compared to 144.4% in Q2 2012, which is impacted by higher inventory levels and higher other receivables. If we look at the first half, the cash conversion was 58.5% versus 52.1% in first half of 2012. Inventory decreased to DKK 1,463 million at the end of Q2 2013 from DKK 1,925 million at the end of Q2 2012. This significant decrease in inventory levels can be explained by improved inventory management and remelting of obsolete inventory from the 2012 stock balancing campaign.
The increase of DKK 67 million compared to Q1 2013 is due to more normalized inventory levels, which were at very low levels in Q1 2013. Trade receivables decreased to DKK 687 million in Q2 2013, corresponding to 8.7% of the preceding 12 months' revenue from DKK 720.24 million in Q1 2013, corresponding to 10% of preceding 12 months' revenue. Other receivables increased by DKK 186 million, which is impacted by changes in prepaid tax as well as the phasing that Allan mentioned around VAT refunds, related to our European Distribution Center. The accumulated total outstanding VAT to be repaid to Pandora in Germany was at the end of Q2 2013 DKK 380 million. DKK 60 million of this amount was repaid to Pandora in August 2013, and we expect that the outstanding VAT will be repaid in six to nine months.
For the quarter, CAPEX was DKK 83 million, and the total interest-bearing debt was DKK 489 million at the end of Q2 2013 compared to DKK 1,036 million at the end of Q2 2012. Cash and short-term deposits amounted to DKK 180 million at the end of Q2 2013 compared to DKK 299 million at the end of Q2 2012. And finally, we had a net interest-bearing debt at the end of Q2 2013 of DKK 309 million, corresponding to 0.1 times net interest-bearing debt to EBITDA compared to 0.4 times net interest-bearing debt to EBITDA at the end of Q2 2012. With this, I'll hand back to Allan to conclude the presentation. Thank you, Henrik. So in summary, if you go to slide 17, you can see group revenue was up more than 50%. Strong performance from the newly launched products.
Gross margin at 66%, EBITDA margin at 27.4%, free cash flow at DKK 102 million. We updated the guidance on the 30th of July. The share buyback is on track. As always, our main focus continues to be on the consumer, the product, and sales out. It's worth saying, I think we believe our strategy of delivering affordable luxury is becoming increasingly relevant. Although there are still many areas in which we can improve, we're, we're pleased with that progress. With that, I'll hand you over, and we'll do Q&As. Thank you. We'll now begin the question and answer session. If you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key.
So that's star and one if you wish to ask a question. Your first question comes from Michael Rasmussen of ABG Sundal Collier. Please ask your question. Hello. Good morning, everybody. I would like to talk a little bit about costs here this morning. First, I'd like to talk about your various OpEx lines. So if we start out by just talking a little bit about marketing costs, there were 10.5% of sales in this quarter, even including higher levels in Germany and also a write-down. This is below the historical average. Could you please elaborate a little bit about this going forward? And also in connection to that, distribution costs were 18.5% of sales in the quarter, which is slightly above the historical average. Is this a sustainable level going forward when excluding the things you mentioned, Allan, on second half?
Second question, to you, Henrik, on interest costs. You mentioned that net interest-bearing debt was a little bit more than DKK 300 million, but you pay only DKK 1 million in interest on that. What's the reason behind that? And it looks like a fairly low interest level you've got. And then finally, on the gross margin, you do mention 71%, was the underlying unhedged level. I do note that you changed your rule of thumb slightly from 200-300 basis points for every 10% change to 100-200 basis points on the gross margin. What is the reason behind this? And does this mean that if we see raw material costs down 30%, would we see a 450 basis points higher gross margin, all else equal? Thank you. Michael, good morning. It's Allan. Let me pick the first two up and leave the other complicated ones to Henrik.
As far as marketing costs are concerned, I, you know, we've always talked around that 10% mark. It will move around from quarter to quarter. And clearly, the thing to think about in the second half of the year is we have a new product to launch, and that will probably get initially, you know, more support. So I think that's the way to think about the marketing costs. Where you are in distribution costs, again, is, you know, probably in the right ballpark. And, you know, that we've always got you know, there's always a bit of one-offs in these types of businesses, and probably that will continue going forward. But, you know, the ballpark number that you're talking about there, sort of 18%-19% range, is probably a good place to be.
