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United Kingdom 1502019The annual report on the most valuable and strongest British brandsMay 2019

2 Brand Finance United Kingdom 150 May 2019

Brand Finance is the world’s leading independent brand valuation consultancy.

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 pride ourselves on four key strengths:

+ Independence + Technical Credibility

+ Transparency + Expertise

We put thousands of the world’s biggest brands to the test every year, evaluating which are the strongest and most valuable.

Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.

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Brand Finance United Kingdom 150 May 2019 3

Contents.About Brand Finance 2

Get in Touch 2

Request Your Brand Value Report 4

Brand Valuation Methodology 5

Foreword 6

Executive Summary 8

United Kingdom 150 Brand Finance (GBP m) 13

Country Reputation Analysis 16

Definitions 18

Consulting Services 20

Brand Evaluation Services 21

Communications Services 22

Brand Finance Network 24


What is a Brand Value Report?

Brand Valuation Summary

+ Internal understanding of brand+ Brand value tracking+ Competitor benchmarking+ Historical brand value

Brand Strength Index

+ Brand strength tracking+ Brand strength analysis+ Management KPIs+ Competitor benchmarking

Royalty Rates

+ Transfer pricing+ Licensing/franchising negotiation+ International licensing+ Competitor benchmarking

Cost of Capital

+ Independent view of cost of capital for internal valuations and project appraisal exercises

Customer Research

+ Utilities + Insurance+ Banks+ Telecoms+ Airlines

+ Tech+ Auto+ Hotels+ Beers+ Oil & Gas

For more information regarding our Brand Value Reports, please contact:

[email protected]

A Brand Value Report provides a complete breakdown of the assumptions, data sources, and calculations used to arrive at your brand’s value.

Each report includes expert recommendations for growing brand value to drive business performance and offers a cost-effective way to gaining a better understanding of your position against competitors.

Request Your Brand Value Report.

What are the benefits of a Brand Value Report?

Insight

Strategy

Benchmarking

Education

Communication

Understanding


Brand Valuation Methodology.Brand 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 strengthexpressed as a BSIscore out of 100.

Brand Royalty RateBSI score applied to anappropriate sectorroyalty range.

Brand RevenuesRoyalty rate applied toforecast revenues toderive brand value.

Brand ValuePost-tax brandrevenues discounted to a net present value (NPV)which equals the brand value.

DisclaimerBrand 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.

David Haigh CEO, Brand Finance


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.


Brexit Won’t Stop the Best of British Brands.

+ Brexit blues haven’t affected all brand values: star performances from McLaren and EY

+ Sectors showing brand value rises: professional services, retail, insurance, tourism and leisure

+ BrewDog sips on success as UK’s fastest growing brand, up 89% since last year to £1.2 billion

+ Retail resilience as supermarket brands thrive with online offering, as CMA rules against Sainsburys-Asda merger


Executive Summary.

Spring surprises for British brands

Spring has sprung a few surprises for British brands in Brand Finance’s UK 150 2019 ranking of the UK’s 150 most valuable brands. Whilst politicians continue the Brexit debate in the corridors of power, some brands have surged forward in brand value, suggesting that there is more mettle to the British economy even in the event of a no-deal Brexit. UK GDP growth is forecast by some to remain subdued in 2019 as political uncertainty continues into the Summer months alongside global trade tensions and higher interest rates weighing down on the economy.

Defying this forecast, strong growth continues apace for many among this year’s top 150 British brands. This year’s total brand value for all of the UK’s most valuable 150 brands has risen 10% to £369.11 billion.

Sector success proves UK brand resilience

Sectors where brand growth has risen include professional services, retail, insurance, tourism and leisure, suggesting resilience from UK brands in the face of an exit from the European Union. Star performers in these sectors include EY (brand value up 40% to £18 billion) with its elite AAA+ brand rating, Tesco (up 17% to £8.77 billion), Aviva (up 39% to £5.18 billion), Prudential (up 47% to £4.96 billion), P&O Cruises (brand value up 31% to £0.9 billion) and British Airways (brand value up 23% to £3.23 billion). A positive for these brands is having a global

It is the best of British brands whose reach already extends beyond the UK which will flourish due to their international presence. This global reach outside of Europe is what will ultimately help sustain momentum and further brand value growth. Despite the weaker pound and the ongoing Brexit saga, this year’s UK 150 brands show a surprising level of resilience. Lower petrol prices, cheaper flights and the continued desire to have a holiday are benefiting airline, hospitality and retail brands.

