Dear associates,
Dear friends,
I would like to thank all of you who are here today and, of course, a warm ‘thank you’ is extended to those of you who participate remotely.
This day is a milestone for MYTILINEOS.
(The Creation)
Our company, a Greek multinational which extends across all five continents, with about 5.000 people, is the transformation of a business created by my grandfather, Evangelos Mytilineos, in 1908, in Piraeus, the first craft activity of the family in the metallurgy field.
Since then, we have faced many adventures; we finally ended up to the center of Athens where my father set up a metals trading company.
And back in the 1980s, we created Geniki Sidirometalliki and subsequently, Geniki Sidiremporiki, turning the representation activity into a commercial one.
(Mytilineos Group)
In 1990, the Company was founded, as you all know it today, and we concentrated in the parent company the activities of subsidiaries; in 1995 we were listed on Athens Stock Exchange.
During this decade, the company strengthened its position in the international metals markets through strategic co-operation agreements with leading copper, zinc, lead and aluminum metallurgy complexes in the Balkans.
(METKA)
And in 1998, we proceeded to the acquisition of METKA’s majority shareholding, Greece's largest metallurgy construction complex.
I will not dwell on each of our milestones.
It would take hours to refer to everything we have done, such as the acquisition of Sometra in Romania in the 90s, where we are currently developing a model innovation program for circular economy.
Or how, since 2000, we joined the electricity generation and trading industry, with an extended investment program in the wake of the market deregulation being in progress at the time.
10 years later, in 2010, and after acquiring ENDESSA, we created Protergia, taking an even more dynamic step in the energy industry.
(Aluminium):
However, it is worth mentioning the acquisition of Aluminium of Greece in 2005.
They were consistently trying to convince me that the acquisition of Aluminium of Greece was not a good idea.
They estimated that the factory at the time didn’t have a future. Now is one of the few fully operational Smelters left in Europe in 2022, amidst the energy crisis that has swept industry on our continent and one of the industrial companies in Greece that grows in a sound way.
(Energy):
Aluminum has helped us make a more dynamic entry into energy production too. Therefore, in 2008 the combined heat & power unit (CHP) was put in trial operation.
Since then, we have created the country's largest energy complex, as our thermal plants already exceed 2GW in operation by adding the new plant of 826 MW
In addition, we have also raised a considerable dynamic in Renewable Energy Sources.
When we established METKA EGN in 2015, we foresaw that the global market was heading towards PV and energy storage projects.
At present, having fully absorbed the company back then, we have established ourselves as the leading global manufacturer and contractor of solar energy and energy storage projects, offering solutions across the entire range of development of these projects, from stand-alone projects to complex hybrid systems.
In addition, the total capacity of our international energy portfolio stands in the order of 6GW, of which 123 MW are operational, 665 MW under construction, 1.5 GW ready for construction and about 3,7 GW at various stages of development.
Of course, in energy, we are not limited to these.
We are building power plants all over the world, such as the ones in England, Ireland, and Poland, whereas in the past we tested ourselves in challenging markets.
It is the strongest confirmation of MYTILINEOS commitment to contributing to energy systems that support entire countries and societies, with the help of healthy Greek entrepreneurship.
And natural gas as a commercial activity is also important to us.
We joined this market in 2010.
MYTILINEOS has paved the way for the market deregulation in Greece, as it was the first private company to have entered the natural gas supply and trading market in the country, ensuring for its customers secure and competitive supply, supporting the Greek market and also our neighboring Balkan countries during this difficult period.
In retail, we are the largest private electricity and gas supply company, offering modern and reliable services which, together with the completion of W+V acquisition process, we reach a single market up to 10%, with a customer base of 550.000 and nearly 100 stores.
And we are now embarking on Projects such as the one of smart cities.
It could be therefore ascertained that having leveraged the company's vertically integrated operation in energy, MYTILINEOS proceeded to the setting up of the most integrated energy provider of the new era ("Utility of the Future").
(Net Zero)
I will dwell on one more milestone.
In 2021, MYTILINEOS became the first industry in Greece and one of the few in the world, to have committed to clear targets for reducing CO2 emissions, implementing initiatives across all areas of our business activity and extending to new activities significantly contributing to our green footprint.
In this respect, in 2019, the acquisitions of Zeologic providing innovative solutions and of the EPALME, being active in green industrial production are turning us into pioneers in each of these sectors.
So, we have achieved 55% of our turnover to come from eligible activities of the of the European Taxonomy for sustainable investments.
(Big One)
I make another small reference to the past, before I switch definitely to the future.
I am talking about the big corporate transformation of 2017, when we moved on to the absorption of the subsidiaries METKA, Protergia & Aluminium of Greece from the parent company.