Henrik, do you wanna pick the others up? Maybe just a quick follow-on on the distribution expenses. We did, I believe, on the call last quarter, talk about this, and we, I think, we indicated that Q1 was on the low side, in terms of the 16% I think it was in Q1, on our revenue. The 18% is more in line with what we saw in Q4. So I think, as Allan said, that's probably what you should be looking at, going forward. On the interest, the debt one is a net of all everything we have on sort of interest, income, and expenses. So we have some interest income from other elements as well, which goes into that line.
On the gross margin, the 1-2 percentage point change is basically because the underlying gross margin that this is calculated on is higher. So now we say that the underlying gross margin is 71, which means that if we have a positive impact from commodity price decreases or increases, or negative from increases, then on a higher base, the relative change will be smaller. So that's the simple, like, explanation behind that. So if there is a 10% or, sorry, 30%, I think you said, change in commodity prices, well, the accumulated impact would be three times 1-2%. Thank you, Henrik. Just in terms of interest costs, can you then kind of help us out a little bit on a full year number?
So will second half also be approximately zero, or what should we look for there? Michael, I don't have all the details, but I mean, as you will understand, we continue to generate cash, and we will generate cash in second half. And we haven't actually also last year seen significant interest expenses. So, I mean, this will not be a significant amount. Great. Thank you very much. Thank you. Your next question comes from Lars Topholm of Carnegie. Please ask your question. Yeah. Lars Topholm of Carnegie here. Congrats with the great results. I do have a few questions. One is on your average realized silver cost, $27.86 for the quarter. After Q1, you disclosed that the hedged price for the quarter was $30.48.
The difference between these two, does that simply reflect that you hedged much lower volume than you actually realized, meaning that revenue was this far ahead of your own expectations? Question number two goes to the full year guidance. And Allan, I fully understand you want to be prudent, but the implied EBITDA margin for the second half of the year is only 24.3%. So, do you see any specific things which we might not be aware of, which we should factor in? Are there any one-offs or special charges you can foresee coming in the second half of the year? Then question number three goes to your and then I'll stop. That goes to your provisions for returned goods. You had DKK 416 million in provisions for that, by the end of the year.
Revenue has since built up, but now total current provisions are only DKK 425 million. I wonder how that adds up, given the much higher revenue, if you can explain that. Thanks. So last, let me take your point on the second half already. I mean, the first thing, as we're saying, is our guidance says the word approximately. And, you know, that's what it is. The second thing is, as far as margin in the second half is concerned, is generally the costs in the business in the second half are traditionally higher. So I think you have to factor that in. And we are going to launch a new bracelet. And, attached to that new bracelet, will be, clearly, marketing cost, more marketing cost.
But also, there's a lot of work happening in Thailand on two fronts—oh, on three fronts. The number one front is that we've—I don't know if you look at our numbers. We've added nearly 1,000 people in Thailand in the last six months, as we've been ramping up the production. And we're just about to move to a full-time night shift. And ramping up of something like a full-time night shift clearly has costs associated to it. And that's there to clearly deliver the volume and also to make sure that we've got sufficient capacity for where our volume goes next year. The other thing we're doing in Thailand is making a new product. And we've not really made that yet, and we don't need to have made it yet in any great significant quantity.
But clearly, when you make a new product and this product is slightly more complex than some of the other products that we make, then you wanna be sure that you can make that product, and there's bound to be costs associated with getting that right because clearly, it's a completely different process. And thirdly, this thing to think about, which will come in towards the end of the year, is that we are going to build a new factory, probably down in Thailand. That is going to be done sometime in probably in the second half of next year. And clearly, you have to, you know, plan that in advance, and you start to take on costs for that in advance in terms of training and development and project management and things like that.
