Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Ecolab Inc., EBITDA calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2017-12-31).
A multi-year analysis of operational performance reveals a period of steady growth from 2017 through 2019, followed by a significant contraction in 2020 and a subsequent partial recovery in 2021. The most pronounced volatility is observed in net income, while operational proxies such as EBITDA demonstrate greater resilience despite the 2020 downturn.
- EBITDA Trend and Operational Capacity
- Earnings before interest, tax, depreciation and amortization exhibited a consistent upward trajectory between 2017 and 2019, peaking at US$ 3,087,500 thousand. A sharp decline occurred in 2020, with EBITDA falling to US$ 2,278,900 thousand, representing a decrease of approximately 26% from the previous year. By 2021, a recovery phase began, with the figure rising to US$ 2,487,900 thousand, although this remained below the 2019 peak.
- Comparative Analysis of Profitability Metrics
- The divergence between EBITDA and Net Income is most evident in 2020. While EBITDA remained positive at US$ 2,278,900 thousand, Net Income fell into a deficit of US$ 1,205,100 thousand. This indicates that while core operational cash flow remained positive, non-operational expenses, taxes, or interest obligations heavily impacted the bottom line during that fiscal year.
- EBIT and EBT Performance
- Earnings before interest and tax (EBIT) mirrored the EBITDA trend, growing steadily to a peak of US$ 2,114,200 thousand in 2019 before dropping to US$ 1,466,200 thousand in 2020. Earnings before tax (EBT) followed a similar pattern, reflecting a consistent correlation between operating profit and pre-tax earnings across the five-year period.
- Recovery Trajectory
- The transition from 2020 to 2021 shows a synchronized recovery across all metrics. EBITDA increased by approximately 9% year-over-year, and EBIT rose from US$ 1,466,200 thousand to US$ 1,644,800 thousand. Net income returned to positive territory at US$ 1,129,900 thousand, signaling a stabilization of profitability, although figures across all categories remained lower than their 2019 levels.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Enterprise Value to EBITDA Ratio, Current
Ecolab Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 60,128,502) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,487,900) |
| Valuation Ratio | |
| EV/EBITDA | 24.17 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Linde plc | 18.80 |
| Sherwin-Williams Co. | 19.83 |
| EV/EBITDA, Sector | |
| Chemicals | 24.85 |
| EV/EBITDA, Industry | |
| Materials | 18.85 |
Based on: 10-K (reporting date: 2021-12-31).
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
Ecolab Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 60,128,501) | 65,306,947) | 58,207,834) | 55,962,006) | 44,975,738) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,487,900) | 2,278,900) | 3,087,500) | 2,980,100) | 2,932,700) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 24.17 | 28.66 | 18.85 | 18.78 | 15.34 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Linde plc | 16.23 | — | — | — | — | |
| Sherwin-Williams Co. | 25.04 | — | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Chemicals | 18.35 | — | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Materials | 13.46 | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/EBITDA = EV ÷ EBITDA
= 60,128,501 ÷ 2,487,900 = 24.17
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA (EV/EBITDA) ratio demonstrates a significant expansionary trend over the five-year period ending December 31, 2021, characterized by a sharp peak in 2020 followed by a partial correction in 2021.
- Enterprise Value Trends
- Enterprise value grew consistently from US$ 44,975,738 thousand in 2017 to a peak of US$ 65,306,947 thousand in 2020. This period of growth represents a substantial increase in the total market valuation of the entity. A subsequent contraction occurred in 2021, with the value declining to US$ 60,128,501 thousand.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization remained relatively stable and grew modestly between 2017 and 2019, reaching a high of US$ 3,087,500 thousand. A significant decline was observed in 2020, where EBITDA dropped to US$ 2,278,900 thousand, followed by a partial recovery to US$ 2,487,900 thousand in 2021.
- EV/EBITDA Multiple Analysis
- The valuation multiple rose from 15.34 in 2017 to 18.85 by 2019. A sharp increase to 28.66 occurred in 2020, driven by the inverse movement of a rising enterprise value and a declining EBITDA. In 2021, the ratio moderated to 24.17, reflecting the combined effect of a decreased enterprise value and a recovery in operational earnings.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?