Brand Finance Engineering & Construction 50 May
2020 3
Content
s. About Brand Finance 4
Get in Touch 4
6
Brand Finance Group 6
Foreword 8
Executive Summary 10
Sector Reputation Analysis 14
Brand Finance Engineering & Construction 50 (USD m) 16
COVID-19 Global Impact Analysis 18
Definitions 22
Brand Valuation Methodology 24
Market Research Methodology 25
Stakeholder Equity Measures 25
Consulting Services 26
Brand Evaluation Services 27
Communications Services 28
Brand Finance Network 30
© 2020 All rights reserved. Brand Finance Plc, UK.
4 Brand Finance Engineering & Construction 50 May
2020
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About Brand
Finance is the world's leading
independent brand valuation consultancy.
We bridge the gap between marketing and
finance Brand Finance was set up in 1996 with the aim
of 'bridging the gap between marketing and finance'. For
more than 20 years, we have helped companies and
organisations of all types to connect their brands to the
bottom line.
We quantify the financial value of brands
We put 5,000 of the world’s biggest brands to the test
every year. Ranking brands across all sectors and
countries, we publish nearly 100 reports annually.
We offer a unique combination of
expertise Our teams have experience across a
wide range of disciplines from marketing and
market research, to
brand strategy and visual identity, to tax and accounting.
We pride ourselves on technical credibility
Brand Finance is a chartered accountancy firm regulated
by the Institute of Chartered Accountants in England and
Wales, and the first brand valuation consultancy to join
the International Valuation Standards Council.
Our experts helped craft the internationally recognised
standards on Brand Valuation – ISO 10668 and Brand
Evaluation – ISO 20671. Our methodology has been
certified by global independent auditors – Austrian
Standards – as compliant with both, and received
the official approval of the Marketing Accountability
Standards Board.
Get in Touch.
value to drive bus iness
per formance and offers a cost-
effective way to ga in ing a better
unders tand ing of your posit ion
aga ins t competi tors.
Request your own
Brand Value Report
A Brand Value Repor t provides a
comple te breakdown of the
assumpt ions, data sources, and
calculat ions used
to arrive at your brand’s value.
E a c h report inc ludes expert
recommendat ions for g row ing
b rand
Ben
ef
its
of
a
B
r
a n
d
V
al
u
e
Re
po
r t
What’s i n a Brand
Val ue
R
e
p
o
rt?
C o m p e t i t
orB e n c h m a r k i n g B r a n d Finance Engineering & Construction 50
May 2020 5
B r a n d
Valuat ion
S u m m a r y
B r a n d
S t r e n g t h
T rack ing
Cost of
Cap i ta l
Analys is
Royal ty
Rates
C u s t o m e r
Research
F i n d i n g s
Ins igh
t
Strat
egy
B e n ch m a rk in
g
Educat io
n
Commun ica t io
n
U n derstandin
g
benraqnudiriireesc@
For b u s i n e s s enquiries, p lease
contact: R ichard Haigh
Managing Director
+44 (0)7725 314400
@
For media enquiries, p lease
contact: Florina Cormack-Loyd
Senior Communications Manager
+44 7939 118932
@
For all other enquiries, p lease
contact:
enquiries@
+44 (0)207 389 9400
For more information, p lease visit our
website:
mailto:@
mailto:@
mailto:ormackloyd@
mailto:enquiries@
6 Brand Finance Engineering & Construction 50 May
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Over 1,500 brands researched each year
29 countries and 10 sectors covered
More than 5 0 , 0 0 0 respondents surveyed annually
Key metr ics across all industries and brands
B2B and B 2 c results
We are now in our 4 t h consecutive year conducting the
study
Customer insight
drives our valuations
Our b rand valuat ions are underp inned by extensive
market research across a wide range of sectors,
countr ies and brands.
Our research integrates all key b rand measures, l ink ing
t h e m to commerc ia l outcomes.
Available for purchase separately or as part of a B rand Value
Report.
om Brandirectory is the world’s largest database of current
and historical brand values, providing easy access to
all Brand Finance rankings, reports, whitepapers, and
consumer research published since 2007.
+ Browse thousands of published brand values
+ Track brand value, strength, and rating across
publications and over time
+ Use interactive charts to compare brand values
across countries, sectors, and global rankings
+ Purchase and instantly unlock premium data,
complete brand rankings, and research
Visit to find out more.
Brand Finance
Group. Brand Dialogue
Brand Dialogue is a public relations agency developing
communications strategies to create dialogue that
drives brand value. Brand Dialogue has over 25
years of experience in delivering campaigns driven
by research, measurement, and strategic thinking
for a variety of clients, with a strong background in
geographic branding, including supporting nation
brands and brands with a geographical indication (GI).
Brand Dialogue manages communications activities
across Brand Finance Group's companies and network.
VI360
VI360 is a brand identity management consultancy
working for clients of all sizes on brand compliance,
brand transition, and brand identity management. VI360
provide straightforward and practical brand management
that results in tangible benefits for your business.