And so that's what I would just build into the thinking about the margin of the second half. So to your question, are they one-offs? Well, clearly, some of them are because they're too related with new products and ramping up in Thailand. But they're a bit more than one-off because they sort of roll into the, I think, you know, the business into the second half in terms of driving the business, not necessarily on the cost base of the business. So I hope you find that helpful. Yeah. Surely. I surely do. Henrik, would you like to? Sure. On the average silver and gold prices, we have first of all, we have not changed anything in terms of how we hedge gold and silver.
It's done according to the same methodology sort of systematic approach, 180, 60, 40% for the coming four quarters. The drop you also generally see a drop in our hedged prices for the four quarters ahead from what we reported in Q4. And that's generally just expressing that when we increase our hedging for the quarters, then the average price drops, and the average realized purchase price that you see is our purchasing price for production. So that will then go into our cost of goods sold at a later stage. So there's actually no changes in that. In terms of provisions, first of all, it's maybe a little bit technical. But first of all, when we stated it's approximately 9%, first of all, of revenue. So, that's one thing.
Secondly, when you calculate the provision, sorry, revenue value of your provision, the revenue value is expressed through the mix that the provision has, where we have different gross margins across the group. So when you convert the provision to revenue value, you can't necessarily just take our reported gross margin and convert it and thereby get the 9%. Thirdly, the provision includes some general provisions where we have stock balancing sort of systematic stock balancing policies like in the U.S. and Canada, and other provisions which are to more specific things across other regions. And at the end of last year, you may recall that we had a provision in Asia Pacific which was related to our Japanese distributor, and we have taken back stock since then and thereby and therefore reduced the provision related to Japan.
So a lot of nitty-gritty, up and down things, but, but in the end, we are still at the approximately 9% of revenue, with our provisions. Okay. Thank you. Thank you. Your next question comes from the line of Dan Wejse of Nordea. Please ask your question. Yes. Also, a few questions from my part. Firstly, on your operating expenses, looking on, excluding these, DKK 35 million in one-off, it appears that operating expenses are up some DKK 40 million quarter-on-quarter. Please elaborate on, on that development. And then secondly, on your cost, I understand that, that there's uncertainty to a number of the cost, elements, for the second half. But then looking on your revenue guidance, there was also stock rebalancing last year, and adjusting for that, you guide for flat year-on-year revenue development despite more stores and new concept being launched.
Please tell us why that should be the case. And then lastly, I've also asked about it previously, your third-party distribution and especially Spain. Now we see that you're taking back revenue. Despite of that, we continue to see a growth in the number of third-party stores. So, what is actually the dynamics here that you report negative revenue and even adjusting for that, a very, very low level compared to the many stores that you have on third-party markets? So also a bit of more flavor on that. Thanks. Dan, let me try and have a go at the revenue. And again, go back to my point is our guidance is approximately. The way to think about the revenue, I think, is a bit like this.
It's a sort of this is the way I think about it, is that, if you take the first half, basically, our sales out are our sales in are up about 50%, and our sales out are up 10%. So there's a gap. And you have to think about where that gap is. And the gap's driven by three or four factors. The first one is the network. Clearly, that has an impact, as you develop the network out. The second thing is the drop structure and strength. And, as we pointed out earlier on, that we've had more drops in the first half of this year than we did last year. And of course, those drops are much stronger. And the third point is that pipeline. When we came into this year, we had very low stock levels in our pipeline.
And therefore, that's been filled. To give you some idea, our backorders today would be a fifth of where they were at the beginning of the year. So you get this pipeline fill effect. And then, of course, you've got stock balancing. And if you think about what of those get carried forward, well, clearly, the network gets carried forward, but the drops start to come against much tougher comparables than they were. There are fewer drops in the second half, and you're up against, in many ways, what was our strongest drop, which is Autumn-Winter of 2012. You lose the pipeline fill because clearly, you only fill it once, and you've been through that piece of exercise. And so you need to build that into the thinking about what happens to the revenue in the second half.
