1. Company Report
The proof is in the pudding: FY23 results beat, on stronger-than-expected Energy.
FY23 headline results announced at end-January bested slightly our (and the consensus,
we think) estimates, on the back of a stronger-than-expected performance in the flagship
Energy division. Importantly, the earnings release also demonstrated – once again – that
the group’s many moving parts, while arguably difficult to monitor, are in fact a blessing
in disguise.
Raising estimates, on strengthened conviction in the group’s ability to continue to
grow profitability. In the face of, first, the Covid-19 outbreak, then the energy crunch
and subsequently, in 2023, the decline in prices for energy and aluminium, MYTIL has
managed to enjoy a step change in profitability over the past few years, courtesy of the
group’s vertical and horizontal integration across the electricity market’s many facets.
And our conviction in MYTIL’s ability to continue to grow earnings has strengthened in
the aftermath of the FY23 earnings release. In fact, due to the group’s powerful push to
capture the seemingly ever-rising electrification trends, we have, on average, raised our
near-term earnings estimates by 6% after a 2% increase in our EBITDA projections, in
turn driven by a 1% uplift in our top-line forecasts.
TP also raised, to €46.0/sh (ie a 30% upside); Remains an OW. So, owing chiefly to
the even stronger push into RES, we have raised our earnings estimates, now modelling
slightly higher than €1.2bn of EBITDA and €0.7bn of net earnings pa on average in our
explicit 3-year forecast period to 2026.
Following, we start-off our SOTP, DCF-based valuation exercise by using a group-wide
WACC of 8.7% (from 8.8%), which we then adjust accordingly for each of the group’s
divisions and units, based on their perceived risk/growth profiles. And we now end-up
with a €46.0/sh TP, up from €41.0/sh, with the difference mainly attributed to a higher
valuation of RES, given a stronger and faster planned capacity rollout.
At our new TP, which implies a 30% upside from current levels, the stock would trade on
FY24e/FY25e EBITDA and EPS of 7.9x/7.4x and 10.0x/9.1x, respectively. The earnings
releases of 1Q24 and 2Q24 over the coming months will re-affirm, in our view, MYTIL’s
mettle even during a period of weak(-er) energy prices. Remains an Overweight.
Overweight
Target price (€) 46.00
Share price (€) 35.26
Potential total return (%) 30
RIC MYTr.AT
Bloomberg MYTIL GA
Market cap ($m) 5,511
Market cap (€m) 5,038
Enterprise value (€m) 7,123
Free float (%) 70
Mytilineos
Strong organic progress
Better-than-expected FY23 results and growing conviction in
future earnings growth, given a stronger and faster planned
RES capacity rollout…
…drives our estimates and our SOTP, DCF-derived TP
higher, to €46/sh (from €41/sh), implying a 30% upside
Remains an OW: impeccable track record of consistent high
growth, courtesy of vertically and horizontally integrated
business model
Diversified industrials
Equity – Greece
14 March 2024
George Grigoriou
Analyst
Pantelakis Securities SA
+30 210 6965 209
george.grigoriou@pantelakis.gr
Disclaimer &
Disclosures
This report must be read
with the disclosures and
the analyst certifications in
the Disclosure appendix,
and with the Disclaimer,
which forms part of it
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3. 3
Mytilineos
Diversified industrials
14 March 2024
The proof is in the pudding: FY23 results beat, on stronger-than-
expected Energy
FY23 headline results announced at the end of January bested slightly our (and the consensus, we think)
estimates, on the back of a stronger-than-expected performance by the group’s crown jewel, the Energy
division. Importantly, the earnings release also demonstrated – once again – that MYTIL’s many moving
parts, while arguably difficult to monitor, are in fact a blessing in disguise.
True to form, MYTIL’s EBITDA and net earnings jumped to more than €1bn and €0.6bn in FY23, up
from €0.8bn/0.47bn and €0.3bn/€0.15bn in FY22 and FY19, respectively. Energy spearheaded once again
group profitability, generating almost €0.8bn of EBITDA last year, up a massive 38% y-o-y, in no small
measure due to the shift in the top-line mix towards higher-margin power generation, from both thermal
power plants and renewable energy sources (RES).
