Good morning, ladies and gentlemen. Thank you for standing by, and welcome to presentation of the Q2 results conference call. At this time, all participants are on a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time to ask a question you may need to press 101 on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today, Thursday the 19th of July 2018. And now I shall hand over the conference to Jörgen Rosengren. Please go ahead.
Thank you, operator. Good morning, everybody, and thanks for joining this conference call regarding the second quarter 2018 results for the Bufab Group. My name is Jörgen Rosengren. I'm the CEO of Bufab, and I'm joined here by Marcus Andersson, our CFO. We will be taking you through the result update here today. Throughout this call, we'll be referring to a PowerPoint presentation, which we have made available on our website, www.bufab.com, under the Investor Relations tab. That presentation has page numbers, and we'll be referring to those also throughout the call. So again, thanks for joining. Let me then start on page two of our presentation entitled "Second Quarter 2018 in Brief." We can say, I think, that the second quarter in 2018, in absolute terms, was quite a good quarter.
We had, starting from the top then, quite strong growth of 19% on the total, which was driven both by organic and acquired growth. We had what we think is quite solid organic growth, but to some extent, of course, helped by calendar effect this year relative to last year. The placement of Easter was such that we had a calendar effect boost in the growth, but nevertheless, good organic growth. And that was driven by market being quite strong and also by continued market share gains, actually, in both of our operating segments. We saw in the quarter also an order intake, which was in line with net sales. That is more or less what we saw also last year. So I guess in the same pattern. And as such, I guess, also a good signal. Our margins improved relative to last year. In fact, just a little.
However, they were slightly lower than we had in the first quarter of the year. It was a mixed bag there of various things. In the gross margin, we have improved our pricing situation by executing quite a large number of price increases to customers. Those price increases are necessary in order to offset the effect that we've had on the cost side due to raw material price increases. But they were not quite sufficient to keep up the gross margin trend that we saw in the first quarter. We were also helped on the gross margin side by currencies being in our favor, especially due to a very strong euro to U.S. dollar rate. On the opposite side, we saw growth of about the same rate as we had in our sales, which is a little bit on the high side as we see it.
That's mainly due to two factors. One is our continued investment in our strategy for Leadership 2020 throughout the company. And secondly, also to rather high cost, in fact, too high costs in Segment Sweden, which were due to both underlying and also one off effects, which we'll comment on separately for that segment. Nevertheless, the EBITDA margin was up slightly, about 0.5 point. And the EBITDA itself grew by no less than 26%, which has to be considered a very strong result. Part of that improvement, generally on all lines of the P&L, was also due to our acquisitions continuing to contribute well, which is quite gratifying, of course.
We are taking this very strong performance as proof that our strategy is working and delivering the results that we had intended, and also as a sign that we can continue with executing the strategy, including the investments that we are making and intend to continue to make in reaching the leadership level in 2020. I'll comment a little bit more on the outlook for the group at the end of this presentation. Right now, I'd like to hand over to Marcus Andersson, our CFO, who will take you through the financial results starting on page three called "Financial Highlights Group." Thank you, Jörgen. If we start looking at the financial highlights for the group on page three, we can see that net sales, as Jörgen said, increased with about 90% compared to last year.
About 9% of that was due to organic growth and about 4% due to currency transaction effects. Also, we had our acquisitions to contribute with about 6% of the total growth. If we look at the gross profit, we can see that it's up a bit compared to last year, mainly due to that Q2 last year had an impact of the raw material price increases that we have seen more or less the last quarters as well. However, we have been able to offset that effect a bit by increasing prices to customers and also by having a somewhat favorable currency rate when it comes mainly to the euro versus the weak Swedish krona.
If we take a look at the operating expenses, we can see that they are up a bit compared to last year, but the uptake percentage in relation to net sales is more or less unchanged, so to say. This all in all gives us an EBITDA increase of about 26%, going from SEK 78 million to SEK 98 million, giving us an EBITDA margin of 10% compared to 9.5% last year. If we take a look at the bridge, we can see that about SEK 6 million of the total increase of SEK 20 million comes from currency effects. SEK 27 million comes from increased volumes. -SEK 22 million comes from price cost mix and other. And acquisition contributed well, as Jörgen said, with SEK 8 million during the quarter. If we turn to page four, we can see some of the historical development.
