It does indeed generate the general ledger/journal. And at least in my case, expenses/revenues seemed to go to the right places immediately. However, this is a very simple and annually very similar accounting process, so I would have been surprised if things were completely off.
But now the discussion is starting to veer off-track from Aallon Group itself. Go and test for yourselves how the AI handles accounting and what it’s capable of 
Here are Atte’s comments on Aallon Group’s recent acquisitions.
Aallon Group announced on Tuesday that it is acquiring Lahti-based Taloushallinta Leiska Oy and the business operations of Oulu-based Taloushallinto Halli. The arrangements are small, targeted acquisitions in line with Aallon Group’s strategy, through which the company strengthens its local market position and seeks synergies. The purchase prices paid in cash were not disclosed, but we estimate them to have been at a moderate level, typical for Aallon Group. We added the transactions to our forecasts, which resulted in a 1% increase in our revenue forecasts and a 2% increase in our earnings forecasts for the coming years. Our view on the stock, updated last week, remains unchanged.
Interesting deals. Regarding Leiska, it would be interesting to know what kind of price range we’re looking at. I’ve heard that small companies (about 5-10 employees) struggle to operate; there aren’t enough employees to ensure substitute labor is always available. On the other hand, the entrepreneur cannot hire someone or focus on doing the meta-work themselves. Perhaps Aallon Group is buying these firms at a good price relative to revenue; I wonder if the price is even 1x revenue. A large firm has the advantages of scale, though; it can improve efficiency, and the entrepreneurs can focus on production instead of HR management or sales.
We added the acquisitions to our forecasts, as a result of which our revenue forecasts for the coming years rose by 1% and earnings forecasts by 2%. Our view on the stock, updated last week, remains unchanged.
I see, the acquisitions are raising revenue and earnings forecasts. Wasn’t the ‘back-end leakage’ (churn) in the forecast model supposed to largely eat up the growth created by the acquisitions? And the growth in the model remains near zero in the coming years, meaning no value is assigned to growth? The growth forecast for the coming years (including organic and inorganic growth) is still 1%, as you state below?
Do you mean that acquisitions should be modeled so that I only deduct the paid purchase price from cash assets and don’t add any revenue at all? 
The point earlier was precisely that I always try to preemptively shave a bit off those reported figures for the coming years to account for that “backboard leakage” (churn). Well, after the first year, that acquired revenue then develops “organically,” and the expectations set in the model for organic growth also apply to that revenue. Historically, my own organic growth assumptions have been too optimistic compared to the actual results. This has been partly influenced by the stagnation of the Finnish economy.
So, the growth forecast for the coming years only includes the organic assumption. Acquisitions are then baked into the model as they materialize.
Hi Atte, my previous message was poorly phrased. I should have been more careful when writing it, but that’s water under the bridge.
I wrote a question on February 18th regarding inorganic growth. You responded to it like this:
Regarding acquisitions, I will also state the following: “Additionally, we revised our long-term growth forecast to 1% (prev. 2-2.5%), which is backed by a few factors. Firstly, Aallon Group’s organic growth has been weaker than our expectations for some time. In our estimation, this is partly affected by customer churn related to acquisitions, regarding which our previous assumptions have been too optimistic.”
So, you begin the answer with the sentence ‘regarding acquisitions I state the following’ and in the next one, you state that you have revised the long-term growth forecast to 1%. When I wrote the previous message, I genuinely thought you meant growth that includes acquisitions. If you had written about organic growth and not referred to acquisitions at the beginning, I probably would have understood better. It may be that others understood, but I didn’t that time.
By the way, you never answered my actual question about inorganic growth. Would you have time to answer it if I put it at the end of this message again?
Why does this matter then? A long-term investor who invests in Aallon Group as a serial acquirer (sarjayhdistelijä) knows that most of Aallon’s expected growth comes from serial acquisition. If the company were to grow organically by, say, 1-2% in the long term, the remaining part of the 15-20% (the company’s own target) must come through serial acquisitions. Inderes forecasts the company up until 2029. The revenue and EBIT forecasts do not include inorganic growth. (And of course, inorganic growth also has a cost; companies don’t come for free).
Atte, how should a long-term investor best utilize those forecasts that go many years into the future when they go wrong year after year (they are too low)? When a serial acquirer is modeled as something other than a serial acquirer? At the very least, the right way hasn’t been to look directly at the Inderes forecast, say, three years ahead. The forecast is surely quite accurate if Aallon stops serial acquisitions permanently today. But since they won’t stop, the forecast misses the mark.
It is true that, for example, in Boreo and Relais, future acquisitions are not forecasted either. However, in their analysis, serial acquisition is at the center. The investor remains well aware of what the company’s growth is about. In Aallon’s “comprehensive report” (pitkä raportti), or even in the latest reports, I can’t even find the word “serial acquirer” (sarjayhdistelijä) using the search function. Of course, the same thing can be said in other ways and with different words. There is talk of an acquisition strategy in the comprehensive report. But as a whole, I think inorganic growth is clearly more on the margins in Aallon’s analyses compared to Boreo and Relais. Aallon’s performance with serial acquisitions has been good, if not excellent. In my opinion, the company’s performance deserves to be talked about more. Perhaps then the market might also eventually understand what Aallon is about? (I’ll leave the AI concerns aside in this message; they are a separate topic).
