Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Hershey Co., 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 The Hershey Company
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The net income shows a consistent upward trend over the five-year period. Starting at approximately 1.18 billion USD in 2018, it experiences a slight decline in 2019 to about 1.15 billion USD. From 2019 onwards, a steady increase is observed, reaching approximately 1.65 billion USD by 2022. This indicates improving profitability and effective management of earnings attributable to the company.
- Earnings Before Tax (EBT)
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EBT mirrors the trend of net income, starting at around 1.41 billion USD in 2018 and dipping slightly in 2019 to approximately 1.38 billion USD. Subsequently, it rises consistently each year, reaching nearly 1.92 billion USD in 2022. This growth suggests strengthening operational profitability before tax obligations, highlighting positive operational leverage and cost control mechanisms.
- Earnings Before Interest and Tax (EBIT)
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EBIT exhibits a similar pattern to EBT and net income, showing steady growth after a minor decline from 1.56 billion USD in 2018 to about 1.53 billion USD in 2019. This is followed by continuous increases each year, culminating in approximately 2.06 billion USD in 2022. The upward movement in EBIT illustrates improving operational efficiency and effective expense management excluding interest and tax impacts.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
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EBITDA presents a stable and rising trajectory, starting from roughly 1.85 billion USD in 2018 and slightly decreasing to about 1.82 billion USD in 2019. Post-2019, there is a consistent increase notable each year, ultimately reaching approximately 2.44 billion USD in 2022. The growth in EBITDA highlights an improvement in core earnings and cash flow potential before non-cash expenses, reaffirming operational strength.
- Overall Analysis
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The financial data collectively indicate a resilient and gradually improving profitability profile over the assessed period. Despite minor declines in 2019 across all indicators, the company demonstrates solid recovery and sustained growth in key profitability metrics from 2020 through 2022. The positive trends in EBIT and EBITDA specifically underscore enhanced operational performance and effective cost management, which are reflected downstream in rising earnings before tax and net income.
Enterprise Value to EBITDA Ratio, Current
Hershey Co., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 52,082,977) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,436,125) |
| Valuation Ratio | |
| EV/EBITDA | 21.38 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Coca-Cola Co. | 21.16 |
| Mondelēz International Inc. | 11.05 |
| PepsiCo Inc. | 13.67 |
| Philip Morris International Inc. | 21.35 |
| EV/EBITDA, Sector | |
| Food, Beverage & Tobacco | 20.17 |
| EV/EBITDA, Industry | |
| Consumer Staples | 22.70 |
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
Hershey Co., 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 | 53,436,870) | 46,279,575) | 34,804,244) | 37,362,005) | 26,861,195) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,436,125) | 2,242,072) | 1,943,375) | 1,824,450) | 1,852,063) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 21.94 | 20.64 | 17.91 | 20.48 | 14.50 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Coca-Cola Co. | 20.83 | 19.52 | 19.66 | — | — | |
| Mondelēz International Inc. | 21.64 | 15.62 | 15.14 | — | — | |
| PepsiCo Inc. | 18.63 | 18.42 | 17.17 | — | — | |
| Philip Morris International Inc. | 14.78 | 13.64 | 12.59 | — | — | |
| EV/EBITDA, Sector | ||||||
| Food, Beverage & Tobacco | 18.49 | 17.05 | 16.29 | — | — | |
| EV/EBITDA, Industry | ||||||
| Consumer Staples | 16.42 | 15.65 | 14.89 | — | — | |
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
= 53,436,870 ÷ 2,436,125 = 21.94
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a general upward trend over the five-year period. Starting at approximately 26.86 billion USD at the end of 2018, it increased significantly to around 53.44 billion USD by the end of 2022. Notably, the most substantial growth occurred between 2020 and 2021, where the EV saw an increase of over 11 billion USD.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA demonstrated a positive trajectory across the years reviewed. Beginning at roughly 1.85 billion USD in 2018, it showed modest fluctuations initially but consistently rose in later years, reaching approximately 2.44 billion USD by the conclusion of 2022. This indicates an improving operating performance over time.
- EV to EBITDA Ratio (EV/EBITDA)
- The EV/EBITDA ratio fluctuated throughout the period, reflecting changes in the company's valuation relative to earnings. Starting at 14.5 in 2018, the ratio increased markedly to over 20 by 2019, decreased slightly in 2020 to around 17.9, then rose again in subsequent years, peaking at nearly 21.94 in 2022. This pattern suggests the market's valuation of the company relative to its earnings has generally increased, which may be indicative of growing investor confidence or expectations of future growth.