Looks like we are complete. Again, welcome to the six-month earnings report from Basler. For those of you who don't know me, I'm Hardy, CFO, COO of the company. I'm happy to present you today a very dynamic and very interesting first six months and review on it. Just looking whether. After showing the disclaimer and making you aware that we are talking here about future statements also based on the current know-how and knowledge, I will immediately go to the agenda. It's an agenda that most of you are aware of. We start with executive summary, combining or summarizing the main results. Then we dig deeper into the financials.
We have a quick glance at the share performance over this first six months, and then we go into the outlook, giving you an understanding of the remainder of this year, but also, looking into our midterm guidance and give you some highlights here. After this formal presentation, we have, I guess, enough time today also to do a Q&A session, so we start with that after the outlook. Yeah, starting with the executive summary and with our market environment and what could have been realized over the first six months of this year, that the German industry for vision components was kind of cooling down, compared to last year, from the growth perspective. Billings and bookings, according to VDMA, were up 5%.
Here also maybe stressing the point that the bookings and billings were up 5% gross. The net value is closer to zero because there was also higher inflation than normal. What we see is that the whole industry is not significantly growing compared to the first half of last year. The main reason behind that, and you will see this later on also in the Basler figures, is that the chip supply is still constrained, and it slows down the potential higher sales. The whole industry is also sitting on high order backlogs and is demonstrating long lead times, long order horizons. This all needs to be, let's say, looked at or considered when thinking about the industry and also the development of the industry.
Last but not least, also the consolidation trend is ongoing. There were some competitors also striking some deals. I'm coming now to Basler and our highlights. We were also pretty active in the consolidation of the industry. As you know, we are looking in order to get more direct market access, and by that we have over the course of the last six months, roughly, closed four deals, M&A deals, where we acquired or in the France example, it's for the moment it's just a minority stake acquisition. But where we did transaction in order to acquire the businesses of our distribution partners and also to enter into a direct sales approach. This kept us obviously very busy.
You will see later on also a lot of distortions in the numbers, especially on the cash flow side. That also needs to be considered in the context that there are extraordinary situations or developments. Bookings were down 3%. I mean, I have to say that the bookings in first half year last year were already very high. We look at the absolute numbers, and so we are still on a very high level of bookings in the first six months. What happened is we have seen the expected normalization in the order behavior. I come to this later during the presentation. Billings up 14%. We created a new sales record for six months, EUR 130.8 million.
We are pretty proud to have this achieved, and I can tell you that we even looked at a little bit higher revenue, but we had a glitch. Also in mid-June, we were missing a part, so our production slowed down, and this is why we do not utilize the full potential or the goal we wanted to shoot at. Having this said, we are on a sales record and we are proud to have shown this or showing this. On the earnings margin, the earnings margin is at the upper end of our guidance, not at the upper end, but in the upper area of our guidance with 11.3%. We have demonstrated relatively weak gross margins, especially in Q2.
I come to this later, also giving you some further explanation. We have significant order backlogs still. Also this needs to put in context here EUR 145 million were still in our books by end of the reporting season. Very proud also, we achieved or exceeded more than 101 thousand full-time equivalent employees. I show you on the next slide the split, as we have also certain inorganic growth and the transaction wherein the field of distribution, what you can see is that the sales and marketing personnel, proportional-wise, is increasing. Production at 22% of overall staff, admin at 15%, and R&D continues to be strong at 25%.
We invested, not approximately, EUR 16.1 million in R&D in the first half year, which means around 12.3% from sales. We are a little bit below our steering point, but we have also to consider that we acquired some distribution business from third parties with the transactions we have done. We are close to our steering point of investing roughly 13% from sales in R&D. In total, 1,020 employees by end of the reporting season, and 50 of that were from inorganic growth by the acquisition from Korea, both acquisitions from Korea. With regard to the acquisition we recently announced also from Italy, we have closed the deal.
The consolidation of this deal will be in the second half of this year. It's not consolidated yet, since we closed at beginning of July. Yeah, some other highlights. We were also very active on physical shows. Again, also very happy to get an interaction again with customers. We have been in Q2 also on three shows in Germany, on analytica show, embedded world, and on the automatica. Just to mark also here, we are proud to be third time in a row that we got the Best Managed Companies Award. Also this happened during the course of Q2. We are also very busy with other projects.