David HaighCEO, Brand Finance


Top 10 Most Valuable Brands

0

10

20

30

40

2019201820172016201520142013

2019201820172016201520142013

Brand Value over Time

12019:2018:

1

£32,855m£29,702m

+10.6%

0

22019:2018:

5

£18,039m£12,906m

+39.8%

2

32019:2018:

2

£17,615m£14,774m

+19.2%

1

42019:2018:

3

£16,564m£14,122m

+17.3%

1

52019:2018:

4

£15,683m£13,791m

+13.7%

1

62019:2018:

6

£8,997m£10,177m

-11.6%

0

72019:2018:

10

£8,775m£7,478m

+17.3%

2

82019:2018:

9

£8,078m£7,656m

+5.5%

2

92019:2018:

7

£7,033m£8,881m

-20.8%

1

102019:2018:

8

£6,452m£8,660m

-25.5%

1

Executive Summary.

GB

P b

n

● Shell ● EY ● BP ● Vodafone ● HSBC

presence and the benefit of established international status so the notion that Brexit will have a major impact is negligible. Whilst EY runs offices in 150 countries, Tesco, operates from 13, and Aviva is present in 16. Prudential to maintain growth has just announced further expansion in West Africa by acquiring a majority stake in Group Beneficial, a life insurer operating in Cameroon, Cote d’Ivoire and Togo.

Will Brexit blues affect brand value?

As Brexit uncertainty continues beyond the expected deal date, the fear of a no-deal has seen other brand values falter as consumers are seen to hold back on non-essential spending. Brands significantly affected include household brand JLP (brand value down by 25% to £1.05 billion). Increased online shopping, a weaker pound as a consequence of the referendum, and heavy retail discounting are also cited by Chairman Sir Charlie Mayfield for the decline in JLP’s performance.

Retail brands thrive

Supermarket brands in the Brand Finance UK 150, which meet customers’ essential needs via their online services, are thriving. Sainsbury’s (brand value up


Brand Value by Sector

11% to £4.53 billion), Morrisons (3.9% rise in brand value to £2.56 billion), Co-op brand value soars 45% to £2.05 billion. Waitrose (brand value up 16% to £1.53 billion). Higher wages, low unemployment (the lowest level since the mid-70s) inflation under 2%, and pre-Brexit stockpiling of dry goods, may be instrumental in this growth. However, in the event of a no-deal Brexit, this buoyancy could well be affected. As well as BrewDog, Prudential, Tesco, and others pursing growth through expansion and acquisition, the Co-op’s 4 years run of introducing large numbers of new stores, some through acquisition, has also boosted brand value.

This year a planned £12 billion merger between Sainsbury’s and Asda was blocked after Britain’s competition watchdog, the Competition and Markets Authority, raised a catalogue of concerns, including higher prices and reduced quality and choice for customers.

BrewDog hops up UK 150

It is not doom and gloom all across the board, however, as the UK’s fastest growing brand is much loved craft beer brand BrewDog. With its brand value up 89% since last year, BrewDog is valued at £1.2 billion in this year’s Brand Finance UK 150 2019 and shows

Executive Summary.

SectorBrand Value (GBP bn) % of total

● Oil & Gas 50.9 13.8%

● Telecoms 48.6 13.2%

● Retail 45.8 12.4%

● Banking 39.0 10.6%

● Commercial Services 29.8 8.1%

● Insurance 20.2 5.5%

● Other 134.8 36.5%

Total 369.1 100.0%


no signs of slowing down. Known for its flavoursome ales and creative packaging, the brand now owns 80 global locations and is expanding rapidly, both here in the UK and abroad, as it seeks new sites in Exeter, and notably announced plans recently for its craft beer hotel concept.

Online offering is way forward

M&S has seen its brand value drop 13% to £2.5 billion in this year’s Brand Finance UK 150 2019, with the brand continuing its reorganization plan in which it aims to relocate a third of its sales online and to have fewer stores in better locations. Marks and Spencer has named the next wave of stores earmarked for closure in its reorganisation plan, with proposed closure forming part of the clothing, homeware and food retailer's five-year plan to shut more than 100 stores by

Executive Summary.

