Building the Utility of the Future

Megatrends are the strong, transformational forces that have the potential to reshape the global economy, business, and society. Today’s megatrends include decarbonization, digitalization and rapid social change, all pointing to the need for a fresh workplace culture. By understanding the megatrends impacting the global economy, leaders are able to adopt a strategy to redefine their organizations and create a competitive advantage.

As many organizations struggle to develop business models and strategies to adapt to the radically different economic, social and political environment of the future, MYTILINEOS, Greece’s leading private electricity and natural gas provider and aluminum producer, is responding effectively to current challenges.

A history of reinvention

The company’s origins date back to 1908, and it has regularly reinvented itself in order to thrive. A mainstay of the Greek economy, producing more than 3% of the country’s GDP, MYTILINEOS is also a decidedly international corporation. With operations in more than 30 countries across five continents, it accounts for more than 3% of Greece’s total exports. “The world changes when you dare to do new things,” says Chairman and CEO Evangelos Mytilineos. “If you don’t change, there is a risk of complacency.”

The company’s approach to an unpredictable world has seen it prosper. 2022 was a milestone year for MYTILINEOS, despite challenges such as the energy crisis and the resulting increase in costs, and the highest inflationary pressures recorded since the 1970s. Amid market volatility and uncertainty, the company has grown substantially over the past five years, taking revenues from €1.3 billion ($1.42 billion) in 2017 to more than €6.3 billion ($6.88 billion) in 2022, with EBITDA of €823 million ($899 million) in 2022 compared to €359 million ($392 million) in 2021.

MYTILINEOS builds on its diversified business profile and synergistic business model, and stellar financial performance has continued in 2023, with the most profitable Q1 in the history of the company. The company’s trajectory has been recognized by global markets, with Fitch recently upgrading MYTILINEOS to BB+ from BB, just one grade below credit rate. The global credit agency justified the upgrade as “driven by expectations of the company’s solid operating performance in 2023 and beyond, characterized by enlarged operations due to growing exposure to the more stable and resilient power and gas segment, and expected increased earnings from execution of build-own-transfer (BOT) projects as well as other projects in renewables.”

The latest restructuring plan

The current transformation of MYTILINEOS is underpinned by recent changes in the global energy and raw materials landscape, and will refocus the company’s activities on energy and metals production. Within the energy sector, the company is strategically positioned at the forefront of the energy transition as an integrated green utility, while in the metallurgy sector, it is well established in the competitive European market. Focused on sustainability, MYTILINEOS has set a target to reduce CO2 emissions by at least 30% by 2030, and to achieve a net-zero carbon footprint by 2050.

In addition to streamlining the company and unlocking new synergies, the revamp will also generate value by simplifying the equity story for shareholders. “We will be an energy and metals company. This is a story that investors like, as they fully understand its synergistic structure,” says Evangelos Mytilineos.

Focused on clean energy

Energy use in industry is the number-one contributor to global greenhouse gas (GHG) emissions. Decarbonization of heavy industry is expected to have a direct and immediate impact on reducing emissions.

More than half of MYTILINEOS’ revenue already comes from activities that qualify for the EU’s Taxonomy for Sustainable Finance. MYTILINEOS embodies the future of green utilities focused on renewable energy and storage; the company runs green energy projects in Chile, Spain, the UK, Kazakhstan and Australia. The capacity of its mature and operational global energy portfolio, which is dynamically expanding on five continents, is approximately 4 GW; including projects in less mature stages of development, with a capacity of 6.4 GW, the company’s portfolio exceeds 10 GW. Total capacity increased by 1.3 GW in Q1 2023. MYTILINEOS has energy storage projects in Greece and Italy at early stages of development, with a capacity of 1.3 GW.

MYTILINEOS also operates the most efficient thermal power plants in Greece, with total thermal capacity exceeding 2 GW, with the potential to serve around 20% of total Greek electricity demand following the start of commercial operation of its new and highly efficient 826 MW combined cycle gas turbine (CCGT). The company’s activities in the energy sector are complemented by its competitive supply of natural gas as well as LNG, providing security of supply in the wider Balkan region.

In 2022, MYTILINEOS successfully replaced a significant percentage of the Russian natural gas previously received by Bulgargaz, the largest Bulgarian gas distributor, while for the next few years, the company secured 40%–50% of the Revithoussa LNG Terminal’s auctioned slots.

The company will increase its focus on energy transition projects, including installing new and more robust distribution networks, producing hydrogen and implementing energy-efficiency measures and digital transition projects such as the development of smart cities.

Reducing the impact of metals production

Metals and renewable power are at the heart of the company’s energy transition. According to the International Energy Agency, heavy industry is responsible for nearly 40% of global CO2 emissions. The steel, cement, chemical and heavy transport industries are among the most polluting and most difficult sectors to decarbonize, owing to technical factors such as the need for very high heat in industrial processes. Economic factors including low profit margins, capital intensity, long asset life and trade exposure are also obstacles to decarbonizing these sectors. For example, switching to zero-carbon production methods will require the steel industry to make capital investments of between $215 billion and $278 billion, according to BloombergNEF.

MYTILINEOS, through its Aluminium of Greece plant, is the EU’s largest vertically integrated alumina and aluminum producer, as well as one of the biggest producers of bauxite.

According to the International Aluminium Institute, the global aluminum industry must cut GHG emissions by 77% by 2050 to meet climate change goals, largely by shifting to green electricity. The sector contributes roughly 2% of GHG emissions, equal to 1.1 billion metric tons of CO2 annually. However, demand for aluminum is expected to increase by 50% to 80% by 2050. Having a sustainable and reliable source of energy is vital to greenify aluminum production. During 2022, the metals sector in Europe suffered surging energy prices, resulting in the closure of half of its zinc and aluminum smelting capacity.

Analysis from BloombergNEF shows that aluminum made with clean energy can be cheaper than using fossil fuels at today’s costs. This transition will enhance the company’s energy and metals synergistic business model—providing the aluminum business with a secure and increasingly green energy supply and offsetting some of its costs, with income going to the energy unit.

Following its investment of €600 million ($651 million) to upgrade its facilities, MYTILINEOS’ recycled aluminum production capacity now represents roughly 26% of its total aluminum production, with the potential to further increase the percentage of recycled aluminum as the company moves towards greener aluminum production.

A platform for future cities

Recognizing that the utility of the future needs to offer end-to-end interconnected solutions for a world in which electrification continues to grow, MYTILINEOS is harnessing digital solutions to increase efficiencies and connectivity.

MYTILINEOS Smart Cities platform develops digital, scalable innovations that aim to improve living standards, optimize the use of resources and actively engage citizens. The platform includes applications and services for smart energy, water, waste and traffic management. Enhanced citizen services include EV charging sites and 5G internet access for weather information and direct communication with public services.

“Our vision is not simply to make our cities smarter, but also friendlier, greener and more sustainable. At the same time, we hope to improve the daily lives of citizens, at a crucial time for our societies,” says Evangelos Mytilineos.

Integration of energy, industry and people is driving the latest restructure. The plan is to create “the most integrated energy provider of the new era—the utility of the future,” says Mytilineos. “My vision is to build an even stronger future for even more dynamic performance. We are not just preparing for the future. We create the future.”