Thank you, Richard, and thank you to all of you listening and joining the call. If you can turn to page two, give you a short presentation of who we are and the agenda. My name's Walker Kinman. I am the CEO of the LMK Group. I'm joined by Erik Bergman, who is our CFO. We're going to give you a quick rundown today, looking at what the LMK Group is shortly. We'll give our highlights for the second quarter 2021. Erik will walk us through some of the more detailed financials. We'll conclude. Then we'll have time for Q&A. Q&A, the questions can be left to the operator, or they can be sent to our investor relations email account. If you turn to page three, LMK Group in brief.
We've been operating for more than a decade, and today are the largest meal kit service provider in the Nordic region, and a leader in Scandinavian food tech. We operate four brands in Sweden, Norway, and Denmark. Those brands are Linas Matkasse in Sweden, Godtlevert and Adams Matkasse in Norway, and the RetNemt brand in Denmark. Our business model is demand-driven, which gives us a lot of visibility on orders. It also allows us to have almost zero in inventory and have minimal food waste, both for our customers as well as our own operations. If you look at 2020, we delivered around 20 million portions or meals for the year. Today, we have roughly 120,000 active customers, and our service and product reaches 80% of the households in the Scandinavian region. If you turn to slide four, some highlights looking at the second quarter.
First of all, we've continued to grow the business in a tough competitive environment. We did organic growth of 18% compared to the second quarter of 2020. As you remember, with COVID-19 reaching a first wave in the second quarter, we saw some tough comparable figures and did, like I said, 18% organic growth. Number of active customers increasing by 16%, deliveries increasing by 13%, and one very important metric for us on unit economics contribution margin, hitting 30%, which is actually an increase of 0.4 percentage points on a year-over-year basis. Adjusted EBIT margin for the quarter was 9.3%. That's 47 million SEK, despite increasing our sales and marketing compared to the same quarter in 2020 by 25 million SEK and increasing that investment level. During the quarter, we've continued the integration of our flexible offering.
If you look at our order production lines, we're now on track to be packing customer-unique fully by the end of the year. If you look at what we've talked about in terms of RetNemt, the integration is on track. We are on track to achieve a single ERP system for the group and a technical platform by the end of the fourth quarter. Finally, on the sustainability side, we also initiated reporting and transparency on the food waste that we generate in our own production, and I'll come back to that. If you turn to slide 5, demand is strong for the flexible meal kit offering that we have. The number of active customers increasing by 16% compared to Q2, where again, we had a clear positive impact due to COVID restrictions last year in the same quarter.
We're also seeing that seasonal patterns even this year are beginning to reflect a pre-COVID environment. Despite that, purchase frequency only declined by 2.2% in the quarter. When we look at production on unique production lines, we did 60% of all deliveries were produced on customer-unique production lines in the quarter. This compares to 30% for the second quarter last year, and it's also up from 49% in the first quarter. We will phase out batch processing completely in the second half for all brands. There is a higher unit production cost related to customer-unique production. In this quarter, they were offset by scale economies and purchasing productivity. We do expect solid growth to continue in the second half. This has a lot to do with the changes that we've made in our product model as well as the increase in the customer base.
If you turn to slide 16, we have been working diligently on the integration of RetNemt, this is, as I said, on track to be completed during the fourth quarter. The investments related to integrating RetNemt are expected to be in the range of SEK 10 million-SEK 15 million over the next 12 months. When we're completed with the integration, we will have this group common ERP system as well as technical platform. This provides us to continue to realize improvements in unit economics, as well as launch new product offerings to help grow the Danish business even more in the Danish market. If you turn to slide 7, we continue to move forward on sustainability. It's important to understand our company has been working with sustainability as a core value for more than a decade.
One of the key important topics related to sustainability is food waste. It is both important from a value perspective, but it's also an intrinsic part of our business. Food waste is something that is generated in homes, and we make our biggest contribution to the homes. To increase even our transparency and underscore our commitment, we have begun to provide accounting, and different impact areas, where we set targets for ourselves. The first of this is food waste. Here, when we look at what we reported in the middle of the summer, we actually have calculated 1.74 grams of food waste in our own productions per meal delivered in 2020. If you were to break it down on a revenue basis, this is 3.08 grams per SEK 100 in revenue.
