Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Altria Group Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 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).
The financial performance from 2019 to 2023 demonstrates a significant upward trajectory in operational profitability, characterized by substantial growth in EBITDA and a transition from net losses to consistent profitability.
- EBITDA Growth and Volatility
- Earnings before interest, tax, depreciation and amortization increased from 2,314 million USD in 2019 to 12,349 million USD in 2023. This growth was non-linear, marked by a significant surge in 2020, a subsequent contraction in 2021 to 5,256 million USD, and a strong recovery through 2022 and 2023.
- Operational Profitability Correlation
- A close correlation is observed between EBITDA and Earnings before interest and tax (EBIT), with the gap between the two remaining relatively narrow over the five-year period. EBIT rose from 2,088 million USD in 2019 to 12,077 million USD in 2023, suggesting that the increase in operational cash flow is driven by core earnings rather than fluctuations in depreciation and amortization.
- Net Earnings Recovery
- A stark recovery is evident in net earnings, which shifted from a loss of 1,293 million USD in 2019 to a profit of 8,130 million USD in 2023. The significant variance between EBITDA and net earnings in 2019 indicates that non-operating expenses, taxes, or interest heavily impacted the bottom line during that period, despite the presence of positive operational earnings.
- Earnings Before Tax (EBT) Expansion
- Earnings before tax exhibited a consistent growth pattern mirroring the EBITDA trend, ascending from 766 million USD in 2019 to 10,928 million USD in 2023. This trend confirms a broadening margin between operational revenue and pre-tax expenses over the analyzed duration.
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Enterprise Value to EBITDA Ratio, Current
Altria Group Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 114,897) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 12,349) |
| Valuation Ratio | |
| EV/EBITDA | 9.30 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Coca-Cola Co. | 23.74 |
| Mondelēz International Inc. | 19.82 |
| PepsiCo Inc. | 14.88 |
| Philip Morris International Inc. | 20.40 |
| EV/EBITDA, Sector | |
| Food, Beverage & Tobacco | 21.44 |
| EV/EBITDA, Industry | |
| Consumer Staples | 25.67 |
Based on: 10-K (reporting date: 2023-12-31).
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
Altria Group Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 94,723) | 105,800) | 117,052) | 105,651) | 104,984) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 12,349) | 8,743) | 5,256) | 8,370) | 2,314) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 7.67 | 12.10 | 22.27 | 12.62 | 45.37 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Coca-Cola Co. | 18.69 | 20.83 | 19.52 | — | — | |
| Mondelēz International Inc. | 14.65 | 21.64 | 15.62 | — | — | |
| PepsiCo Inc. | 16.75 | 18.63 | 18.42 | — | — | |
| Philip Morris International Inc. | 13.66 | 14.78 | 13.64 | — | — | |
| EV/EBITDA, Sector | ||||||
| Food, Beverage & Tobacco | 16.21 | 18.49 | 17.05 | — | — | |
| EV/EBITDA, Industry | ||||||
| Consumer Staples | 16.39 | 16.42 | 15.65 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 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).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 94,723 ÷ 12,349 = 7.67
4 Click competitor name to see calculations.
The financial data reveals a significant compression in the Enterprise Value to EBITDA (EV/EBITDA) multiple over the five-year period ending December 31, 2023. This trend is characterized by a substantial increase in operational earnings alongside a general stabilization and eventual decline in total enterprise value.
- Enterprise Value Trends
- The Enterprise Value remained relatively stable between 2019 and 2022, fluctuating within a range of 104,984 million USD to 117,052 million USD. A notable decrease occurred in 2023, where the value fell to 94,723 million USD, marking the lowest valuation in the observed five-year window.
- EBITDA Volatility and Growth
- EBITDA exhibited significant volatility but maintained a strong long-term upward trajectory. After a baseline of 2,314 million USD in 2019, earnings surged to 8,370 million USD in 2020. Despite a temporary contraction to 5,256 million USD in 2021, EBITDA recovered strongly, peaking at 12,349 million USD by the end of 2023, representing more than a five-fold increase from 2019 levels.
- EV/EBITDA Ratio Interpretation
- The EV/EBITDA ratio decreased sharply from 45.37 in 2019 to 7.67 in 2023. The most dramatic reduction occurred between 2019 and 2020, coinciding with the rapid expansion of EBITDA. While a spike to 22.27 was observed in 2021 due to decreased earnings, the subsequent years showed a consistent decline in the multiple. This downward trend indicates that the company's enterprise value is now supported by significantly higher operational earnings, resulting in a more compressed and lower valuation multiple.
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