Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's Inwido fourth quarter report. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star followed by one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today, Thursday, the 1st of February 2018. I would now like to hand the conference over to your first speaker today, Håkan Jeppsson. Please go ahead.
Yes, thank you very much and good morning to you all, and welcome to the year-end report for Inwido with myself, Håkan Jeppsson, and Peter Welin. As stated, there will be a presentation. As usual, we will open up for questions afterwards. Let's turn to slide two, where I give an executive summary of the development for the group. I would like to say, and to start with, that we are absolutely following our strategic plan. We have a good sales growth that continue. We have year-to-date a 12% growth. The company has never been larger than we are today. Even in Q4, we grew by 4% and organically by 3%. You can say that all business areas grow organically in the quarter as well. We are satisfied with the growth development, even though it can, of course, always be better.
The supply chain is now back on track. We have handled all the distortions that we had during Q2 and Q3. We are more or less ready towards the end of the Q4. It's been hard work, of course, in the Swedish factories and in the component supply area. We are now back on track, and that is satisfactory for us. The efficiency improvements is according to plan. We're working with the SEK 100 million program. It's, of course, very early. We have just started the program. We see it as being fully on track so far. Two acquisitions in 2017, both based in Denmark, Bøjsø, that we have closed during the summer. Bedst & Billigst will be added to our e-commerce portfolio, and that will be, as it seems, during February, hopefully.
These two acquisitions will add at least SEK 200 million of turnover to the group. Finally, I would also like to conclude that we invest rather heavily when it comes to e-based products and processes, both connectable products, e-trade solutions, business to business and business to consumer, and also internally in digital processes. We have taken rather large steps in the area during 2017. Turning to slide three, talking about the market development. The summary would be that the markets are still strong. There's always some question marks, of course. I think there will be no time in the future either where you live without any question mark at all. We see, as you all see, high GDP growth in general. It's basically all over the world. Good growth with some minor exceptions.
We can also luckily see stable to increased consumer confidence in more or less all markets. Some hesitance, of course, in U.K. with the Brexit discussions, but the adjustment downwards in confidence in U.K. is still rather small, actually. It looks not that bad in U.K. either so far. We see strong demand for new houses and for dwellings, and this is a debate we have in Sweden about the lack of dwellings. It's not only in Sweden, of course. We have the same discussion in many markets, and that also means that a lot of the markets where we operate are also driven by new build at this stage. The raw material prices are, again, after several years of stable or lower prices increasing. You can also see that as a good sign to some extent, that we are in a good market situation.
Some inflation seem to be back, and that is not always negative, and we are normally quite good at compensating for raw material price increases that would also enhance our margins in the best of worlds. We see sharper competition in some markets. Sweden, we have stated that for some years now. U.K., of course, with the situation there, and some struggle also in the Finnish market that we have handled well so far. Despite the strong demand, I would say, as always, there is some price pressure and price decreases overall in the markets. Nothing serious. Nothing we can't handle. We have a good margin development, but that's a fact. The big question marks for us is, of course, the development in the housing and real estate markets in Scandinavia, and how that will impact consumers.
We have seen more or less a weaker demand in Scandinavia from the consumer side, meaning that we have not seen the growth Figures that we saw in 2014 and 2015 since early 2016, actually. We now see a more stable consumer demand in the Scandinavian markets, especially Sweden and Norway, while Denmark is a bit stronger. Of course, the financial restrictions for consumer lending from the banks could also have some impact on the temperature when it comes to the consumers. If they have to amortize more, how much can consumers borrow? We have also seen 24 months back a worse subsidiary program in Sweden, of course. All in all, good stable markets with less growth than some years ago when it comes to especially Sweden and Norway. Going to slide four, talking about our performance in quarter four.
We are not completely pleased, but we are pleased that we see good growth and a stabilized profitability development. Actually, it's the second-best quarter four ever, and it's only the fourth time in history that Inwido has passed an operating EBITDA in a quarter more than SEK 200 million. It's absolutely a step in the right direction with some of our historic problems adjusted. We grew by 4%, 3% organically. All markets actually grow except the Norwegian market, where we have also increased prices quite dramatically to enhance our margins, and that have had some impact in combination with a slightly weaker second half year of the Norwegian market. Order intake, still positive, +2%, 1% or one and a half organically.