It was the first step towards creating a large industrial and energy-related multinational company in Greece.
This decision has allowed us to move towards a more efficient and flexible scheme, that, on the one hand, was completed with good corporate governance procedures and on the other hand, enabled significant synergies, that skyrocketed the turnover.
(The result - Doubling of Figures)
So, we have now reached the present day having multiplied our financial figures over the last years.
Most of you know the figures, but I must insist because the company's turnover in the first nine months of 2022 stood at €4.573, posting an increase of 169%.
At the same time, the EBITDA increased by 121% to €533 million, and the net profits of the nine-month period amounted to €312 million, increased by 171% compared to the nine-month period of 2021.
A few days ago, at the Road Show in London, we were congratulated for our performance, building many expectations for the closure of the year.
They were particularly impressed about the high growth rate in correlation to such a large investment plan, and at the same time a net debt to EBITDA at relatively remarkably low levels - I think by the end of the year we will be close to 1.2x.
This is due to the company's very strong cash flows, that are largely self-financing our growth.
I owe to acknowledge that we wouldn’t have these funding lines that meet all our needs.
I can overall declare being proud of the work done.
Especially when large entites such as Bank of America recommend MYTILINEOS as top European Picks.
At this point, it is worth mentioning that if someone had placed €100.000, in MYTILINEOS in 1995, when the company was listed on Athens Exchange and assuming that this person did not participate in any share capital increase, today the total value would be €6.9 mn with a yield of around 7.000%, including dividends distributed.
Yesterday, we saw Fairfax showing confidence in this performance and becoming the second largest shareholder in MYTILINEOS, recognizing its potential all those years.
Are we satisfied?
No.
But we do not intend to stay with our fingers crossed.
We are all working to this direction.
We wish to unlock our hidden value, increase it and return it to our shareholders.
(Why we are here today)
So we are coming to today.
We now stand ready for the next chapter in MYTILINEOS.
Because we want to achieve even more.
Because we like to evolve.
If something makes MYTILINEOS stand out, it is our ability to read through developments and get ready for them.
It is the outcome of thorough preparatory work, having assessed the environment, but above all the lessons we learn from our path.
We manage to adapt and create the mechanisms that effectively address the challenges, both in terms of improving our operating conditions and risk management, and in terms of the requirements set out in our activities, existing and future ones, allowing us to continuously grow, both in Greece and abroad, where we turn out attention.
This internationalization of MYTILINEOS, alongside the complexity of the projects we undertake and the competitive environment in all the countries that we operate, requires a serious mechanism for managing the regulatory framework of each environment and of each contractual response.
The upcoming chapter transforms MYTILINEOS into an even more dynamic and flexible company, ready to face challenges of our times, including:
Having assessed our course and with a view to meeting all these challenges, we are announcing the new transformation of the company in order to:
We are thus creating the organization that will be effective in the emerging conditions, but also in those to emerge over the next many years.
This is what we define as a new era for MYTILINEOS.
(Transformation – the two new subsidiaries)
Much has been heard recently on our future in constructions and concessions/PPPs.
But it's time you found out what is actually the case.
We believe that the country seriously needs the implementation of investment projects across its entire infrastructure, including both the new one and also the regeneration/maintenance existing infrastructure.
Projects exceeding €20 billion in the near future are emerging which may be auctioned either as (a) public projects, funded through the Public Investment Program and/or the RRF, or (b) through a public-private partnership (PPPs) and long-term concessions. The prospect of planning and implementing projects through the Unsolicited Proposals is also very interesting.
In addition, there is a huge scope in environmental projects and other resources management projects aimed at Sustainable Development.
Acknowledging and leveraging all of the above we proceed to a double spin off in the general construction sector and the PPPs/Concessions sector, creating two new companies,
The aim of this transformation is (a) to give the necessary management focus to these activities, (b) to optimize their operational efficiency as separate corporate entities and (c) to enhance transparency in the illustration of financial figures.
Existing projects already undertaken and/or claimed will be contributed to the two companies, while at the same time we will endow them with significant funding, up to EUR 1 billion, of which EUR 300 million in deposited share capital and EUR 700 million in guarantees of all kinds. The two companies will be further supported by existing and new managers with the necessary expertise and experience.
The heads of the new companies METKA ATE and M Concessions will be:
I would like to point out here that ΜΥΤILINEOS is not a newcomer in constructions. It may be a newcomer in Greece, but not abroad, where it has been operating very successfully over the last 25 years in a highly competitive environments, in difficult areas and with highly demanding customers. We have tested ourselves and have learned how to deal with the quality of projects, their smooth execution, their completion on mutual economic benefit. We envisage to bring this culture to Greece as well.