And I think that's the you know, that's the way we think about it because clearly, when you see the difference between 50% sales in and 10% sales out, you wanna be very sure that we're not filling the pipeline up and just filling the pipeline, and you understand the rationale behind it. So some of those, as I described, positive tailwinds disappear in the second half. And that's roughly the way we think about how our sort of revenue could develop. Henrik, do you wanna pick the other points up? Yes. First on the OpEx, up DKK 40 million. As you will see, that is actually mainly related to the distribution expenses, where we, as previously mentioned, did say that in Q1, that was on the low side. So this quarter's probably more representative of where it should be.
So I think that's the short explanation to that. In terms of the third-party distribution, that is, for this quarter, impacted by a decision to take back some stock from our Spanish distributor. We have a very good relationship with our Spanish distributors. They are seeing improvement in their business. The like-for-likes in Spain are improving, but they've had some tough years. Actually, the stock that we take back for the majority of that is something which could be directly redistributed to other markets. So we're basically helping ourselves by helping them. But it has, for the quarter, taken off DKK 55 million worth of revenue to the third-party distributors, which obviously impacts the comparison to last year. The average revenue per point of sale for us in a third-party market is significantly lower than in other markets.
As you will also see, our third-party distribution to markets relative to the rest of our business has a fairly high number of, for instance, white stores. So one of the things that we are talking to our third-party distributors about is basically sort of working with their distribution in the same way that we do in our direct distribution markets. So that's, I guess, my comments on that one. Okay. If I just could follow up on your distribution cost, then, Allan said something about that we could, a run rate going forward could be some 18%-19%. That is a level of the same magnitude in 2012 where you had all these changes related to the stock rebalancing program. So please tell us why underlying have we seen a significant increase compared to what has been the history in the past.
Did you say 18%-19%? I think we, we the 18% what we saw for Q2, what will probably be fairly reflective of what you should expect. Going forward. We have added about 20 owner and operator stores as well in the past 12 months. That also impacts our distribution expenses in absolute terms. So that's the main explanation to that. Okay. Thanks. Thank you. Your next question comes from Chiara Battistini of J.P. Morgan. Please ask your question. Hi there. Just a couple of questions from me, please. First of all, in the last few days, there have been some rumors in the market on Germany and some IT issues in the geographical area.
So I was just wondering if you could shed more color on, on that front and if we should expect any extra cost related to your organization in Germany or what we've seen in quarter two is all for Germany. And then the second question, on the UK, that posted an impressive growth of 82% organic in quarter two. So I was wondering what drove such impressive growth in the quarter and what kind of contribution from online you saw to that growth. And on online specifically, if you could update us on your plans to further roll out online in other markets, please. Thanks a lot. Okay. Good. It's Allan. I'll take that. I know this, this rumor is not correct. We actually, we did introduce a new IT system into our EDC.
We've had some bug issues with it, which has had some impact in the U.K., nothing of great significance. And so that sort of rumor that was, you know, the reason why the margin was down is completely inaccurate. The second thing on the U.K., it's largely been the all the things that have worked everywhere else. The new products have done incredibly well. The drop structure has been, you know, worked particularly well there. Our Concept Stores are performing particularly well. You can see the like-for-like sales have been transformed in that market. And, you know, this point I make about, you know, our positioning in the marketplace of Affordable Luxury, never being more relevant, I think is particularly plays in the U.K.
So it's just a strong all-around performance on all of the fronts, product marketing, execution, and I think relevance. I think our relevancy is increasing significantly. As far as online is concerned, we're still, as you know, just in the UK. We're pleased with it. We've been very focused on service. You know, the most important thing is to get the service element of that right. We have pretty low returns. We have a pretty high conversion rates, and we have pretty good satisfaction rates. And so we're pleased with the progress that the UK has made online. And there's been low to no cannibalization, which, of course, has always been really important in the way that our partners think about the product. We'll continue to learn from it.
We will probably extend to one, possibly two more countries in the rest of the year. But as you know, this is still a relatively small part of our business, which we believe over time could be and should be a significant part of our business. Perfect. Thank you. Thanks a lot. Your next question comes from Niels Leth of SEB. Please ask your question. Yes. Good morning. My first question would be on the jewelry industry in general. Have you seen any signs of price reductions in the wake of lower gold and silver prices, which eventually could have an impact on your sales prices on a retail level? Secondly, could you talk about the number of stores that you expect to ship the new bracelet concept to during the course of this year?