We have now had 20 solid consecutive quarters of growth, not only acquired growth but also organic growth. Last quarter, of course, helped a bit by the positive currency effect mentioned. If you look at the right graph, we can also see that the positive trend when it comes to EBITDA % is also going in the right direction, driven mainly by the increased gross margin compared to last year but also due to operational leverage on the cost side. If we turn to page five and take a look at Segment International, we can see that Segment International is more or less showing positive figures on each and every row, we can say. The net sales was up with solid 25%, whereof about 11% is organic and 5% come from currency effects, mainly the euro, as I said.
Also, Kian Soon and Thunderbolts, our latest acquisitions, contributed about 9% when it comes to growth. The gross profit is up for what needs to be considered as a good or a really good level for the segment, the highest we have seen, actually. This mainly has to do with price increases to customers, so to say, offsetting the negative effect of raw material prices but also a positive effect from the euro, as I said. Operating expenses, you can see that we have a positive operational leverage when it comes to operating expenses, both compared to last year and also if you look at the first half year, 2018 versus 2017. This all in all gives us an impressive, you have to say, EBITDA development from SEK 50 million to SEK 77 million quarter to quarter.
If we take a look at the EBITDA bridge, we can see that the increase of SEK 27 million comes from currencies with about SEK 9 million, volumes with about SEK 18 million, price cost mix and other, minus SEK 8 million, and acquisition, SEK 8 million. If we go to page six and take a look at the financial development for international, we can also here see that we have had growth for many quarters, actually 21 consecutive quarters. A very good development in international, we have to say, both recent years and the last quarters. Good growth, good gross profit development, helped by the currency, of course, but also a good operational leverage and well-managed acquisitions, giving us actually a really good development when it comes to the EBITDA margin.
If we take a look at Segment Sweden, we can see that Segment Sweden showed a growth of about 8%, whereof all of those 8% were organic. Somewhat lower gross profit. Segment Sweden is affected, of course, by the increase in raw material prices, but also the Swedish krona has been pretty weak, especially against both the euro but also the U.S. dollar. And we buy a lot of goods from Far East in U.S. dollars. So that's affecting Segment Sweden a bit more than International. So we need to work more on that. When it comes to operating expenses, they were pretty high in the quarter, which was also explained in the report.
We had some extra high costs when it comes to revaluation of reserves and also when it comes to currency effects in OPEX, mainly related to revaluation of accounts payable subledger and also accounts receivable subledgers during the period. When it comes to the EBITDA, of course, the lower gross margin and the higher cost is giving us a decrease in EBITDA with about SEK 3 million from 37 to 34. If we take a look at the EBITDA bridge, we can see that currencies had a negative impact on EBIT with about SEK 3 million in the quarter, volume positive with SEK 9 million, price cost mix and other minus SEK 9 million, giving us an EBITDA adjusted to also SEK 34 million. If we take a look at page eight, we can also see that the financial development for Sweden.
We have now seen growth for nine consecutive quarters in a row, telling us that the growth strategy is actually working. On the other hand, we are struggling a bit when it comes to the gross profit and also on the cost side that we need to continue working on. At least we see growth in the segment. By that, I give the word to Jörgen , commenting on the acquisitions.
Yeah. So turning then to page nine of the presentation called "Acquisitions since 2014," we've made in the past three years, then, we've made six acquisitions, about three years, then. And it's been a good journey. The acquisitions are picked with care. They've turned out to also be good companies in reality, not just on paper. And they have contributed well to our financial development. But they have also strengthened us in various ways. And a good example of that is the acquisition of Kian Soon, which we made in November, December, thereabouts, in Singapore, and where we're now working very closely together with that team to use the combined strength of Kian Soon and of the firm in the Southeast Asia region in order to become more relevant to our customers there and be able to serve them better.
This is, of course, quite nice to see that that is happening. And it's also given us confidence that we can continue to make further acquisitions. And that indeed, of course, is also part of our strategy and also part of our daily work to have a pipeline of acquisition candidates also for the future. Now, we're quite determined not to make any acquisitions that we will regret. And therefore, we're very careful to only pick such candidates that we believe will really strengthen the firm going forward. And that makes it hard to predict exactly when we'll make more acquisitions, but we're pretty sure that we will continue to make acquisitions as a regular part of our development also going forward. The next page, page 10, comments on net working capital.
