Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
3M Co., EBITDA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2017-12-31).
The financial data reveals several key trends over the five-year period ending December 31, 2021.
- Net income attributable to 3M
- The net income showed fluctuating performance within the period. Starting at $4,858 million in 2017, it increased to $5,349 million in 2018, which marked the peak during the initial years. However, it declined in 2019 to $4,570 million, before rebounding in the following two years to reach $5,921 million by the end of 2021. Overall, this indicates a recovering profitability trend after a dip in 2019.
- Earnings before tax (EBT)
- EBT started at $7,548 million in 2017 and displayed a downward trend through 2018 and 2019, reaching a low of $5,712 million in 2019. It then recovered to $6,706 million in 2020 and further increased to $7,214 million in 2021. This pattern mirrors the movements seen in net income, with an evident recovery phase post-2019.
- Earnings before interest and tax (EBIT)
- The EBIT figures reflect a similar trend as EBT and net income. Beginning at $7,870 million in 2017, EBIT decreased to $7,350 million in 2018 and dropped notably to $6,160 million in 2019. Thereafter, it demonstrated a recovery trend to $7,235 million in 2020 and further to $7,702 million in 2021. The drop in 2019 is significant but the subsequent years show a positive restoration of operating earnings.
- Earnings before interest, tax, depreciation and amortization (EBITDA)
- EBITDA, representing cash operating performance, followed a consistent downward path from $9,414 million in 2017 to $8,838 million in 2018 and enduring a sharper decline to $7,753 million in 2019. Recovery is noticeable in the final two years with $9,146 million in 2020 and reaching $9,617 million in 2021, the highest in the observed period. This indicates a substantial cash flow improvement after the 2019 trough.
In summary, the data exhibits a declining trend across all major profitability metrics in 2018 and especially in 2019, followed by a clear recovery in 2020 and 2021. The peak values often occur at the start or towards the end of the period, reflecting both a temporary setback and a strong rebound. The improvements in EBITDA are particularly notable as they signify enhanced cash operating performance, supporting the sustained recovery in net income and earnings measures.
Enterprise Value to EBITDA Ratio, Current
3M Co., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 78,269) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 9,617) |
| Valuation Ratio | |
| EV/EBITDA | 8.14 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 13.33 |
| Eaton Corp. plc | 26.14 |
| GE Aerospace | 28.54 |
| Honeywell International Inc. | 17.74 |
| Lockheed Martin Corp. | 14.33 |
| RTX Corp. | 18.56 |
| EV/EBITDA, Sector | |
| Capital Goods | 29.63 |
| EV/EBITDA, Industry | |
| Industrials | 21.17 |
Based on: 10-K (reporting date: 2021-12-31).
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
3M Co., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 106,224) | 116,495) | 111,816) | 126,601) | 142,683) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 9,617) | 9,146) | 7,753) | 8,838) | 9,414) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 11.05 | 12.74 | 14.42 | 14.32 | 15.16 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 12.43 | 19.87 | — | — | — | |
| Eaton Corp. plc | 17.06 | 22.11 | — | — | — | |
| GE Aerospace | 95.57 | 9.35 | — | — | — | |
| Honeywell International Inc. | 15.57 | 20.21 | — | — | — | |
| Lockheed Martin Corp. | 11.97 | 9.97 | — | — | — | |
| RTX Corp. | 15.48 | 41.71 | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Capital Goods | 19.87 | 25.02 | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Industrials | 16.30 | 30.80 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/EBITDA = EV ÷ EBITDA
= 106,224 ÷ 9,617 = 11.05
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a consistent decline over the five-year period under review, falling from $142,683 million in 2017 to $106,224 million in 2021. This downward trend reflects a decrease of approximately 25.6% over the duration, with the most significant drop occurring between 2018 and 2019.
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- The EBITDA experienced fluctuations throughout the period. It started at $9,414 million in 2017, followed by a decline to $7,753 million in 2019. Subsequently, there was a recovery increasing to $9,617 million by the end of 2021. Despite variability, the 2021 EBITDA slightly surpassed the 2017 level, indicating an overall recovery in operating profitability.
- EV/EBITDA Ratio
- The EV/EBITDA ratio showed a downward trajectory from 15.16 in 2017 to 11.05 in 2021. This gradual decrease suggests that the market valuation relative to earnings improved over time, potentially indicating that the enterprise value declined faster than EBITDA or that EBITDA growth outpaced the decrease in enterprise value. The lowest ratio was observed in 2021, supporting the view of enhanced operating performance or valuation adjustment.