Brand Value Change 2018-2019 (%)

+89.4%

+71.5%

+56.2%

+47.3%

+44.7%

+40.5%

+40.2%

+39.8%

+39.4%

+39.3%

-20.3%

-20.8%

-22.5%

-23.4%

-25.1%

-25.5%

-29.8%

-33.7%

-38.7%

-40.8%

BrewDog

McLaren

Rolls- Royce

Prudential (UK)

The Co-operative

Sports Direct

J&B

EY

Aviva

IHS Markit

EE

Land Rover

National Grid

William Hill

John Lewis

BT

RBS

Finish

Aptiv

Premier Inn


2022. So far, 30 stores have closed and another eight have already been named. M&S’s recent joint venture announcement with Ocado to provide a home delivery service could boost the brand’s performance.

Other strong retail performers with significant online offerings include: Sports Direct (brand value up 40% to £0.9 billion), B&M (brand value up 32% to £1 billion) and ASOS whose brand value has shot up increase by 35% to £1.17 billion. Despite ASOS’s recent failure to meet customer online demand from a new warehouse in the US, it continues to woo the young British consumer and results in the UK market are healthy.

British auto brands power through

Surprisingly, after last year’s surge, some brand values for auto brands have fallen: Mini’s is down 2% to £2.48 billion, Aston Martin’s falls 5% to £2.53 and Bentley’s drops 5% to £1.76 billion. Land Rover’s brand value slips 21% to £7.03 billion but the brand keeps its place in Brand Finance’s UK top ten strongest brands. Brexit concerns, particularly in the case of Mini’s parent company BMW, and growing interest in the production and sale of environmentally friendly cars, may be partly to blame. However, for Vauxhall (brand value up 4% to £0.5 billion) and luxury brand Rolls Royce (brand value up 56% to £1.23 billion), the story is different. 2018 was its most successful year ever following the sale of 4107 cars to 50 countries. Profit is said to have been boosted by its revamped Phantom flagship, and its Dawn and Wraith coupé models.

Heathrow flies into the Brand Finance UK 150

Heathrow Airport, with its AA+ brand strength rating, is one of several new arrivals to this year’s ranking. As one of the oldest hub airports in the world and the third largest by passenger numbers, its position at 109th in the top 150 UK brands is well deserved. In 2018 it met the needs of a record 80 million passengers. As well as wanting to be the best service airport in the world the brand has high levels of global awareness and potentially provides the springboard to push the brand beyond the physical infrastructure and extend into adjacent categories.

Top 10 Strongest Brands

12019:2018:

1

89.7 AAA+89.7 AAA+

0.0

0

22019:2018:

2

87.8 AAA89.0 AAA

-1.2

0

32019:2018:

4

86.7 AAA87.6 AAA

-0.9

2

42019:2018:

8

86.6 AAA85.1 AAA

+1.5

2

52019:2018:

7

86.3 AAA85.3 AAA

+1.0

2

62019:2018:

16

86.1 AAA83.2 AAA-

+2.9

2

72019:2018:

6

85.8 AAA85.7 AAA

+0.1

1

82019:2018:

38

85.2 AAA77.0 AA+

+8.2

2

92019:2018:

19

84.7 AAA81.9 AAA-

2018:

+2.8

+5.9

2

102019:

33

78.2 AA+84.1 AAA-

2

Executive Summary.


Brand Finance United Kingdom 150 (GBP m).Top 150 most valuable British brands 1-50

