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.
Mytilineos’s 9M results were broadly in line with our expectations, with revenues +43% y-o-y to €1,548m and adjusted EBITDA +14%, with earnings growth mainly driven by the power & gas business. 9M EBITDA margins reduced (to 16% from 20% a year earlier) reflecting the growth in lower-margin solar plant construction projects. Alumina/aluminium price reductions have led Mytilineos to launch a cost cutting/efficiency programme with the aim of maintaining top quartile positions on the global cost curve for both commodities.
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. In particular, the highly efficient gas-fired plants and access to cheap natural gas allow Power & Gas 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 is well positioned to capture a growing number of international renewable projects.