Now we will go over to some questions and answers to our year-end report 2023 that we have received. I will give the questions and then Ulf will give the answers. The first question. You mentioned the Mekano and Carl A merger as one of the reasons behind the lower EBITA in business area services during the quarter. Can you quantify the impact of the merger between Mekano and Carl A on EBITA during the quarter?
Thanks, Niklas. When we measured the direct cost and cost for own personnel used in the relocalization of Carl A to Mekano at the end of the year, the effect is around SEK 2 million.
What is the focus in the service segment in terms of eliminating less profitable volumes contracts? When is it expected to be ready?
The last contracts have been phased out during 2023. We still sell to these customers, keep in mind, but to other prices and margins. The work now is to make sure that the contracts are replaced by other projects, which will be a continuous work also for this year in combination with cost adjustments.
How do you view the acquisition market? A fantastic M&A for you in terms of adding sales to the group. Can you add the same size or larger in 2024? If so, will you need to broaden the organization in terms of acquisition teams?
Regarding the organization, we did some important investments already at the start of 2023 when we started to build up the business units that we now have made official as of January 1st, 2024. That included business unit managers as well as controllers. For 2024, we have a good pipeline of prospects and cases that are in negotiation phase. If that means that we will be able to match last year, it is too early to say, but we're working as hard as we did last year with the M&A activities.
Another question related to acquisitions. The acquisitions are somewhat less profitable than the group in general. Will you be able to raise the profitability of the acquisitions to the group level? What does the profitability look like in companies in the other Nordic markets?
The acquisitions are a bit lower in terms of EBITA margin, but the difference is not that huge compared to our existing companies. We're still talking double-digit EBITA margins on average, and some have very healthy margins. The prospect for increasing our profitability is, however, good. I would say as one of the focus areas is to increase our working capital turnover, where we see a great potential in these companies. Comparing to other countries in the Nordic is not really relevant. It is more related to niche, the value proposition, and customer mix rather than country.
Can you describe how demand has progressed throughout the quarter? Stronger or weaker demand in the beginning or towards the end?
During the quarter as a whole, the demand was quite stable. The only real exception being that the Danish companies reported a slow second half of December. We didn't know the cause for this really. Demand has improved after Christmas again. What we have stated, however, and what we see is the gradual change in customer behavior during the year, with focus on price and credit terms and less so on availability. This is quite normal for the economic cycle that we have experienced this last year and the years before as well.
That concludes the presentation and Q&A relating to our Q4 report that we released today. If you have any additional questions or would like to get in touch with us, please don't hesitate to do so by emailing or calling us at the address at the page. Thank you very much for listening.