I expect that it would not be all your store categories that would receive this new concept. And then, thirdly, could you elaborate a little bit more on the extra marketing which is needed in the second half of this year in order to push your new bracelet concept? Thank you. No. Okay. Yeah. Yeah. That's Allan. I'll take that. I mean, generally, I don't—I mean, we don't think we're seeing a lot of price reduction in the market, if any, in terms of certainly the retail pricing in terms of sales out in most of the markets. There's a lot of activity, because, you know, like every—you know, everybody who's in retail, if you're not doing stuff, then nothing happens to you. So, I think that, you know, there's lots of different marketing campaigns happening.
There's quite a lot of sales take place, I think much more noticeable for me than I've noticed before, but that's a sort of general trend, everywhere. So, I think it's, it's more, more activity, more sales, but certainly nothing significant in terms of price reduction. When you talk about the new, the new, bracelet, in terms of marketing, it is, you know, I can't really go into the detail of it, but if you've got a new product, then clearly, the weight of advertising and marketing support you put behind a new product is much greater, than you put behind an existing product, and particularly when you're in that, initial launch phase. So, you know, when I talk about extra marketing, it really all comes we always think about it two ways.
One is clearly, if you've got new products, you have to put support behind it. And at the beginning, that support is always greater than it is when you start to establish that product. Certainly, for the first 12 months, you sort of invest more than you would do normally to get traction on that brand. And the second thing where we do and will spend extra marketing money is in markets that are doing really well. And if we see there's an opportunity in a market that's doing well to push it on, then we'll invest money in it. You know, often, people invest marketing money when it's too late. The art of investing marketing money is, you know, when you've got that momentum.
And that's something we've really much bring into and have brought into our thinking over the last six months. As far as I can't be specific. I wouldn't want to be specific on the number of outlets that we would be putting the sort of bracelet in, not least the fact that I'd like to have made it for two or three weeks in with some volume before I could, you know, finally decide that. But suffice it to say, we are pretty targeted. It is Concept Stores. It's not beyond all of that, because, you know, the way, again, you build businesses like this is you build them out. So it will be a very focused launch of the product, and not too deep down in terms of distribution. Okay.
Thank you. Your next question comes from Clemens Bomsdorf of Dow Jones. Please ask your question. Yes. You already earlier spoke about the online sales. Could you give us some figures, what big share how big is the share it makes in the UK or anything else? You can tell us more about it. I mean, unfortunately, the answer is no. You know, we clearly don't want to share figures on that. As I say, suffice it to say that, you know, we're pleased with it, and it underpins our view that over a, you know, a three-year period, this is a business that, you know, we could grow significantly. Thanks. Your next question comes from Faisal Ahmad of Handelsbanken Capital Markets. Please ask your question. Yes. Faisal Ahmad from Handelsbanken Capital Markets. A couple of questions from my side.
The first one, being on marketing spend. You previously guided for marketing spend to be flat, compared to last year in absolute terms. Have you changed your view on that, considering the product launch which you're talking about in the second half? That's the first question. The second question basically relates to concept store openings. You have increased your target to 175 from 150 previously. Which markets are you expanding more in than what your previous targets indicated? If you could provide us with some color on that. And then finally, the new factory which you're talking about in Thailand, CapEx lifted by DKK 100 million next year. How should we think about CapEx next year if we're from this factory expansion? That's all from my side. Okay. Well, let those sort of do them in reverse order.
I mean, first of all, in terms of well, in terms of marketing, we don't really guide for marketing. We always talk a bit about a framework. You know, we've always talked around that 10% number, and it's, you know, up or down, off the back of that. And clearly, the way to think about the second half, if we sort of always talk around a framework of 10, then if you're going to do something new, then it's likely to be higher than 10 than lower than 10. I think that's the way to think about it. The second thing is regards new factory is, again, we're probably in the EUR 10-15 million type capital expenditure to put a new plant down.