2019 Rank

2018 Rank Brand Sector

2019 Brand Value

Brand Value Change

2018 Brand Value

2019 Brand Rating

2018 Brand Rating

1 1 0 Shell Oil & Gas £32,855 +10.6% £29,702 AAA- AAA-

2 5 2 EY Commercial Services £18,039 +39.8% £12,906 AAA+ AAA+

3 2 1 BP Oil & Gas £17,615 +19.2% £14,774 AA- AA+

4 3 1 Vodafone Telecoms £16,564 +17.3% £14,122 AA+ AA+

5 4 1 HSBC Banking £15,683 +13.7% £13,791 AA- AA

6 6 0 Barclays Banking £8,997 -11.6% £10,177 A+ AA

7 10 2 Tesco Retail £8,775 +17.3% £7,478 AA+ AA

8 9 2 Sky Telecoms £8,078 +5.5% £7,656 AAA- AAA-

9 7 1 Land Rover Auto £7,033 -20.8% £8,881 AA+ AA+

10 8 1 BT Telecoms £6,452 -25.5% £8,660 AA AA+

11 12 2 3 Telecoms £6,339 +14.5% £5,536 AA AA

12 13 2 NatWest Banking £5,999 +22.6% £4,892 AA+ AA+

13 11 1 O2 Telecoms £5,736 -11.9% £6,508 AAA- AA+

14 15 2 Lloyds Bank Banking £5,268 +9.6% £4,806 AA+ AA+

15 21 2 Aviva Insurance £5,187 +39.4% £3,720 AA+ AA

16 25 2 Prudential (UK) Insurance £4,968 +47.3% £3,374 AA- A+

17 20 2 BHP Mining, Iron & Steel £4,638 +20.6% £3,845 AA AA

18 19 2 Sainsbury's Retail £4,538 +10.7% £4,101 AA AA

19 16 1 Pall Mall Tobacco £4,410 -2.7% £4,532 AA- AA-

20 14 1 Asda Retail £4,321 -10.4% £4,823 AA+ AA+

21 17 1 Standard Chartered Banking £4,302 +0.7% £4,274 A+ AA-

22 18 1 BBC Media £3,982 -6.5% £4,261 AA+ AAA-

23 24 2 Burberry Apparel £3,636 +5.2% £3,456 AAA- AAA-

24 31 2 BAE Systems Aerospace & Defence £3,617 +30.3% £2,775 AA AA+

25 28 2 Johnnie Walker Spirits £3,608 +11.5% £3,237 AAA- AAA-

26 22 1 Dove Cosmetics & Personal Care £3,485 -4.6% £3,652 AAA AAA

27 32 2 SSE Utilities £3,450 +24.9% £2,762 AA- AA-

28 35 2 British Airways Airlines £3,238 +23.4% £2,625 AA+ AAA-

29 26 1 Unilever Food £3,229 -1.6% £3,281 AA AA+

30 - 3 JD Retail £3,114 - - AA- -

31 29 1 Rolls-Royce Aerospace & Defence £3,084 +6.2% £2,904 AAA- AAA

32 36 2 Halifax Banking £2,885 +11.7% £2,582 AAA- AA+

33 34 2 ITV Media £2,877 +8.4% £2,654 AAA AAA

34 23 1 EE Telecoms £2,812 -20.3% £3,530 AAA- AAA-

35 27 1 Nationwide Building Society Banking £2,797 -14.3% £3,265 AAA- AA+

36 43 2 Virgin Media Telecoms £2,634 +24.2% £2,120 AA+ AA

37 39 2 Rio Tinto Mining, Iron & Steel £2,609 +11.6% £2,338 AA AA

38 38 0 Morrisons Retail £2,564 +9.3% £2,346 AA AA

39 42 2 GlaxoSmithKline Pharma £2,553 +12.8% £2,263 AA AA

40 33 1 Aston Martin Auto £2,536 -5.3% £2,679 AAA AAA

41 30 1 Marks & Spencer Retail £2,497 -12.5% £2,854 AA+ AA+

42 37 1 MINI Auto £2,488 -1.9% £2,536 AA+ AAA-

43 41 1 Jaguar Auto £2,460 +8.0% £2,278 AA+ AAA

44 47 2 Legal & General Insurance £2,416 +27.3% £1,898 AA AA

45 44 1 Compass Group Retail £2,302 +12.6% £2,045 AA- AA

46 46 0 Lipton Soft Drinks £2,205 +15.0% £1,917 AA+ AA+

47 50 2 Scottish Widows Insurance £2,152 +22.7% £1,754 AA+ AA-

48 61 2 The Co-operative Retail £2,058 +44.7% £1,423 AA AA

49 40 1 Willis Towers Watson Commercial Services £2,045 -11.4% £2,308 A+ AA-

50 45 1 Aon Insurance £2,032 +4.3% £1,949 AA+ AA+


Top 150 most valuable British brands 51-100

Brand Finance United Kingdom 150 (GBP m).