Brand Exchange
Brand Exchange is a contemporary and exclusive
members' club and events space nestled in the heart of
the City of London. It was launched in 2015 to provide
members with a private space to network and socialise.
The club has since held several prestigious events
and welcomed many key figures in the marketing and
finance sectors as speakers. The membership brings
together senior professionals from the world's strongest
and most valuable brands.
enquiries@
mailto:enquiries@
David Haigh
CEO, Brand Finance
8 Brand Finance Engineering & Construction 50 May
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Brand Finance Engineering & Construction 50 May
2020 9
Foreword.
What is the purpose of a strong brand: to attract customers, to build loyalty, to
motivate staff? All true, but for a commercial brand at least, the first answer must
always be ‘to make money’.
Huge investments are made in the design, launch, and ongoing promotion of
brands. Given their potential financial value, this makes sense. Unfortunately, most
organisations fail to go beyond that, missing huge opportunities to effectively make
use of what are often their most important assets. Monitoring of brand performance
should be the next step, but is often sporadic. Where it does take place, it
frequently lacks financial rigour and is heavily reliant on qualitative measures, poorly
understood by non-marketers.
As a result, marketing teams struggle to communicate the value of their work and
boards then underestimate the significance of their brands to the business. Sceptical
finance teams, unconvinced by what they perceive as marketing mumbo jumbo, may
fail to agree necessary investments. What marketing spend there is, can end up
poorly directed as marketers are left to operate with insufficient financial guidance
or accountability. The end result can be a slow but steady downward spiral of poor
communication, wasted resources, and a negative impact on the bottom line.
Brand Finance bridges the gap between marketing and finance. Our teams have
experience across a wide range of disciplines from market research and visual
identity, to tax and accounting. We understand the importance of design, advertising,
and marketing, but we also believe that the ultimate and overriding purpose of
brands is to make money. That is why we connect brands to the bottom line.
By valuing brands, we provide a mutually intelligible language for marketing and
finance teams. Marketers then have the ability to communicate the significance of
what they do, and boards can use the information to chart a course that maximises
profits. Without knowing the precise, financial value of an asset, how can you know if
you are maximising your returns? If you are intending to license a brand, how can
you know you are getting a fair price? If you are intending to sell, how do you
know what the right time is? How do you decide which brands to discontinue,
whether to rebrand and how to arrange your brand architecture? Brand Finance has
conducted thousands of brand and branded business valuations to help answer
these questions.
Brand Finance’s research revealed the compelling link between strong brands and
stock market performance. It was found that investing in highly-branded companies
would lead to a return almost double that of the average for the S&P 500 as a whole.
Acknowledging and managing a company’s intangible assets taps into the hidden
value that lies within it. The following report is a first step to understanding more about
brands, how to value them and how to use that information to benefit the business.
The team and I look forward to continuing the conversation with you.
China’s
C S C E C
Overtakes
General
Electric as
World’s Most
Valuable
Engineering
&
Construction
Brand.
+ Engineering & construction sector moderately
impacted by COVID-19 pandemic, brands could
lose up to 10% of brand value, equating to over
US$30 billion loss
+ China’s C S C E C overtakes G E to become
world’s most valuable engineering &
construction brand, brand value US$ billion
+ China’s Conch is fastest growing brand, up 39%
+ Siemens claims title of world’s strongest
engineering & construction brand, Brand Strength
Index (BSI) score out of 100
10 Brand Finance Engineering & Construction 50 May
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Executive
Summary.
Top 50 E&C brands could
lose US$30bn from
COVID-19
The world’s top 50 most valuable engineering &
construction brands could lose over US$30 billion
worth of brand value as a result of the COVID-19
pandemic. Brand Finance’s analysis shows that the
engineering & construction sector is a moderately
impacted industry globally and could face a potential
10% loss in brand value.
As with the majority of sectors globally, COVID-19 is
undoubtedly going to wreak havoc on the engineering
& construction sector in the coming year, through
production disruption, broken supply chains and future
investment uncertainty.
Looking beyond the engineering & construction sector,
the value of the 500 most valuable brands in the world,
ranked in the Brand Finance Global 500 2020 league
table, could fall by an estimated US$1 trillion as a result
of the Coronavirus outbreak.
Brand Finance has assessed the impact of COVID-19
based on the effect of the outbreak on enterprise
value, compared to what it was on 1st January 2020.
The likely impact on brand value was estimated for
each sector. The industries have been classified
into three categories – limited impact (minimal
brand value loss or potential brand value growth),
moderate impact (up to 10% brand value loss), and
heavy impact (up to 20% brand value loss) – based
on the level of brand value loss observed for each
sector in the first quarter of 2020.
Executive
Summary.
C S C E C leads way for
Chinese brands
China State Construction
Engineering Corporation
( C S C E C ) has overtaken
General Electr ic (down 14% to US$ billion)
to become the world’s most valuable engineering
& construction brand, despite recording a 3% drop
in brand value to US$ billion.
