Welcome to Desenio Group Q4 Report 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions-and-answers session, participants are able to ask questions by dialing pound 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 very much, operator. Welcome everybody to Desenio Group's Year-End Results Presentation Conference Call. With me today, as usual, I have our CFO Anna Ståhle. We will start with presenting the outcome of the quarter, and the Q&A session will follow at the end. In Q4, net sales grew 4.3% to SEK 294 million despite lower activity in the e-commerce in general in several of our markets. One example of the weak development for e-commerce in the end of 2023 is that total e-commerce sales in December fell by 10% in our largest Nordic market, Sweden, according to the Business and Employers Association, Swedish Commerce, in Swedish Svensk Handel. The fact that we, despite this negative trend, grew 7% in the Nordics shows the advantage of being the market leader in our market with a brand that is well known.
In addition, some of our smaller competitors are no longer active on the market. Sales in our larger markets in Europe were also maintained despite weak market activity in December. In Core Europe, net sales increased by 4%, while the Rest of Europe increased by 1%. The Rest of the world grew by 7%, and in North America, which is included in the Rest of the world, grew by 25%. This is relatively modest for North America considering the growth in Q3 was 45%. Our focus on defending and strengthening Desenio's market position in the challenging market comes with a price. Marketing costs in relation to net sales continue to be at a higher level than we desire in the long term and amounted to 30.6% compared to 29.2% in Q4 2022. In addition, we are investing in building our market presence in North America.
The cost ratio for fulfillment costs increased from 27.8% to 26.9%, while the cost ratio for admin costs increased from 10.3% to 13%. However, it should be noted that in the fourth quarter of 2022, we reported SEK 4 million less than the actual cost for administration and SEK 4 million more for fulfillment in order to compensate for wrong allocation of costs in Q3 2022. In addition to that, actual admin costs were SEK 2.5 million higher in Q4 2022 since we compensated for CapEx incorrectly reported as cost earlier during the year of 2022. This means that in order to compare between years, one should add SEK 6.5 million to the admin cost in 2022 and deduct SEK 4 million from the fulfillment cost in the fourth quarter of 2022. So cost allocation between fulfillment and admin costs are correct for the full year of 2022.
So for the full year, fulfillment went from 29.7% for the full year 2022 to 27.1% for the full year 2023. Admin and other went from 17.1% to 15.1%. This shows the measures we are taking to improve the efficiency in the business. In addition, we have in February notified about a reorganization affecting approximately 10% of the employees in Sweden, which will give us further reduction of admin and other. The financial development of our daughter companies has not met the expectations we had at the time of the acquisition of Poster Store in December 2020. We have, therefore, as stipulated by accounting standards, adjusted the goodwill related to the acquisition by SEK 250 million. So that means it goes from SEK 834 million to SEK 584 million. And this write-down does not affect cash flow. The operating profit, including impairment of intangible assets, amounted to -SEK 220 million.
However, excluding impairment of intangible assets and the items affecting comparability, we reached an adjusted EBITDA of SEK 37.7 million compared to SEK 45.7 million in Q4 2022. This corresponds to an adjusted EBITDA margin of 12.8% compared to 16.2% last year. The difference of SEK 8 million between the periods is mainly a result of higher marketing costs. Cash flow from operating activities amounted to SEK 29.6 million compared to SEK 23.9 million in 2022. Despite the result before tax being SEK 8 million lower in Q4 2023 compared to Q4 2022. This is mainly due to positive cash flow effects from changes in working capital in Q4 2023 compared to Q4 2022. Related to higher short-term liabilities in Q4 2023 compared to 2022. To note is that short-term liabilities at the end of Q3 2022 were paid during Q4 2022, which were related to building inventory for the high season.
Short-term liabilities in 2023 are, however, flat between Q3 and Q4. And they're slightly higher in Q4 2023 compared to Q4 the previous year, 2022. That improves cash flow from operating activities. This is due to improved inventory management, where the bulk of inventory sold in Q4 was also purchased in Q4. As of December 31st, 2023, cash and cash equivalents amounted to SEK 149.9 million compared to SEK 155.7 million in the beginning of the year, despite spending SEK 24.5 million on buyback of our own bond and interest payments of SEK 100 million. Procurement and COGS were largely at the same level in Q4, which meant that the inventory values, as I mentioned, were unchanged at the end of the quarter compared to the end of the previous quarter, Q3.
As you all know, Desenio Group's leverage in the form of issued bonds amounts to SEK 1.1 billion, which is to be refinanced at the end of 2024. We're currently evaluating various alternatives to refinance the debt and to find a sustainable capital structure going forward. This evaluation process includes discussion with different bondholder groups, which we initiated during the fourth quarter of 2023, and we will continue now during the spring of 2024. We aim to intensify such discussions and also explore other alternatives in order to find a solution well before the end of this year that is acceptable to both bondholders and shareholders. So in summary, net sales increased despite the challenging market. The gross margin decreased slightly. The adjusted EBITDA decreased as a result of higher marketing spend and higher admin costs. And the cash flow improved compared to the previous year.
Here, we analyze the impact of our work to decrease cost levels and increase efficiency. We see that our improved efficiency in fulfillment had a positive impact of one percentage point, while marketing costs had a negative impact of 1.4 percentage points compared to Q4 last year. Admin costs had a negative impact of 2.6 percentage points compared to Q4 last year. And again, please bear in mind that during the fourth quarter of 2022, we reported SEK 6.5 million less than the actual costs for admin and SEK 4 million more for fulfillment to compensate for wrong allocations of costs in Q3 2022. Now, let me comment more in detail on the development of the business in our markets.
