Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Estée Lauder Cos. Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
- Net Earnings Attributable to The Estée Lauder Companies Inc.
- The net earnings exhibited significant fluctuations over the period. Starting at 1,108 million USD in 2018, there was an increase to 1,785 million USD in 2019, followed by a sharp decline to 684 million USD in 2020. Subsequently, net earnings surged to a peak of 2,870 million USD in 2021 before decreasing again to 2,390 million USD in 2022 and further dropping to 1,006 million USD in 2023. The data indicates considerable volatility, with a notable recovery in 2021 after the 2020 downturn, and a downward trend in the last two years.
- Earnings Before Tax (EBT)
- Earnings before tax showed a generally upward trend from 2018 (1,980 million USD) to 2021 (3,331 million USD), despite a decrease in 2020 to 1,046 million USD. After 2021, EBT declined to 3,036 million USD in 2022 and further to 1,397 million USD in 2023. The pattern mirrors that of net earnings, with a pronounced dip in 2020 followed by recovery and subsequent decline.
- Earnings Before Interest and Tax (EBIT)
- EBIT followed a similar trajectory, rising from 2,108 million USD in 2018 to a peak of 3,504 million USD in 2021. A decrease ensued in the following years, with values dropping to 3,203 million USD in 2022 and 1,652 million USD in 2023. The data indicates strong performance improvements culminating in 2021, followed by diminished earnings in the last two years.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA also showed substantial growth from 2,639 million USD in 2018 to 4,155 million USD in 2021, despite a decline in 2020 to 1,818 million USD. In 2022, it slightly decreased to 3,930 million USD, followed by a more marked decrease to 2,396 million USD in 2023. The pattern aligns with the overall earnings trends, highlighting a strong rebound in 2021 and notable contraction thereafter.
Enterprise Value to EBITDA Ratio, Current
Estée Lauder Cos. Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 60,132) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,396) |
| Valuation Ratio | |
| EV/EBITDA | 25.10 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Procter & Gamble Co. | 17.66 |
| EV/EBITDA, Industry | |
| Consumer Staples | 21.97 |
Based on: 10-K (reporting date: 2023-06-30).
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
Estée Lauder Cos. Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 60,132) | 96,188) | 123,779) | 81,575) | 71,573) | 50,639) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,396) | 3,930) | 4,155) | 1,818) | 2,997) | 2,639) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 25.10 | 24.48 | 29.79 | 44.87 | 23.88 | 19.19 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Procter & Gamble Co. | 18.03 | 17.48 | 17.56 | 18.11 | 32.66 | — | |
| EV/EBITDA, Industry | |||||||
| Consumer Staples | 16.39 | 16.42 | 15.65 | 14.89 | — | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 60,132 ÷ 2,396 = 25.10
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value showed a rising trend from 2018 to 2021, increasing from approximately $50.6 billion to a peak of about $123.8 billion. However, this was followed by a decline over the next two years, falling to around $60.1 billion by mid-2023. This pattern reflects significant volatility, with the value almost doubling between 2018 and 2021, then nearly halving by 2023.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA experienced fluctuations during the period. Initially, it increased modestly from about $2.64 billion in 2018 to roughly $3.0 billion in 2019, followed by a substantial decline to $1.82 billion in 2020. Subsequently, a strong recovery occurred in 2021, with EBITDA reaching approximately $4.16 billion, slightly declining to $3.93 billion in 2022, and then decreasing further to about $2.40 billion in 2023. The trend indicates sensitivity to external or operational factors, with notable instability particularly around 2020.
- EV/EBITDA Ratio
- The EV/EBITDA multiple exhibited considerable variation. It started at 19.19 in 2018, increased steadily to 23.88 in 2019, then surged sharply to 44.87 in 2020, reflecting elevated valuation relative to earnings amid reduced EBITDA. In 2021, the ratio decreased to 29.79, followed by further declines to 24.48 in 2022 and a slight increase to 25.10 in 2023. This fluctuation suggests valuation adjustments in response to earnings volatility and market conditions.
- Overall Observations
- The data reveals periods of both expansion and contraction in market valuation and profitability. The spike in the EV/EBITDA ratio in 2020 corresponds with a marked drop in EBITDA, implying temporarily diminished earnings power relative to enterprise value. The subsequent recovery in EBITDA and adjustment in enterprise value through 2021 and 2022 indicates some normalization, whereas the declines in 2023 suggest emerging challenges or market reassessments. These dynamics underscore a cyclical performance pattern and changing investor sentiment over the six-year span.