Welcome to Björn Borg, our Q2 presentation. I'm Head Coach Henrik Bunge, and later you will be joined by Jens, our CFO. Looking back, we look at one of the best Q2s that we have ever done. So, of course, I'm very, very happy. Starting with sales, we have currency-neutral growth of 15% versus 2020. Looking at 2019, a more normal year, we have currency-neutral growth of roughly 20%. So, good solid growth numbers.
Looking at the profitability, this is a record Q2 for us. We closed the quarter at 19 million SEK EBIT, which is more than what we've done combined all other Q2s since I started in 2014. Absolutely fantastic. For those of you that have followed us for a while, you know that we at Q2 had some issues with making a profitable quarter. But throughout the years, we've been really working really hard to improve that profitability. And we see that the work with lowering the discounts, selling more full-price business, streamlining the organization, and becoming much more efficient is now really paying off.
So, with that said, of course, I'm looking back at a very, very strong quarter. But it's also a quarter where we confirm that many of our strategic choices that we made the last couple of years are really paying off. One, as you know, I've been talking about for many, many quarters, is our online focus. And we see that our online growth is really continuing to grow. So, in the quarter, our retail business is growing 40% versus 2019, more than 60%. We also see that our brand is evolving very, very good in the online community. And all of our brand track measurements, you know, when we measure how strong the brand is, are pointing in the right direction.
So, of course, you know, with that said, improved gross margins, improved sales, low costs, and a record quarter behind us, you know, we're confident that our strategy to become a global online sports fashion brand is really coming to reality. So, with that said, here is our CFO, Jens, to showcase more of the numbers.
Hello. Very warm welcome from me as well. As you just heard from Henrik, this is a record Q2. Never, ever has this company had a Q2 as good as this one. Net sales is growing 10% versus last quarter, 15% currency-neutral. What's going in our favor is, as we just heard Henrik said, the online business. Our own e-commerce continues to grow strongly. Our retailers, so the online players in the wholesale channel, they're growing with 40% in the quarter. Our own retail business, the physical stores, are recovering well in the quarter, growing 33% versus last year. Our distributors are growing over 100% in the quarter.
The downside might be the classic brick and mortar in the wholesale. It's declining with some 20% in the quarter. However, a very strong quarter also in the sales. But as we just heard from Henrik, in terms of operating profit, it's a record. Never, ever have we shown such a good profit in a Q2. SEK 19 million is compared to SEK -13 million last year. And Q2 2019 of SEK -2 million. As you just heard, we tend to be around the break-even in Q2 historically. Now it's a SEK +19 million.
What's driving this is obviously the increased sales. But with that, the improved gross margin that's coming from reduced discounts in the wholesale segments, and also the very good, I would say, cost control in the operating expenses. So that together brings us to a 12% EBIT margin in the quarter. If we summarize the year-to-date numbers, so January through June of this year compared to last year in a simplified P&L, we can see that we grow net sales with some 9%. The gross profit margin is up around 3 percentage points. This is coming then, as I just said, from the reduced discounts mainly in the wholesale segments.
The operating expenses, they have been streamlined during the pandemic, and it's now paying off, so - 13% in the operating expenses, or some SEK 25 million reduction. That brings us to a year-to-date operating profit of just above SEK 41 million compared to SEK -6.2 million last year, same period. The operating margin is then 12% compared to - 2% last year. If we try to summarize this in the segments or the channels, the way we measure our business internally, we can see that in total sales numbers, we grow 8% from SEK 336 million year-to-date last year to SEK 362 million this year. The main driver in nominal value is coming from our distributor business, which is growing over 100% year-to-date.