CSCEC leads the way for a further 10 Chinese brands
in the ranking, with a combined brand value of US$
billion, closing the gap behind US brands, which
currently dominate the ranking, with 19 featuring with a
combined brand value of US$ billion.
Entering the ranking for the first time, in 10th position,
is Power China (brand value US$ billion). As one
of China’s biggest multinationals, Power China
has
established itself as a leading enterprise in the hydropower
industry both on home soil and internationally.
Leading Chinese cement producer, Conch, is this year’s
fastest growing engineering & construction brand, recording
President Xi Jinping’s Belt
and Road Initiative has
successfully propelled
Chinese engineering and
construction brands onto
the global stage and has
been the main impetus for
their solid performances in
the Brand Finance
Engineering &
Construction ranking.
These brands’ resilience
and strength have been put
to the ultimate test,
however, as COVID-19
engulfs not only the
Chinese but global
economy. With life making
a slow return to normal
across the nation, these
brands will hope to bounce
back, minimising risk to
their brand values in the
coming year.
Richard Haigh
Managing Director, Brand Finance
Top 10 Most Valuable
Brands
1
2020:
$24,820m
2019:
$25,673m
-
%
2020:
$24,205m
2019:
$28,263m
-
%
2020:
$20,057m
2019:
$21,607m
-
%
2020:
$19,596m
2019:
$22,941m
-
%
2020:
$14,449m
2019:
$13,905m
+
%
2020:
$12,196m
2019:
$15,164m
-
%
2020:
$11,306m
2019:
$11,653m
-
%
8
2020:
$8,330m
2019:
$6,382m
+
%
2020:
$7,901m
2019:
$7,730m
+
%
10
2020:
$7,715m
2019: –
2 2
2 1 1
3 2 4
5 2 6
2 14
NEW3
%
%
%
%
%
. Horton
John Deere
Sekisui House
CNBM
CRCC
Caterpillar
Ferguson
Johnson Controls
ABB
Brand Value Change 2019-2020
(%)
Conch %
%
%
%
%
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6 1 5
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7 0 7
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NEW
12 Brand Finance Engineering & Construction 50 May
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brands through a balanced scorecard of metrics
evaluating marketing investment, stakeholder
equity, and business performance. According to
these criteria, S i e m e n s (down 7% to US$
billion) is the world’s strongest engineering &
construction brand with a Brand Strength Index
(BSI) score of out of 100 and a corresponding
AAA brand strength rating.
The brand has committed to its Vision 2020+
strategy, focusing on growth in the fields of
electrification, automation and digitalisation, and
invested nearly €6 billion in R&D in 2019 alone.
The brand has scored particularly well on the
environment and governance score, a testament
to the brand’s environmental protection drive. CEO
Joe Kaeser has announced that he hopes to bring
forward its current 2030 CO2 neutrality target – a
reflection of Siemens’ success thus far.
This success as not come without its difficulties,
however, demonstrated by the 7% drop in brand value
to US$ billion. Siemens has cited the slowing
European and global economy, paired with the slump
in the car market, as key contributing factors towards
dented profits and forecast revenue.
Executive
Summary.
Executive
Summary.
Brand Value by
Economy
Economy
Brand
Value
(USD
bn)
%
of
total
Number
of
Brands
● United States % 19
● China % 11
● Germany % 3
● Japan % 7
● France % 4
● Switzerland % 2
● Other % 4
Total % 50
an impressive 39% brand value growth to US$ billion. The
brand has continued to commission several global projects
and celebrated solid revenue growth, which it has attributed
to strong sales performances.
John Deere bucks trend and
enters top 10
Bucking the negative trend in the top 10 is Illinois-
headquartered John Deere, recording a 31%
brand value increase to US$ billion and
simultaneously jumping 6 spots in the ranking from
14th to 8th.
Priding itself as a leader in the delivery of smarter, more
efficient and sustainable solutions, the brand continues
to strive towards innovative product development.
Despite John Deere suffering from the repercussions of
the US-China trade war and from the US farm industry
slowdown, the brand celebrated record performances
in its construction and forestry businesses, marking a
record year for sales and operating profit.
Siemens is sector’s strongest
In addition to measuring overall brand value,
Brand Finance determines the relative strength of
Top 10 Strongest
Brands
1
2020: AAA
2019: AAA
-
+1.
2
0 1
2
2020:
2019:
AAA
-
AAA
-
-
0 2
3
2020:
2019:
AAA
-
AAA
-
+0.
6
2 4
4
2020:
2019:
AAA
-
AAA
-
+1.
1
2 6
5
2020:
2019:
AAA
-
AAA
-
-
1 3
6
2020:
A A
+
2019:
A A
+
+0.
0
2 9
7
2020:
A A
+
2019:
A A
+
-
2 10
8
2020:
A A +
2019: AAA
-
1 5
9
2020:
A A +
2019: AAA
-
-
NE
W
1 8
NEW
2020:
A A
+
2019: –
10
3
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2
02
0
©
B
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F
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2
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14 Brand Finance Engineering & Construction 50 May
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Benchmarking against the very
best
Every brand owner will want to compare brand equity
against immediate competitors and peers. But broader
benchmarking against brands across a range of categories
provides a more rounded assessment of brand strength.