When it comes to other initiatives that we've looked at, we launched, during the quarter, a pilot project in Sweden aimed at providing information on climate-calculated recipes. We will continue to provide more transparency and really underscore our commitment when it comes to sustainability topics by releasing more information, as well as setting clear targets that all external stakeholders can see and be more visible on. With that, I'd like to turn it over to Erik Bergman to talk us through the financials.
Thank you, Walker. We could move on to slide 9. I'm very glad and proud to present the report for the 1st half of 2021. The second quarter was an important quarter for us to evaluate the customer behavior post-COVID. As Walker mentioned, during the quarter, we have seen less impact from COVID restriction. We have seen the purchase behavior come back to pre-COVID levels, meaning we have more pronounced seasonal slowdown towards summer, and more customer is pausing deliveries during the many Nordic holidays that they had during the second quarter. We are having a bit of tough comparison figure as the second quarter last year had a great push from an accelerated COVID situation. Despite that, we are continuing to grow. Net sales is up 17.6% during the quarter, adjusted for currency.
Our deliveries have increased by almost 13% versus the same period last year. Another thing I would like to highlight, as Walker also mentioned, is the good contribution margin at 30%. This feels extra good to say, as we have worked really hard the last years throughout the company in all functions to really be on top of the unit economics. We have managed to improve the contribution margin at the same time as we have taken huge leaps in the journey with an even more flexible offering. Due to the increased flexibility, we do see an increase for production costs, although in this quarter that is offset by a higher sourcing and productivity. To conclude on the slide, we do see that the profitable growth continues even though the COVID influence recedes. Please move on to page 10. What is behind the continued growth?
We have two important growth factors that I would like to highlight, and those are the growth in active customers and growth in average order value. With our strong financial position, we have executed on our growth strategy and continue to accelerate investment into sales and marketing, amounting to 11.3% of net sales. Despite the tough comparison figures in Q2 2020, numbers of new customers were up 12% this year compared to the same period last year. The new customer inflow and increased retention rates is what drove the increase in active customers up by 16% versus the same period last year. Our flexible offering has also enabled a good trend when it comes to basket size and to add-on sales, such as groceries. This, in combination with the price increase, is what drove the growth in average order value increased by almost 4% adjusted for currency.
All in all, our stronger financial position and good control over unit economics has enabled us to invest more in customer acquisition, which is driving growth. Please move on to profitability on page 11. We continue to see what we consider a good level when it comes to profitability, which is driven by increased top line and good control of unit economics. Marketing investment is driving the top line, but it also has an impact on the EBITDA. This is a strategy that we believe in, that we're spending 11.3% of net sales in sales and marketing—versus 5.7% last year during the quarter is something that we strongly believe will drive growth also in the coming periods. As mentioned earlier, active customers up 16% end of June.
Increased spending in sales and marketing is enabled by the good control over unit economics, which is driven by good contribution margin or which is shown in the good contribution at 30% mentioned in the earlier slide. Adjusted EBIT at 9.3% second quarter and 8.1% in first. Please go on to the balance sheet on page 12. A lot has happened during the quarter as the company being listed the 29th of March. Many of the transaction and handling of the proceeds occurred during the second quarter. We are looking at the strong balance sheet with non-current liabilities at a low level. End of the quarter, it consists mainly of leasing tax liabilities as the corporate bond was repaid in full during the quarter. Let's move on to the cash flow on page 13.
With the subscription model, we do have a strong cash flow conversion, and we're working with a negative working capital. End of the quarter cash position, we're at SEK 138 million compared to SEK 60 million last year. The increased cash position is driven by profit and to some extent, the proceeds from the listing. The listing was done the 29th of March, so there's a lot of movement in cash flow between the quarters. Therefore, I would say that the first half bridge gives a better understanding of the movements in the cash flow. Investment activities include acquisition of the remaining shares of RetNemt of approximately SEK 4.9 million, which is half paid by issued shares in LMK Group, which is then included in financial activities. During the quarter, we also repaid the corporate bond, including accrued interest and fees, which amounted to about SEK 169.8 million.
The net cash contributed from the IPO during 2021 is about SEK 20.6 million. That includes the proceeds less costs related to acquisition of remaining shares in RetNemt, repayment of the corporate bond, and the transaction costs. During the quarter, we are increasing the CapEx at SEK 7.2 million in second quarter, and we continue to invest in increased flexibility and in the RetNemt integration. We do have a good cash-generating business, which enabled us to invest in growth. With that, I would like to hand over to Walker for the final conclusions.