I have no specific slide, but we are still very actively working, obviously, on our S/4HANA integration I reported earlier in other presentation. We are in the midst of finalizing our headquarters extension, creating spaces for 300 new employees. I can tell you there is a lot going on, and we are very busy. We were also very active in the field of new product introductions. Just some highlights here. We extended our 3D offering with stereo technology. You see at the upper end two images here, or pictures of products. We offer now besides time-of-flight technology, an additional technology, which is stereo, to expand our 3D offering. In the field of medical, we launched new product versions with new feature sets.
For example, medical feature sets when it comes to dust protection, so very clean cameras that, for example, lab automation applications are required. In the field of embedded vision, we are happy to have entered into a elite partnership with NVIDIA, so one of the most famous embedded processor companies in the world. By that, we are also starting to more deeply integrate and work together with NVIDIA on customer projects where Basler vision technology is combined with NVIDIA processor technology. Yeah, the highlight, and I really want to stress this point, is the recent release of pylon 7. Pylon, for those of you who are not so familiar with that, is our central software development kit that enables the customer to parameterize and to connect all the different components we offer in their systems.
Please recall, our customers are typically OEM customers who have vision experience engineers on their side, and we enable them with the software development kit to work with our products, to connect our products in their systems. What is new, also now with pylon, we chose to offer imaging processing functions. This is definitely one of our highest investment in the R&D investments in the company, over proportional investments to make this product, the central software development kit, get stronger, and create differentiation for the customer or for us against a competition, and to enable our customers to design their systems much quicker, much easier than with competition products, hardware and software. Yeah. This is another demonstration here.
You see pylon on top of every different components from left to right that we offer. Lighting, lenses, cameras, cable, processing cards, PC, so processing units, and then there is also obviously some switches and network power cables. Pylon is connecting all active parts. For example, lighting with a camera and the frame grabber, and you can synchronize and work seamlessly with one software as a customer. We are expanding in this full line provider. This is also what you see in the next picture here on the Y-axis. On the X-axis, we are also expanding in different market fields, from factory automation to medical to ITS, so intelligent traffic systems, logistics and also retail. Agriculture is also a very nice future application.
We are moving further down, and we have done this in the first six months of this year, our strategic path from a single component factory automation company to a full line provider attacking computer vision, so the whole landscape. Putting in the center of our offering a pylon software and also, in order to bring this positioning really to the customer, entering in the important markets, regional markets of the world, entering into a direct sales model. Yeah, coming now to the financials of the first half year and starting with bookings and billings, so starting with the top line numbers. Looking at this picture, you can see what's happening, and it's exactly happening what we have guided. For us, it's not a surprise.
At the beginning of the year, we have said we see a normalization of order entries happening over the course of the year. This is what we now see. The reason behind that is the market liftoff already back. You can see it even here in 2020 and in the fourth quarter, coming originally from a, let's say, order entry level of approximately EUR 50 million per quarter, then towards EUR 67 million, already very strong in Q1. We had four consecutive quarters in a row at really high level of order entries of EUR 85 million. Unfortunately, you know all the story, we were not able to catch up with these high order entries because of the supply constraints of, in the beginning, many chips.
Now it's becoming only part of a limited number of chips that are short. The net effect were that we created a gap of bookings and billings over the last couple of quarters, and our order backlog grew, and the order backlog is stable also by end of the second quarter was stable at around EUR 145 million. What we are seeing is now that the order entries per quarter are approaching more or less the level of deliveries we could supply over the course of the last quarters. It's even a bit higher. What we see is that demand and supply is starting to get back in balance.
We have still a very high backlog, and this kind of phenomena that the highest level of bookings per quarter are in the past, we also expect in the future, but we come to this in the outlook. Our revenue in the second quarter was stable. I mentioned in the beginning, we shot for a little bit higher revenue. Unfortunately, we had a missing part that stopped our production lines in right in the middle of June. We have seen the impact when we closed the books for the second quarter. I'm confident that we can catch up for this in the third quarter. These EUR 130.8 million in total revenue for the first six months, you can see here the regional distribution.