MYTIL’s natural gas-fired powergen grew 13% y-o-y to just over 4.0TWh in 2023, as the new 826MW
combined cycle gas turbine (CCGT) unit came gradually on stream during the year, doubling MYTIL’s
total installed thermal capacity (all of which is based in Greece) to almost 1.7GW. On top, production of
electricity by RES climbed by 11% to 596GWh in Greece and by – take note – 3.6x to 516GWh abroad
on a y-o-y basis, as the group’s installed capacity grew by some 2.5x during the year to over 0.8GW.
Take note also that, despite the record capex levels of more than €1.0bn in FY23, higher by almost 50%
y-o-y, net debt remained in check, amounting to €1.9bn at end-December 2023, compared to €1.4bn at
end-3Q23 and €0.7bn at end-2022, equivalent to a still very passable 1.9x 12-month trailing EBITDA.
Let’s get this – electric – party started (€m)… …while still keeping debt levels in check
Source: Company data/Pantelakis Securities estimates Source: Company data/Pantelakis Securities estimates
FY23 results beat
Key P&L items y-o-y Actual y-o-y
(€m) FY:22 FY:23 ch. vs PSe FY:23e ch.
Energy 5,372 4,425 -18% -1% 4,461 -17%
Metals 817 942 15% 3% 916 12%
Infrastructure & Concessions 117 125 7% 3% 121 3%
Revenues – Total 6,306 5,492 -13% 0% 5,498 -13%
Energy 554 766 38% 5% 733 32%
Metals 270 248 -8% 5% 237 -12%
Infrastructure & Concessions 13 18 38% 24% 15 12%
EBITDA – Total 823 1,014 23% 3% 984 20%
EBITDA margin 13.1% 18.5% 5.4pp 0.6pp 17.9% 4.8pp
Net earnings 466 623 34% 1% 616 32%
Source: Company data/Pantelakis Securities estimates
0
250
500
750
1,000
1,250
1,500
FY:19
FY:22
FY:23
FY:24e
FY:25e
FY:26e
EBITDA Net earnings
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
€0.0b
€0.5b
€1.0b
€1.5b
€2.0b
€2.5b
FY:19
FY:22
FY:23
FY:24e
FY:25e
FY:26e
Net debt (LHS) Net debt/EBITDA (RHS)
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4. 4
Mytilineos
Diversified industrials
14 March 2024
Raising estimates, on strengthened conviction in the group’s ability
to continue to grow profitability
In the face of, first, the Covid-19 outbreak, then the energy crunch and afterward, in 2023, the decline in
prices for both energy and aluminium, MYTIL has managed to enjoy a step change in profitability over
the past few years, owing to the group’s vertical and horizontal integration across the electricity market’s
many facets.
And our conviction in MYTIL’s ability to continue to grow earnings has strengthened in the aftermath of
the FY23 earnings release. In fact, we have, on average, raised our near-term earnings estimates by 6%
after a 2% increase in our EBITDA projections, in turn driven by a 1% uplift in our top-line forecasts, as
summarised in the table above.
The key driver behind our earnings estimates upgrade is, unsurprisingly, the group’s powerful push to
capture the seemingly ever-rising electrification trends. First, in response to the ‘energy transition’, the
dominant theme du jour, MYTIL is rapidly expanding its renewables portfolio, both at home and, mainly
abroad. Sporting a total pipeline of almost 14GW, we – arguably conservatively – expect MYTIL to roll-
out slightly more than 7GW by 2030, up from less than 1GW at end-2023.
The key reason, however, we pencil-in our forecasts a lower number of installed GW vs MYTIL’s total
size of RES projects is that we believe that the group will continue with its so-called “asset rotation plan”,
in that a certain number of wind farms and solar parks it designs, constructs, and operates are eventually
sold to part fund the group’s RES expansion plans. Last year’s disposal, for example, of mature projects
in the Balkans and in Spain boosted the EBITDA of the “Renewables” unit by more than €120m, on our
estimates, a figure we expect to be sustained (if not higher) in the coming years.
Raising group estimates, again
Key P&L items – group level ___________ FY:24e ___________ ___________ FY:25e ___________
(€m) New Old ch. New Old ch.