All BAs, business areas, are growing except Sweden, Norway, and that is to some extent because we also restricted capacity a little bit to make sure that we could handle the customers we had. EBE, the Emerging Business Europe, is growing by 10%. Order intake, e-commerce +20%, and Finland is back on track also after some of the challenges they saw especially in quarter two last year with the sales organization. Again, a very good operating EBITDA in Q4, more than SEK 200 million. We have to remember that 2017 was exceptional, as we see it, with maximum deliveries and a very fortunate calendar. Now we see that EBITDA is stabilizing, and we do in Q4, the best quarter also of 2017. Denmark is still a top performer with a solid margin, more than 20% operating.
That is, of course, very strong and incomparable, I would say, in the industry, and we see that continue in 2018. E-commerce, the business unit selling directly to consumers in several European markets, is growing fast, more than 20% full year 2017. As I said, also with the same order intake organically in Q4 with more than 20% increase. It looks as a stable and very positive development for us in that concept. Supply chain disturbances have been resolved after lots of efforts, and now it's important for us to consolidate. I state that disturbances are behind us. Efficiency measured as minute per produced window or door is not completely back on track since we have taken so many extra measures to handle the disturbances. You couldn't expect more, and I see that we normalize efficiency completely during the first quarter.
It's not a big deviation, but we see that we have some more improvements to do to be fully back on track when it comes to our efficiency in that sense. Not something that will impact us dramatically in the first quarter of 2018. Consumer sales share a bit too low at around 70% in the quarter. We will be working on the mix, especially in the Swedish, to some extent, the Finnish markets going forward. Turning to slide five and summarizing the full 2017. It's a good sales development. Of course, if you take the full year into account, the profit level is below our expectations. As I stated, now back on track. SEK 6.4 billion of sales, the highest ever for the group. We have an order backlog of +5% at year-end, the highest backlog we've ever had in the group.
The operating EBITDA at SEK 649 million, slightly less than 2016 because of all the extraordinary operational costs that we've had, especially in Sweden, Norway, to handle the situation. Operating EBITDA still for our industry on a very high level at 10.2%, but obviously down in comparison to 2016. Two acquisitions made. The pipeline is okay, but as I have stated many times before, we are mostly negotiating with family-owned companies, and the processes are not always very easy to prepare and to predict how they will end. I would be, of course, disappointed if we couldn't close more acquisitions during the year. It's absolutely one of our core targets for the year. Several digital products and concepts launched for the smart homes, as working efficiency improvement tools for installers and retailers in most markets. We see that continuously ongoing into the future.
The board proposes a dividend of SEK 3.50. It's the same as last year, that also gives us a very good headroom for further development, and not the least, further acquisitions in the coming years. Turning to slide six, going through the business areas, starting with the biggest ones, Sweden, Norway. Business area combined since 1st of July 2017. We still have some effects of the supply chain disturbances in the quarter, much less than before, and we have concluded and solved the problems towards year-end. Consumer confidence on a healthy level. Still, I must say that the consumer market, the renovation market is not growing fast. It's high, it's stable. It's a good market, but there are, of course, some uncertainties when it comes to all the measures that the authorities might take when it comes to consumer lending and amortizations.
Disturbances have been handled. They were not higher than expected, they were resolved, we are now working very hard to come back to the maximum efficiency. If you can ever measure maximum efficiency, we will always like to improve, of course, efficiency continuously. The segment mix in Sweden, Norway is still less favorable than wanted. It dropped a little bit during 2017, that is, of course, because market is driven and has been driven by new build, we see that being restored to a more healthy mix during 2018 if our measures will bite as we expect them to.
Total sales, still, despite the fact that we restricted capacity a little bit to handle the customers we have, total sales were still +3% in the quarter, the order backlog is still on the same level, the high level that we had towards the end of 2016. The Norwegian market, though, has been slightly weaker than earlier, has actually been negative during the second half of 2017. It's not impacting us extremely much since we have a minor share in Norway, it's a minor part of the business area and the group as a whole. Slide seven, coming into Finland, where we see a normalization and a strong improvement with strong order intake in all sales channels. It's a competitive market, but many of our core competitors are struggling, actually, we can take advantage of that.
