Welcome to the presentation of Desenio Group Q3 report. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to CEO Fredrik Palm and CFO Anna Ståhle. Please go ahead.
Thank you, operator, and welcome everybody to Desenio Group's Q3 results presentation conference call. As usual, with me today, I have our CFO, Anna Ståhle. We will start by presenting the outcome of the quarter, and the Q&A session will follow at the end. In Q3, we delivered the second quarter in a row with growth after a long period of decline. Sales was particularly strong in July and August, but slowed considerably during the heat wave in Europe in September. It is common for us, where colder weather than normal is positive for sales, and vice versa. In addition, we delivered a stable cash generation as a result of continuous efficiency improvements, despite higher marketing costs.
However, we run the company with a challenging balance sheet, which includes the senior secured bond we issued in December 2020 of SEK 1.1 billion, which matures in December 2024. Therefore, we have started a project to actively work on evaluating our balance sheet and how we can optimize our capital structure to reduce our interest costs and net out. To help us, we have mandated ABG as financial advisor to evaluate the options available. There's not much more to say about this for now, but we'll, of course, comment on the development of the project going forward. Looking at the numbers in the quarter, we can conclude that net sales grew by 7.5%, amounted to SEK 228 million.
It is also encouraging that the number of visits rose by 7.7% and that the average order value increased by 6.1%. We saw increasing net sales in the Nordics and in the core markets in Europe, as well as North America, where we have net sales growth of 45%. The lower net sales in rest of Europe is a consequence for staff reductions last year, where we decided to focus on the Nordics, Core Europe, and North America. Marketing costs in relation to net sales increased from 24.8% in the third quarter last year to 30.2% in the third quarter this year, and that is excluding the depreciation of the Postery customer database of SEK 8.3 million for the quarter.
This is a result of a focus on strengthening or defending our marketing, market positions. However, cost is high, since the consumer in the current market climate is less inclined to buy, which forces us to spend more on market than we would like to. In North America, we invest to build our market presence. One initiative is our collab with the YouTube influencer, Lil Fox, in North America, who, as an ambassador for Desenio and in collaboration with our design studio, has created a collection that is communicated with films and interviews online. We already see positive signs from this cooperation and plan more initiatives to improve Desenio's position in North America. The cost reductions and improved efficiency is key to manage our growth ambitions.
Here we are successful, partly because we reduced the workforce last year, and partly because we are continuously more efficient in fulfillment. The cost ratio for fulfillment decreased from 27.6% to 26.4% as a result of our investments in an efficient logistics structure. The cost ratio for admin decreased from 18.1% to 14.6%. However, it should be noted that during the third quarter last year, parts of the cost for fulfillment, approximately SEK 4 million, were reported as admin costs. From the fourth quarter last year, this cost is instead included in the fulfillment.
Adjusted for this change in cost allocation, admin costs during the quarter fell from 16.1% to 14.6%, so 1.5 percentage points, while cost for fulfillment fell from 29.5% to 26.4%, which is 3.1 percentage points. Profitability during the third quarter was slightly lower than the corresponding quarter in 2022, mainly as a result of higher marketing expenses. EBITDA amounted to SEK 25 million, compared to SEK 28 million last year, and the EBITDA margin decreased to 11%. Cash flow from operating activities amount to SEK 9.1 million, to be compared to SEK 40 million last year.
At first sight, this could be misunderstood and looks like a big decline, but in reality, two-thirds of this, this difference is explained by a non-cash flow affecting reclassification of leasing and us reversing a provision related to the reduction of staff last year. In addition, last year, we had a refund from the Swedish Tax Agency, positively affecting cash flow. It is satisfying that our cash position is stable. As of September thirtieth, cash amounted to SEK 128 million, which is SEK 3.6 million higher than at the end of the previous quarter. At the beginning of the financial year, cash amounted to almost SEK 156 million.
Most of the decrease in relation to the end of the third quarter is explained by the repurchase of the Desenio's bond over the market in June 2033, and that was corresponding to 3.2% of the total outstanding bond loan. The purchases were made with an average repurchase amount of 70% of nominal value for a total amount corresponding to SEK 24.5 million. To summarize, we grew in the quarter, the gross margin was slightly lower, the EBIT, EBITDA decreased slightly, and the operational cash flow was much lower than in Q3 last year, partly as a result of the lower result before tax, but mainly as a result of special circumstances last year. Here, we analyze the impact of our work to decrease cost levels and increase efficiency.