This perspective is also important as brand categories
converge, with new technologies enabling disruption and
brands seeking tactical entry into neighbouring categories,
like a trusted supermarket offering financial or telecoms
services (but are themselves under threat from Amazon
and other disruptors).
Brand reputation is relatively straightforward to compare
across sectors. This year’s global and UK sector rankings
from our B2C research are similar to the previous wave.
Reputation dips slightly overall
On a like-for-like basis, reputation scores are lower this
year, by a small margin. The average brand score fell from
out of 10. Categories where a poor reputation
is the default position, such as utilities, telecoms, and
banks, have failed to convince customers that they are
consumer champions – and the average scores for brands
in these categories reflects overall feelings towards brands:
acceptance and appreciation, but rarely love and devotion.
Autos lead the way
Car brands continue to enjoy strong reputations, both in
the UK and globally. The sector also ranks first on other
indicators, such as perceived quality, recommendation
and word-of-mouth sentiment – people like talking about
cars. Top brands are generally German, such as Audi
(reputation score and BMW (), but Jaguar
()
competes strongly in its home market. Meanwhile there are
few instances of brands with a really poor reputation – most
cars nowadays are well-designed and equipped.
Importantly, the category enjoys a good reputation for
being innovative – allowing century-old brands to be
well-positioned to withstand the enormous disruption in
mobility expected in the coming decade.
Tech halo continues to shine in
the UK
Consumers continue to hold the tech sector in high
regard. This is true globally, even though reputation
Sector Reputation
Analysis. Sectors Ranked by
Reputation
D
C
L
d
g
H
G 2
f 1
3=
3=
5=
5=
7
8
9=
1
0
=
Aut
o
T
ech
Appare
l
Retai
l
Airline
s
Bank
s
Telecom
s
/10
/10
Restaurants
/10
/10
/10
Insurance
/10
/10
/10
Utilities
/10
/10
b
t
scores have fallen slightly – and in any case this small
drop has not occurred in the UK. Paypal (), Netflix
( – up significantly vs. the previous year), Amazon
and Google () continue to enjoy strong reputations
and buzz – most brands would love to be in their position.
Where supermarkets need to raise their game,
perhaps, is in innovation. Online grocery shopping has
had increasing profile and usage during the pandemic,
and is increasingly routine and relied-on. Hence to be
innovative means offering more than an efficient online
platform – what else can supermarkets offer?
Banks and Telcos Continue to
Struggle
Banking brands and telecoms providers continue to
struggle to earn the respect of consumers, both globally
and in the UK. Telecoms providers are particularly poorly-
perceived in the UK, with no dimension where they score
even moderately well – rated lowest of all for overall
reputation and quality of service ( out of 5).
Banks fare a little better with some consumers
acknowledging service delivery and ease of doing
business. In addition, for national and regional brands
especially, banks score reasonably well for ‘care about
the wider community’ – a possible pillar for building a
defence against encroachment from tech giants and
fintech challenger brands.
Sector Reputation
Analysis.
Metric Top Sector
Reputatio
n
A
UTO
Qualit
y
The implications are clear – brands in categories such as
retail, media, banking and automotive will continue to be
under constant threat of disruption from these tach giants,
regardless of concerns about security, tax arrangements
and other issues which some have. Hence Netflix’s
continued growth during the COVID-19 pandemic.
Supermarkets are value
champions
A U T O Supermarket brands seen as very reputable in most
countries, though in the UK their ranking is only
mid-table. They are category leaders in terms of
delivering value for money, and for ‘caring about
the wider community’, and it may be that their
handling of the COVID-19 crisis may well result in an
improvement in the next wave’s scores. Consumers
are well aware that supermarkets are out to make a
profit – but the consumer verdict is that brands such
as Aldi (68% ‘great value’), Lidl (62%) and A s d a
(52%) charge fair prices.
Recommendati
on (NPS)
A
UTO
Loyalt
y
T E C
H
Innovatio
n
T E C
H
Website/Ap
p
T E C
H
Value for
money
R E T
AIL
OVERA
LLS T A K E H O L D
E REQUIT
Y T E CH
Top Sectors per
Metric
16 Brand Finance Engineering & Construction 50 May
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m
Brand Finance
Engineering &
Construction 50 (USD m).