Finnish economy seems to be back on track with good GDP development and very high consumer confidence. The consumer confidence is actually higher than before the financial crisis, that is very promising for our growing Finnish business. Our sales organizations, especially the consumer ones, are more or less back on track, we are fully recruited as it seems, we can also see that in the order intake figure and sales figures also for the quarter. It looks promising. High share of industry sales also in Finland. Actually, the new build market has not dropped substantially during the tough years in Finland, so our mix has been slightly negatively impacted, the activity level in construction sector is still high in Finland.
Total sales +3% in the quarter. The backlog is actually 21% higher than last year, so it's promising for us going into 2018, of course. The star in our books, Denmark in slide eight, had a very strong year and ended with a strong quarter also, another record quarter for the Inwido company in Denmark. We also see continued strong market indicators with high consumer confidence. General demand has been good in Denmark, and we have no reason to believe that it will drop substantially in 2018 either. It looks stable. We have seen positive development in all our sales channels. You have to remember that we have very little industrial sales in the Danish market, so we're talking about different consumer channels, actually. Good segment mix with almost 95%-96% consumer share. Total sales were 10% plus in the fourth quarter.
The backlog might look a bit scary. I think you shouldn't be too afraid of that, -23% at year-end. We had extremely high order book with some big orders that we had into 2017. I sleep calmly at night despite the fact that the order book might look a bit lower than that could be expected. The order intake in Denmark in Q4 was actually +6% also. It means that we have good pace in our sales in Denmark still. Finally, around the business area, slide nine for EBE, Emerging Business Europe, including the business unit e-commerce, continued strong growth for e-commerce, good or stable growth in all markets except partly U.K. Obviously, there are probably some Brexit effects. We don't really see them.
I think some of the challenges we have are more connected to our wood window business in U.K., where we had some struggle with structure, organization, and the supply chain there. While our PVC business for consumers is going really well and with few signs of the upcoming Brexit one year from now. As I said before, e-commerce order intake growth of 20%. We are planning for introduction to more markets going forward. The only thing we have to be sure of is that we have the right capacity to also deliver products to new e-commerce markets around Europe. With the fast growth, we've had some challenges to ramp up capacity, especially in our Polish factory, as fast as we would have wanted. It's only a matter of time. We are investing in that factory to increase capacity rapidly.
We have some heavy efficiency measures ongoing in U.K. and Austria with restructuring to improve cost efficiency and competitiveness. We see those actions going as planned. That will also improve performance in EBE in 2018 and onwards. Total sales in the quarter, -2%. Organically, sales were actually ±0 in the quarter. Total order backlog, much because of U.K. and to some extent Ireland, is -1% at year-end. Turning to slide 10. Taking a look at the outlook, I must say that I feel Inwido having very good prerequisites going into the new year. We are absolutely looking forward to this year and this season with some of the major disturbances behind us. The need for our product is still good, as I said, in general, in most markets. Markets are overall rather positive with high consumer confidence.
The underlying performance of Inwido, if you disregard the extra cost we had to take for handling suppliers and supply chain distribution matters in especially Sweden and Norway, is very good. Coming back to normal, that will also impulse a good development in 2018. We are very well positioned within all the e-connected and digital processes and concepts. We are actually the clear market leader in Europe when it comes to e-commerce for windows and doors, and we will continue to develop that strategy forward. As I said, also supply chain now back on track also gives us good grounds for some optimism in the new year. Challenges, yes, getting the right and enough competence. Unemployment rates are very low.
We are operating in some very small villages and cities, and to some extent, there could be challenges to find the right amount of skilled people and to even find people overall. Of course, the political and financial uncertainties that you're always facing. I think the biggest challenge might be what happened with the good and profitable business around consumers in Sweden, and we talked about that before. It's a good market, but house owners are facing some short-term challenges with house prices, mortgages, and lending, borrowing money. Final remark for quarter one is, of course, also that everybody should remember that the first quarter of 2017 was extremely strong, with all the stars looking in the right direction, and also to a great extent, that was also because Easter was in the second quarter 2017, while Easter will start in the first quarter of 2018.
Some tough comparison figures for the first quarter. To conclude, the focus areas short term on slide 11. Our overall plan is unchanged. We have the absolute ambition to, on average, improve operating EBITDA by at least 10% yearly. To do that, I think there are five areas where we have to focus very hard in the coming period and during 2018. That is, of course, to consolidate the normalized supply chain with good quality control and to create the absolute right stability that we would like to have in our big factories. The pricing and segment mix to have a slightly better and improving mix of consumer and industry sales that we would like to have, especially in Sweden and Finland. Then also compensate completely for the raw material price increases during the year.
