Carnegie Investment Bank
eEducation Albert
Date Title Alternative
2024-05-14 Another challenging quarter Download | Show Close
2023-11-24 Steps towards profitability Show Close
Research | 24 Nov 2023 | eEducation Albert

Steps towards profitability

 

B2B still delivering

Net sales hit SEK 48.3m in the quarter, which was an increase of 46% y/y. Organic growth came in at -11% as lower marketing led to greater churn in B2C. This is reflected in revenues from the B2C business of SEK 24.1m, which represents growth of -3.6% y/y. Q3 2023 ARR was SEK 203.8m, representing growth of 34%, of which -21% was organic. This negative organic growth in ARR can largely be explained by the same factors as for net sales above. Marketing expenses in Q3 2023 were less than one-third of those in Q3 2022, explaining the negative organic growth. We believe the churn will stabilise in the coming quarters as “marginal” customers have now left. EBITA came in at SEK -6.8m, up from SEK -21.4m for Q3 2022. The company is thus moving gradually towards EBITA figures in the black at the pace we expected, and we forecast it reaching this in 2024.

Adjusting for continued lower marketing expenses

Based on the lower organic growth, primarily in B2C, we cut our net sales estimates by an average of 10% for 2024–2025. We believe the company will balance marketing investments against its aim of achieving decent profitability. With the report, the company also stated it is beginning to identify and realise cost synergies. Along with our reduction in marketing investment estimates, this cost base optimisation will reduce EBITDA by SEK 6.9m for 2024 and by SEK 12m for 2025. We thus believe the company will move towards positive EBITA earlier than we anticipated at the start of the year.

 

Share remains misunderstood

We have previously been clear in our belief that the market prices Albert in line with consumer subscription services, which are undervalued on the stock market. At present, Albert sees some 51% of its revenues from its B2B business. We believe these revenues should be valued differently as they see less churn and require lower marketing expenses – something not currently reflected in the valuation. After reducing estimates, we also lower our fair value to SEK 32–34 (45–47). Albert currently trades at a P/B of 0.8x. Its cash position as of Q3 2023 was SEK 94m, in contrast to its market cap of some SEK 190m.

 

Download (EN)
2023-10-04 Change in revenues not reflected in valuation Show Close
2023-08-24 Impressive B2B revenues Show Close
2023-05-30 Healthy cash flows and steps towards profitability Show Close
2023-04-21 Reduced revenue volatility not reflected in valuation Show Close
2023-03-07 Acquisitions push company closer to goal Show Close
2022-11-03 Big stride towards financial targets Show Close
2022-07-19 Strong growth during the quarter Show Close
2022-03-17 A European market leader Show Close

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