Revenues – Total 6,139 6,051 1% 6,545 6,467 1%
EBITDA – Total 1,091 1,080 1% 1,178 1,153 2%
Net earnings 658 625 5% 722 682 6%
Source: Pantelakis Securities estimates
Strong expansion of portfolio of RES assets (GW)
Source: Company data/Pantelakis Securities estimates
13.8
0.8
1.4
1.0
1.7
2.2
7.0
6.8
0
3
5
8
10
13
15
Installed
capacity
Under
construction
RTB (0-6
months)
Mature
development
(6-12 months)
Mid stage of
development
(12-18 months)
Visible pipeline
of projects
Long-term
projects
Total pipeline of
RES projects
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5. 5
Mytilineos
Diversified industrials
14 March 2024
Note also that this 6GW of additional RES capacity we forecast to be deployed by the end of this decade
will predominantly take the form of solar parks, which should account for almost 90% of the total count
in 2030. And even though it will span from Canada down to Chile, and from Italy and Greece to as far as
Australia, we expect more than 60% will be installed in Europe. Subsequently, we forecast MYTIL will
produce some 12.5TWh of electricity from RES in 2030, up from just 1.1TWh in 2023.
Energy – Renewables: key assumptions and financials
Metric Unit FY:22 FY:23 FY:24e FY:25e FY:26e FY:27e FY:28e FY:29e FY:30e
PPA (€/MWh) 155 85 70 65 60 55 50 50 50
Load factor (%) 24 15 18 18 20 20 20 20 20
Capacity (GW) 0.3 0.8 1.3 2.2 3.3 4.6 5.8 6.4 7.0
Production (TWh) 0.7 1.1 2.1 3.5 5.9 8.2 10.4 11.4 12.4
Revenues (€m) 683 734 1,565 1,690 1,894 1,916 1,908 1,888 1,872
EBITDA (€m) 141 240 287 338 394 511 546 572 597
Source: Company data/ Pantelakis Securities estimates
And natural gas-fired power generation is also bound for a shot in the arm, as the new, 826MW CCGT
unit ramps-up operations, expected to be fully functional before year-end. As a result, MYTIL’s total
thermal power generation (ie excluding the 334MW cogeneration/combined heat and power plant, CHP,
at the fully owned subsidiary Aluminium of Greece, AoG) are seen almost doubling to almost 8TWh in
2026 from 4TWh in 2023.
Courtesy of its high efficiency and, in tandem, a forecast 60% load factor when fully up and running, we
estimate this new power plant to gradually ramp-up operations and contribute to the “Energy Generation”
unit’s EBITDA close to €80m pa from FY26 onwards, thus more than offsetting the very much expected
normalisation/weakening of spark spreads in Greece (to €30/MWh, we assume), after the heady days of
2023 and, in particular, 2022.
Energy – Thermal power generation: key assumptions and financials
Metric Unit FY:22 FY:23 FY:24e FY:25e FY:26e FY:27e FY:28e FY:29e FY:30e
DAM (€/MWh) 279 119 90 90 90 90 90 90 90
TTF (€/MWh) 125 41 35 35 35 35 35 35 35
EUAs (CO2) (€/MWh) 81 84 70 70 70 70 70 70 70
Power demand (% ch.) -3.3 -2.4 2.8 2.3 1.8 1.5 1.2 1.0 1.0
Load factor (%) 48 31 45 52 55 55 55 55 55
Capacity (GW) 0.9 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7
Production (TWh) 3.6 4.0 6.5 7.6 7.9 7.9 7.9 7.9 7.9
Revenues (€m) 1,346 620 695 792 820 822 822 822 822
EBITDA (€m) 169 147 186 202 189 190 190 190 190
Source: Company data/ Pantelakis Securities estimates
RES powergen’s forecast steep ascent (TWh) Gas-fired powergen should double by 2026 (TWh)
Source: Company data/Pantelakis Securities estimates Source: Admie/Pantelakis Securities estimates
0.0
2.5
5.0
7.5
10.0
12.5
2019
2020
2021
2022
2023
2024e
2025e
2026e
2028e
2030e
Wind Solar
0
2
4
6
8
10
2019
2020
2021
2022
2023
2024e
2025e
2026e
2028e
2030e
Total thermal powergen ex. CHP @ AoG
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6. 6
Mytilineos
Diversified industrials
14 March 2024
Take note that energy prices understandably came off the boil in 2023, albeit the pace of decline picked-
up pace in early-2024: Greece’s day-ahead market electricity price (DAM) sank by 21% m-o-m and 53%
y-o-y to €74/MWh in February, when natural gas prices (TTF) continued their descent, down 14% m-o-m
and 52% y-o-y to €26/MWh. Happily, though, prices for CO2 emission permits (EUAs) decreased in sync
in February, by 15% m-o-m and 39% y-o-y to €56/tonne. So, although Greek spark spreads (gross) have
tumbled to levels last seen back in May 2021, ie before the onset of the energy crisis, which was flamed
by Russia’s invasion of Ukraine, they remain at the healthy levels of about €30/MWh. Note also, MYTIL
enjoys a higher-than-market spark spread, as it sources natgas at prices below TTF levels, plus its power
plants (especially the newer, 826MW) are far more efficient that the average.
