is gross margin, and the gross margin has increased by one percentage point, and profit before tax increased by 19% to 46.8, and the net margin increased to 5.4% compared to 4.8% corresponding quarter previous year. And we have also been able to increase the solidity. So the solidity is up from 20%-21%. And we have seen a positive development both with regards to system sales. The system sales revenues increased by 6% and amounted to SEK 575. And the service revenues, they have continued to develop positively during the quarter as well, and amounted to SEK 291, which is an increase of 4%.
The same goes for revenues relating to cloud services, which amounted to SEK 109 million, and rolling twelve months, cloud revenues amounted to SEK 431 million, which equals an increase of 11% YoY. And looking at the revenue and profit per business unit, we have seen a positive trend in all business units. So, in Nordics, the revenue was SEK 418 million, and the profit before tax, SEK 22 million, which means a net margin of 5.3%. And new accounting principles have affected Nordics with SEK 15 million during the quarter. And if looking at Business Unit UK, it's a really good development in U.K. We saw good development in Q1, and now we see a continued positive trend in U.K.
So, the revenue in U.K. was SEK 170 million, and the PBT, or the profit before tax, was SEK 7.1 million. Then we have increased the net margin also in U.K. compared to the corresponding quarter last year. And, the new accounting principles affected UK negatively with SEK 6 million in the quarter. In West, Business Unit West, a continued good development also in that business unit, both from a revenue perspective and from a profit perspective. So the revenue for Business Unit West was SEK 249 million, and the profit before tax was SEK 18 million, which means a net margin of 7.2%. And we see the same trend in East, which, of course, is pleasing to see.
So the revenue in East was SEK 32 million in the quarter, and the profit before tax was SEK 2.9 million, which equals a net margin of 9.3%. East has been negatively affected by the new accounting principles with SEK 1 million. The positive trend from an overall perspective from Q1 continues also into the second quarter of the year. Now, I would like to hand over to Jonas Persson when it comes to cash flow and the balance sheets.
Yes, thank you, Peter. We start with the cash flow for the last quarter, the second quarter, and during that quarter, we had SEK 55 million from the current operation, and the change in working capital was nearly flat. And during the quarter, we invested around SEK 60 million; most of that is related to our own leasing company, Proact Finance, and that's in line with what we have seen in the past, roughly SEK 50 million per quarter. Then we have minimized our utilization of the overdraft facility, so it's down SEK 27 million, and we have paid back SEK 34 million to the company shareholders as dividends. So in total, that's SEK -22 million.
So we ended the quarter with SEK 163 million in cash. And if we look at the first half year, we have had SEK 90 million from the current operation, and we have a negative change in the working capital of 48, and that is related to the extraordinary good result in Q1, Q4 last year. So we paid out some money in the beginning, as we explained in Q1. So Q2 was good, but in six months period, it was minus. And of course, that should be nearly flat over the year. It's we don't have so much stock and so on, so it should be around zero.
During this period, we have invested 46 million in Proact Finance and we have paid 19 million for the old acquisitions in Germany, and that was the final payment for that acquisition. That was done in January Q1 this year. We have bought back some own shares of 8 million, and as I said, we have paid out 34 million as a dividend. So that means that we, during the period, it has been - 77 million, but most of that was related to Q1. If you look at the key ratios of the balance sheet, it's up a bit due to the fact that IFRS 15 have added roughly 200 million to the balance sheet.
And the solidity is 21, and our long-term goal is to be between 20 and 25. Of course, we want to be closer and closer to 25, but at least 21 is above 20. That's good. As I said, the cash and bank deposit ended on SEK 163, and we had bank loans and overdraft facilities of SEK 138. So at the moment, we have more cash than debt, + 25. And we have unutilized the bank overdraft facilities of SEK 223 at the moment. So the situation is very healthy, I must say. Questions about the cash flow and key ratios and balance sheet?
Yes, Daniel here from ABG. I have one question on the short-term debt that we see in the balance sheet that has moved from long-term debt to short-term debt. What maturity is that, and do you have any finance plans-
Uh, yes-
To meet those obligations?
Yeah, it's we have a bullet in the end of the year with our bank, and that will be arranged over summer. So it's not a problem, but it's not solved at the moment, but it will be in July and August.
Yeah.
And we will change to a more long-term solution. So that's something we work on, of course, to solve during the summer period, and we have good control over that process, I would like to say. So the aim is to finalize everything in the end of August, beginning of September.
What's the current financial terms on that debt, and do you think you can improve that with a new solution?
Yeah, that's absolutely our aim, to do that.
Okay, and what's the current terms?
From what perspective do you mean?
Terms of interest rates.
Yeah. You can see that in the annual report, but it's, I think, 2%+. I think it will be 2%- in the next version.
Yeah.
So it will improve, yes.
Yeah. So what you're saying is it will be below 2%?
Yes.
That's our aim, yeah.
So, um...