We're sort of waiting for that to be so, but I think that's the way to think about that. It's not all huge amounts of money, but that will certainly be in our capital for next year. Well, it's included for this year, part of it, obviously, in that updated guidance. In terms of CapEx for next year, you'll have to have some patience. We will guide on that when we come to our guidance for 2014, so have some patience on that one. Remind me again. What was your third question? Concept store openings. We're supposed to be having. Yeah. Yeah. Yeah. Right. I mean, largely our across the in the core markets is the way to think about it.
It's our core markets that are increasing the number of Concept Stores. I think this is a really pleasing sign, because clearly, it's really a statement about how our partners and franchisees are really beginning to get, you know, really confident about the proposition. And again, I think it absolutely plays to this point of our relevance. And you know, that relevance is beginning to show not just in the performance, but in the number of people who are prepared to come and talk to us about, you know, opening Concept Stores. Okay. Thank you. Thank you. Your next question comes from Michael Rasmussen of ABG Sundal Collier. Please ask your question. Yes. I have two follow-up questions, if I may.
First of all, on the CapEx, I didn't fully understand the difference between the DKK 10 million-DKK 15 million for a new plant, which I thought was in end 2014, and then the DKK 100 million increased CapEx guidance for 2013. Is that related to the existing factories being expanded, or what's the point here? And then, on Rings, Rings were below 5% of total sales. Even though the year-on-year growth in Rings is still a very, very strong number, it is the first time that Rings has been below 5% of group sales since the beginning of 2010. So what's going on? Why are Rings not growing as fast as the rest of your business? So, Michael, let me deal the Rings issue first. Yeah. I actually think I agree with you. I was slightly disappointed with Rings in this quarter.
I think it's largely to do with, you know, emphasis. It's that we're in the markets where we've, you know, put some emphasis. The Rings business continues to do well. So, you know, I too was slightly disappointed by that Rings performance, in Q2. The other way to think about it is I don't think about it as a % of. I think it's very dangerous to think about Rings as a % of our total sales because, frankly, I'm not interested in that. I'm interested in the absolute revenue it does. Because, of course, you know, we could have Rings growing as a % of our revenue and the rest of our revenue not growing. That's not the idea.
So, one of our strategic projects is very much the development of Rings, and, you know, how we can make this a scale business for us because that's what it needs to be. And a part of how we really use our manufacturing, i.e., when we build the new plant, how we then divide our manufacturing within that, a big part of the thinking that Thomas and Per are doing down in Thailand is how can we really get some real expertise and focus on Rings, which we can then use to drive in the markets. It still does incredibly well in some markets and not in others. It has a particularly low share in the U.S., and that is something that Scott and the team are really thinking about for driving next year.
So, you know, I have a lot of faith in Rings. I think we do. The product has a tremendous consumer acceptance. I don't believe yet that our programs, or our execution, is as good as it can be, and that's where the focus is going to be. CapEx? On the CapEx, the up to DKK 15 million that Allan estimated is for the new plant that Allan referred to, that we are looking at establishing during 2014. Part of that will be in 2013. Part of that will be in 2014. The DKK 100 million includes part of that, but it also includes that we are, you say, expanding where we are currently. I mean, already. So we are investing in additional capacity where we already in our existing location, you could say. So that's the way to look at it.
And the way to think about that, Michael, you know, casting is a big issue for us in terms of how we can, you know, that's, it takes a long time in the factory. And therefore, one of the ways to get around that is that I basically put more bits of kit in. And so the CapEx is a combination of more kit, better kit for the existing plant as we ramp up the capacity, new kit because clearly, we move on to a night shift, and then there's the element of next year. Yeah. Great. Thank you. That was very helpful. Thanks. Thank you once again. If you wish to ask a question, it's Star and One on your telephone. That's Star and One if you wish to ask a question.
There appear to be no further questions on the line. Please continue. Good. Well, thank you very much, everyone. Some of you will see tomorrow. Looking forward to that. Some of you, hopefully, will see over the next few days. Thanks very much for your participation. Bye.