Don't Have a delay on that, and that is something we are already working very focused on in our businesses. Thirdly, organic and acquisition-based growth. We would like to create more structural growth. We have more or less grown the business with 50% in the last four to five years, and we would like to continue that structural growth and substantial growth both in the Nordic region but also in the European continent. We are working actively with a pipeline of potential acquisitions as we speak. Fourthly, efficiency and cost improvements are always important in our type of business, and we have launched the SEK 100 million program, and we should now make sure that we secure the effects of the program, and it looks promising in the start of the year. Finally, continue to launch e-products, concepts, and processes.
We must always be relevant for customers and consumers, the smart home is out there, and it's a big opportunity for us. Digitalization is also a very good way of improving the operational efficiency, and we will continue to invest in smarter processes internally in our factories and in our administration going forward. That concludes the presentation of the situation. Now I will hand over to Peter, he will give you an overview of figures for Q4 and full year 2017.
Thank you so much. We go to page number 13. On page number 13, you can see to the left the income statement for Q4, and to the right, you can see the full year 2017 as well as 2016. For Q4, as Håkan said, sales grew by 4%, and adjusted for currency as well as acquisitions, sales were up 3%. Operating EBITDA ended at SEK 201 million compared to SEK 227 million last year. As Håkan also said, it was the second-best Q4 result ever Inwido had. During the quarter, we had some production disturbances, and as we said, in October, we're going to have costs for SEK 10 million to SEK 15 million in Q4, and that was also the state. We had about SEK 15 million extra costs in Q4 connected to the disturbances. We have a negative sales mix effect.
However, the sales efficiency that we had problems in Q2 and Q3 have been solved and have not affected the Q4 results. Further down in the income statement, we have restructuring costs of SEK 112 million in the quarter. SEK 10 million is connected to transaction costs, and the SEK 63 million is connected to the cost-saving program. I will come back later to the cost-saving program. We have Outrup, that has affected us by SEK 39 million in Q4. When it comes to Outrup was a company in Denmark that we acquired during the summer of 2016. At that time, we acquired 25% of the shares, and the remaining 75% shall be acquired in 2018 and 2019 based on a fixed multiple. We have, from the summer of 2016, booked the expected purchase price for remaining shares in the balance sheets.
However, the company has performed better than planned, especially now late in 2017. This means that the purchase price for remaining shares has thereby increased. The increase is SEK 39 million, and we have to book this SEK 39 million increase as a cost of the income statement. That has affected EBITDA for the quarter. We also agreed with the seller that we are going to acquire the remaining part now in February 2018. Further down the income statement, we can see the profit after tax ended up at SEK 34 million and earnings per share SEK 0.38 compared to just above SEK 2 last year. If we adjust the earnings per share with the restructuring cost and also with amortizations, the earnings per share end at SEK 2.03 compared to SEK 2.50 last year.
The full year results, sales +12%, and organically, meaning adjusted for currency as well as acquisitions, sales grew by 4%. Operating EBITDA ended at SEK 649 million compared to SEK 673 million last year. If we turn page to page number 14. On page number 14, you can see to the left the sales in Q4 for 2015, 2016, and 2017, and to the right, you can see the order intake for Q4 the same years. The order intake is lower than the sales in the quarter, and that is due to the fact of the seasonality. Sales was +4% in Q4 compared to last year, and organically it's +3%. All units but EBE had a positive growth, and EBE had about the same sales organically as last year in Q4.
If we look at the order intake, the order intake is +2%, and adjusted for acquisitions, the order intake is +1%. Here is all units but Sweden and Norway positive with a positive order intake compared to last year. Sweden and Norway was negative due to lower capacity in Q4 due to the fact of these disturbances that we had during the autumn. However, the order backlog end of December for Norway, Sweden is in the same level as last year. If we turn page to page number 15, we can see the order backlog for the whole group. The order backlog ended at SEK 855 million in Q4 2017, compared to SEK 850 million last year. An increase by 5%, and adjusted for acquisitions, the increase is +4%. We have the highest order backlog ever for Q4 and end of 2017.