Let us not forget that we have delivered a project 5 months ahead of schedule, despite any delays in the contracting authorities' procedures in financing the project.
(Vision and Strategy)
I now come to MYTILINEOS.
We have a new vision for the New Era of MYTILINEOS.
To be at the forefront of energy transition as a leading integrated green utility with a global presence and to be established as a benchmark in the field of competitive green metallurgy.
We aim at a higher growth rate both organically, but also through acquisitions and mergers, to further expand our international presence and to develop even more activities connected with the energy transition and digitalization.
(Transformation – the two new sectors)
MYTILINEOS is transformed into a Metallurgy and Energy company
These two activities are fully interconnected and complementary, and through their synergies they manage to unlock multiple value across the whole range of their activities.
This, however, requires streamlining and optimization of their structures and functions within the corporate scheme, to perform in the most ideal way.
Metallurgy Industry
Where do we stand at present?
Today, MYTILINEOS operates the only vertically integrated plant for the production of bauxite, alumina and aluminium plant with privately owned port facilities and the largest co-generation power plant, while at the same time with targeted takeovers (EPALME) and organic investments, the company has dynamically joined the area of recycled aluminum, lead and zinc (Pilot facilities in Sindos Thessaloniki).
What we want to do:
We will build the industry’s future on these strong foundations and:
Energy industry
But the big challenge is the energy sector transformation.
To this day, the company has been active across the energy spectrum, from the development, construction and operation of thermal and RES projects, retail and supply of electricity and natural gas, as well asnatural gas supply and trading, the planning and construction of electrical infrastructure projects, etc. All the above were executed through 3 separate business units, P&G, RSD and SES with many overlapping activities that were often confusing both to the parties we were transacting with and the broader investment community, not enabling the optimization of the business outcome, nor the correct illustration of real value. Example: PV in RSD -Wind parks in P&G
For this reason, we integrate the three previous business units under a single energy sector with the following five divisions:
In this way:
We also focus on:
Common components of Metallurgy and Energy Industries:
(a) the overall improvement, competitiveness and resilience of all our activities through:
(b) the creation of a working environment for continuous progress, professional and personal development of employees and more widely among the Company’s associates, to enrich our human capital with skills and new talents.
(c) the increase of synergies across the whole range of our activities.
(New structure)
At the same time, we are modernizing our Corporate Governance at the executive level, in line with the updated international practices of governance for a better and more efficient management of everyday life and of the current challenges, always bearing in mind the preparation of the next day at all levels of the administrative pyramid. In particular:
We replace the current Executive Committee with a few-membered CEO’s Cabinet, aimed at optimal operation, with a view to rapid and effective decision-making. The Cabinet will be the key body to assist the CEO in corporate management and in formulating/making operational and strategic decisions. In addition to D. Stefanidis (head of Metallurgy sector) and I. Kalafatas (head of Energy Sector), senior Company executives will also participate, bringingthe necessary expertise and experience to their areas of responsibility.
The Cabinet of the CEO will be complemented by the Chief of Staff participation (recruitment in progress), who in turn will oversee the proper functioning of the company's bodies.
In addition to the Cabinet of the CEO, we are adopting a global best practice, something new for Greek standards. The Leadership Council, whose aim is to disseminate information, knowledge and experience at all levels of the hierarchy, hoping to be an incubator of executives wherefrom the company's leading team of the future will emerge.
Following the company's transformation, we will have an even more extrovert company, with a clearer value proposition based on:
The new MYTILINEOS structure will start being implemented at the beginning of the new year and will be concluded once the procedures for setting up the new companies will be complete under the current regulatory framework.
You will now perhaps ask me, so far so good, Mr. Chairman, but in practice how will the company operate, how will synergies be increased,
How these plans will be funded. Here you have the answer:
Dear friends, over the past 30 years, MYTILINEOS has effectively responded to the biggest challenges faced by the country and the global economy, growing in a sound way, offering real value to its shareholders & stakeholders.
I repeat that our aim is to further unlock our value and enhance it for our shareholders.
We are a company accounting for about 3% of the Greek economy's GDP and 2% of Greek exports, with 5.000 headcount, in more than 30 countries, more than 10.000 suppliers, and EUR 2,35 billion of social output.
We do not rest on our laurels but are laying the foundations for further growth.
We take advantage of our own experience, knowledge, and skills to endow the people who will drive our development.
My aim is that every one of our executives is ready, from each position, to constantly create value for all of us.
My vision is to jointly build an even stronger future for even more dynamic performance.
So today we are not just preparing for the future.
We create the future. We create the new era of our Company.
Thank you.
