André Will-Laudien, goingpublic.de, August 27, 2024
CEO Ralf P. Pfeffer had imagined things differently.
Launched on the stock exchange with great ambitions in the fall of 2023 and immediately fell into an industry slump.
Coupled with a lack of investor interest, the announced expansion into Europe could not take place on schedule.
As a result, sales did not move towards EUR 110 million, but instead fell to EUR 99 million.
In our opinion, this is not a disaster, as the goals of the enterprising CEO are not out of the question and are still on the agenda after extensive experience of a bumpy start on the stock market.
The signs are good, because Avemio has learned a lot in 9 months and has already implemented important steps.
The year 2023 was anything but good
When Ralf P. Pfeffer published his business figures for 2023 at the end of June, he had to admit that the original forecast of EUR 115 to 120 million in sales and a single-digit EBIT in the EUR 4 to 6 million region could not be achieved after all.
As early as January, the management announced that sales were weakening and that EBITDA would only just reach the positive zone.
Things then went even worse until the end of the year.
Overall, sales only reached EUR 99.2 million after EUR 108.7 million and EBITDA barely made it to the zero line after EUR 4.4 million in 2022.
The main reason for the change in revenue development was that the companies MoovIT GmbH and MoovIT Software Products GmbH, which were acquired in June 2023, were not consolidated retroactively as at January 1, 2023, contrary to the original plan, but only as at September 1, 2023.
The resulting effect on revenue amounted to around EUR 3.6 million.
The negative change in EBITDA is also due to unexpectedly higher start-up and development costs for start-ups and incubators in the scope of consolidation.
Equity improved by EUR 13.4 million to around EUR 25.9 million as at December 31, 2023 due to the contribution of Teltec AG.
The equity ratio thus reached a value of over 50%.
Wild share price speculation in 2023
The Avemio AG share was admitted to the Düsseldorf primary market in April 2023.
The first few weeks were characterized by wild growth speculation from a stock market letter, which caused the share price to rise from EUR 40 to over EUR 80.
CEO Ralf P. Pfeffer certainly did not feel comfortable with this higher valuation, as shortly after the IPO the company wanted to prove how the European consolidation in media technology could take place.
By the end of the year, the special technical movement had collapsed and the Avemio share price landed at around EUR 5.
With 3.832 million shares issued, including the new shares, the valuation thus only amounted to just under EUR 20 million.
With sales of around EUR 100 million, the share was certainly undervalued at this point and the research houses also revised their estimates.
Only in retrospect did Avemio realize that it was facing a difficult media year.
There was then a need for one or two adjustments to the previous forecasts.
All in all, not a disaster!
Arriving in reality
The economic slowdown led to a significant weakening of demand, particularly in the second half of 2023.
This affected major projects, in particular the lack of willingness to invest in social media business models, which are mainly financed from marketing budgets.
CEO Pfeffer described this situation as “sewn-up pockets”.
The icing on the cake was a strike by the writers’ and actors’ unions in the USA due to price adjustments in the industry, which also had a significant impact on the European production landscape after some delay.
However, the agreement with the unions lasted until the end of the year and productions overseas are now gradually starting up again.
In Europe, this will have a positive impact with a certain time lag despite the sluggish economy.
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