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Currency in EUR
Last close As at 09/06/2023
EUR30.38
▲ 0.64 (2.15%)
Market capitalisation
EUR4,341m
Research: Industrials
Mytilineos reported record-high H122 results. Net profit after minorities increased by 116% to €166m, versus H121 (€77m) and was higher than the previous record performance in H221 (€103m). In particular, Power & Gas and Metallurgy delivered results significantly above our expectations. Sustainable Engineering Solutions gained momentum in Q2 and the firm order backlog increased by 65%. We also expect Renewables & Storage Development to be stronger in H2 due to solar parks under construction nearing conclusion (potentially c 450MW). Mytilineos is on a strong growth trajectory and has been investing to benefit from the energy transition. On the earnings call, the chairman suggested that Mytilineos could potentially substantially exceed its previous informal FY22 net income guidance of €260m (with H2 notably better than H1). As a result of this, our forecasts and valuation are under review until the full H122 report is published.
Mytilineos |
Strong H122 and with continued momentum |
H122 results |
Industrials |
1 August 2022 |
Share price performance
Business description
Analyst
Mytilineos is a research client of Edison Investment Research Limited |
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Mytilineos reported record-high H122 results. Net profit after minorities increased by 116% to €166m, versus H121 (€77m) and was higher than the previous record performance in H221 (€103m). In particular, Power & Gas and Metallurgy delivered results significantly above our expectations. Sustainable Engineering Solutions gained momentum in Q2 and the firm order backlog increased by 65%. We also expect Renewables & Storage Development to be stronger in H2 due to solar parks under construction nearing conclusion (potentially c 450MW). Mytilineos is on a strong growth trajectory and has been investing to benefit from the energy transition. On the earnings call, the chairman suggested that Mytilineos could potentially substantially exceed its previous informal FY22 net income guidance of €260m (with H2 notably better than H1). As a result of this, our forecasts and valuation are under review until the full H122 report is published.
Year end |
EBITDA |
Net income |
EPS* |
DPS** |
P/E |
Yield |
12/20 |
315 |
130 |
0.91 |
0.38 |
15.9 |
2.6 |
12/21 |
359 |
180 |
1.32 |
0.46 |
10.9 |
3.2 |
12/22e |
518 |
271 |
1.98 |
0.69 |
7.3 |
4.7 |
12/23e |
642 |
359 |
2.61 |
0.91 |
5.5 |
6.2 |
12/24e |
670 |
373 |
2.71 |
0.95 |
5.3 |
6.4 |
Note: *Number of shares is adjusted for the company’s ongoing buyback scheme. **Final distributed dividend per share
Following record-high results in FY21, Mytilineos’s continued strong growth momentum in H122 demonstrates the robustness of its business model despite the energy crisis in Europe, inflationary pressures, rising interest rates, the evolution of the pandemic and the recent geopolitical tensions. We are impressed by the continued strength of the Power & Gas division, which has more than doubled its EBITDA to €125m versus H121 (€48m), and Q222 was 6% above Q122 (€64m versus €61m). This is a testament to Mytilineos’s integrated model (including increasing exposure to retail), its ability to source gas at competitive prices and the high efficiency and flexibility of its power generation portfolio. The efficiency will be further enhanced as the new high-efficiency combined cycle gas turbine plant ramps up during H2. We expect to see solid growth in the Sustainable Engineering Solutions division in the coming quarters, as projects come to fruition, and are encouraged by the c 65% increase in its firm order book to €1.24bn at end of H122, up from €0.75bn at end of FY21. It has an additional mature pipeline of c €1.3bn and is well-positioned to benefit from the mobilisation of the European Recovery Fund’s resources to focus on ‘green’ development projects. In addition, we expect continued strong performance in the RSD division as Mytilineos, which has an own projects pipeline of more than 6GW, is well-placed to benefit from accelerated growth in renewables in the EU (and other markets globally).
Despite Mytilineos’s ongoing heavy investment programme in the energy transition, net debt to EBITDA is now under 2.0x. Mytilineos continues to have significant financial flexibility, with total liquidity of c €1.5bn, augmented by strong operating cash flow in all areas of the business. We will review our forecasts and valuation once Mytilineos publishes its H122 report.
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Research: Healthcare
Respiri has announced that, along with partner Access Telehealth, it has successfully concluded a system integration of the companies’ platforms with the Michigan Children’s Hospital, the company’s first US customer. This includes Respiri’s proprietary wheezo device, application and health portal (which manages respiratory health data) along with Access Telehealth’s remote patient monitoring (RPM) platform, Remotli. Patient intake is expected to start in the coming weeks and would mark the first patient use of wheezo in the US, feedback from which is likely to set the direction for future uptake. We highlight that the market for wheezo in the US is expected to be physician led and, unlike Respiri’s domestic Australian market, is reimbursed under the relevant RPM procedural terminology codes. The US market therefore presents a significant opportunity for Respiri.
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