Mytilineos - Profiting from energy transition

Mytilineos is well placed to benefit from several energy transition-related themes. Mytilineos’s proactive management team has shown foresight in its investment decisions on decarbonisation over the last few years. It has built a renewable portfolio of c 8.6GW, including 2.4GW in Greece and 6.2GW of international projects that are mostly being developed for sale; it is decarbonising its integrated aluminium production facility, such that it should benefit from ‘low carbon’ aluminium branding from 2025; and it is increasing its activities in sustainable infrastructure projects. We estimate the share of earnings (EBITDA) derived from energy transition activities will increase from 26% in 2021 to 57% in 2025 (and 60% from 2026), which will help drive a four-year group EPS CAGR of 18%, with Mytilineos continuing to achieve superior returns (c 14% ROCE). It is well funded to support its investment in the energy transition, with financial flexibility of c €1.5bn augmented by strong operating cash flow in all business areas.