€1476.1m market cap

€10.33 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’s 9M results suggest that it is on track to reach our FY19 forecasts. While declining alumina/aluminium prices create earnings risks for FY20, the efficiency programme launched in Q319, the strength of the US dollar vs the euro and volume growth are potentially mitigating factors. We forecast an average FY20–22 free cash flow yield of 14% and our valuation of €14.5/share offers significant upside.

Y/E Dec
Revenue (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 1527.0 299.0 175.0 102.0 10.1 6.9
2018A 1527.0 290.0 167.0 101.0 10.2 9.1
2019E 1941.0 337.0 220.0 118.0 8.8 7.1
2020E 2088.0 330.0 220.0 122.0 8.5 6.9
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. 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.

Last updated on 20/01/2020
Share price graph
Balance sheet
Forecast net debt (€m) 419
Forecast gearing ratio (%) 42
Price performance
Actual 7.3 5.0 34.7
Relative* 1.8 (3.7) (11.6)
52-week high/low €11.3/€7.9
*% relative to local index
Key management
Yiannis Kalafatas CFO
Evangelos Mytilineos CEO and Chairman