€1564.7m market cap

€10.95 last close

Mytilineos operates three main businesses: metallurgy (aluminium/alumina production), power & gas (power production/supply and gas trading) and large-scale infrastructure EPC. It operates in 29 countries across Europe, the Middle-East and Africa and has 2,700 employees.

Investment summary

We expect H119 results to show strong EBITDA growth for the group (up 23% y o y), with the power & gas business a key driver (EBITDA up almost three times y o y). We see several growth opportunities in the Greek power and gas market for Mytilineos and the election results may accelerate its growth plans. Furthermore, we believe the recently announced construction of a new power plant is likely to achieve high returns and drive further growth. Despite the recent re-rating, the stock remains attractively priced, offering 12–14% pa free cash flow yield in FY19–22e.

Y/E Dec
Revenue (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 1527.0 299.0 175.0 102.0 10.7 7.3
2018A 1527.0 290.0 167.0 101.0 10.8 9.7
2019E 2237.0 360.0 264.0 143.0 7.7 6.4
2020E 2373.0 346.0 250.0 138.0 7.9 6.6
Industry outlook

Although Mytilineos operates in highly competitive international markets, it has leveraged the synergies between the three divisions to build a portfolio of assets that have in common a low-cost, competitive positioning. Cost leadership is the key feature the three businesses have in common. In particular, the highly efficient gas-fired plants and the access to cheap natural gas allow the Power & Gas business to achieve high load factors and higher-than-average margins. Production costs for both alumina/aluminium allow Metallurgy to be profitable and strongly cash flow generative. The EPC business has a track record of stable and relatively high margins.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (€m) 306
Forecast gearing ratio (%) 31
Price performance
Actual 8.4 15.3 26.2
Relative* 3.6 0.6 7.2
52-week high/low €11.3/€6.7
*% relative to local index
Key management
Yiannis Kalafatas CFO
Evangelos Mytilineos CEO and Chairman