In addition, note also that total consumption of electricity Greece continues its ascent at the start of 2024,
jumping by 6.6% y-o-y to 4.5TWh in January, despite a relatively warm winter. Demand, take note, fell
2.4% and 3.3% in 2023 and 2022, respectively, due to both fairly mild weather conditions and the EU’s
decision in late-September 2022 to curb consumption by 10% on a voluntary basis and commitment to a
mandatory 5% cut during peak hours.
Tellingly, demand for electricity, after increasing by 4.5% in 1H22, dived by 10.2%/8.4% in 2H22/1H23,
however has sharply rebounded since mid-2023, in part on easier comparables but also because of the
broader economy’s strength (as GDP grew 2.0% in 2023, easily outpacing the EU average), climbing by
3.8% y-o-y in 2H23.
Greek electricity demand rebounds strongly since mid-2023 MYTIL’s supply market share jumps in early-2024 (%)
Source: Admie Source: EnEx
Energy prices sink in early-2024, including CO2 though… …while Greece’s spark spread remains healthy (€/MWh)
Source: EnEx/Bloomberg Source: EnEx/Bloomberg/Pantelakis Securities estimates
-15.0
-10.0
-5.0
+0.0
+5.0
+10.0
75
100
125
150
175
200
1Q19
3Q19
1Q20
3Q20
1Q21
3Q21
1Q22
3Q22
1Q23
3Q23
Jan-24
Demand/day (GWh, LHS) y-o-y ch. (%, RHS)
45
50
55
60
65
0
5
10
15
20
Dec-21 Dec-22 Dec-23 Feb-24
MYTIL GEK Elpedison
MOH PPC (RHS)
0
20
40
60
80
100
0
100
200
300
400
500
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
DAM (€/MWh) TTF (€/MWh) EUA (€/t, RHS)
0
20
40
60
80
100
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
5-yr rolling avg
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7. 7
Mytilineos
Diversified industrials
14 March 2024
Furthermore, MYTIL, Greece’s second largest electricity supplier, witnessed a marked increase in its
total market share (ie including the recent, bolt-on acquisitions of the local Watt + Volt and Volterra
suppliers, which collectively have added about 4pps of market share) on Greece’s mainland in early-
2024: following the expiration of the supply contract with incumbent PPC in late-2023, AoG has
switched its electricity needs to in-house sources and, hence, MYTIL’s market share has jumped
3.2pps/5.3pps y-t-d/y-o-y to 16.8% in February. Further out, we project MYTIL’s market share will
easily climb to 18%.
At the same time, MYTIL continues to benefit from its ability to source large quantities of natural gas
and at very competitive prices, not only as feedstock for its own plants, but also for its clients (both at
home and abroad). Sourcing options, take note, include the Greek regasification LNG (liquefied natural
gas) terminal on the Revithoussa island, the TurkStream pipeline, which carries Russian gas, as well as
the Trans-Adriatic pipeline (TAP), through which Greece imports Azeri natgas. Recall that Azerbaijan
has agreed to more than double gas exports to the EU by 2027 to up to 20bcm pa. TAP, the final leg of
the Southern Corridor gas pipeline network, last year brought more than 11bcm of Azeri gas into Europe,
vs 8bcm in 2021.