The order backlog is always at lowest level in Q4, and that is due to the fact of our seasonality. All units but Denmark has higher order backlog compared to last year, and the deviation in Denmark is explained by extraordinary high order backlog end of last year, and shortened lead and delivery times during autumn 2017. If we turn page to page number 16. On page number 16, you can see to the left EBITDA and EBITDA margin, operating EBITDA and operating EBITDA margin. To the right, you can see the full year. To the left is the quarter, and to the right is the full year. Operating EBITDA, as I said before, ended at SEK 201 million compared to SEK 227 million last year, a margin of 11.3% compared to 13.3% last year.
Denmark had a very positive development in the quarter, and Finland and EBE were in about the same level as last year, meaning that Finland is back on track. The problems we had in Finland before with sales efficiency is solved and has not affected Q4. The negative deviation is mainly related to Sweden, Norway, due to mix and the production disturbances of about SEK 15 million extra costs in Q4 connected to last year. To the right, you can now see the full year and the operating EBITDA then ended at SEK 649 million, equal to an EBITDA margin of 10.2% compared to 11.9% last year. If we turn page to page number 17, and that is regarding the efficiency program that we have launched in Q4. The program is running according to plan, and we have identified savings of about SEK 100 million.
We have one-time restructuring cost of SEK 82 million, where we have taken SEK 63 million now in Q4. Of this SEK 63 million, SEK 42 million is write-down of fixed assets. We have additional write-down of other assets, including the SEK 63, and that is the write-down when it comes to inventories. Meaning the cash effect from the restructuring costs are quite limited. We now have further SEK 90 million to be booked now in Q1, and this SEK 90 million cost is connected to Västerbacke. We are going to close down a factory in Västerbacke in Sweden. The negotiation started now in January and has also ended now in January, and the cost will be taken in Q1 2018.
When it comes to the effects, the full effect will start from 2019, but we will see some effect now also in the first half of 2018, and then they will gradually increase and have full effect, as I said, from January 2019. If we turn page to page number 18, this last page, this shows net debt and net debt versus EBITDA. Net debt versus EBITDA ended at 2.1 after Q4, and net debt has been little higher than expected due to the fact of this Outrup, because the adjustments for the purchase price remaining shares of Outrup has now been booked as net debts. The net debt has been increased by SEK 39 million, and net debt to EBITDA ended then at 2.1. You can see that net debt has been reduced during these last quarters, and we are generating cash flows more or less as predicted.
This was the presentation. We open up now for questions.
Thank you. If you have any questions, please press star one. If you wish to cancel your request, please press the hash key. Once again, if you have a question, please press star followed by one on your telephone. Our first question comes from the line of Johan Dahl. Your line is open.
Yes, hi. Can you hear me?
Yes.
Yeah. Just a question on the segment mix. You talked about, Håkan, your priority to improve that. What do you see in the order book with regards to the segment mix as we go into 2018? Also, the various initiatives that you're driving in consumer and in project, is that reason to believe the mix will change in any way?
Yeah, I think we will get some help from the market. I think there is reason to believe going forward that the new build will not stay on that level, maybe for the full 2018 and not at least for 2019. We see in our order book in Sweden that there is a slightly positive mix effect already going into 2018.
Okay, gotcha. Secondly, if you just look on the Danish operations, you talked about you're sleeping well on that topic of the order book. What gives you that confidence in the Danish operations?
Well, we have an increase in sales in the quarter four. We have an order intake class. We have been able to decrease delivery times in Denmark further, and that also make.
Means that we can also deliver the orders faster, meaning that we dispatch more orders in the current quarter, so to speak. The order backlog exactly at the quarter end will not be as important. We see good confidence and good demand in the Danish market going forward. Therefore, I feel rather optimistic. We had some extraordinary bigger orders actually for some of the projects in Denmark when we ended 2016. Therefore, I'm optimistic still.
All right. Could you also address what complexities does the increase in raw material cost and freight cost cause you? Have you taken sort of orders on previous price levels that may pressure margins as we go into 2018? Is there a time lag sort of from when you expect to receive compensation for higher raw material cost?
No, not really. We have actually historically never had any huge problems with the raw material prices. Actually, we see it very often as a good thing because as a big player, we can get lower price increases than some of our competitors, and it's also a good way of compensating and actually increasing margins a little bit when raw material prices are going up. There is very little or actually no time lag since we are selling made to order and we create the offered prices day by day with the new raw material prices at hand. There is no negative effect, I would say, overall at all.
