Announcement posted by StrategyCo 19 Feb 2013
LONDON, UK: Apple (US$87 billion) pips Samsung (US$58 billion) as the world’s most valuable brand but Ferrari is the world’s most powerful brand, according to leading brand valuation and marketing experts Brand Finance.
Table 1: Top 5 most valuable brands in the world |
||||||
Brand Value Rank 2013 |
Brand |
Domicile |
Brand Value 2013 (US$ bn) |
Brand Value 2012 (US$ bn) |
Change (US$ bn) |
Change (%) |
1 |
Apple |
US |
87.3 |
70.6 |
16.7 |
24% |
2 |
Samsung |
South Korea |
58.8 |
38.2 |
20.6 |
54% |
3 |
|
US |
52.1 |
47.5 |
4.7 |
10% |
4 |
Microsoft |
US |
45.5 |
45.8 |
-0.3 |
-1% |
5 |
Walmart |
US |
42.3 |
38.3 |
4 |
10% |
Source: BrandFinance® Global 500 (2013) |
The
Global 500 analyses financial and brand performance of leading brands across
all major business-to-consumer (B2C) and business-to-business (B2B) sectors, making
it the most extensive brand valuation study of its kind in the world.
Apple pips Samsung
Electronics
giant Apple had a roller coaster year in 2012 – its enterprise value rocketed
from US$350 billion to US$600 billion only to dip to US$400 billion in the
space of 12 months. Despite a raft of new product launches such as the new
iPhone and iPad the company continued to lose ground to Samsung and it was only
its sheer size that helped Apple maintain its lead position over its smaller
but more nimble South Korean rival.
The
net result for Apple’s brand value was a rise from $70 billion to $87 billion
but a slight weakening of its brand rating from AAA+ to AAA.
The
mighty Apple brand is supporting the company as it arguably loses its
competitive edge to Samsung in the wake of the launch of Galaxy S3, the most
pre-ordered smart phone of all time. Samsung’s brand value leaped by a
staggering 54 per cent (US$20.6 billion) and more new digital consumer products
are expected to be launched during 2013.
Commenting
on the findings, Brand Finance CEO David Haigh said: “Brand is one of many
intangible assets which drive profitable growth. Technology, contractual, human
capital and customer intangibles as well as general goodwill all drive overall
corporate value. With revenues in the tens of billions, Apple and Samsung are
slugging it out for global brand supremacy and are vying with each other to
create strong ‘customer love’ for their brands. However, there are
other brands in the Global 500 that though they may never challenge the brand
value giants, are nonetheless extremely powerful and well-loved.”
Italian Beauty
A case in point is Ferrari,
owned by Italian car giant Fiat, that achieved the highest brand rating in the
Global 500 despite being a niche sports car manufacturer with a much smaller
enterprise value than many of the other global brands in the Top 500.
“I
often think that the Italian genius for car design is based in the language of
craft,” comments world renowned design critic Stephen Bayley. “Theirs is a
workshop vocabulary with words for a car’s features and contours many of which
simply don’t exist in English. If you have a word for it you can draw it. That
word is beauty,” he says.
Table 2: Top 5 strongest brands in the world according to brand rating |
||||
Brand Rating Rank 2013 |
Brand |
Domicile |
Brand Value 2013 (US$ bn) |
Brand Value 2012 (US$ bn) |
1 |
Ferrari |
Italy |
3.6 |
3.3* |
2 |
|
US |
52.1 |
47.5 |
3 |
Coca-Cola |
US |
34.2 |
31.1 |
4 |
PwC |
US |
16.4 |
14.3 |
5 |
Hermes |
France |
4.5 |
3.4 |
Source: BrandFinance® Global 500 (2013) |
||||
*Ferrari brand value restated for 2012, according to 2013 methodology |
A key driver of brand value
is revenue. Clearly Ferrari cannot compete in terms of the size of the
multi-national brands. However its brand rating takes into account other
financial metrics such as net margins, average revenue per customer, marketing
and advertising spend as well as qualitative measures such as brand affection
and loyalty.
Taken together, Ferrari
outperforms not only rival auto manufacturers BMW, VW, Mercedes Benz, Lexus and
Audi but all brands worldwide.
Ferrari today announced
record results for the first nine months of 2012, recording an increase in net
profits by 7.6 per cent to €152.4m on a turnover of €1.76 billion.
"It is always a pleasure
to top any list and still more so when the competition includes some of the
world's most famous companies. This achievement proves that even in very tough
economic times, Italy can still offer the world businesses of excellence,"
commented Ferrari Chairman Luca di Montezemolo. "Behind this
acknowledgement are exceptional products made by equally exceptional men and
women. They made it possible and for that I thank them."
David Haigh concludes:
“As the Global 500 powerfully
demonstrates, customer expectations of brands are much higher than ever as
trust becomes a critical business issue in a time of increased economic
uncertainty. To fulfil such expectations, brand owners must continue to
innovate whilst at the same time deliver quality with value, choice with social
responsibility and sustainability with growth.”
Australian Brands
Eight Australian brands have
featured in the Global 500, with Woolworths inching closer to joining the Top
100 Global 500 Brands. For more
information on the Australian contingent, contact us.
ENDS
For more
information, please contact:
Maree Schneiders
StrategyCo Pty Ltd
+61 (0) 411 446 484
maree@strategyco.net
Note to Editors
The
methodology used in compiling the Global 500 uses a discounted cash flow (DCF)
technique to discount estimated future royalties at an appropriate discount
rate and to arrive at a new present value (NPV) of the trademark and associated
intellectual property rights in order to compute brand value.
Royalty Relief Approach
The royalty relief
methodology determines the value of the brand in relation to the royalty rate
that would be payable for its use if it were owned by a third party. The
royalty rate is applied to future revenue to determine an earnings stream that
is attributable to the brand. The brand earnings stream is then discounted back
to a net present value.
There is a six-step process involved
in making the brand value calculations:
1.
Obtain specific financial and revenue data.
2.
Model the market to identify market demand and the position
of individual brands in the context of all other market competitors. There are
three forecast periods used:
·
historical financial results up to 2012. Where these
are not available using Institutional Brokers Estimate System (IBES), consensus
forecasts are used;
·
a five-year forecast period (2012-2016), based on
three data sources (IBES, historic growth and GDP growth); and
·
perpetuity growth, based on a combination of growth
expectations (GDP and IBES).
3.
Calculate the royalty rate for each brand by:
·
calculating brand strength – on a scale of 0-100,
according to the number of attributes such as financial, brand equity, market
share and profitability, among others;
·
using brand strength to determine βrandβeta® index score; and
·
applying Brand Strength Score to the royalty rate
range to determine the royalty rate for the brand. The royalty rate is
determined by a combination of the sector of operations, historic royalties
paid in that sector and profitability of the company.
4.
Calculate the future post-tax royalty income stream.
5.
Calculate the discount rate specific to each brand,
taking account of its size, geographical presence, reputation, gearing and
brand rating.
6.
Discount future royalty stream (explicit forecast
and perpetuity periods) to a net present value – ie. the brand value
Brand Ratings
These
are calculated using Brand Strength analysis, which benchmarks the strength,
risk and future potential of a brand relative to its competitors on a scale
ranging from AAA to D. It is conceptually similar to a credit rating. The data
used to calculate the ratings is taken from a variety of sources including
Bloomberg, annual reports and proprietary research by Brand Finance.
Note: The AAA to A ratings
can be altered by including a plus (+) or minus (-) sign to show their more
detailed positioning.
Valuation Date
All
brand values in the Global 500 are for the end of the year, 31 December 2012.
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