Top 50 most valuable engineering & construction
brands 1-50
2020
Rank
2019
Rank Brand Economy
2020
Brand
Value
Brand
Value
Change
2019
Brand
Value
2020
Brand
Rating
2019
Brand
Rating
1 2 2 CSCEC China $24,820 % $25,673 AA- AA-
2 1 1 General Electric United States $24,205 % $28,263 AAA- AAA-
3 4 2 Siemens Germany $20,057 % $21,607 AAA AAA-
4 3 1 Bosch Germany $19,596 % $22,941 AA+ AAA-
5 6 2 Hitachi Japan $14,449 +% $13,905 AAA- AAA-
6 5 1 CRCC China $12,196 % $15,164 AA- AA-
7 7 0 CRECG China $11,306 % $11,653 A+ A
8 14 2 John Deere United States $8,330 +% $6,382 AAA- AAA-
9 11 2 VINCI France $7,901 +% $7,730 AA+ AA
10 - 3 POWERCHINA China $7,715 - - AA- -
11 9 1 Honeywell United States
12 10 1 CRRC China
13 15 2 Saint-Gobain France
14 16 2 Daiwa House Japan
15 12 1 Caterpillar United States
16 17 2 CNBM China
17 13 1 MCC China
18 18 0 CCCC China
19 8 1 ABB Switzerland
20 21 2 Carrier United States
21 22 2 Daikin Japan
22 32 2 . Horton United States
23 19 1 Cummins United States
24 28 2 Larsen & Toubro India
25 29 2 Danaher United States
26 27 2 Schneider Electric France
27 31 2 Lennar United States
28 26 1 Hochtief Germany
29 38 2 Conch China
30 25 1 Samsung C&T South Korea
31 24 1 Mitsubishi Heavy Industries Japan
32 33 2 Otis United States
33 41 2 Sekisui House Japan
34 35 2 Eaton United States
35 34 1 CGGC China
36 20 1 Ferguson United States
37 30 1 International Paper United States
38 37 1 Eiffage France
39 40 2 Ingersoll Rand United States
40 23 1 Johnson Controls United States
41 39 1 Cemex Mexico
42 36 1 Holcim Switzerland
43 42 1 Oji Japan
44 45 2 Arconic United States
45 - 3 Kone Finland
46 43 1 ITW United States
47 - 3 Obayashi Japan
48 44 1 BLACK + DECKER United States
49 46 1 Grainger United States
50 - 3 CNNC China
COVID-19 Global
Impact Analysis.
18 Brand Finance Engineering & Construction 50 May 2020 Brand Finance Engineering & Construction 50 May
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Companies
likely to lose up
to $1tn in Brand
Value as Direct
Impact of COVID
-19
Outbreak,
Effects to be
Felt Well into
Next Year.
+ Worst hit industries: aviation, oil & gas, tourism &
leisure, restaurants, retail
+ Brand Finance has measured levels of business
impact categorised by: limited impact, moderate
and worst hit
+ International aviation, airlines and airports to be
worst affected by Coronavirus outbreak, with
measures of social distancing, closure of borders,
advice against travel
+ Home delivery apps, online video conferencing
platforms, digital media see surge in demand from
remote working revolution
COVID-19
Global Impact
Analysis.
20 Brand Finance Engineering & Construction 50 May
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m
Executive
Summary.
Executive
Summary.
Up to US$1 trillion estimated
brand value loss from COVID-
19 globally
The brand value of the world’s biggest companies
is set to lose an estimated US$1tn as a result of the
Coronavirus outbreak, with the aviation sector being
the most affected. The 2003 SARS outbreak, which
infected about 8,000 people and killed 774, cost the
global economy an estimated US$50 billion. As of
14th May 2020, there have been 4,466,625 cases and
299,483 deaths of COVID-19 confirmed worldwide.
Global spread has been rapid, with 146 countries now
having reported at least one case.
Brand Finance has assessed the impact of COVID-19 on
brands based on the effect of the outbreak on enterprise
value, compared to what it was on 1st January 2020. The
likely impact on brand value was estimated separately
for each sector. The industries have been classified into
three categories – limited impact (minimal brand value
loss or potential brand value growth), moderate impact
(up to 10% brand value loss), and heavy impact (up to
20% brand value loss) – based on the level of brand value
loss observed for each sector in the first quarter of 2020.
The COVID-19 pandemic is
now a major global health
threat and its impact on
global markets is very real.
Worldwide, brands across
every sector need to brace
themselves for the
Coronavirus to massively
affect their business
activities, supply chain and
revenues in a way that
eclipses the 2003 S A R S
outbreak. The effects will be
felt well into 2021.
David Haigh,
CEO, Brand Finance
Work from home revolution
Brands offering in-home or remote working solutions
have observed an immediate uptick in demand, as
multiple Zoom online video conferencing platform
prompted huge demand for workable solutions
Food delivery apps Deliveroo and UberEats, now
offering contact-free delivery options whereby a food
delivery is conveniently left on your doorstep so as not to
encourage contact between customer and delivery driver,
have also seen a huge surge in demand for their services.
Media and film industry feel
effects
Film production and promotion schedules have been
affected by the outbreak, with Disney pushing back
the release of its remake of Mulan as well as The New
Mutants, part of the X-Men franchise. The effects of
social distancing have meant more viewers watching
TV, however Netflix has had to suspend production
on all scripted series and films in the US and Canada.