Okay, just a final question before I get back in line. You talked about uncertainties, mainly Sweden, Norway. What contingency plans do you have at the moment should stuff hit the fan and things turn more sour than you expect today?
We have normal contingency plans. Right now we have launched a SEK 100 million program. I think that is a contingency plan good enough to continue to improve efficiency and be prepared. We don't see the fan being hit, so to speak, yet, and I think right now it's more important for us to consolidate the customers and the orders we have and make sure that we satisfy our customers completely this year, that we to some extent didn't do in 2017. If things happen, we have shown earlier that we are rather flexible in adjusting capacity and cost levels. I'm not so worried about that.
Thanks.
Thank you. As a reminder, if you wish to ask a question, please press star followed by one on your phone and wait for your name to be announced. The next question comes from the line of Fredrick Sevenovich. Sorry. The line is open.
Thank you very much. On Finland, could you maybe just comment a bit more on the competitor situation there? Is there a status quo with your major competitor there and their production plans?
Not really.
If so, no.
Not really. The number two in Finland actually more or less went bankrupt during fall. They were acquired 80% by one of the bigger players in Europe, IFN from Austria. We haven't seen the full activity from that competitor yet, but they have been struggling. We have the number three in the market has also been struggling. Number four has also been struggling, that means when they struggle in this industry, unfortunately, it very often, especially in Finland, leads to that you try to increase order intake very fast to fill up your factories, putting some pressure on the prices. Far, we have gained market share, we have restored some gross margin, we have actually, to some extent, also increased prices in the Finnish market.
We are not hit or hurt yet, but we can see that the struggling delivers some price pressure at certain projects. Absolutely.
To expect that you would have some kind of accelerated growth for an extended time, that's not something we should assume in that case.
We expect to grow in Finland in 2018, of course, and we feel really strong in the Finnish market right now with the organization we have and what we see from major competitors, actually.
All right. On Norway, you stated that you increased prices quite substantially. You had a weaker performance on the top line, but what is the profitability like for Norway now if you isolate that country? Is it on plus now?
It's still in red to some extent because we took some cost also. We have had some restructuring costs in the Norwegian organization there, and we're absolutely not satisfied with the Norwegian development, but it was necessary to increase prices and to restore and improve margins there. Whether that will hurt our sales or not, that is something we have to do. Short term, that hurt our order intake and our sales a little bit in Norway. I think we are on the right track, but Norway is still a question mark where we, in the combined Norway-Sweden business area, have some further initiatives to take to be on track completely.
Okay. Could you maybe let us know what the respective growth levels are in Sweden and Norway on an organic level instead of just grouping them up together?
Yeah. Sweden was growing in the fourth quarter by 3%, and Norway was negative by around 2%. Organically. That I think is a combination of the increased prices and also that the Norwegian market in the second half year has been rather negative, actually. I think the Norwegian market fell 8% volume-wise in quarter three, another 1% or 2% in quarter four, probably linked also to the housing challenges that they've had there. Sweden has continued to be positive, and we see good growth in Sweden actually, and it continued also in Q4.
Okay. Thank you. One final one from me. If e-commerce is growing quite fast still, makes us question a bit what kind of shape the other business in EBE is like. If you can maybe give us some comment there, if we would exclude e-commerce to know what kind of trending we see there at the moment.
Yeah. It's a mixed picture. I think the real problem child we have in EBE is the U.K., that should not be very much linked to Brexit or anything like that. We ran into some big challenges in our so-called old U.K. business, and that is dragging down the result quite substantially. We have taken out a substantial amount of people and restructured the whole U.K. business. Of course, when you do that, you also lose top line because people are more concerned about what is happening internally in the organization, et cetera. Ireland is doing fantastically. E-commerce is doing great. Poland is now in black figures and partly the U.K. is negative for us. Order intake is very strong and grew by 10% in the fourth quarter. We are looking ahead towards a better 2018 and 2017 in EBE also.
Okay, thank you. Just one last one. You say the demands for building cheaper is increasing, yet I think on the CMD you mentioned that you have some possibility to raise prices, I'm guessing then in the consumer channel. Given your comments on the Finnish market now, the industrial side in Sweden, what kind of effect should we expect here? On net effect, so to speak.
