Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
DuPont de Nemours Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The financial performance from 2015 to 2019 is characterized by significant volatility across all earnings metrics, with a general downward trajectory interrupted by a substantial recovery in 2018. A critical divergence is observed in 2019, where operational cash flow proxies remained positive while bottom-line profitability collapsed.
- EBITDA Trend Analysis
- EBITDA exhibited extreme fluctuations, starting at 13,397 million US$ in 2015 and declining to a low of 6,244 million US$ by 2017. A strong recovery occurred in 2018, with values returning to 12,915 million US$, nearly reaching 2015 levels. However, this gain was short-lived, as 2019 saw a sharp contraction to 3,389 million US$, the lowest point in the five-year period.
- Operating Profitability and EBIT
- Earnings before interest and tax (EBIT) followed a similar volatile pattern to EBITDA but at lower absolute levels. The most notable decline occurred between 2018 and 2019, where EBIT dropped from 6,997 million US$ to 194 million US$. This precipitous fall indicates a severe compression of operating margins during the final year of the analyzed period.
- Bottom-Line Net Income and EBT
- Net income and earnings before tax (EBT) showed a more aggressive decline than EBITDA. EBT transitioned from a peak of 9,930 million US$ in 2015 to a negative value of -474 million US$ in 2019. Net income similarly plummeted from 7,685 million US$ in 2015 to 498 million US$ in 2019, reflecting a substantial erosion of shareholder earnings.
- Analysis of Non-Cash Charges and Interest
- The widening gap between EBITDA and EBT, particularly in 2019, suggests that depreciation, amortization, and interest expenses became increasingly burdensome. In 2019, while EBITDA remained positive at 3,389 million US$, the EBT became negative, implying that non-cash charges and financing costs exceeded the company's operational earnings capacity for that year.
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Enterprise Value to EBITDA Ratio, Current
DuPont de Nemours Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 55,738) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 3,389) |
| Valuation Ratio | |
| EV/EBITDA | 16.45 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Linde plc | 18.10 |
| Sherwin-Williams Co. | 20.26 |
Based on: 10-K (reporting date: 2019-12-31).
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
DuPont de Nemours Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 55,738) | 67,539) | 77,054) | 40,369) | 30,575) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 3,389) | 12,915) | 6,244) | 8,133) | 13,397) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 16.45 | 5.23 | 12.34 | 4.96 | 2.28 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
3 2019 Calculation
EV/EBITDA = EV ÷ EBITDA
= 55,738 ÷ 3,389 = 16.45
4 Click competitor name to see calculations.
The financial performance from 2015 to 2019 is characterized by significant volatility in both enterprise valuation and operational earnings, resulting in a highly inconsistent EV/EBITDA ratio. The period is marked by divergent trends where valuation multiples spiked during years of diminished operational profitability.
- Enterprise Value Trends
- Enterprise value exhibited a sharp upward trajectory between 2015 and 2017, rising from 30,575 million US dollars to a peak of 77,054 million US dollars. Following this peak, a consistent downward trend was observed over the next two years, with the value contracting to 55,738 million US dollars by the end of 2019.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization showed extreme instability. A substantial decline occurred between 2015 and 2017, with EBITDA falling from 13,397 million US dollars to 6,244 million US dollars. A brief and significant recovery was recorded in 2018, reaching 12,915 million US dollars, before a sharp collapse to a period low of 3,389 million US dollars in 2019.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio fluctuated significantly, moving from a low of 2.28 in 2015 to a high of 16.45 in 2019. The expansion of the multiple in 2017 and 2019 correlates directly with steep declines in EBITDA. The 2019 peak is particularly notable, as the ratio reached its highest level despite a decreasing enterprise value, indicating that the decline in operational earnings far outpaced the reduction in total enterprise valuation.
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