You can see that if we follow the solid blue line, which represents the firm excluding the acquisition of Apex - Apex is a company which we acquired a few years ago and which has a different net working capital profile than the rest of the group and also has some other aspects of its business model which are different - and for that reason, like for like, it's better to look at the blue line where you can see that we had a bad development during 2014 and 2015, which we have seen corrected. But also, you can see that now the improvement that we had for some years has flattened out a bit. That is, of course, not our intention because we intend to drive this number down further.
We're hoping that continued work with systematic processes in the company, especially relative to our suppliers, will make that possible. That's certainly our ambition anyway. To summarize the quarter, we have on page 11 an EBITDA bridge from last year's SEK 78 million EBITDA. So this year's SEK 98 million. And as you can see, currencies and price cost mix other, those two items need to be seen together in some way because the currency effects are mainly on the transaction side. Those contributed -SEK 16 million, whereas volume contributed +SEK 27 million. That's explaining the profit increase. And then our acquisitions that we have made since last year, those are two in number, Thunderbolts and Kian Soon, have contributed another SEK 8 million, bringing the total up to SEK 20 million then from SEK 78 million to SEK 98 million, which we think, of course, being a 25% increase is a solid number to be happy about.
And then summarizing it also on page 12, you can say that the second quarter was characterized by good growth, driven both by underlying demand, by our increased market share, and by our acquisitions. So in fact, all parts of our strategy. We improved our margins over last year, especially as the EBITDA margin was up about 0.5%. That's good. But the margins were nevertheless lower than Q1, and that's, of course, not good and caused for action in various areas. International enjoyed a good, not to say a very good performance. And Sweden enjoyed a less good performance, mainly due to somewhat weak gross margin and an OPEX level which is too high. And the acquisitions continued to contribute well.
Looking ahead, and I guess that's a point of interest to our investors, there is no use pretending that there is not increased uncertainty about the economic development going forward. That's something that both we and our customers have to face. We don't know, of course, what it's going to happen to the general economic development. It doesn't seem like anybody else knows anything about it either. However, it's somewhat comforting to see that we have not yet seen any effects of this uncertainty in our demand picture. We saw in the quarter a continued strong demand, and we saw in the quarter a continued strong order intake. What will happen during the fall, we will just have to wait and see. We are, of course, aware of this, and we're also ready to react to signs of a declining demand, big or small.
But on the other hand, we're also continuing to aim for continued market share gains by continuously bringing in many small new businesses with many customers in many markets. And that's the intent to be able to also go forward, of course. There remains a necessity to increase prices to offset the high raw material prices which have been prevalent for the last six quarters or so. And that's, of course, especially important in Segment Sweden and has a special focus there. We are realizing price increases, in fact, quite large price increases in both our segments and have been realizing price increases for quite some time now. But we are not yet at the level where we can say that we are comfortable with the gross margin development again, especially in Segment Sweden.
Like I said in the beginning of the talk, we're continuing to invest in the initiatives that underpin our strategy to become the strongest company in our business in 2020 called Leadership 2020. Those initiatives, we are financing, of course, with our growth and our general profit improvement. But they also require that we continue to improve our efficiency throughout our productivity. That too is something that we will have been doing and hope to be able to continue to do also going forward. With those remarks, that concludes the sixth piece of this presentation. Therefore, I'm turning to you, operator, please, to open up for any questions there may be.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, you will need to press star and one on your telephone keypad and wait for your name to be announced. Once again, star and one if you do have a question. Thank you. Ladies and gentlemen, as a gentle reminder, star and one if you do have a question. Thank you. There seems to be no question at this stage. Please continue.
Okay. Thank you, operator. In that case, I conclude that everything must have been crystal clear . I would like to thank all of you for attending this Q2 conference call for Bufab in 2018. Enjoy yourself, please, and welcome back another time. Thank you. Goodbye.
Thank you. Ladies and gentlemen, now that that concludes our conference call today, thank you all for participating. You may now disconnect.