Welcome to this presentation of Kitron ASA's Q2 results. My name is Dag Songedal. I will do this presentation together with our CFO, Cathrin Nylander. The Q2 was a mixed quarter for Kitron. We had a strong order intake, but the profitability is still a challenge. If you start with the order intake, it was really strong in the quarter with several larger defense orders. The order backlog was strengthened and is 15% higher than at the same time last year and ended at NOK 858 million. We also had an increase in the revenue and ended at NOK 457.1 million up 6.2% compared with the same quarter last year. The main challenge is, however, the profitability.
Earnings before interest and tax ended at NOK 6.9 million, which is 26% down from last year. It is however, a mixed picture because we have improvements in all factories except the factory in Norway. There we have a significantly lower results than we had in the same period last year. All over, we also see some margin pressure which also hurt the numbers in the period. The operating cash flow was positive by NOK 9.5 million, but still down from last year with 68%. The main reason for this is revenue growth in the period. Net working capital ended at NOK 504 million, which is up 4% compared with the same period last year.
If you look into the main orders in the period, we had one big order that was announced in April, which was within the defense sector and was an order from Kongsberg Defence & Aerospace. The order is for equipment for military communication equipment, it's related to an order Kongsberg have signed with Raytheon, for NASAMS air defense systems to Oman. The production will take place in Arendal, the products are for delivery in 2014 and 2015, the value of the order is 80.7 million NOK. This is a really important order, both for the operation in Arendal, but also to maintain the position as Kitron as the number one EMS supplier for the defense industry in Norway. The main challenge at the moment is the situation in Arendal.
In February and March this year, we announced a program to reduce the cost base in Arendal. The main reason was that we saw that the revenue would decrease in the Norwegian part of Kitron during 2014. A plan was initiated to reduce costs, different types of costs, but also related to employees. We have a plan of reducing the employees by 85 during 2014. At end June, 40 of these have left the company, and the main part of the remaining ones will leave the company end August. During the Q2 , the profitability in Arendal has given further cause for concern and due to the fact that the results in the Q2 is lower than expected. There are several reasons for this, but the situation in the Q2 strengthen the need for actions to reduce cost.
The main focus in the Q3 will be to ensure that the effects of the initiated actions are fully utilized, and also to initiate further actions to get the profitability at an different level than the level we have at the moment. Early May, it was announced that Peter Nilsson is appointed as new CEO in Kitron. He will join Kitron early November at the latest. He has had several senior and executive leadership position for Swedish and US companies and has a really strong experience within the EMS industry. We are really looking forward, Peter, to come on board in Kitron in November. We move on to the financial part of the presentation, and I leave the word for Cathrin.
Thank you, Dag. I will talk about the financial statements for Q2 2014. When we look at the revenue, we see a strong development in energy telecoms and some reductions within offshore marine. The revenue for the quarter was NOK 457 million, up NOK 27 million from last year, as in a 6.2% increase compared to last year. About one-third of the increase from last year is currency translation effects, and the rest is underlying growth. We also had an increase from the Q1 in 2014 with about NOK 21 million. When you look on the different sectors and their change from the Q2 in 2013, we see then that the offshore marine segment has a reduction of 10.8%.
The reduction is primarily in the Norwegian market, which we also previously have announced we are seeing. The medical equipment sector is up 7.1%. It's primarily due to increased demand in the Swedish market. Defense aerospace is about 4.1%, a slight reduction compared to last quarter, the Q2 last year. Energy and telecoms are up 36.7%. The main reason here are project deliveries between within the Swedish market. The industry sector is up 12.5% compared to Q2 last year. When we look on the share of total revenue, offshore and marine is now at 15%. It is a reduction compared to last year with about 3%. Medical equipment is at 24.1% and almost on the same level as last year. Defense aerospace is at 20%, a reduction of 2% compared to last year.
Energy and telecoms is at 15.2% and up 2%-3% from last year, and industry is about the same level as last year. When we look on the revenue by country, let's start with Norway. Norway has a reduction of 9.9% for the quarter compared to last year, going from NOK 250 million to NOK 225 million. Sweden are up 14.9% from NOK 97 million to NOK 112 million this year. Lithuania up 39.2% from NOK 81 million to NOK 113 million this quarter. The others, which are China and the U.S., they're up 32.8% from NOK 45 million to NOK 59 million. Quite a substantial growth in all parts of Kitron, but from Norway. When you look on the share of the total revenue, Norway is now at 44.2%.
The same period last year was about 54.8%, so we see quite a reduction in the share compared to the same quarter last year. Sweden is at 22%, up 2% compared to last year. Lithuania is at 22.2% on the revenue share, up about 5 percentage points from last year. The others, US and China then are at 11.6%, and they're up about two percentage points from last year. Good progress on the other countries. EBIT. Reduction in EBIT. We have a EBIT of NOK 6.9 million for the quarter compared to NOK 9.3 million same period last year, which is a reduction of NOK 2.4 million. The EBIT margin is at 1.5% compared to 2.2% last year.
