Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Johnson Controls International plc, FCFF 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).
The cash provided by operating activities from continuing operations demonstrates variability across the examined periods. There is an initial decrease from 2,513 million USD in 2018 to 1,743 million USD in 2019, suggesting a slowdown in operational cash generation. This is followed by a recovery phase, with values rising to 2,479 million USD in 2020 and slightly further to 2,551 million USD in 2021, indicating improved operational efficiency or increased revenue streams. However, the amount declines again in 2022 to 1,990 million USD before recovering to 2,221 million USD in 2023, showing some volatility in operational cash flows in recent years.
Free cash flow to the firm (FCFF) follows a somewhat parallel pattern, suggesting a relation to operating activities but with distinct fluctuations. FCFF decreases from 1,871 million USD in 2018 to 1,507 million USD in 2019, mirroring the downward trend seen in operating cash flow. The figure then experiences a significant increase, reaching 2,380 million USD in 2020 and maintaining a similar level at 2,285 million USD in 2021. This stability contrasts with the operating cash flow's volatility and may reflect variations in capital expenditures or working capital management. In 2022, the FCFF declines to 1,723 million USD, followed by a partial recovery to 1,975 million USD in 2023, aligning closely with the trend in operating cash flow during those years.
- Overall Trends:
- Both cash from operations and free cash flow exhibit cyclical fluctuations with notable decreases in 2019 and 2022 and recoveries in subsequent years.
- Operational Efficiency:
- Periods of increased cash flow suggest improved operational performance or favorable conditions impacting cash generation, while declines suggest challenges either operationally or in working capital management.
- Correlation between Metrics:
- The similar directional movement between operating cash flow and FCFF indicates that operational cash generation remains a key driver of free cash flow, although their divergences in magnitude highlight the influence of investment activities and capital management decisions.
Interest Paid, Net of Tax
Johnson Controls International plc, interest paid, net of tax 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).
2 2023 Calculation
Interest paid on short and long-term debt, tax = Interest paid on short and long-term debt × EITR
= 298 × 12.50% = 37
- Effective Income Tax Rate (EITR)
- Over the six-year period, the effective income tax rate demonstrated significant variability. Initially, it decreased from 18% in 2018 to 12.5% in 2019 and slightly lower to 12% in 2020. In 2021, there was a marked increase to 33%, representing a notable deviation from prior years. Following this spike, the rate reverted to 12.5% in both 2022 and 2023, suggesting a return to a lower and more stable tax environment.
- Interest Paid on Short and Long-Term Debt, Net of Tax
- The interest expense, net of tax, exhibited a decreasing trend from 2018 to 2021, falling from $340 million to $162 million. This represents a substantial reduction in interest costs over the four-year span. However, from 2021 onwards, the interest paid began to increase again, rising to $198 million in 2022 and further to $261 million in 2023. This uptick may indicate increased borrowing or changes in interest rates impacting the cost of debt toward the later years.
Enterprise Value to FCFF Ratio, Current
Johnson Controls International plc, current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 49,899) |
| Free cash flow to the firm (FCFF) | 1,975) |
| Valuation Ratio | |
| EV/FCFF | 25.27 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 21.34 |
| Eaton Corp. plc | 40.45 |
| GE Aerospace | 50.57 |
| Honeywell International Inc. | 28.25 |
| Lockheed Martin Corp. | 19.02 |
| RTX Corp. | 40.51 |
| EV/FCFF, Sector | |
| Capital Goods | 30.89 |
| EV/FCFF, Industry | |
| Industrials | 30.22 |
Based on: 10-K (reporting date: 2023-09-30).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Johnson Controls International plc, historical EV/FCFF 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) | |
| Free cash flow to the firm (FCFF)2 | 1,975) | 1,723) | 2,285) | 2,380) | 1,507) | 1,871) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 23.29 | 31.15 | 27.47 | 16.72 | 25.25 | 22.92 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Boeing Co. | 25.63 | 37.53 | — | — | — | — | |
| Caterpillar Inc. | 16.08 | 23.54 | 20.50 | 23.83 | — | — | |
| Eaton Corp. plc | 38.49 | 33.44 | 38.16 | 21.94 | — | — | |
| GE Aerospace | 29.56 | 17.29 | 56.53 | 32.34 | — | — | |
| Honeywell International Inc. | 29.13 | 29.82 | 25.22 | 26.49 | — | — | |
| Lockheed Martin Corp. | 17.62 | 19.69 | 13.92 | 14.64 | — | — | |
| RTX Corp. | 23.86 | 28.45 | 27.29 | 35.26 | — | — | |
| EV/FCFF, Sector | |||||||
| Capital Goods | 23.34 | 25.87 | 32.16 | 74.97 | — | — | |
| EV/FCFF, Industry | |||||||
| Industrials | 25.93 | 24.30 | 28.80 | 189.49 | — | — | |
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/FCFF = EV ÷ FCFF
= 45,986 ÷ 1,975 = 23.29
4 Click competitor name to see calculations.
- Enterprise Value
- The enterprise value showed a decreasing trend from 2018 to 2019, dropping from 42,897 million US dollars to 38,054 million. It then slightly increased in 2020 to 39,790 million, followed by a significant surge in 2021 to 62,765 million. After this peak, the value decreased again in 2022 to 53,660 million and further declined in 2023 to 45,986 million. Overall, the enterprise value exhibited volatility with a pronounced peak in 2021.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm experienced initial decline from 1,871 million US dollars in 2018 to 1,507 million in 2019. It rebounded strongly in 2020, reaching 2,380 million and remained relatively stable in 2021 at 2,285 million. In 2022, FCFF decreased to 1,723 million but showed a modest recovery in 2023, increasing to 1,975 million. The overall pattern indicates some fluctuations with peaks in 2020 and 2021.
- EV to FCFF Multiple
- The EV/FCFF ratio fluctuated significantly over the period. Starting at 22.92 in 2018, it increased to 25.25 in 2019, then dropped markedly to 16.72 in 2020, reflecting improved cash flow relative to enterprise value. However, the ratio surged to 27.47 in 2021 and further to 31.15 in 2022, indicating a rising valuation multiple despite lower or stable cash flows. By 2023, the ratio declined to 23.29, suggesting a normalization of valuation in relation to free cash flow compared to the previous two years.
- Summary
- The data reveals a volatile enterprise value with a significant peak in 2021 followed by declines in subsequent years. Free cash flow to the firm experienced ups and downs, peaking in 2020 and 2021 with a partial withdrawal thereafter. The EV/FCFF ratio mirrors these dynamics, showcasing a notable decrease in 2020 implying a more attractive valuation, followed by elevated multiples in 2021 and 2022 and a corrective decline in 2023. These trends suggest variability in both market valuation and operational cash generation capacity over the analyzed period.