But the higher volumes cannot counterbalance the weaker energy prices, in our view. As such, on our
estimates, the combined Energy Supply unit (ie “Energy Customer Solutions” plus “Integrated Supply
& Trading”) will post revenues/EBITDA of about €2.6bn/240m pa on average in the FY24-26e period,
down from €2.8bn/€282m in FY23.
Last but certainly not least in the flagship Energy division, the various EPC (engineering, procurement,
and construction) contracts are also instrumental to the group’s future earnings growth: On our numbers,
the “Power projects” unit adds some €0.7bn and €100m pa to group revenues and EBITDA, respectively,
in the FY24-26e period.
Energy – Supply & Trading: key financials
(€m) FY:22 FY:23 FY:24e FY:25e FY:26e FY:27e FY:28e FY:29e FY:30e
Revenues 3,806 2,762 2,513 2,670 2,721 2,767 2,811 2,853 2,896
EBITDA 167 282 244 244 235 239 243 246 250
EBITDA margin 4.4% 10.2% 9.7% 9.1% 8.6% 8.6% 8.6% 8.6% 8.6%
Source: Company data/ Pantelakis Securities estimates
Grid-related projects amount for almost 50% of the €1.8bn
total backlog of “Power projects”…
…of which Greece and the UK collectively account for
almost 60%
Source: Company data Source: Company data
Grid-related
46%
Other
54%
Greece
12%
UK
45%
Other
43%
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8. 8
Mytilineos
Diversified industrials
14 March 2024
At end-2023, take note, MYTIL’s backlog of power projects for third-party clients amounted to €1.5bn, a
figure that rises to €1.8bn including deals that are at an advanced stage of contracting. Rapidly growing,
grid/network-related projects make up for nearly half of the total backlog, of which Greece and the UK
collectively account for almost 60%, as shown in the charts on the previous page.
Note here that MYTIL clinched two major deals in the UK during 2023, an EPC contract for an 299MW
open cycle gas turbine (OCGT) power station with Dutch Vitol, as well as a c€1.2bn high-capacity east
coast subsea transmission link in partnership with GE of the US.
Metals remains a long-term staple and infrastructure/concessions
poised for strong growth
As for MYTIL’s remaining two divisions, first, we forecast Metals to eke out slightly more than €270m
pa in EBITDA (on average) in the 2024-26e period, practically flat over the past two years’ levels but
well above the c€150m generated between 2017 and 2021. At heart, we expect the relative weakness in
aluminium and alumina prices, which declined by 16%/5% in 2023 due to macro woes globally and in
China in particular, to be more than offset by a lower total energy bill and the positive industry tailwinds
going forward (on the back of its high exposure to the energy transition, eg usage in EVs and in RES).
Yes, now that the supply contract with PPC has expired, MYTIL is forced to cover a large part of AoG’s
annual electricity needs of 2.9TWh at market prices, which are seemingly higher than what PPC charged.
At the same time, however, a significant portion of the aluminium smelter’s electricity requirements are
sourced from MYTIL’s own RES. In addition, with AoG being the largest "battery" in Southeast Europe,
MYTIL can opportunistically feed the smelter with spot power prices that reach single digit (if not zero)
or low double digit €/MWh at certain days/times of the year. On top, the decline in natgas prices clearly
lowers the energy cost bill for AoG.
In addition, the recent acquisition of French Imerys’ two red bauxite mining operations in Greece, which
happily neighbour MYTIL’s owns bauxite mines, on top of strengthening security of supplies should also
lower the division’s total opex by some €10m pa, on our estimates.
Finally, MYTIL’s third division, Infrastructure & Concessions, though dwarfed by its Energy and Metals
siblings, is poised for exceptionally strong EBITDA growth in the future, thanks to Greece’s expected
infrastructure boom, due, in turn, mainly to the EU’s €750bn Recovery and Resilience Facility (RRF).