Because of our Korean acquisition, the consolidation started beginning of January, the Asian portion even grew further to 58% EMEA 25% and America 17%. But it also needs to be mentioned that the China market was relatively weak in the first six months of this year, especially in the second quarter, due to the lockdown situation. What you could read in the news regarding the macroeconomic situation of China, we can also see this in our bookings and billings in China, especially in Q2. Yeah. Further down, in the P&L sheet, let's have a look at the gross margin.
Here you can see that we had a decline in gross margin from Q1 to Q2, and I would like to shed some light on it in order to interpret the numbers. Maybe, first of all, the 54% gross margin that we have seen or that we realized in the first half of 2021 are exceptionally high. Our gross margins are typically in the range of 50%-52%. This is also our long-term steering point. You can also see that we are below that. We started roughly in that range in Q1, but we were below in Q2. There are multiple effects.
One effect is that there is a product mix change or was in Q2, because as mentioned earlier, we had a production line down in Q2 in June that created lower numbers of production output for Q2. This means that our production costs were a bit higher because all the fixed costs are still there, even though we produce lower numbers. We also had weaker revenues and business in China. China is a 100% direct region with relatively high gross margins, so that was missing in the mix. We also had a better business in Korea, as mentioned earlier, but most of this business was third-party, so it was kind of distribution business with third-party products with relatively low margin.
We had some M&A effects, so extraordinary effects like stock clearance in Korea. We acquired also Basler cameras in that deal. This needs to be turned around. We are continuing or having the burden of increasing material costs. I was emphasizing on this in further calls. We have structural increased material costs, but we have also spot buys where we go into the gray market and we buy it for higher prices. We also adjusted our prices beginning of the year, but the effect will be mostly be seen in the second half of this year because we have so high order books, and also we need to turn around the order books before our price increase become effective. Our expectation is that this is not a trend that it's further going down.
We believe that sooner or later we get back on track and get back in the area of 50%-52% of our gross margin. Yeah. With this lower gross margin and also 3%, EUR 3 million in absolute terms, roughly, EUR 3 million less in gross profit, and higher costs because of expanding organization. You see the result on the earnings. We are EUR 4 million roughly below, a little bit less than EUR 4 million below the Q1. Our earnings margin 9% roughly in the second quarter. We started the year with a relatively high 13.9%, so almost 14%.
We will see how this will continue, but in total, for the first half-year with the 11.3% accumulated earnings margin, we are satisfied and we are in line with our guidance. Looking at the whole, let's say, or the main P&L parameters, also here in a half-year comparison. Order entry, more or less stable, as I mentioned earlier. Sales +14%. Main growth in the first six months coming from acquisition. I have to stress this point, the total production output was less than approximately 8%-10% less than in the H1 of last year. Hopefully we can catch up here so we have a positive M&A effect. The own production, let's say, is still suffering a lot from missing material.
Gross profits in absolute terms more or less stable, but the gross profit margin significantly lower compared to the very high number in the first half year of last year. EBITDA, or let's combine them, all the earnings parameter are more or less in between 25%-30% less compared to the first half year. But again, I want to stress the point, we had a very tremendously high first half year. The second half year of last year was there. The business slowed down top line and also bottom line. We need to see, but we are optimistic at this point in time that we can continue more or less the course that we are currently demonstrating.
Yeah, the cash flow parameters are very much distorted by the M&A transactions, especially the M&A transactions in Korea. As you can see, we had negative operating cash flows in Q1 and Q2. This is mainly due to the reason that we increased our stock. Also here, the stock increase due to the purchase plays a role, but also the raw material increased because the majority of the parts that were short last year we now get, but some parts are still missing. We have an uneven part supply at the moment, leading to higher raw material levels by end of the first six months. We are roughly at 2.5x a normal raw material stock. We have high raw material stocks.
Unfortunately, not for all parts, some parts are still missing, but we are seeing continuously an improvement in the situation even though the production output is still limited by the parts supply. On the investing cash flow, there is huge distortion, or you can see the M&A transactions. This is why you see so much negative numbers. In Q2 and Q3, just to give you an outlook, you will also see some extraordinary effects because some payments for France and for Italy will also be done in Q3. After that, we will see again a picture that is, let's say, more clearly demonstrating the normal behavior or the normal operational and investing cash flow. You are also, when you look back to 2021, this is a normal pattern.