As massive televised sports events and festivals such
as
Glastonbury being cancelled, TV executives will be feeling
the strain of providing fresh and watchable it is not all doom
and gloom. Some brands
will fare better under
COVID-19: Amazon,
Netflix, WhatsApp, Skype,
B B C and BUPA are all
booming.
David Haigh,
CEO, Brand Finance
Brand Value at
R isk
High Impact
-20%
Moderate Impact
-10%
Limited Impact
-0%
o Food
A Pharma
D Supermarkets
H Telecoms
l Cosmetics & Personal Care
g Banking
m Engineering & Construction
j Chemicals
E Tea
F Spirits
q Healthcare
t Insurance (General)
z Oil & Gas
J Tobacco
n Financial Services
t Insurance (Life)
h Beers
d Apparel
D Retail
I Tyres
f Auto
r Hotels
b Airlines
©
B
ra
n
d
F
in
an
ce
P
lc
2
02
0
22 Brand Finance Engineering & Construction 50 May
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Enterprise Value
Branded Business Value
Brand Contribution
Definition
s.
[Carrier]
[Carrier]
Brand
Value
that the business derives from
owning the brand rather than
operating
a generic brand.
The brand values contained in our league
tables are those of the potentially
transferable brand assets only, making
‘brand contribution’ a wider concept.
An assessment of overall ‘brand contribution’
to a business provides additional insights
to help optimise performance.
+ Brand Value
The value of the trade mark
and associated marketing IP
within the branded business.
Brand Finance helped to craft the
internationally recognised standard on
Brand Valuation – ISO 10668. It defines
brand as a marketing-related intangible
asset including, but not limited to, names,
terms, signs, symbols, logos, and designs,
intended to identify goods, services
or entities, creating distinctive images
and associations in the minds of stakeholders,
thereby generating economic benefits.
+ Enterprise Value
The value of the entire enterprise,
made up of multiple branded
businesses.
[United Technologies]
Where a company has a purely mono-
branded architecture, the ‘enterprise value’
is the same as ‘branded business value’.
+ Branded Bus iness Value
The value of a single branded
business operating under the
subject brand.
[Carrier] A brand should be viewed in the context
of the business in which it operates.
Brand Finance always conducts a branded
business valuation as part of any brand
valuation. We evaluate the full brand value
chain in order to understand the links
between marketing investment, brand-
tracking data, and stakeholder behaviour.
+ Brand Contribution
The overall uplift in shareholder
value
Bran
d
Value B
ra
n
d
S
tr
e
n
g
th
In
d
e
x
Widely recognised factors deployed by marketers to create brand loyalty
and market share.
Perceptions of the brand among different stakeholder groups,
with customers being the most important.
Quantitative market and financial measures representing the success
of the brand in achieving price and volume premium.
Brand Strength
Brand Strength is the efficacy of a
brand’s performance on intangible
measures, relative to its competitors.
In order to determine the strength of a brand, we look
at Marketing Investment, Stakeholder Equity, and the
impact of those on Business Performance.
Each brand is assigned a Brand Strength Index
(BSI) score out of 100, which feeds into the brand
value calculation. Based on the score, each brand
is assigned a corresponding rating up to AAA+ in a
format similar to a credit rating.
Analysing the three brand strength measures helps
inform managers of a brand’s potential for future success.
Definition
s.
Stakeholde
r
Equity
Business
P
erformance
Equit
y
Performanc
e
Marketing Investment
• A brand that has high Marketing Investment but low Stakeholder Equity may be
on a path to growth. This high investment is likely to lead to future performance in
Stakeholder Equity which would in turn lead to better Business Performance in the future.
• However, high Marketing Investment over an extended period with little improvement
in Stakeholder Equity would imply that the brand is unable to shape customers’
preference.
Stakeholder Equity
• The same is true for Stakeholder Equity. If a company has high Stakeholder Equity,
it is likely that Business Performance will improve in the future.
• However, if the brand’s poor Business Performance persists, it would suggest that
the brand is inefficient compared to its competitors in transferring stakeholder sentiment
to a volume or price premium.
B u s i n e s s Performance
• Finally, if a brand has a strong Business Performance but scores poorly on Stakeholder
Equity, it would imply that, in the future, the brand’s ability to drive value will diminish.
• However, if it is able to sustain these higher outputs, it shows that the brand
is particularly efficient at creating value from sentiment compared to its competitors.
Investmen
t
Marketin
g
Investmen
t
24 Brand Finance Engineering & Construction 50 May
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Brand Valuation
Finance calculates the values of
the brands in its league tables using
the Royalty Relief approach – a brand
valuation method compliant with the
industry standards set in ISO 10668.
This involves estimating the likely future revenues that
are attributable to a brand by calculating a royalty rate
that would be charged for its use, to arrive at a ‘brand
value’ understood as a net economic benefit that a
licensor would achieve by licensing the brand in the
open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard
of metrics assessing Marketing Investment,
Stakeholder Equity, and Business Performance. Brand
strength is expressed as a Brand Strength Index (BSI)
score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting
the importance of brand to purchasing decisions. In
luxury, the maximum percentage is high, in extractive
industry, where goods are often commoditised, it is
lower. This is done by reviewing comparable licensing
agreements sourced from Brand Finance’s extensive
database.
