€1357.5m market cap

€9.69 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

Mytilineos leverages its strong competitive positioning to generate robust cash flow (FCF yield of 14–16% in 2019–22e), supporting both dividends (c 4% FY18 yield with 13% CAGR) and large growth investments with potentially double-digit returns, which could boost current EBITDA by c 50% (in addition to our current forecasts). The stock trades at more than a 40% discount to other European diversified industrial companies on P/E and EV/EBITDA and at more than a 40% discount to a SOTP based on international peers’ multiples.

Y/E Dec
Revenue (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 1527.0 299.0 175.0 102.04 9.3 6.3
2018A 1527.0 290.0 174.0 100.92 9.4 8.4
2019E 2234.0 359.0 263.0 142.97 6.6 5.6
2020E 2356.0 344.0 248.0 136.64 7.0 5.7
Last updated on 17/04/2019
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 17/04/2019
Share price graph
Balance sheet
Forecast net debt (€m) 306
Forecast gearing ratio (%) 31
Price performance
Actual 7.5 16.4 (4.0)
Relative* (1.5) (4.7) 4.0
52-week high/low €10.2/€6.7
*% relative to local index
Key management
Yiannis Kalafatas CFO
Evangelos Mytilinoes CEO and Chairman