I think for some reason to substantially raise prices in the new build sector, in the industrial sector, is not that easy. I think we will absolutely compensate for the raw material price increases. We are right now in negotiations with some of the big builders, of course, we'll see what happens there. The consumer side is completely different when you invest and build for yourself and for your own house, you look up on pricing and equipment in a completely different way. It will be tougher in the industry side, but I'm absolutely confident that we will at least compensate for the raw material price increases. We have also seen underlying profitability increases and margin increases in both Finland and Sweden for new build sector in the last couple of years. It actually looks rather promising there.
With a better mix, I think the underlying margin will also come up in the next couple of quarters.
All right. Many thanks.
Thank you. Once more, if you wish to ask a question, please press star and one on your phone and wait for your name to be announced. We have a question from the line of Marcella Klang. Your line is open.
Hi. A couple of questions from me. You mentioned organic growth in Sweden of around 3% in the fourth quarter. Is it mainly coming from the consumer channel or renovation? What is happening with the industrial channel?
The growth was more from industry in the fourth quarter. We were talking about the order books. Consumer looks more promising going into 2018 in the Swedish market. There seems to be a little bit of a mix shift for us, and we have been working also on that in the last couple of quarters. We should see that happen.
If I understand you correctly, you expect the consumer channel to grow in 2018?
That is our absolute ambition, and we would very much like to see that happen.
Where is the segment mix in Sweden for you right now? Where would you like it to go? On the group level, you have some 70% share of consumers. What is the situation in Sweden?
Swedish consumer sales is 55% to 56%. We were a couple of years ago when we had a better situation, we were plus 60%, we would like to come back on that level. I think that will happen no matter what we do because as I stated to some earlier question here, I think the new build sector will not keep this level that we have seen in the last couple of years, and that will help us to also restore the mix. We will actively work to come back to at least 60 plus in the next phase. That will help us a lot. We have actually seen already in Q4 a gross margin improvement also in the Swedish business, and that looks promising.
Thank you. Another question on your M&A efforts. Have you increased your efforts compared to 2017 when you managed to close only two acquisitions?
Only two. Thank you for that. Well, we acquired 4 companies in 2016, I guess, a couple of companies in 2015, and 2 in 2017. I think, yes. I think I would say to some extent we have increased activity level, and we are concentrating a lot on that now, especially when the supply chain disturbances are more or less over. We can also concentrate from the top level more on the acquisition. We are working with the pipeline we have, and we spend a lot of time on this. It's time-consuming, and the processes are rather, as I've stated many times, uncertain. I really hope that we will pull a couple of acquisitions off during the year or in the beginning of next year.
Thank you. The follow-up question on the supply chain disturbances. Have you changed anything? Have you got any backup suppliers, or is it mostly the low season helping you now?
No, I would say that obviously, it's rather hard to change completely processes when you're in the middle of challenges where you have to think about your customers and consumers. That is why it costs so much money to handle. Of course, as long as especially the quarter four has commenced, we have also been able to work through capacity planning, forecasting, much more transparent processes with our core suppliers. We have also exchanged or increased the amount of suppliers in some areas. We have, to be honest, also exchanged a couple of people in some of the key positions. We have done many things to stabilize and improve the processes. Absolutely, we will see effects from that in 2018, for sure.
The final question from me regarding the cost-cutting program that you have launched. You mentioned writing down assets, closing down the factory in Sweden, and targeting efficiency improvements in the U.K. and in Austria. Anything else where you are targeting your cost savings?
It's also connected to Denmark, we had some, and also in Finland. In Denmark, we had some products that were not profitable that we have been closing down.
Thank you. That's all from me.
Thank you. We have another question from the line of Predrag Savinovic. Your line is open.
Thank you. A follow-up from me. On some question that another analyst had. What kind of margin impact could we see in the case the new build doesn't keep up? Given utilization rates for factories going down in Sweden, et cetera, even in spite of mix improving, could we still see negative impacts? While listening to you, it feels like you would rather expect the opposite.
I expect the opposite. I expect margins to strengthen in Sweden for efficiency reasons, of course, for extra cost going away, but also that we get a more favorable mix and that we also work even better with the different customer channels and the pricing we have for them. There are many activities and initiatives being driven in the Swedish market that should support better margins going forward.
Okay. Thank you.
Thank you. We currently have no other questions.
Okay. Thank you everybody for listening in, and have a good day. Thank you. Bye-bye.
Thank you. This does conclude our conference for today. Thank you for participating. You may now all disconnect.