2019 Rank


2019 Brand Value

Brand Value Change

2018 Brand Value

2019 Brand Rating

2018 Brand Rating

51 54 2 Dunhill Tobacco

52 51 1 Boots Retail

53 55 2 Bunzl Commercial Services

54 53 1 Primark / Penney's Apparel

55 67 2 Astrazeneca Pharma

56 52 1 Royal Mail Logistics

57 63 2 Rothmans Tobacco

58 57 1 Bupa Insurance

59 48 1 Bentley Auto

60 58 1 Cadbury Food

61 60 1 Next Retail

62 56 1 Johnson Matthey Chemicals

63 49 1 Costa Coffee Restaurants

64 68 2 Easyjet Airlines

65 65 0 Waitrose Retail

66 75 2 IHS Markit Commercial Services

67 66 1 Travis Perkins Retail

68 73 2 Chivas Regal Spirits

69 92 2 Rolls- Royce Auto

70 71 2 Smith & Nephew Healthcare

71 109 2 BrewDog Conglomerates

72 87 2 Asos Retail

73 74 2 Tate & Lyle Food

74 - 3 Gvc Leisure & Tourism

75 64 1 British Gas Utilities

76 76 0 Twinings Soft Drinks

77 72 1 Intercontinental Hotels

78 79 2 Sunsilk Cosmetics & Personal Care

79 81 2 B&Q Retail

80 62 1 John Lewis Retail

81 69 1 Capita Commercial Services

82 82 0 G4S Commercial Services

83 116 2 McLaren Auto

84 84 0 Babcock Commercial Services

85 77 1 RSA Insurance

86 97 2 B&M Retail

87 78 1 Crowne Plaza Hotels

88 99 2 Anglo American Mining, Iron & Steel

89 100 2 P&O Cruises Leisure & Tourism

90 106 2 Sports Direct Retail

91 70 1 National Grid Utilities

92 80 1 Barratt Developments Engineering & Construction

93 89 1 Schroders Banking

94 90 1 Sage Tech

95 95 0 Taylor Wimpey Real Estate

96 59 1 Aptiv Auto Components

97 83 1 Bank of Scotland Banking

98 96 1 Intertek Commercial Services

99 103 2 Thomas Cook Leisure & Tourism

100 - 3 Ineos Chemicals


Brand Finance United Kingdom 150 (GBP m).

Top 150 most valuable British brands 101-150

2019 Rank


2019 Brand Value

Brand Value Change

2018 Brand Value

2019 Brand Rating

2018 Brand Rating

101 110 2 Centrica Utilities

102 98 1 Magnum Soft Drinks

103 93 1 FremantleMedia Media

104 122 2 Rentokil Commercial Services

105 88 1 Balfour Beatty Engineering & Construction

106 91 1 Ladbrokes Leisure & Tourism

107 112 2 Dulux Retail

108 120 2 Grant's Spirits

109 - 3 Heathrow Airport Airports

110 105 1 Persimmon Engineering & Construction

111 117 2 Ballantine's Spirits

112 108 1 Bookers Retail

113 86 1 William Hill Leisure & Tourism

114 114 0 DS Smith Engineering & Construction

115 104 1 TSB Banking

116 113 1 Old Mutual Insurance

117 102 1 Scottish Power Utilities

118 128 2 Hays Commercial Services

119 115 1 Pearson Media

120 - 3 Informa Media

121 - 3 Poundland Retail

122 - 3 Jet2.com Airlines

123 111 1 Saga Leisure & Tourism

124 118 1 Kingsmill Food

125 - 3 npower Utilities

126 143 2 J&B Spirits

127 85 1 Premier Inn Hotels

128 121 1 BetFair Leisure & Tourism

129 130 2 AA Commercial Services

130 134 2 Vauxhall Auto

131 101 1 RBS Banking

132 145 2 Just Eat Tech

133 119 1 First Logistics

134 132 1 Iceland Retail

135 135 0 Lifebuoy Cosmetics & Personal Care

136 - 3 Bombay Sapphire Spirits

137 - 3 Cineworld Group Plc Leisure & Tourism

138 138 0 Dettol Household Products

139 - 3 Petrofac Oil & Gas

140 - 3 Glenfiddich Spirits

141 129 1 Associated British Foods Food

142 144 2 Rimmel Cosmetics & Personal Care

143 133 1 Penguin Media

144 127 1 Currys PC World Retail

145 - 3 West Tobacco

146 136 1 Screwfix Retail

147 - 3 Ocado Retail

148 107 1 Finish Household Products

149 - 3 Boohoo.Com Apparel

150 - 3 Aggreko Commercial Services


Why brand reputation matters

Comparing brand reputation across sectors is a valuable process. Brand categories are converging in different ways, with new technologies disrupting many industries. A poor reputation of the sector leaves all brands vulnerable to disruption.