3 Calculate royalty rate. The BSI score is applied to the
royalty range to arrive at a royalty rate. For example, if
the royalty range in a sector is 0-5% and a brand has
a BSI score of 80 out of 100, then an appropriate
royalty rate for the use of this brand in the given sector
will be 4%.
4 Determine brand-specific revenues by estimating a
proportion of parent company revenues attributable
to a brand.
5 Determine forecast revenues using a function of
historic revenues, equity analyst forecasts, and
economic growth rates.
6 Apply the royalty rate to the forecast revenues to
derive brand revenues.
7 Brand revenues are discounted post-tax to a net
present value which equals the brand value.
Brand
Strength
Index (BSI )
Brand strength
expressed as a BSI
score out of 100.
Brand
Royalty
Rate
BSI score applied
to an appropriate
sector royalty range.
Brand
Revenues
Royalty rate applied
to forecast revenues
to derive brand value.
Brand Value
Post-tax brand
revenues discounted
to a net present value
(NPV) which equals
the brand value.
Disclaimer
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions produced in this study are based only on publicly available information
and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available
information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the report are not to be construed as providing investment or business advice.
Brand Finance does not intend the report to be relied upon for any reason and excludes all liability to any body, government or organisation.
Market Research
Methodology.
Stakeholder Equity
Measures. Brand converison funnel
The brand conversion funnel is a way of summarising
the likely strength of a brand to convert to purchase.
Brand Finance conducted original market research in 10 sectors across 29 markets
with a sample s ize of over 50,000 adults, representative of each country’s internet
population aged 18+ .
Surveys were conducted online during autumn 2019.
Key
Metrics
+ Reputation
+ Innovation
+ Value for Money
+ Emotional Fit
+ Recommendation
+ Quality etc.
Awareness
Knowledge that your brand exists
Familiarity
Depth of knowledge of the brand
Consideration
Narrowing down market to candidate brand set
Preference
Category users’ brand preference
Loyalty
Intention to repeat purchase
Auto
Tech
Apparel
Restaurant
s Airlines
Retail
Insuranc
e
Utilities
Banking
Telecom
s
26 Brand Finance Engineering & Construction 50 May
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m
2. Analytics: How can I
improve marketing
effectiveness?
Analytical services help to uncover drivers
of demand and insights. Identifying the
factors which drive consumer behaviour
allows an understanding of how brands
create bottom-line impact.
Market Research Analytics +
Return on Marketing Investment +
Brand Audits +
Brand Scorecard Tracking +
4. Transactions:
Is it a good
deal? Can I
leverage my
intangible
assets?
Transaction services help buyers,
sellers, and owners of branded businesses
get a better deal by leveraging the value of
their intangibles.
+ M&A Due Diligence
+ Franchising & Licensing
+ Tax & Transfer Pricing
+ Expert Witness
3. Strategy: How
can I increase the
value of my
branded business?
Strategic marketing services enable
brands to be leveraged to grow
businesses. Scenario modelling will
identify the best opportunities, ensuring
resources are allocated to those activities which
have the most impact on brand and business value.
Brand Governance +
Brand Architecture & Portfolio Management +
Brand Transition +
Brand Positioning & Extension +
MARKETING FINANCE TAX LEGAL
We help marketers to
connect their brands to
business performance by
evaluating the return on
investment (ROI) of
brand-based decisions
and strategies.
We provide financiers and
auditors with an
independent assessment
on all forms of brand and
intangible asset
valuations.
We help brand owners
and fiscal authorities to
understand the
implications of different
tax, transfer pricing, and
brand ownership
arrangements.
We help clients to enforce
and exploit their
intellectual property rights
by providing independent
expert advice in- and
outside of the courtroom.
2. ANALYTI C
S
3.
AN
SA
CT
IO
N
S
1.
VA
LU
AT
I O
N
1. Valuation: What are my
intangible assets worth?
Valuations may be conducted for technical
purposes and to set a baseline against
which potential strategic brand
scenarios can be evaluated.
+ Branded Business Valuation
+ Trademark Valuation
+ Intangible Asset Valuation
+ Brand Contribution
Brand
&
Bus ine
ss
V
alue
Consult ing
Services.
Brand Evaluation
Services.
How are brands
perceived in my
category?
Brand Finance tracks brand fame and perceptions
across 30 markets in 10 consumer categories. Clear,
insightful signals of brand performance, with data
mining options for those who want to dig deeper – all at
an accessible price.
What if I need more
depth or coverage of
a more special ised
sector?
Our bespoke brand scorecards help with market
planning and can be designed to track multiple brands
over time, against competitors, between market
segments and against budgets. Our 30-country
database of brand KPIs enables us to benchmark
performance appropriately.
Do I have the right brand
architecture or strategy in
place?