So by looking at search trends in comparison to sales development in Germany and the UK, we can see that our sales continue to trend higher than the market search volumes in Q4, which is positive. Comparing Desenio Group to a few of our biggest competitors, we see that during Q4 came into Q4 with a high share of voice in Germany, but dropped somewhat in December. In the UK, we also dropped in share of voice towards the end of Q4. And that is in light of decreased marketing spend towards the end of Q4 when we saw that the market was weaker than expected. And the group's gross order intake in Q4 was 5.2% above last year and 24.5% above 2019, which we still consider as the most recent normal reference year. The development looks the same in most of our markets with some differences.
In the Nordics, net sales grew by 7%. Our core markets in Europe grew by 4%, while the rest of Europe increased by 1%. The rest of the world grew by 7%. And in North America, which is included in the rest of the world, net sales increased by a relatively modest 25%. This slide shows customer highlights. We see that our active customers decreased while the number of orders increased compared to last year, which is positive, of course. Our sales growth comes from a combination of increasing number of orders and increased average order value. Now 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 4.3% in Q4 2023 compared to Q4 2022. Gross margin, unfortunately, decreased from 85.6% in Q4 2022 to 84.2% in Q4 2023, driven by exchange rate effects. Despite stronger sales in Q4 2023 compared to Q4 2022, we did not quite manage to reach the same profitability as in Q4 2022. Adjusted EBITDA in Q4 2023 was SEK 37.7 million compared to SEK 45.7 million in Q4 2022. So the adjusted EBITDA margin was 12.8% in Q4 2023 compared to 16.2% in Q4 2022. So moving to the next slide. CapEx in Q4 2023 was lower than in Q4 2022. CapEx in Q4 2023 of roughly SEK 800,000 is related to smaller investment in our warehouse in the Czech Republic.
The investment in Q4 2022 referred to investment in our warehouse in the Czech Republic and in the US. Excluding the bond, which is, as of December 2023, classified as current liabilities, the net working capital in relation to the net sales for the last 12 months is -9%, which is in line with the corresponding quarter last year or 2022, sorry. Current liabilities have slightly increased, while current assets have slightly decreased in Q4 2023 compared to Q4 2022. Our operating cash flow in the quarter was positive SEK 29.6 million, which is further explained on the next slide. So here is a breakdown of the operating cash flow. The operating cash flow during the quarter was positive SEK 29.6 million. We had a positive Adjusted EBITDA of SEK 37.7 million in the quarter, including the write-down of goodwill of SEK 250 million and the amortization of the Poster Store customer database.
By SEK 7.7 million. We are at a negative EBIT of -220 million in the quarter. The bond interest payment amounted to SEK 26.5 million. And non-cash items, which includes the depreciation and amortization of fixed assets, leasing assets, and intangible assets, which also includes the write-down of goodwill, altogether SEK 267.1 million. Paid tax in the period was SEK 5.9 million, and inventory levels were somewhat unchanged by an increase by SEK 0.3 million. And changes in current assets and liability positively affected cash flow in the quarter by SEK 20.5 million, which is mainly driven by increased liability because of higher sales in Q4 compared to Q3. So in summary, operating cash flow during the quarter was positive by SEK 29.6 million, mainly driven by increased current liabilities. I now hand over to Fredrik again for a summary.
Thank you, Anna. So to summarize the fourth quarter of 2023. The positive growth trend in recent quarters slowed somewhat in Q4. In fact, the slower market development also continued in the beginning of 2024. It's positive that net sales grew despite the challenging market due to leading market position and rather high marketing spend. In the quarter, we wrote down 250 million SEK goodwill related to the acquisition of Poster Store. And we have begun discussions with bondholders to evaluate the various alternatives well in time for the refinancing at the end of 2024. We continue leveraging on our market leading position, a focus on defending and strengthening market position and increasing efficiency. As part of this, unfortunately, we have recently given notification of a reorganization affecting approximately 10% of our employees in Sweden. All in all, the conditions for Desenio are good after all.
Our business is profitable, well invested, and our low price points create good conditions even in tougher economic times. At the same time, we are, of course, humbled by the fact that the market continued to be challenging even in the start of 2024. Thank you very much for listening, and we're now more than happy to ask your questions. So over to you, operator.
If you wish to ask a question, please dial pound five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound six hash on your telephone keypad. As a reminder, if you wish to ask a question, please dial pound five on your telephone keypad. The next question comes from Viktor Hansen Hansen from Carnegie. Please go ahead.
Thank you, operator, and good morning. So Fredrik, one question from me here. You mentioned in the report that you're evaluating refinancing alternatives, including other alternatives. I'm wondering if it would be possible to provide any color on what the other options you are exploring are or anything else on this matter. Thank you.
Good morning, Viktor. Yeah, we're in very early discussions with groups of bondholders and also, of course, our shareholders. And I don't want to speculate really in where we're going to land because it's too early to do that. But of course, I mean, in general, there are a few different options for any company with that.
Okay, understood. Thank you.
As a reminder, if you wish to ask a question, please dial #5 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. Thank you, everyone, for your time and the questions we got. As always, please don't hesitate to reach out to us should you have any questions or requests. Thank you. Speak soon. Stay safe.