The Röko thread has featured quite a bit of interesting discussion regarding serial acquirers (sarjayhdistelijä). It fits well in the Aallon thread too. 
In my opinion, Aallon is not a pure-bred serial acquirer, nor does the company profile itself as one in its own communications. The company also does not report inorganic growth separately, and nowadays, the purchase prices and often the profitability of smaller deals remain undisclosed. This always makes it difficult for an outsider to interpret what was bought and at what price. And since acquisitions occur on an annually “regularly irregular” basis, I don’t know how these should or could be modeled in advance.
How should these future acquisitions then be taken into account in the valuation? In the latest analysis, I state once again: “We continue to believe that the company’s acquisition strategy creates value and that its consistent implementation will gradually increase the company’s fair value in the coming years.” So, if and when acquisitions continue and are reflected in the company’s bottom line, the value will gradually rise. It then depends on the quality of the company’s execution and partly on market sentiment as to how much of a head start should be taken in the stock’s valuation regarding this positive M&A option. Currently, very little of it is baked into the valuation.
And regarding that question about old analyses: if you look at the earnings forecasts from February 14, 2025, expectations for the coming years were higher than they are now, even though some acquisitions have taken place in the meantime. In other words, the decrease in earnings forecasts combined with lower acceptable valuation multiples explains the difference in target prices.
Aallon made a small acquisition. However, it doesn’t really affect the big picture at all. Revenue is only about €0.5M.
“primarily serving its customers electronically”
So some parts are still done on paper… or supporting documents are delivered in paper format. Well, modernization can improve margins.
The expression is “primarily their customers,” not “their customers primarily electronically.” So maybe they also serve relatives and friends?
Here are Atte’s comments regarding Aallon Group’s recent acquisition
A small acquisition even during the summer, as they acquire Ab Memeran, located in the Swedish-speaking area of Turku. The turnover here is approximately EUR 1 million.
Aallon Group ostaa toisen tilitoimiston | Arvopaperi.
According to Aallon Group’s CEO Tuija Keronen, the acquisition provides Aallon Group with a strong presence in the Turku archipelago region and supports the company’s goal to better serve its Swedish-speaking clientele.
Atte has released a new equity research report on Aallon Group.
We reiterate our Accumulate recommendation and target price of EUR 10.5 for Aallon Group. We have incorporated the company’s latest acquisition into our forecasts, which marks the sixth acquisition of the year. Like many other service companies on the Helsinki Stock Exchange, Aallon Group’s share price has remained depressed in recent months. AI fears and slow organic growth continue to weigh on the valuation, but at Aallon Group’s current valuation (2026e-2027e adj. P/E 9x-8x), expectations for future performance are very modest. Recently, there have been promisingly positive signs from the Finnish economy, which should reflect in the accounting industry with a lag. Overall, we see the risk-reward ratio as attractive at the moment.
Here are Ate’s preview comments as Aallon Group reports its H1 results next Monday
We expect the company’s revenue growth in the first half of the year to have been driven entirely by acquisitions, as we forecast organic growth to have remained slightly negative. At the comparable EBITDA level, we predict a slight decline in relative profitability, but with a proportionally smaller share of depreciation, we expect a slight improvement in the EBITA margin. In the report, our focus is particularly on management’s comments regarding the outlook for organic growth, the efficiency gains from the completed organizational restructuring, and the M&A pipeline for the remainder of the year.
Aallon Group H1 result in line with expectations, although revenue fell slightly short of expectations.
The robot did a pretty good job of picking up the essential points from the report. I would just correct that the non-recurring items (approx. EUR 0.2 million) were at the level we expected, so otherwise, the operational cost structure was a notch lighter than our expectations for the beginning of the year.
We will return with more detailed comments tomorrow in the report; I need to head to Pasila soon to listen to the earnings call and conduct an earnings interview!
Atte interviewed Aallon’s CEO Tuija Kero and CFO Henri Enola regarding the H1 results
Topics:
(00:12) New CFO
(01:17) Performance in the beginning of the year
(01:50) Six acquisitions made in 2026
(04:14) Negative organic growth
(06:04) Consolidation of the property management sector
(06:46) Profitability improved
(08:34) Aallon Port accounting software
(10:54) Artificial intelligence
(12:52) Outlook for the remainder of the year
It would be interesting to see a forecast that takes into account the revenue growth generated by acquisitions in line with the company’s strategy for the coming years as well. There is already about half a dozen years of history behind us, the strategy has been implemented consistently, and as far as I know, there have been no changes to it. I don’t recall seeing this growth included in the forecasts used for calculating the target price. Perhaps the “Robo” [analyst model] considers something for next year.