But also the wholesale channel is growing SEK 6 million. The direct-to-consumer, including the e-commerce, our own e-commerce and own retail business, is also growing some SEK 6 million. The licensing business is declining slightly since we brought the category of bags in-house. It used to be in a licensing partner. All in all, 8% growth. The operating profit, as you can see from this slide that I show, the main driver for the high increase of the profit is coming from the wholesale segment. Over SEK 40 million increase compared to last year. Really great. So this is increased sales, improved gross profit margin. The online players, the retailers are growing a lot. And the reduced operating expenses all are talking in our favor. So SEK 40 million up in the wholesale channel. But also the direct-to-consumer, our own retail business and own e-commerce is generating profits.
So SEK +7.4 million compared to the same period last year. And here is obviously driving from the own e-commerce, growing 25% year-to-date. And even though the own retail is growing 33% in the quarter, as I just said, year-to-date we're declining 7% mainly due to a lockdown that we had in the first quarter of this year in the Netherlands. Distributor sales is growing, as I said, over 100% in sales, and then obviously generating a profit as well. So all in all, a very good quarter for Björn Borg. Very happy to be here. Obviously makes my life as the CFO much easier. Very, very happy. A smiling face handing over to Henrik again. Thank you.
I'm back again. What we see from consumer research throughout this year, but also in 2020, is an increased demand for purpose-driven companies. Companies that want to do something that goes beyond just selling products. And Björn Borg is that company. Our whole idea is to inspire you that you can be a better version of yourself, that you can become more. And we truly believe that training is the key to unleash your own potential. With training, you can be a better father, you can be stronger, and you can live longer. What we see also throughout our data is that our online focus is really paying off. And it's been clear also the last probably two, three years that people and individuals have a tendency not to listen to brands anymore, but they rather listen to people. Internally, we call it simply people listen to people.
Of course, the key is to attract a number of ambassadors or influencers or individuals telling your story, but in their way. And we can see when we are measuring the result of that that it's very working really, really well for us. For one example, our brand awareness. When asking consumers whether they know Björn Borg as a sports brand or not, that unaided awareness has increased 150% versus last year in the quarter. We also, during Q2, have done a trial with a new sales channel, meaning that we have ambassadors and influencers selling our products through our own website. That is also working really, really well. And all of that is, of course, to support the online journey that we're on. Looking back, we have a compound annual growth rate of above 30% in our online business, retailer, marketplaces, and own e-com.
And for us, that's really where the future is. So our focus looking ahead is to continue to grow with online channels, but also to continue to build the brand online. And currently, our share is roughly about 50%-55% of our total business is coming from online channels. And we believe that share is only going to grow looking ahead. Lastly, but also more important than probably anything I've said prior to this, if you want to be relevant today, you need to make sure that you are sustainable. And that means, of course, you need to have a working environment so people that work there can work hard, but also live hard, live long. So when they go back from work, they also feel as strong as when they enter work.
But it also means that you need to take a responsibility for the products that you produce and how you sell them and where you sell them. And I'm super happy and proud that for FY 2021, our entire collection is sustainably sourced. And that's just one way to make sure that we are a relevant brand so we can continue to build a global sports brand for the future as well. So with that said, thank you for listening in. Our journey has just begun. So hang on. Thank you so much.
Hello, Henrik, and welcome. Thank you for a good presentation and congratulations on a very strong quarter.
Thank you, Jalmari. It's good to be back again.
If we look at the industry, we have seen quite a number of companies who are spending heavily on advertising and who are presenting tremendous growth. And of course, there's a dynamic and also a trade-off between growth and profitability. Could you elaborate a bit on this dynamic and perhaps how it relates to your strategy in the online segment?
No, absolutely. I think so overall, the theme that we're working on and been doing for probably the last two and a half years is profitable growth. So it means that we want to grow our profit quicker than our top line. And also, we want to make sure that we only do investments where we can see a strong return on that investment. So that's the sort of the overall approach. Then, however, of course, depending on which channel we're looking at, we have a slightly different view. So looking at our own retail stores, that's something we want to, of course, close down, limit the investments. If we look at online e-com, retailers, marketplaces here, of course, we would want to invest. So here we invest more. But the general focus that we are having is sort of profitable growth also on all the channels.