There were no significant impacts from M&A transactions. Looking at the liquidity situation, we started the period with almost EUR 55 million cash. We had negative EUR 6.1 million negative cash flow from operations, EUR 28.3 million negative cash flow from investments. Free cash flow EUR 34.4 million. High investments, especially due to raw material stock increase and M&A transactions. We had some additional financing. We took EUR 11.6 million. We also paid our dividends in this period of time of a little bit over EUR 6 million, so that by end of this season here, our cash account was at around EUR 32 million.
Looking at the share price development, the share price went, I would say, with the market, but a little bit weaker than the market, as you can see. You see the TecDAX development, the slowdown from beginning of the year, until end of June. We started the season with 160.6 share price. At the end of the first six months, we were at 76.5. Significant decline. I mean, 160 was pretty high valuation. 76, I mean, we already increased a bit since then, so quite a weak, for us, perceived as a weak share price.
What we have also done, we have implemented a share split, or we brought out two bonus shares for each share, so that is why the share price recently was divided by three because people that hold shares got two additional bonus shares for one Basler share. Yeah, this brings me already to the outlook, and what are our assumptions for the second half of this year. We expect that the order entries and order horizons will further normalize. The pattern that we have seen that the orders when order entry went down, we see that this will continue in order to bring back the market in balance.
Unfortunately, there is also the structural problem that supply is not meeting demand and for so long time, so demand is starting to adjust. All our customers are also not able to supply what they want to supply, so they now start to adjust their order behavior. We see relatively sound, to give you also information here, sound demand on the backlog. However, nobody knows how long this will be. I mean, also the backlog can be influenced by cancellations. At the moment, it's very limited shifts and cancellation, but we will keep you posted. We are looking on this situation. The production output and revenue will still be limited by supply shortages. As mentioned earlier, the vast majority of semiconductor components, raw materials we now get in high volume. So there is a positive news.
The bad news is some parts are still missing, and these parts have still structural problems. The production capacity is very limited, and this is why some of those common parts are not coming, and this is slowing our production down. You can also see, because these are the similar parts, you can see it across our whole industry. It's not a Basler issue, it's an industry problem, and you can also see it in other industries like medical, like automotive, that the output numbers are constrained, significantly constrained.
Gross margins, we see them slightly increasing step by step in the second half of the year when the extraordinary effects go down, when our price increase will materialize, and also the product mix between third-party products that we more or less buy and sell and own Basler products will again swing back a bit more towards Basler products with an increased number of product output. Our organizational costs and also the OpEx costs that are closely related to HR costs or personnel costs will increase over the course of the second half of the year as we are in the hiring program.
We have already closed contracts for another 50 people that start in the second half of the year, and we continue to hire in order to prepare the company for our midterm, long-term goals. I mentioned earlier that the Italy acquisition will be consolidated in the second half of the year. Just to set the right expectation, this is not a significant gain. We are talking about approximately a half year gain, revenue gain of EUR 3 million to give you also a reference point. Under these assumptions, we confirm our guidance with a double-digit growth and a sound profitability. We confirm a revenue corridor of EUR 235 million-EUR 265 million at an earnings margin between 9%-12%.
Obviously, in the first half, we are more at the upper ends, not the upper end, but in the upper arena of this guidance. We also feel confident for the third quarter. However, there are still significant supply risks and the transparency that we have for the critical parts is only three months in advance. This is why we need to keep the corridor wide in order to reflect this risk. It's not a demand risk here in the short term because the backlogs are very high. You have seen that the order entry levels are also still high, but it's a supply risk, and this needs to be considered appropriately.
You know that we are very transparent with that and we are confirming our guidance and feel good about the guidance and also about the development for the second half. For the midterm outlook, this stands also here in concrete our 2025 goal. This is also why we are expanding the organization. We want to achieve EUR 400 million and an earnings steering point, earnings before tax margin of around 12% and a sound cash conversion rate of 70%. We need to see along the way, everyone knows that the general economic outlook gets more and more fuzzy.
On the track record that we have at the moment on the things that we have in the pipeline, we feel very comfortable to achieve our midterm plan. Yeah. We continue to invest, we continue to move on with high speed in order to realize this. Having this said, I come to the end of my presentation. I thank you very much for the attention of this slideshow here, and we'll now open the Q&A session. There are two ways, actually. If you are not able to switch on your mic, you can also put your-