Ladies and gentlemen, a warm welcome also from my side. It's my great pleasure to have with me today Dr. Mathias Hallmann, our Group CEO, who will walk you through our presentation in a minute. The slide deck is also available under the investor relations section of our website, www.r-stahl.com. Before we begin, allow me to point you to our safe harbor statement, which you will find at the beginning of the slide deck. With this, I hand the call right over to Dr. Hallmann.
Yeah. Good morning, ladies and gentlemen. Welcome to this Q2 2021 investors call. Yeah. I think the overall message for this call is that after a very difficult 2019 and also a difficult first quarter, which was heavily impacted from low orders in the end of 2020, we are starting to gain momentum. Our sales are 8% up year-on-year, reaching a level of EUR 64.5 million. That was due to higher shipments of finished goods we already produced the quarters before, also a pickup of the daily business. We continue to control our costs and improve the operating leverage that resulted in a year-on-year improvement of our EBITDA of roughly 17%. It improved up to EUR 4.5 million. In the bottom line, we had a net profit increase to EUR -1.2 million.
Orders or order intake grew 7.5% year-on-year, reaching a level of EUR 65.2 million, and order backlog stabilized on a level of EUR 68 million at the end of Q2. Net profit and continuous investments in R&D led to a temporary quarter-on-quarter increase of net debt to a level of EUR 13.2 million, which, given the profitability of the business, isn't an issue at all. Our guidance remains unchanged. We see sales between EUR 254 million and EUR 260 million and an EBITDA pre between EUR 17 million and EUR 19 million at this point of time.
If we look into the regional pattern of our sales, we see a good development in Germany, which already remained strong during the whole crisis. A very good position in the German market with another year-on-year change of +9.6%. We see a very strong development in Asia Pacific, with a growth rate of almost 35%. Stable business in the central region also a somewhat stable, little minus in Americas. If we look into that in detail, it clearly indicates what's still the problem. It's problems we have in the regions where we have high exposure to oil and gas business.
That is reflected in the Americas numbers. This is partly reflected in the central region with high exposure on oil and gas in Norway and the U.K., and especially in Germany, with good exposure to chemicals, pharmaceutical industry. Asia Pacific, where we more and more get into gas and LNG. There we see these favorable developments.
Looking at the overall development on the next page, we see that after three very difficult quarters in 2020 with order intake between low EUR 60s and low EUR 50s, we now had a 20% jump, more or less, in the first two quarters, reaching a level of around EUR 65 million, and the stabilized backlog. We are somewhat cautious when we think that this should improve quickly in the next quarters because what we see that large investment projects are still kept on hold, mainly in the oil and gas business, but also in some other areas. This is due to the fact that we still have lots of uncertainties around COVID-19, especially in Asia Pacific. Singapore, for example, closed down the offices. All people are working from home. It's almost impossible to interact face-to-face with customers.
We see rising numbers in Korea and China, there is more and more uncertainty in Asia Pacific. What we also see is due to the broken supply chains and especially due to major demand shifts in the electronics industry, our customers anticipate procurement risks, this is also what we anticipate for the second half of the year. Looking into the numbers a little bit more in detail, we see what I said before. Sales are up due to the fact that we could ship finished goods, which we produced before, also total operating performance is up. We have improved cost of material ratio. It improved by 100 basis points to 32.8%. We had 33.8% in quarter two 2020, that's demonstrating our favorable product mix.
Nevertheless, also here, looking forward, we will face challenging times, because we are all aware of sometimes dramatic price increases in raw materials market and also high internal costs, which are sometimes necessary to take just to make sure that we get the materials. We continue to manage our personnel costs pretty tight. The slight increase is heavily or somewhat driven by a year-on-year increase of EUR 400,000 in insurance costs. Our other operating income is slightly up, driven by software licenses and certification services, and both is very much related to the continuing execution of our strategy. Next slide, there's not much to say. Restructuring costs are under control. They are slightly up with respect to last year, but they are not critical for a company like ours, EUR 600,000 in six months. I think that's in line.
When we look in our key cash flow data, we see some differences from equity valuation. We had good dividend payments in Q2 2020 from our ZAVOD Goreltex share. That's our Russian joint venture we have. These dividend payments didn't arise. This year, we are expecting it for the second half of the year. We have better cash flow from higher net profit. We have an improved tendency in our working capital. We are benefiting from working capital reductions, what goes in the other direction is higher CapEx. That's again, linked to the execution of our strategy with higher investments in R&D and higher investments in plant property and equipment. That all then results in a net debt level of EUR 13.2 million. Coming to the outlook, I already mentioned that we don't change our outlook. We still expect sales between EUR 254 million-EUR 260 million.