Aluminium and alumina price decks ($/t) “Metals” EBITDA seen effectively flat at around €270m
Source: Bloomberg/Pantelakis Securities estimates Source: Company data/Pantelakis Securities estimates
200
250
300
350
400
450
500
1,500
1,750
2,000
2,250
2,500
2,750
3,000
2017
2018
2019
2020
2021
2022
2023
2024e
2025e
2026e
Aluminium (LHS) Alumina (RHS)
0
50
100
150
200
250
300
FY:17
FY:18
FY:19
FY:20
FY:21
FY:22
FY:23
FY:24e
FY:25e
FY:26e
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9. 9
Mytilineos
Diversified industrials
14 March 2024
Greece is the top beneficiary (vs its peers and as a % of GDP) from this wall of money, as it stands to
receive €36bn or c16% of 2023 GDP. Adding the leverage from the private sector in the form of both
equity and bank lending, the country aims to mobilise more than €60bn in total, which represent close
to 28% of its GDP.
TP also raised, to €46.0/sh (ie a 30% upside); Remains an OW
So, owing chiefly to the stronger push into RES, we have raised our earnings estimates, now modelling
slightly higher than €1.2bn of EBITDA and €0.7bn of net earnings pa on average in our explicit 3-year
forecast period to 2026, as shown below. And we also expect FCF to turn positive from FY24e onwards,
first because of a lower capex bill going forward vs the record highs of FY23, but also thanks to a marked
improvement in future WC needs versus FY23, which we think was hampered by an extraordinary (ie
one-off) build-up in WC requirements from power and infrastructure/concession projects.
Bringing it all together: €1.2bn of EBITDA and €0.7bn of net earnings pa in the 2024-26e period
Key P&L items y-o-y y-o-y y-o-y y-o-y
(€m) FY:22 FY:23 ch. FY:24e ch. FY:25e ch. FY:26e ch.
Renewables 683 734 7% 1,565 >100% 1,690 8% 1,894 12%
Energy Generation & Mngt 1,346 620 -54% 695 12% 792 14% 820 3%
Supply & Trading 3,806 2,762 -27% 2,513 -9% 2,670 6% 2,721 2%
Power Projects 308 646 >100% 689 7% 693 1% 705 2%
Energy 5,372 4,425 -18% 5,075 15% 5,432 7% 5,706 5%
Metals 817 942 15% 814 -14% 826 2% 839 2%
Infrastructure & Concessions 117 125 7% 250 >100% 288 15% 316 10%
Revenues – Total 6,306 5,492 -13% 6,139 12% 6,545 7% 6,861 5%
Renewables 141 240 70% 287 20% 338 18% 394 17%
Energy Generation & Mngt 169 147 -13% 186 27% 202 9% 189 -6%
Supply & Trading 167 282 69% 244 -13% 244 0% 235 -4%
Power Projects 77 97 26% 103 7% 104 1% 106 2%
Energy 554 766 38% 821 7% 888 8% 924 4%
Metals 270 248 -8% 265 7% 273 3% 281 3%
Infrastructure & Concessions 13 18 38% 25 39% 36 44% 63 76%
EBITDA – Total 823 1,014 23% 1,091 8% 1,178 8% 1,249 6%
EBITDA margin 13.1% 18.5% 5.4pp 17.8% -0.7pp 18.0% 0.2pp 18.2% 0.2pp
Net earnings 466 623 34% 658 6% 722 10% 776 7%
Source: Company data/Pantelakis Securities estimates
RRF to mobilise >€60bn of investment resources in total,
which represent more than 25% of Greece’s GDP
Greece’s total infrastructure backlog estimated at €44bn, of
which 37% relates to energy projects (€bn)
Source: Greek government/EU Source: PwC
0
5
10
15
20
RRF funds Mobilised country resources
Grants Loans
16.3
13.9
7.4
3.7
2.8
0
5
10
15
20
Energy Rail Roads Tourism Waste
mangement
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10. 10
Mytilineos
Diversified industrials
14 March 2024
Additionally, take note that we now start-off our sum-of-the-parts (SOTP), DCF-based valuation exercise
by employing a group-wide WACC of 8.7% (from 8.8%), which we then adjust accordingly for each of
the group’s divisions and units, based on their perceived risk/growth profiles. So, as shown in the table
above, after calibrating our earnings and valuation models, we now end-up with a target price (TP) per
share of €46.0, compared to €41.0/sh before, with the difference mainly attributed to a higher valuation
of RES, given a stronger and faster planned capacity rollout.
