CITI’S TAKE
MTLN has announced a strategic review of its infrastructure and concession business with proposed consolidation of its construction, concession, PPP investment and facility management activities under the METKA Group as a standalone company. MTLN has further proposed to explore the possibility of independent listing of METKA on Euronext Athens, thus enabling the business to access growth capital independent of the group company. The company has said that it intends to retain a majority stake in the business. MTLN has guided for €150 million in medium-term EBITDA for the concession business, which we believe could be achieved by 2027. We see the proposed strategic review to be a net positive for the stock.
Infra businesses have seen rapid growth since 2024 — MTLN’s infra and concession business saw its revenue doubling in 2025 to €0.6 billion, from €0.25 billion in 2024. We see the revenue increasing to €0.8 billion in 2026. EBITDA of the business increased to €100 million in 2025, while 1H’26 EBITDA at €82 million implies another year of strong growth. We believe that MTLN’s medium-term guidance of €150 million in EBITDA could be delivered ahead of the timeline, with potential upside thereafter.
Company description
Metlen is a diversified Industrial group with primary listing in London and is a FTSE-100 stock. The company has its primary business in Greece with following business verticals: 1) largest fully integrated producer of aluminium in Europe through 100%-owned Aluminium of Greece SA; 2) power portfolio in Greece with 2.4GW installed capacity, mostly thermal and a robust growth pipeline in renewables.
Investment strategy
We rate Metlen Buy. 1) The company is well positioned on the aluminium cost curve, and should benefit from higher aluminium and alumina prices; 2) 100% subsidiary Protergia appears well positioned for an improving Greek energy market, where demand looks set to increase, and lower natural gas prices make thermal a more attractive option for electricity generation. The company is also benefiting from liberalisation of the retail energy market where its strong position as the largest independent and strong balance sheet make it well positioned for new opportunities. 3) Attractive growth proposition with 2.0GW solar power capacity target in Greece and big expansion pipeline for renewable capacities outside of Greece. 4) The company has an attractive pipeline of growth in critical metals with gallium, copper, nickel and cobalt production.
Valuation
Our target price of €52 is based on the average of our DCF-based SoTP NPV valuation and our EV/EBITDA valuation. The NPV approach provides a longer-term view of its growth potential and normalised returns. We calculate the DCF-based enterprise value using a WACC of 9.0% and terminal growth rate of 2%. Thereafter, we reduce EV by net debt and minorities to arrive at our NPV. We apply a blended multiple of 7.5x to our forecast EBITDA (average of 2026-27E), slightly ahead of the stock’s long-term average multiple. This is consistent with our view for stronger earnings in its aluminium business with steady cash flow for power generation, valued at higher multiples than global/European peers.
Risks
The key risks that could prevent the shares from reaching our target price are: 1) Lower LME aluminium prices, a stronger euro (versus USD) and a higher oil price are all negative for AoG profits; 2) Greek politics are uncertain, with the risk of higher taxes and increased regulation, especially in energy. 3) Higher geopolitical risks and softer economies in MTLN’s end-markets could impact sales and new orders; 4) Renewable expansion plans are exposed to risks of project delays, resulting in higher capex and lower returns. 5) With improving balance sheet and the company moving to investment mode there is also the risk that comes with deploying capital in new projects.
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