We expect EBITDA pre between EUR 17 million and EUR 19 million, free cash flow of around EUR 6 million, and stable net debt year-on-year. The risks we clearly see, and this is a risk we are sharing with everybody, is that we need to tightly manage raw material supplies. Sometimes the suppliers give notice 24 hours before they just don't deliver confirmed deliveries. This is nothing where we have a good foresight into. We manage it tightly. Right now, we have no major impact. We could solve all critical situations. We expect that we can solve most situations coming in the second half, but there is some uncertainty from this side and also from the further development of the COVID-19, which we think will keep us busy at least this year and also partly in 2022. That's my presentation. Thanks for listening, and we are happy to take questions.
Thank you. We will now begin our question and answer session. If you have a question for our speakers, please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. The first question is coming from Tristan Landher at Hauck & Aufhäuser. Your line is now open.
Hi, everyone. Thanks for taking my question. I'm going to start with a bit more macro question now. Have you seen in the beginning of the third quarter, the first six weeks now, have you seen any material changes of the trends that you've seen in the second quarter to the positive or to the negative?
What we see on a macro level is really what I just pointed out, that now these supply issues are reaching everybody. We all hear it from the automotive industry, that they stop production. We had some waves with supply issues on the plastic side and on the steel side, and we could manage very well. Now we are really facing this wave from the electronic side, that we really struggle with deliveries, that we have many internal teams running, which do nothing else than securing supplies. This is impacting everything. Besides that, we still see a recovery in our industries. Pharmaceutical industry remained strong during the whole crisis. It's continuing to be strong. The chemical industry is getting stronger and stronger.
There's a strong shift from oil to gas, which is also favorable for us, when we think about our long-term strategy, and hydrogen is a big issue also. We are not expecting that will impact top line and bottom line in the next one, two years. The macroeconomic issue is really global supplies and the next wave of COVID-19.
Right. You just mentioned the whole topic of the supply chain issues with electronics being a scarce good. Will you be able to pass on some of the higher input costs onto your customers, or are you largely limited when it comes to pricing? How does that look?
No, we are not limited at all. We announced a price increase of 4.9%, a general price increase of 4.9% for July, and 2.9% on stock articles. The customer reaction was, I would not say positive, but there was a lot of understanding in the market. We don't have too much headwind when we started to implement. That was well accepted in the market. We will most likely have another price increase at the end of the year.
The overall impact on your gross margin should be rather limited.
We should be able to compensate, yeah.
Have you gotten any indications from your oil customers in North America or in Norway, U.K., as to when they would be willing to revitalize projects that have been postponed?
If you look, where we really have very good data, is Norway. When you looked into the Norwegian data, you clearly see the oil business will not come back. The oil business in Norway will not come back, and the Norwegian government is heavily investing in renewables and in hydrogen and bridging technology somewhat into the LNG business, or also hydrogen, where we use natural gas and carbon capture. This is what's going to happen in Norway, and definitely in Norway, this oil business will not come back. We will not see major investments. We will see automation investments again, because they still have the strategy in place to run oil and gas pretty much unmanned from onshore control facilities, and only fly out if necessary. The big investments in oil and gas in the Norwegian area are over, and they will not come back. Oil.
Somewhat in gas, but not in oil, and they will move to hydrogen. In the U.S., the situation is much more unclear. Following the strategy of Biden, I would say we will see something similar, but we don't have those insights. Where we will see a recovery is definitely in the Middle East, because these countries are so heavily depending on the income of the oil business, they can just not afford to change rapidly.
Okay, great. Thanks for that. I will jump back to the queue. As a reminder, if you have a question for our speakers, please dial zero one now to enter the queue. The next question is coming from Ulrich Sachse at UniCredit. Your line is now open.
Thank you. Ulrich Sachse, UniCredit. Thanks for the overview. Just let me take a closer look to your P&L. You showed us a recovery in revenue and sales. When do you think you reach the break-even point? In Q3, Q4? To give us a little better view on this. Thank you.
I would expect that we can reach the break-even in Q3 if we don't have supply issues. This is really the question. Because if we can't deliver 2, 3 million a month because we are missing parts and we need to shift that to the next quarter, then we will not reach break-even. If we can manage the situation, we should be able to reach break-even or come very close to break-even. Our expectation and our forecast clearly indicates that break-even should be reached in the next two quarters, if we don't see major supplies not arriving at our site.
Okay. Thank you.
There seem to be no further questions for the moment. Closing remarks, I give back to the speakers.
Ladies and gentlemen, thank you for joining today's conference call. We look very much forward to staying in touch with you. As a reminder, our next event will be the third quarter earnings release 2021 on November 10th. Have a great day and a nice and healthy summer break. Goodbye.