Thank you, Erik. On slide 15, we have our second quarter takeaways. First and foremost, profitable growth continues in our business. We've seen increased delivery volumes, even as seasonal purchasing behavior has begun to return to pre-COVID levels. High customer activity and strong demand for our flexible meal kit offering, and we are on track to fully integrate RetNemt as well as achieve 100% customer-unique production before the end of the year. With that, looking towards the second half of the year, because of the changes to our product model and customer base increases, we do expect solid growth to continue in the second half. Just before we take questions, I'd just also like to thank all of our employees and partners for both a great quarter and all of their ongoing efforts in continuing to innovate the mealtime experience.
Richard, back to you for Q&A.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypad now and your entry key. Please hold until we have the first question. Our first question comes from Clément Genelot from Bryan, Garnier. Please go ahead. Your line is now open.
Yeah. Hi, Walker and Erik. I would have four questions from my side, if I may. The first one is on price increases. Do you expect some price increases to take place here in H2, either from your own initiative or whether to reflect the incoming food inflation? My other question is on the contribution margin. Do you think that the continuous gross margin improvement and the fact that our production costs on the flexible lines are lower than initially expected, is it enough to, let's say, offset the upcoming additional fulfillment costs that are more related to your willingness to which also be cut off in H2? In other words, can the contribution margin be flat year-on-year in 2021 or maybe even up? My final question is on the marketing. Do you still stick to your guidance of marketing costs below 18% of sales in 2021? Thanks.
Great. Thanks for the questions, Clément . Let's take that first one, really on the price increasing side, how much of this is our own initiative? How much of it is addressing increases in food inflation? I'll let Erik take that first one.
Yes. We do see an indication of increasing food costs. Although we have calculated with it and are also doing price adjustment through all our brands actually during the third quarter. That is to mitigate the effects of the increased cost that we're seeing.
Yeah. If we're looking at contribution margins, I think you're right here. The fact of the matter is that our expectations when it came to flexible production was that we would experience a higher cost in the transition and transformation to flexible production. We have a higher cost related to flexible production, as I stated in the remarks, this is what we're seeing, that has been lower than our expectations. As we saw both in the first quarter and in the second quarter, that has been fully mitigated through productivity on the purchasing side and the work that the sourcing teams are doing, as well as basic scale economies with higher volume.
I think I'm fairly comfortable at this point in time to think that going forward for the rest of the year when it comes to flexible production, that this isn't going to drive significantly higher unit cost on the production side. We don't expect to give any ground either when it comes to cost productivity or even further economies of scale. When it comes to fulfillment and logistics, we are going to be making some changes, and we do expect to increase the flexibility consistent with our personalization strategy to increase personalization so that the offering is more flexible, and that can be choice of delivery, it can be more delivery days, it can be shorter cutoff times from order to delivery. All of those elements are still pending to be implemented, and we intrinsically know that there are higher costs associated with that.
We're conservative in our view of that. It's not expected to be significant cost increases due to that impacting fulfillment. I'm not ready to go so far as to say that we'll be up on contribution margin for 2021 versus 2020. We're certainly doing everything we can to continue to improve unit economics. Any significant impacts that would come from fulfillment, you wouldn't see more than a point or two in impact at CM levels anyway. I think when we look at the marketing side, we do see marketing definitely below 13% for the full year. We made significant investments in the second quarter. Also, we're definitely trying new things, and we're testing where we can get the most impact for the marketing money that we spend.
Some of those investments will have an impact through the rest of the year as well because of the nature of the business and the reactivation of customer and that cycle. Certainly, I think we intend, and we have always stated that we'll be making heavier investments in sales and marketing. We've increased the rate of new customer acquisition year-over-year as well, but we've had to work harder to get it in the second quarter. These are things that we'll be evaluating from a marketing efficiency standpoint in the future as well. The good news is that we continue to increase in the unit economics area and have a lot more capital to fund investments in sales and marketing.
Thanks a lot.
Thank you. As another reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. Okay, it appears we have no audio questions. I'll return the conference to the speakers for any closing remarks.
Thank you, Richard, and thank you again to everybody who took the time to join the call. Any further questions can be dropped to our investor relations email account. I wish all of you a good day. Thank you.