Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Philip Morris International Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the financial data reveals notable fluctuations in both the net cash provided by operating activities and the free cash flow to the firm (FCFF) over the observed five-year period.
- Net cash provided by operating activities
- This indicator demonstrates a generally positive trajectory, beginning at $9,812 million in 2020 and increasing significantly to $11,967 million in 2021. This peak was followed by a decline to $10,803 million in 2022, and a further decrease to $9,204 million in 2023. However, the value sharply rebounded in 2024 to $12,217 million, surpassing all previous years within the timeframe.
- Free cash flow to the firm (FCFF)
- The FCFF presents a similar pattern to operating cash flows. It started at $9,780 million in 2020, rose to $11,779 million in 2021, but then experienced declines to $10,305 million in 2022 and $8,924 million in 2023. In 2024, FCFF recovered markedly to $11,947 million, nearing the 2021 peak level.
Overall, both metrics exhibit synchronized trends, characterized by increases through 2021, subsequent declines over the next two years, and substantial recoveries in 2024. This pattern may suggest external factors or operational challenges impacting cash flows during 2022 and 2023, followed by improved performance or management initiatives leading to enhanced cash generation in 2024.
Interest Paid, Net of Tax
Philip Morris International Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Cash paid, interest, tax = Cash paid, interest × EITR
= 1,559 × 24.70% = 385
The financial data over the five-year period shows notable trends in the effective income tax rate (EITR) and cash paid for interest, net of tax. These two indicators reveal insights into the company's tax strategy and financing costs.
- Effective Income Tax Rate (EITR)
- The EITR remained relatively stable between 2020 and 2021 at around 21.7% to 21.8%. In 2022, there was a decline to 19.3%, indicating a reduction in the tax burden or the impact of tax planning strategies during that year. However, this downward trend reversed in the subsequent years, rising to 22.4% in 2023 and further to 24.7% in 2024. This increase suggests either higher taxable income, reduced tax benefits, or changes in tax regulations leading to a greater effective tax rate in the later years.
- Cash Paid, Interest, Net of Tax
- The cash paid for interest, net of tax, exhibited a gradual decline from 570 million US dollars in 2020 to 560 million in 2021, suggesting lower debt costs or reduced borrowing in that period. It then slightly increased to 579 million in 2022. A significant jump is observed in 2023, where cash interest payments nearly doubled to 1,041 million, followed by a further increase to 1,174 million in 2024. This substantial rise indicates increased borrowing costs or higher levels of debt financing in the recent years. The marked increase in interest payments could impact the company's profitability and cash flow.
Overall, the data reflects a scenario where the company experienced a temporary reduction in its effective tax rate followed by an increase, paralleled by rising interest expenses in the last two reported years. This combination suggests possible shifts in the company's financial structure and tax environment that could influence future financial strategies and performance.
Enterprise Value to FCFF Ratio, Current
Philip Morris International Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 321,789) |
| Free cash flow to the firm (FCFF) | 11,947) |
| Valuation Ratio | |
| EV/FCFF | 26.93 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Coca-Cola Co. | 55.15 |
| Mondelēz International Inc. | 27.66 |
| PepsiCo Inc. | 25.07 |
| EV/FCFF, Sector | |
| Food, Beverage & Tobacco | 32.19 |
| EV/FCFF, Industry | |
| Consumer Staples | 35.71 |
Based on: 10-K (reporting date: 2024-12-31).
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
Philip Morris International Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 269,311) | 184,812) | 201,244) | 192,527) | 159,557) | |
| Free cash flow to the firm (FCFF)2 | 11,947) | 8,924) | 10,305) | 11,779) | 9,780) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 22.54 | 20.71 | 19.53 | 16.35 | 16.31 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Coca-Cola Co. | 54.19 | 26.54 | 27.95 | 25.28 | 26.04 | |
| Mondelēz International Inc. | 23.73 | 31.39 | 34.05 | 31.98 | 30.11 | |
| PepsiCo Inc. | 26.33 | 28.63 | 40.39 | 33.08 | 30.09 | |
| EV/FCFF, Sector | ||||||
| Food, Beverage & Tobacco | 30.16 | 26.10 | 28.47 | 24.71 | 24.26 | |
| EV/FCFF, Industry | ||||||
| Consumer Staples | 31.17 | 30.26 | 30.41 | 20.99 | 23.37 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 269,311 ÷ 11,947 = 22.54
4 Click competitor name to see calculations.
The financial data demonstrates evolving trends in the enterprise value (EV), free cash flow to the firm (FCFF), and their derived ratio over the five-year period ending in 2024.
- Enterprise Value (EV)
- The enterprise value exhibited an overall upward trend, starting at approximately 159.6 billion USD in 2020 and rising notably to about 269.3 billion USD by the end of 2024. Despite a dip observed in 2023 following a peak in 2022, the value significantly increased in 2024, reaching the highest level within the period. This suggests a growth in market valuation, reflecting changes in market capitalization, debt, and cash positions.
- Free Cash Flow to the Firm (FCFF)
- The FCFF figures displayed a less consistent pattern. It increased from 9.78 billion USD in 2020 to a peak of 11.78 billion USD in 2021, followed by a declining trend over the next two years, reducing to 8.92 billion USD in 2023. However, there was a subsequent rebound in 2024 to 11.95 billion USD, almost recovering to the earlier peak. This indicates variability in the company's operational cash generation capacity, potentially impacted by changing operational efficiencies, capital expenditures, or working capital management.
- EV/FCFF Ratio
- The EV to FCFF ratio started at 16.31 in 2020 and experienced a steady increase each year, reaching 22.54 by 2024. This progressive rise implies that the market valuation relative to the firm's free cash flow has become more expensive over time. An increasing ratio may indicate market expectations of future growth or a potential overvaluation, especially as the ratio peaked along with the highest EV but not the highest FCFF.
In summary, while the enterprise value has substantially increased over the five years, the free cash flow has been somewhat volatile with a recent recovery. The increasing EV/FCFF ratio suggests a growing premium placed by the market on the company's cash-generating ability, pointing to investor optimism or possibly a reassessment of risk and growth prospects over the period analyzed.