Of course, I think with that said, if we look at our Q2 results, I think looking at our e-com business, for example, it's growing 11%, which is not a lot. We have some challenges in the U.K. due to the Brexit. So that market, which used to be one of our biggest ones, is pretty much close to zero. So of course, if we take U.K. out, we're growing about 20%. But we can also see that if we would invest even more in e-com, we can grow even further. But instead, of course, we are dramatically improving our profitability for own e-com. So I think having a constant balance, I think, is for us at least the key where we are driving profit before sales growth.
Okay. And while on the topic of operating expenditures, we've seen during 2020, of course, that you displayed this impressive ability to reduce the costs. If we're looking forward, are there areas where there could be additional reductions, perhaps relating to store spaces or items like that?
Absolutely. I think, of course, you always need to sort of review your operating expenses to see whether you are investing where it gets best results. There are, of course, various areas where I see a bigger potential in cost savings than others. And of course, one, as you already mentioned, of course, is our retail portfolio. So we've closed four stores at the beginning of this year. And we'll continue to close our concept stores because we know that in best case, those stores are having a low single-digit profit. And in worst case, they're actually loss-making. And in our ambition to have at least 10% profit margin, we also, of course, need to refocus our investment. So retail is definitely one area where we can save. And then, of course, instead, we need to invest part of that saving into further e-com and online growth.
You mentioned during the presentation your discount level in the quarter. And of course, those are heavily affected, the gross margin. Could you elaborate a bit on your discount levels in this strong quarter and what we could expect going forward?
Yeah, absolutely. So I think our work to improve the gross margin is related to a number of different initiatives. So of course, one is depending on which product you sell. But of course, different products have a different starting margin. So that's one work that we are working with that is working really well. A second one, of course, is the discount that you would apply when you sell that out.
And of course, when you are doing business-to-business, business is about looking at the discounts that you give to your wholesale partners. And then when you sell direct-to-consumer through own retail or marketplaces or e-com, it's about selling at full price and not being lured into driving top-line growth by having too much discounts. I think here we are applying a very rigid approach to all those with the purpose of sort of slowly improving and growing our gross margins. Because, of course, that's one key KPI for us to enable profitability and profitable growth.
While we're on the topic of product segments, was there any standouts in contributing to the online growth in this quarter in terms of products?
No, but I think we see across the board for retailers, marketplaces, and our e-com that sports apparel is really driving the growth. And of course, that's also where our main focus is. We believe that the sports apparel category has tremendous potential. We're still very, very small. And there's a massive amount of business to be done by us, even if we just focus on our mature markets. We also see good growth in underwear, but of course, at a lower level because here, of course, we are a market leader. And our strategy is not to open up in a bunch of new markets, but actually rather to focus on adding more categories in mature existing markets where the brand is strong.
Thank you. And finally, if we look at the supply chain, I mean, this has been a tough year in terms of logistics and supply chain. Are you experiencing any issues? And what could we expect going forward?
I think looking back, of course, it's been a very, very tough year from a sort of supply chain perspective. There was a massive container leakage in China. There's also, of course, a high demand for product capacity. I think so far we've been handling that really, really well. We have some delays from some factories and some countries, but nothing that we can't handle. I think looking at fall, I think it's a bit hard to predict what would happen.
I believe, at least for us, with such a high focus on sustainability that there might be a shortage of material because, of course, more and more brands are increasing their focus on sustainability. Here, I think we have a good starting point. Of course, we need to continue to evolve that. Overall, it's been a tough year from a supply chain perspective. We've had some delays that you actually also see, for example, in the wholesale business in Q2. I would believe it's all sort of within our control and something we can handle.
All right. Thank you so much for joining us today.
Thank you, Jalmari. Thank you so much. And thank you, guys. And have a fantastic Friday.