The readiness to pilot their own accounting module says a lot about how significantly software development costs have decreased over the last 20 years. In my opinion, there is no major risk involved in Aallon Group’s lean development strategy. In fact, I think now is the perfect moment to implement such proprietary software; the implementation is, of course, natively web-based, but development can also natively take into account the possibilities brought by AI. Adding those to existing heavy and rigid systems is difficult, but at this stage, it is an interesting opportunity.
I also think it is completely clear that proprietary software development is the only right way to keep software costs reasonable, and combined with that, sufficient independence from any single software vendor is sensible. I have been slightly surprised by some of the fearful comments regarding this. As an investor, I am personally very happy that they are investing in such an important matter, which could drive both the company’s earnings and the share price significantly higher with almost negligible risk given the current investments.
A comment on AI. AI offers possibilities, but I think its threat to this industry is greatly exaggerated. It’s a bit like, after the development of the internal combustion engine, thinking that everyone will soon be traveling into space in their own rockets. Let me explain.
If you understand the growing requirements of AI from the perspectives of data volume, complexity, error-proneness, the difficulty of verifying errors, and increasing liabilities, you quickly notice that we are on an exponential requirement curve that it is not realistic for AI to reach without the industry being able to essentially adapt to it.
Error-proneness is in the genes of all generative large language models (x.AI, Claude, ChatGPT, Perplexity), and it hasn’t been solved, nor has any credible solution model been proposed, at least publicly. There is hype, certainly.
A separate challenge is posed by the interpretability and even contradictions in Finnish legislation, collective agreements, Supreme Court (KKO) decisions, guidelines, and so on. Accounting firms have liability insurance for errors, but, for example, Anthropic is unlikely to bear financial responsibility if Claude makes significant mistakes in the future, say, towards the tax authorities. Here we arrive at a problem somewhat similar to the one where if a Tesla in self-driving mode gets into an accident, who is responsible—the company that coded the AI or the owner of the car? When will Tesla start bearing responsibility for this? Never?
In my view, AI assistants will not achieve the capability to provide the level of financial management services that client companies need, at least when dealing with companies that are even remotely profitable. For the reasons mentioned above. Various stock portfolio companies are not the core business of the accounting industry, but rather a bit more like low-margin charity work. The idea that AI assistants would replace the need for financial management services for accounting firms’ highly profitable clients and thus significantly reduce the profitability or necessity of the accounting industry is, therefore, not realistic in my opinion yet.
Furthermore, services from efficient AI models are, for the most part, paid or are shifting to a paid model. For example, ChatGPT’s best model (PRO) costs over €100/month for a private individual (ChatGPT pointed out that the list price in the US is $200), so I wouldn’t consider it free either. Nor is there any sign of these costs going down in price trends—on the contrary. Among other things, rising energy costs and fiscal needs are set to grow in the future, but improving profitability is also necessary when investments are astronomical. The payers will be the users of these models, most likely companies in particular.
Of course, there is all sorts of talk, claims, and “information” about AI that different “players” use to serve their own interests. Or should we think that it’s best to just sell all stocks (or even that it’s good to sell) because Musk promises that in the future we won’t need to work, as androids will do all the work for free, meaning we won’t need companies anymore—and thus there won’t be, or won’t be a need for, company shares when companies are run by those same androids?
It would be interesting to hear what the target price for Aallon Group’s stock would be if AI were not primarily seen as a threat and future forecasts were in line with that. Or at least, I felt that strict lines were drawn now when it was seen as a threat, like Andromeda in its time.
Perhaps one could think at least that positive expectations (new services, better software, efficiency) and negative expectations (less need for service) cancel each other out, since these are speculative matters anyway??
In my opinion, the €10.50 target price feels very low. It also seems that the stock price follows the target price quite slavishly, staying about 1–2 euros below it.
ps. ChatGPT did not, at least in any significant way, disagree with the points I’ve presented here and nicely stylized this text as well. Some things are matters of opinion.
Here is the company report on Aallon Group from Ate following H1
We reiterate our “accumulate” recommendation and €10.5 target price for Aallon Group. Although the company’s organic revenue growth in the beginning of the year was slightly weaker than we expected, profitability improved more strongly than our forecasts. This indicates that the company’s implemented organizational restructuring is starting to bear fruit, and further efficiencies are being sought through the launched lean development program. We believe the company will remain active on the M&A front, and the nascent recovery of the Finnish economy may also gradually begin to support development starting next year. With the stock’s depressed valuation (2026e-2027e EV/EBIT 8.5x-7.3x), expectations regarding future performance are very modest, which makes the risk-reward ratio attractive.
Subheadings:
Aallon Group’s balance sheet remains in good condition, and the renewed financing agreements allow for the continuation of their M&A strategy. The company has €8 million in credit limits available for new acquisitions. Net debt (excluding IFRS16) was only €4.2 million at the end of H1, which represents a net debt/EBITDA ratio of 0.6x calculated using the comparable EBITDA of the last 12 months.