At our new TP, which implies a 30% upside from current levels, the stock would trade a very reasonable
7.9x/7.4x EBITDA and 10.0x/9.1x EPS on our FY24e/FY25e numbers. True, the share price has enjoyed
a strong run over the past two years or so, however we think the rally has further to go. A key catalyst, we
believe, will be the earnings releases for 1Q24 and 2Q24 over the coming months, which should re-affirm
MYTIL’s mettle even during a period of weak(-er) energy prices. Remains an Overweight.
Risks to our estimates & rating
These mainly take the form of declining prices for aluminium and alumina, a weakening of the $ against
the €, rising interest rates (as they increase the cost of debt and capital), cost inflation, an unfavourable
electricity market backdrop (including RES) in terms of pricing, regulation, demand and rivalry both in
Greece and in foreign markets MYTIL operates, power-generation stoppages due to mechanical failures
and/or unfavourable weather trends (which can heavily impact the performance of RES assets), along
with geopolitical risks associated to doing business in frontier markets (eg Ghana, Syria and Libya).
SOTP, DCF-based valuation: TP raised to €46.0/sh, 30% above current levels
(€m) % of _______ Implied EV/EBITDA _______
Sum-of-the-parts valuation (SOTP) Method/Valuation details EV total FY:24e FY:25e FY:26e avg.
Renewables DCF: WACC 7.20%, LTG 0.00% 3,740 43% 13.0x 11.1x 9.5x 11.2x
Energy Generation & Mngt DCF: WACC 8.20%, LTG 1.00% 1,384 16% 7.4x 6.9x 7.3x 7.2x
Supply & Trading DCF: WACC 9.45%, LTG 0.25% 1,094 13% 4.5x 4.5x 4.7x 4.5x
Power Projects DCF: WACC 8.70%, LTG 1.00% 552 6% 5.3x 5.3x 5.2x 5.3x
Energy DCF: WACC 7.90%, LTG 0.35% 6,770 78% 8.2x 7.6x 7.3x 7.7x
Metals DCF: WACC 8.70%, LTG 0.00% 1,645 19% 6.2x 6.0x 5.8x 6.0x
Infrastructure & Concessions DCF: WACC 9.70%, LTG 0.00% 214 2% 8.6x 6.0x 3.4x 6.0x
Total EV 8,630 100% 7.9x 7.4x 7.0x 7.4x
Plus: Associates 22
Less:
Provisions et.al 190
Net Debt/(Cash) 1,893
Implied Value of Equity 6,568
Implied Value per Share (€) 46.00
Up-/(Down)-side 30%
Source: Pantelakis Securities
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11. 11
Mytilineos
Diversified industrials
14 March 2024
Disclosure appendix
Analyst Certification
The following analyst(s), economist(s and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the opinion(s) on the
subject security(ies) or issuer(s) and/or any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part
of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research
report: George Grigoriou
Important disclosures
Stock ratings and basis for financial analysis
Pantelakis Securities SA believes that investors utilise various disciplines and investment horizons when making investment decisions, which
depend largely on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations. Given these
differences, Pantelakis Securities SA has the principal aims in its equity research to identify long-term investment opportunities based on
particular themes or ideas that may affect the future earnings or cash flows of companies on a 12 month time horizon.
This report addresses only the long-term investment opportunities of the companies referred to in the report.
Pantelakis Securities SA believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's
existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating systems to describe
their recommendations. Investors should carefully read the definitions of the ratings used in each research report. In addition, because research
reports contain more complete information concerning the analysts' views, investors should carefully read the entire research report and should
not infer its contents from the rating. In any case, ratings should not be used or relied on in isolation as investment advice.
Pantelakis Securities SA policy is to update research reports as it deems appropriate, based on developments and/or any material upcoming
events.
Rating definitions
Stock ratings
Pantelakis Securities SA assigns ratings to its stocks on the following basis:
For each stock we set a required rate of return calculated from the cost of equity for that stock’s domestic or, as appropriate, regional market.