We see that our further reduction of salary costs stick out with a positive impact of 3.5 percentage points, and that our improved efficiency in fulfillment added another 2.2 percentage points, while marketing costs had a negative impact of 5.5 percentage points compared to Q3 last year. Again, please bear in mind that during the third quarter last year, parts of the cost for fulfillment, approximately SEK 4 million, were reported as admin costs. Now, let me comment more in detail on the development of the business in the markets. By looking at search trends in comparison to our sales development in Germany and the UK, we can see that our sales continue to trend higher than the market search volumes in Q3 since the low point in June.
And if you look at this with some perspective, the data shows that we are much more dominant as a player in the market now compared to 2019. Comparing the Desenio Group to a few of our biggest competitors, we see that we during Q3 increased our share of voice in both Germany and the UK. Our higher marketing spend gives us higher market shares. Our conversion rate for the Desenio websites was in Q3 this year lower than last year, but less volatile between the month and above 2020 and 2021. The traffic in Q3 was higher than last year for the quarter as a whole, but slightly lower in September. As I mentioned earlier, we believe this is due to the unusually warm weather in Europe in September.
The group's gross order intake in Q3 was 7.5% above last year and 21% above 2019, which we see as the most recent normal reference year. As mentioned earlier in this presentation, the sales development varied across geographic markets. In the Nordics, net sales rose by 11% and in the core markets in Europe by 20%, while the rest of Europe decreased by 23%. Rest of world grew by 29%, and in North America, which is included in the rest of the world, net sales increased by 45% compared to the third quarter last year. This slide shows customer highlights. We see that our active customers decreased, while the traffic and orders increased compared to last year, which is positive. So our sales growth comes from a combination of increasing visits and increased average order value.
I'll hand over to Anna for the financial update.
Thank you, Fredrik. In the following slides, we will take a closer look at some financials. As Fredrik mentioned, net sales increased by 7.5% compared to Q3 last year. Gross margin decreased from 83.8% in Q3 last year to 83.3% in Q3 this year, driven by increased campaign intensity in the quarter compared to last year. Despite stronger sales in Q3 this year compared to Q3 last year, we did not quite manage to reach the same profitability levels as in Q3 last year. EBITDA in Q3 this year was SEK 25 million, compared to SEK 28 million in Q3 last year, and the EBITDA margin was 11% in Q3 this year, compared to 13.3% in Q3 last year.
In terms of CapEx in Q3 this year, it was lower than last year. CapEx in Q3 this year of roughly SEK 200,000, it's related to smaller investments in our warehouse in the Czech Republic. Last year's investments refer to investments in the warehouse in the Czech Republic, as well as in the U.S. We see that the net working capital, -8% of the net sales for the last 12 months, was in line with Q3 last year. Inventory levels and current liabilities have decreased, while current assets are somewhat flat compared to the corresponding quarter last year. Our operating cash flow in the quarter was positive by SEK 9.1 million, which is further explained on the next slide. Here is a breakdown of the operating cash flow.
The operating cash flow during the quarter was, as I said, positive by SEK 9.1 million. We had a positive, positive EBITDA of SEK 25.1 million in the quarter, including amortization of four months Post Store customer database. We are at a positive EBIT of SEK 16.1 million in the quarter. The bond interest payment amounted to SEK 26.5 million, and non-cash items include the depreciation and amortization of fixed assets, intangible assets, and leasing assets, altogether SEK 18.6 million. Paid tax in the period was SEK 7.6 million, and inventory levels decreased by SEK 5.6 million, and changes in current assets and liability positively affected cash flow in the quarter by SEK 6.1 million due to higher liabilities because of higher sales in Q3 compared to Q2.
In summary, operating cash flow during the quarter was positive by SEK 9.1 million, mainly driven by lower inventory and increased current liabilities. I now hand over to Fredrik again for a summary.
Thank you, Anna. To summarize the third quarter of 2023, the growth trend has been positive in the recent quarters. This was the second quarter of the year with growth. We operate the business with increasing efficiency, with a fully integrated web platform and efficient distribution, which, together with our data-driven design and marketing, means we continue to have a leading position. We see good growth opportunities, especially in North America. But at the same time, we can conclude that the consumer purchasing behavior is uncertain in light of the macroeconomic and geopolitical development. However, there's no doubt that the Desenio Group is a well-managed company in our industry. We operate a fully integrated business with an efficient web platform and distribution, data-driven design and marketing, and we have highly competent employees.
Last, but very important, we have started evaluating our balance sheet to optimize capital structure. Thank you all for listening, and we are now more than happy to answer your questions. Over to you, operator.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Thank you very much, operator, and thank you, everyone, for your time and for listening in. And as usual, please don't hesitate to reach out to us if you have any questions or requests. So speak soon and stay safe.