However, we see an increase in the EBIT margin for the Q2 compared to Q1 and compared to the Q4 in 2014. The reduction in profitability is primarily due to Arendal, which has a very disappointing profitability. It's partially compensated by positive development in especially Lithuania and China, and it's due to margin pressure due cost both on the contract side and also on the development in the material expenses due to currency. We have initiated cost measures. As mentioned before, the downsizing of Arendal continues according to plan, and further actions will be initiated. EBIT by country. Again, Norway is disappointing, others positive. The EBIT for the Norwegian operations for the quarter is negative NOK 7.5 million compared to a positive NOK 6.3 million EBIT last year, going from a positive 2.5% EBIT margin to a negative 3.3%.
There are several reasons. We have a 10% reduction in revenue. We have adverse effects on profitability due to development on the Norwegian kroner on the material expense. We also have some projects with negative effects on the profitability and also, as mentioned, some temporary reduction in ineffectivity due to the fact that we are changing the operations. Very disappointing. Sweden, we see an increase in EBIT from NOK 2.1 million to NOK 2.7 million compared to last year and an increase in the margin from 2.2%-2.4%. It's primarily due to the revenue growth from existing customers, but what we see is that the margin on the revenue is slightly lower than before. Lithuania, same reason primarily as Sweden.
We have a revenue growth from existing customers, and we're going from NOK 5.6 million to NOK 8.5 million this year and an EBIT % from 6.9%-7.5% for this quarter. Very important to mention, other, China, is now in positive figures for the full quarter. They have an 8.4% EBIT margin compared to about 0 last year, and US is at break even. The EBIT for US and China are going from a -1.7% to +2.3% for the quarter. Of course, from a negative EBIT margin to a positive 3.9%. That is very positive. Cash flow. Cash flow is weak. We're having a positive cash flow for the quarter of a 9.5%, from NOK 9.5 million from NOK 30.3 million in the same quarter last year and a reduction of 68.6%.
It's primarily due to working capital increases due to increased sales and, more specifically, trade receivables increase. We also have a slightly lower profitability, which are part of the explanation. When we're looking at the working capital increase, we can see that it's now at NOK 505 million from, compared to NOK 486 last year and NOK 488 last quarter. We see an accounts receivable increase about NOK 60 million both from last year and from last quarter due to the same reason as we said before, primarily increased sales. We have an inventory decrease in the quarter from the last quarter with about NOK 26 million, and inventory terms are improving. Compared to last year, the inventory is increasing with NOK 16 million, the inventory terms are improving regardless.
Some positive sides there are coming, but we can't really see them yet. I would like to give the word back to Dag to talk about the market.
If you look more into the development in the order backlog, we see a really strong development in the defense sector in the quarter. We have a heavy increase, both really, compared with last year and also, in the quarter compared with the end of Q1 . It's mainly related to the operations in Norway and the U.S. We see an increase in the order backlog in all segments, all sectors except the offshore and marine. We also see a growth in the order backlog compared with last year, for all the different manufacturing companies in the group. However, this does not change the picture that we will have a decrease in the revenue in Norway in the end of the year.
If we look into the different market sectors, what we see is that for the offshore marine, which is mainly affecting the Norwegian operation, we see a decline in the Norwegian market, as we also said in the last quarter. For medical equipment, we see a positive development in the Swedish market with growth from several different existing customers. This have impact on the operations both in Sweden but also in Lithuania and in China. We do also see a stable development in this sector in the Norwegian market. For defense and aerospace, at the moment, the main part of the defense and aerospace sector is covered by the Norwegian and the U.S. factories.
We have some small customers in Sweden, but that is a small part of what we do for the defense and aerospace sector. We expect a strong growth. We have a strong growth in the order backlog, and we also expect a growth in the quarters to come. We do have a growth in the Q2 too, not compared with last year, but compared with the Q1 this year. For the energy telecom, we had a really strong quarter in the Q2 due to project deliveries. We do expect a continuous strong development, slightly above previous levels. For the industry sectors, we have seen a strong development over the last four or five quarters with continuous growth.
We see that the growth is leveling out, but still we expect to maintain the positive development with growth in the sector. This is both related to growth for existing customers and also due to the fact that we still have industrial customers that are in a ramp-up phase. If we look into how we'll see the revenue for the rest of the year, we do see a positive development both in the Swedish and the German market, and we expect growth for the factories in Sweden and Lithuania. We do also expect to have growth in China and the U.S., while we do foresee lower volume in the Norwegian factory. In total for 2014, we expect growth compared with last year.
We have had a significant growth in the first half of the year. Our expectations for the second half are closer to the level we had in 2013. As we have said several times during this presentation, despite us we have the revenue growth, we are not satisfied with the profitability level we have in the first half of 2014. We have initiated several actions to rectify this situation. This is kind of the number one target for the second half is to execute these actions and to initiate further actions in order to improve profitability. That was what we intend to say. Thank you for joining this presentation. Have a nice day. Thank you.