Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Albemarle Corp., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Net Income Attributable to Albemarle Corporation
- The net income exhibits a declining trend from 693,562 thousand USD in 2018 to 123,672 thousand USD in 2021, indicating a substantial decrease in profitability over these years. However, a significant recovery is observed in 2022, with net income surging to 2,689,816 thousand USD, which is the highest value within the period analyzed.
- Earnings Before Tax (EBT)
- EBT follows a pattern similar to net income, decreasing from 883,965 thousand USD in 2018 to 229,388 thousand USD in 2021. Subsequently, in 2022, EBT sharply increases to 3,205,719 thousand USD, surpassing all previous values and indicating a strong improvement in pre-tax earnings.
- Earnings Before Interest and Tax (EBIT)
- EBIT also demonstrates a downward trend from 936,370 thousand USD in 2018 to 290,864 thousand USD in 2021. This is followed by a marked rise in 2022, reaching 3,328,692 thousand USD. The growth in EBIT in 2022 suggests enhanced operational profitability compared to the prior years.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA decreases steadily from 1,137,068 thousand USD in 2018 to 544,864 thousand USD in 2021, reflecting reduced earnings before non-cash charges during these years. The year 2022 shows a significant rebound with EBITDA reaching 3,629,533 thousand USD, indicating a strong recovery in cash-generating capacity.
- Overall Analysis
- The financial performance reveals a downward trend in all key earnings metrics from 2018 through 2021, with gradual declines each year. This may suggest increasing challenges impacting profitability and earnings capacity during this period. Contrastingly, 2022 marks a dramatic turnaround, with all earnings measures increasing substantially, reaching their highest levels within the time frame. This recovery could be attributable to improved operations, market conditions, or other factors that enhanced both profitability and cash flow generation at that time.
Enterprise Value to EBITDA Ratio, Current
Albemarle Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 22,214,822) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 3,629,533) |
| Valuation Ratio | |
| EV/EBITDA | 6.12 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Linde plc | 18.50 |
| Sherwin-Williams Co. | 20.90 |
| EV/EBITDA, Sector | |
| Chemicals | 24.23 |
| EV/EBITDA, Industry | |
| Materials | 17.60 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Albemarle Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 33,896,614) | 24,588,783) | 21,240,189) | 11,695,034) | 11,082,644) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 3,629,533) | 544,864) | 806,140) | 963,697) | 1,137,068) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 9.34 | 45.13 | 26.35 | 12.14 | 9.75 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Linde plc | 18.36 | 16.23 | 17.70 | — | — | |
| Sherwin-Williams Co. | 19.16 | 25.04 | 21.01 | — | — | |
| EV/EBITDA, Sector | ||||||
| Chemicals | 18.57 | 18.35 | 18.67 | — | — | |
| EV/EBITDA, Industry | ||||||
| Materials | 14.17 | 13.46 | 17.97 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 33,896,614 ÷ 3,629,533 = 9.34
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The Enterprise Value exhibited a consistent upward trend from 2018 through 2022. Starting at approximately 11.1 billion in 2018, there was a moderate increase by 2019, followed by a substantial rise in 2020 and 2021, culminating in a significant peak at nearly 33.9 billion in 2022. This growth indicates a considerable expansion in the company's market valuation and investment appeal over the five-year period.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA demonstrated a declining trend from 2018 through 2021. Beginning with around 1.14 billion in 2018, EBITDA decreased each year, reaching its lowest point at approximately 545 million in 2021. However, in 2022, there was a notable recovery, with EBITDA surging to about 3.63 billion, surpassing the initial 2018 figure by a wide margin. This suggests a significant improvement in operating performance after a period of decline.
- EV/EBITDA Ratio
- The EV/EBITDA ratio increased considerably between 2018 and 2021, starting at 9.75 in 2018 and escalating progressively to reach a high of 45.13 by 2021. This upward trajectory reflects the combined effect of rising Enterprise Value and declining EBITDA during most of those years, indicating potentially higher valuation multiples or reduced earnings performance relative to the company's valuation. In 2022, this ratio sharply reversed course, falling to 9.34, mainly driven by the significant rebound in EBITDA relative to the elevated Enterprise Value. The ratio's return to a level near the 2018 figure suggests a normalization of valuation in relation to earnings.