Research is conducted in addition to strategic
analysis to provide a robust understanding
of the current positioning. The effectiveness
of alternative architectures is tested
through drivers analysis, to determine which option(s)
will stimulate the most favourable customer behaviour
and financial results.
How can I improve
return on marketing
investment?
Using sophisticated analytics, we have a proven track
record of developing comprehensive brand scorecard
and brand investment frameworks to improve return on
marketing investment.
What about the social
dimension? Does my brand
get talked about?
Social interactions have a proven commercial impact
on brands. We measure actual brand conversation and
advocacy, both real-world word of mouth and online
buzz and sentiment, by combining traditional survey
measures with best-in-class social listening.
28 Brand Finance Engineering & Construction 50 May
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m
How we can help communicate your brand’s
performance in brand value rankings
Communications
Services.
T O P 5 0
engineering&cOnsTruc
TiOn B r A n D
M O s T
V A L u A B L e
engineering&cOnsTruc
TiOn B r A n D
s T r O n g e s T
engineering&cOnsTruc
TiOn B r A n D
Bespoke Events – organise an award ceremony or celebratory
event, coordinate event opportunities and spearhead communications
to make the most of them.
Digital Infographics – design infographics visualising your
brand’s performance for use across social media platforms.
Trophies & Certificates – provide a trophy and/or hand-written
certificate personally signed by Brand Finance CEO to recognise your
brand’s performance.
Media Support – provide editorial support in reviewing or copywriting
your press release, pitching your content to top journalists, and monitoring
media coverage.
Sponsored Content – publish contributed articles, advertorials,
and interviews with your brand leader in the relevant Brand Finance report
offered to the press.
Video Endorsement – record video with Brand Finance CEO or
Director speaking about the performance of your brand, for use in both
internal and external communications.
Brand Accolade – create a digital endorsement stamp for use in
marketing materials, communications, annual reports, social media and
website.
Advertising use subject to terms and conditions.
Value-Based Communications
With strategic planning and creative thinking, we develop communications plans to create dialogue with
stakeholders that drives brand value. Our approach is integrated, employing tailored solutions for our
clients across PR, marketing and social media.
S E R V I C E S
• Research and Insights
• Integrated Communications Planning
• Project Management and Campaign Execution
• Content and Channel Strategy
• Communications Workshops
For more information, contact enquiries@ or visit
Brand Dialogue is a member of the Brand Finance plc group of companies
BEC OME A MEMBER T OD A Y
A C O N T E M P O R A R Y A N D E X C L
U S I V E
C H A R A C L S P A C
E
P R I V A T E E V E N
T S
3 Birchin Lane, London, EC3V 9 B +44 (0)207 389 9410
enquir ies@
Brand Exchange is a m e m b e r of the Brand Finance plc group of companies
M E M B
E
E N T
S
F O C U S
O
R
w
S
it
'
h
E V
N M A R K E T I N
G
B R A N D I N
G
D I S C O U N T
E D
M E E R
S
M B
R O OM H I R E
M E M B E R S ' C L U B
I N T H E H E A R T O F T H E C I T Y O F L O N D
O N
M E
N G
S
T E R F
U
E T I & &
for
for
mailto:enquiries@
mailto:enquiries@
mailto:enquiries@
30 Brand Finance Engineering & Construction 50 May
2020
m
For further information on our services and valuation experience, please contact your local
representative:
Brand Finance
Network.
Market Contact Email Telephone
Africa Jeremy Sampson @ +27 82 885 7300
Asia Pacific Samir Dixit @ +65 906 98 651
Australia Mark Crowe @ +61 282 498 320
Canada Charles Scarlett-Smith -smith@ +1 514 991 5101
Caribbean Nigel Cooper @ +1 876 825 6598
China Scott Chen @ +86 186 0118 8821
France Bertrand Chovet @ +33 6 86 63 46 44
Germany Holger Muehlbauer @ +49 151 54 749 834
India Ajimon Francis @ +91 989 208 5951
Indonesia Jimmy Halim @ +62 215 3678 064
Ireland Simon Haigh @ +353 087 669 5881
Italy Massimo Pizzo @ +39 02 303 125 105
Japan Jun Tanaka @ +81 90 7116 1881
Mexico & LatAm Laurence Newell @ +52 55 9197 1925
Middle East Andrew Campbell @ +971 508 113 341
Nigeria Tunde Odumeru @ +234 012 911 988
Romania Mihai Bogdan @ +40 728 702 705
Spain Teresa de Lemus @ +34 654 481 043
Sri Lanka Ruchi Gunewardene @ +94 11 770 9991
Turkey Muhterem Ilgüner @ +90 216 352 67 29
UK Richard Haigh @ +44 207 389 9400
USA Laurence Newell @ +214 803 3424
Vietnam Lai Tien Manh @ +84 90 259 82 28
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mailto:@
mailto:@
mailto:-smith@
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mailto:@
mailto:@
mailto:@
Contact
us.
The World’s Leading Independent Brand Valuation
Consultancy T: +44 (0)20 7389 9400
E:
enquiries@
mailto:enquiries@
