Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Kimberly-Clark Corp., EBITDA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2016-12-31).
The financial performance over the examined five-year period demonstrates notable fluctuations in profitability metrics. Net income attributable to the corporation showed an initial increase from 2016 to 2017, rising from 2,166 million US dollars to 2,278 million US dollars, followed by a significant decline to 1,410 million US dollars in 2018. The subsequent years indicate a recovery and growth trend, with net income increasing to 2,157 million US dollars in 2019 and further to 2,352 million US dollars in 2020, surpassing the earlier peak.
A similar pattern is observable in earnings before tax (EBT), which decreased markedly from 3,095 million US dollars in 2017 to 1,916 million US dollars in 2018. This figure then rebounded to 2,773 million US dollars in 2019 and continued to climb to 3,072 million US dollars in 2020, nearly matching the initial 2016 level. Earnings before interest and tax (EBIT) follow this trend as well, with a dip in 2018 to 2,179 million US dollars before recovering to 3,034 million US dollars in 2019 and 3,324 million US dollars in 2020.
EBITDA reflects a reduction from 4,137 million US dollars in 2017 to 3,061 million US dollars in 2018 but demonstrates a strong rebound thereafter, reaching 3,951 million US dollars in 2019 and 4,120 million US dollars in 2020. This indicates improvements in operating cash flow generation and suggests effective management of earnings quality despite the volatility.
- Key observations
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The year 2018 marks a low point across all earnings measures, likely indicating a period of operational or market challenges. The subsequent recovery over 2019 and 2020 suggests strategic initiatives or market conditions that positively influenced profitability.
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By 2020, earnings levels generally reached or exceeded those observed at the start of the period in 2016, highlighting resilience and potential growth in operational efficiency or market presence.
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The trends between EBIT and EBITDA suggest consistent depreciation and amortization expenses across the years, with operating profitability improvements contributing to EBITDA recovery.
Enterprise Value to EBITDA Ratio, Current
Kimberly-Clark Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 52,882) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 4,120) |
| Valuation Ratio | |
| EV/EBITDA | 12.84 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Procter & Gamble Co. | 17.73 |
| EV/EBITDA, Industry | |
| Consumer Staples | 24.13 |
Based on: 10-K (reporting date: 2020-12-31).
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
Kimberly-Clark Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 52,998) | 57,004) | 46,202) | 46,232) | 50,665) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 4,120) | 3,951) | 3,061) | 4,137) | 4,165) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 12.86 | 14.43 | 15.09 | 11.18 | 12.16 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Procter & Gamble Co. | 18.11 | 32.66 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Consumer Staples | 14.89 | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2016-12-31).
3 2020 Calculation
EV/EBITDA = EV ÷ EBITDA
= 52,998 ÷ 4,120 = 12.86
4 Click competitor name to see calculations.
The financial data reveals several noteworthy trends from 2016 to 2020 regarding enterprise value, EBITDA, and their ratio.
- Enterprise Value (EV)
- The enterprise value exhibited a decline from 2016 to 2018, decreasing from $50,665 million to $46,202 million. However, a reversal of this trend occurred in 2019 when EV rose substantially to $57,004 million, followed by a mild decrease to $52,998 million in 2020. Overall, EV showed volatility with a noticeable peak in 2019.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA remained relatively stable between 2016 and 2017, at $4,165 million and $4,137 million respectively, before sharply declining in 2018 to $3,061 million. The figure rebounded significantly in 2019 to $3,951 million and further increased slightly to $4,120 million in 2020. This pattern indicates a recovery phase following a significant dip.
- EV/EBITDA Ratio
- The EV/EBITDA multiple started at 12.16 in 2016 and dropped to 11.18 in 2017, consistent with the declining EV and stable EBITDA. It then surged sharply in 2018 to 15.09 due to the disproportionate decrease in EBITDA relative to EV. The ratio slightly decreased to 14.43 in 2019 and further to 12.86 in 2020, following improvements in EBITDA and some variability in EV.
In summary, the data shows that the company's enterprise value experienced fluctuations with a peak in 2019, while EBITDA faced a notable dip mid-period but recovered subsequently. The EV/EBITDA ratio mirrored these dynamics, indicating periods where enterprise value was high relative to operating earnings and other periods reflecting improved earnings performance relative to valuation.