The price target for a stock represents the value the analyst expects the stock to reach over our performance horizon. The performance horizon
is 12 months. For a stock to be classified as Overweight, the implied return must exceed the required return by at least 5 percentage points over
the next 12 months. For a stock to be classified as Underweight, the stock must be expected to underperform its required return by at least 5
percentage points over the next 12 months. Stocks between these bands are classified as Neutral. Our ratings are re-calibrated against these
bands at the time of any 'material change' (initiation of coverage, change of volatility status or change in price target). Notwithstanding this,
and although ratings are subject to ongoing management review, expected returns will be permitted to move outside the bands as a result of
normal share price fluctuations without necessarily triggering a rating change.
Rating distribution
As of 14 March 2024, the distribution of all ratings published is as follows:
Overweight (Buy) 83% (0% of these provided with Investment Banking Services)
Neutral (Hold) 9% (0% of these provided with Investment Banking Services)
Underweight (Sell) 4% (0% of these provided with Investment Banking Services)
Not rated 4% (0% of these provided with Investment Banking Services)
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12. 12
Mytilineos
Diversified industrials
14 March 2024
Ratings history
04/05/2023 Rating: Overweight Price: €25.80 Target Price: €28.50
10/07/2023 Rating: Overweight Price: €30.96 Target Price: €41.00
27/07/2023 Rating: Overweight Price: €36.68 Target Price: €41.00
26/10/2023 Rating: Overweight Price: €36.78 Target Price: €41.00
25/01/2024 Rating: Overweight Price: €39.46 Target Price: €41.00
Pantelakis Securities & Analyst disclosures
Disclosure checklist
Company Tickers Recent price Price Date Disclosure
Mytilineos MYTr.AT/MYTIL GA €35.26 13 March2024 3
1 Pantelakis Securities SA has managed or co-managed a public offering or placement of securities for this company within the past 12
months.
2 Pantelakis Securities SA expects to receive or intends to seek compensation for investment banking services from this company in the
next 3 months.
3 At the time of publication of this report, Pantelakis Securities SA is a Market Maker or liquidity provider in a financial instrument by
the issuer.
4 At the time of publication of this report, Pantelakis Securities SA beneficially owned 5% or more of a class of common equity securities
of this company.
5 This company was a client of Pantelakis Securities SA or had during the preceding 12-month period been a client of and/or paid
compensation to Pantelakis Securities SA in respect of investment banking services.
6 This company was a client of Pantelakis Securities SA or had during the preceding 12-month period been a client of and/or paid
compensation to Pantelakis Securities SA in respect of non-investment banking-securities related services.
7 This company was a client of Pantelakis Securities SA or had during the preceding 12-month period been a client of and/or paid
compensation to Pantelakis Securities SA in respect of non-securities services.
8 A covering analyst/s has received compensation from this company in the past 12 months.
9 A covering analyst/s or a member of his/her household has a financial interest in the securities of this company, as detailed below.
10 A covering analyst/s or a member of his/her household is an officer, director or supervisory board member of this company, as detailed
below.
11 Pantelakis Securities SA is engaged in an agreement with and/or received compensation from the subject company for the preparation
of this report.
12 As of 14 March 2024, Pantelakis Securities SA beneficially held a net long position of more than 0.5% of this company’s total issued
share capital, calculated according to the SSR methodology.
13 As of 14 March 2024, Pantelakis Securities SA beneficially held a net short position of more than 0.5% of this company’s total issued
share capital, calculated according to the SSR methodology.
Analysts, economists, and strategists are paid in part by reference to the profitability of Pantelakis Securities SA.
Additional disclosures
1 This report was produced, signed off by the author and was first disseminated on 14 March 2024 at 13:39:12 local exchange time.
2 All market data included in this report are dated as at close 13 March 2024, unless otherwise indicated in the report.
3 In order to find more about the valuation models used to produce this report, please contact the authoring analyst.
4 For a complete list of all the independent fundamental ratings disseminated by Pantelakis Securities SA during the preceding 12-month
period please contact the Research department (Email: greek-equities@pantelakis.gr, Tel.: +302106952-09/-10/-12).
Pantelakis Securities SA has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its
Research business. Information Barrier procedures are in place between the other divisions of the company to ensure that any confidential
and/or price sensitive information is handled in an appropriate manner.
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