Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Johnson Controls International plc, EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
An analysis of the financial performance between 2018 and 2023 reveals significant volatility in operational profitability, specifically regarding Earnings before interest, tax, depreciation and amortization (EBITDA). After reaching a peak of 4,423 million USD in 2018, EBITDA experienced a sharp decline over the following two years, reaching a trough of 1,965 million USD in 2020. A substantial recovery occurred in 2021, with values rising to 3,678 million USD, before stabilizing within the 2,765 million to 2,865 million USD range during 2022 and 2023.
- Operational Profitability Trends
- The EBITDA trend indicates a period of instability between 2018 and 2021. The decline of approximately 55% from 2018 to 2020 suggests a significant contraction in operational cash flow. While the 2021 surge indicates a strong rebound, the subsequent correction in 2022 suggests that the 2021 peak was an outlier rather than a new baseline of performance.
- Depreciation and Amortization Consistency
- The variance between EBITDA and Earnings before interest and tax (EBIT) remains relatively constant from 2019 through 2023, hovering between 822 million and 848 million USD. This stability indicates that capital expenditure and the resulting amortization schedules remained consistent despite the volatility observed in overall earnings.
- Net Income Divergence
- A notable divergence is observed in 2019, where Net income attributable to Johnson Controls peaked at 5,674 million USD despite a concurrent drop in EBITDA to 2,216 million USD. This suggests that the 2019 net profit was driven by non-operational factors, such as asset divestitures or one-time tax benefits, rather than core operational efficiency.
- Earnings Margin Compression
- Comparing the 2018 EBITDA of 4,423 million USD to the 2023 figure of 2,865 million USD reveals a long-term reduction in operational earnings capacity. Although the 2023 figure represents a slight improvement over 2022, the overall trajectory indicates that operational profitability has not returned to 2018 levels.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Enterprise Value to EBITDA Ratio, Current
Johnson Controls International plc, current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 49,899) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,865) |
| Valuation Ratio | |
| EV/EBITDA | 17.42 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | 21.93 |
| Caterpillar Inc. | 19.97 |
| Eaton Corp. plc | 22.04 |
| GE Aerospace | 27.65 |
| Honeywell International Inc. | 11.12 |
| Lockheed Martin Corp. | 17.27 |
| RTX Corp. | 19.49 |
| EV/EBITDA, Sector | |
| Capital Goods | 22.02 |
| EV/EBITDA, Industry | |
| Industrials | 18.32 |
Based on: 10-K (reporting date: 2023-09-30).
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
Johnson Controls International plc, historical EV/EBITDA calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 45,986) | 53,660) | 62,765) | 39,790) | 38,054) | 42,897) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,865) | 2,765) | 3,678) | 1,965) | 2,216) | 4,423) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 16.05 | 19.41 | 17.07 | 20.25 | 17.17 | 9.70 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Boeing Co. | 71.32 | — | — | — | — | — | |
| Caterpillar Inc. | 12.16 | 13.86 | 12.43 | — | — | — | |
| Eaton Corp. plc | 24.91 | 19.18 | 17.06 | — | — | — | |
| GE Aerospace | 11.06 | 14.82 | 95.57 | — | — | — | |
| Honeywell International Inc. | 15.55 | 18.01 | 15.57 | — | — | — | |
| Lockheed Martin Corp. | 11.71 | 14.98 | 11.97 | — | — | — | |
| RTX Corp. | 16.62 | 14.92 | 15.48 | — | — | — | |
| EV/EBITDA, Sector | |||||||
| Capital Goods | 16.03 | 19.01 | 19.87 | — | — | — | |
| EV/EBITDA, Industry | |||||||
| Industrials | 14.85 | 16.46 | 16.30 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 45,986 ÷ 2,865 = 16.05
4 Click competitor name to see calculations.
The analysis of the Enterprise Value to EBITDA ratio from 2018 to 2023 reveals significant volatility in both market valuation and operational performance, resulting in a substantial expansion of the valuation multiple compared to the baseline year.
- Enterprise Value (EV) Trends
- The enterprise value exhibited a fluctuating trajectory, starting at 42,897 million USD in 2018 and declining slightly through 2019. A significant spike occurred in 2021, where the value reached a peak of 62,765 million USD. This peak was followed by a consistent downward trend over the next two years, closing at 45,986 million USD in 2023.
- EBITDA Performance
- Earnings before interest, tax, depreciation, and amortization experienced a sharp contraction between 2018 and 2020, dropping from 4,423 million USD to a period low of 1,965 million USD. A temporary recovery was observed in 2021, with EBITDA rising to 3,678 million USD, before stabilizing in the range of 2,765 million USD to 2,865 million USD during 2022 and 2023.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio expanded aggressively from 9.70 in 2018 to a peak of 20.25 in 2020. This expansion was primarily driven by the steep decline in EBITDA while the enterprise value remained relatively resilient. Although the ratio contracted to 16.05 by September 30, 2023, the multiple remains elevated relative to 2018 levels, suggesting that the market valuation of the company's operational earnings has shifted to a higher plateau over the analyzed period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?