Yeah, that's my-
We do have a good financial position, which means that we do have a good opportunity to negotiate good terms. That's our belief. Good. And to summarize, we are, of course, pleased with the development. All the financial key ratios, they are going in the right direction. And as I've said before, we see some positive trends in the market. So from that perspective, we do have the future in our own hands, I would like to say. So it's more up to us to ensure that we focus on the right things to be able to continue this positive trend also in Q3 and the rest of the year. So now I think it's time for questions, if any.
Yeah, I have a few. Daniel, again, from ABG, if that is fine. So just to clarify, the IFRS 15 effect in the quarter, that was only -SEK 8 million.
Yeah.
Is that correct? It was SEK -95 million in Q1.
Yes, but-
You expected that to go down during the year.
Yeah.
Did you expect it to go down that rapid?
No, but, if you look at, page number 5, in the interim report, you can see that we have sold or the revenues related to, that part, throughout the first half year is SEK 134. So if you take SEK 134, and compare that with SEK 95, then you see the difference in, Q2. But at the same time, SEK 31 million, which is related to previous periods, has affected the revenues positively. So if you take SEK 134 minus SEK 31, then you end up with SEK 103.
If you take 103 minus 95, you end up with 8. But to see what we have sold throughout the second quarter, you need to compare the 134 and deduct the 95 from the first quarter, right? Are you with me? So it's 39.
Yep, absolutely. So, but the thing that was difficult to compare was the SEK 31 million from last year, right? Because that was nothing that we knew about.
No, but that's not only related to last year, it's also related to the,
Ninety-five.
The 95, because the deals closed in the first quarter will, of course, have a positive effect already now in Q2, because we are talking about, in average, a contract length or length of, let's say, 18 months or so. So-
Okay.
We already see a positive effect in Q2 of the deals closed in the first quarter.
Okay, understood. Understood.
But,
What visibility do you have on this? Do you know how much the positive effect will be in Q3 already now or?
Oh, that, yeah. From these closed in previous periods, we of course do have control over that, but we do not know-
Mm.
how much we will sell in Q3 at this point in time. That's the reason for why it's really difficult, actually, to give a forecast from that perspective, and a guidance.
Okay, but what's your best guess for the second half of the year? Will we see an effect closer to the SEK 8 million that we saw in Q2, the net effect, or closer to the kind of gross effect of SEK 95 million we saw in Q1?
No, it's closer to what you now see in Q2, and I mean, Q1 was the worst quarter from that perspective.
Mm, mm.
Because Q1 was the first quarter when we saw the effect of the new accounting principles.
Okay. Could it, by any chance, be a net positive effect in Q3, Q4, or will it be a negative effect?
No, it will, it will be a, a negative effect, I would like to say.
Okay. And closer to the SEK 8 million that we saw-
Yeah, I would, yeah, closer to 8 rather than 95, at least.
Yeah, exactly.
Okay. And then when we enter into 2019, we will have a normalized situation, as earlier described.
Yeah. Okay, so focusing a little bit on the UK growing nicely in the quarter, 30% up YoY, even more adjusting for IFRS, the SEK 6 million effect you talked about. Anything of non-recurring characteristics in the quarter, or just business turning around in the right direction again?
I would like to say that we have been able to turn around the business in a good way. So we have seen a positive development both in terms of the system and the service operation. And at the same time, we have been careful with our costs and so forth. So that's the main three reasons for why we have seen a really good development in U.K., I would like to say.
Is it the market picking up, or you taking some market shares?
We are taking some market shares, but at the same time, we did one really large deal in the end of the quarter, and that of course helped out in a good way. But even if you deduct the numbers with that specific deal, we still do have a positive trend in UK.
Okay. Okay, and all business units reported better earnings YoY. Is anything you would like to highlight there? Is that driven by cost savings in the different markets or mainly-
I think you can see in all the different business units, we do act according to the sales strategy. And the service business is picking up really nicely, and of course, we are careful with the costs within the company. We are trying to take advantage of being a group, I mean, when it comes to customer support operation, as well as the operation related to managed cloud services. So, yeah, and by that, I've also been able to increase the margin in the different regions.
Are the cost savings of a sustainable characteristic, so that you are fewer people all in all in the group? Will that sustain for-
Yeah
for the second half of the year as well? Or is it anything you have done which has a non-recurring effect here?
No, no, no.
causing lower cost in Q2?
No. No, I would like to say it's a sustainable situation.
Okay. When will we see number of employees growing again?
I can't really say, because, I mean, it's not an end in itself to grow the number of employees. I mean, the aim is rather to do more with fewer employees, actually, and by that, be more efficient. Because we can build our service operation without adding new resources to it. And that's a huge-
Mm.
-difference if you compare it to, an ordinary consulting company.
Yeah. Mm.
So as I said, it's not an end in itself to grow the number of employees. We are very careful with that. We have been so during the first half of this year, and we will continue to be that for the second half as well.
Yeah. That was all from me for now, at least.
Okay. Any more questions? Okay, if not, then I thank all of you, and wish all of you a nice summer, and talk to you in after the Q3 report. Thank you all.