Trust in Tech is High

Consumers continue to hold the tech sector in high regard despite scandals tarnishing reputation of some industry giants. The sector ranks joint-third out of the 10 sectors covered in Brand Finance’s research, with a reputation score of 6.8 out of 10 in the UK, significantly higher than that for banking, telecoms, and utility brands.

In the UK, brands such as PayPal (8.0) and Samsung (7.6) enjoy very strong reputations, with Google (7.4) and Amazon (7.4) also in the top 20 out of over 200 brands assessed. These brands deliver on their promises and consumers broadly trust them. The misgivings that consumers have developed towards Facebook (5.5) and Uber (5.1) has not eroded trust in the sector as a whole.

Hotels boast five-star rating

Overall, the hotel sector boasts the highest score for reputation in the UK. Premium hotel brands are held in especially high regard, (e.g. Mandarin Oriental scores 7.6 for reputation), but many mass chains, e.g. Premier Inn (7.5), also receive high marks from consumers.

Banks and telcos lag behind

Banking brands and telecoms providers continue to struggle to earn the respect of consumers, taking the bottom places globally and in the UK. In banking, reputation is recovering only slowly since the days of the global financial crisis. Telecoms providers are in a similar fix – rated lowest of all for overall reputation and quality of service (3.2 out of 5).

Brands such as Amazon and Google enjoy significantly higher scores for reputation, innovation, and closeness, and banking and telecoms brands need to address this reputational challenge as tech brands increasingly encroach on their territories.

Sector Reputation Analysis.

1=

Hotels 7.1/10

1=

Autos 7.1/10

3=

Tech 6.8/10

3=

Beers 6.8/10

5=

Oil & Gas 6.7/10

5=

Airlines 6.7/10

5=

Insurance 6.7/10

8=

Utilities 6.2/10

8=

Banks 6.2/10

10Telecoms 6.0/10

Reputation Scores by Sector


Autos keep up in the race

Auto is another sector facing disruption by new technologies, but here the brands appear more resilient. Brand reputation is high, led by premium German brands such as Mercedes and Audi. Crucially, auto brands also generally rate high for being innovative (at 27% second only to tech both globally and in the UK).

Throughout 2018, tech brands have faced a number of reputational challenges regarding data privacy, corporate practices, tax avoidance, and market dominance. While individual brands have clearly lost their reputations as a result, this has not dragged the whole sector down. Distrust is only apparent where a brand has had a clear lapse in standards or service.Steven ThomsonInsight Director, Brand Finance

Sector Reputation Analysis.

1 7.3/10

2 7.1/10

3=

7.0/10

3=

7.0/10

5=

6.8/10

5=

6.8/10

7 6.6/10

8 6.5/10

9=

6.2/10

9=

6.2/10

Sectors Ranked by Reputation - The World

Hotels

Auto

Tech

Beers

Oil & Gas

Airlines

Insurance

Utilities

Banking

Telecoms


Definitions.

Brand Value

+ Enterprise Value The value of the entire enterprise, made up of multiple branded businesses.

Where a company has a purely mono- branded architecture, the ‘enterprise value’ is the same as ‘branded business value’.

+ Branded Business Value The value of a single branded business operating under the subject brand.

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 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.

Brand Value

Enterprise Value

Branded Business Value

Brand Contribution

[RBS]

[NatWest]

[NatWest]

[NatWest]


Bra

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Str

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Widely recognised factors deployed by marketers to create brand loyalty and market share.

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.

Business 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.

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.

Investment

Equity

Performance

Definitions.

Marketing Investment

Stakeholder Equity

Business Performance


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

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. ANALYTICS

3. STRATEGY 4. TRANSACTI

ON

S1.

VAL

UATION

Brand & Business

Value

Consulting Services.


Brand Evaluation Services.

How are brands perceived in my category?

Brand Finance tracks brand fame and perceptions across over 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 specialised 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.


We also offer a variety of other services to help communicate your brand’s performance

How we can help communicate your brand’s performance in brand value rankings

Communications Services.

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.

TOP 150BRITISHBRAND

MOST VALUABLEBRITISHBRAND

STRONGESTBRITISHBRAND


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.

SERVICES• Research and Insights• Integrated Communications Planning• Project Management and Campaign Execution• Content and Channel Strategy• Communications Workshops

For more information, contact [email protected] or visit www.brand-dialogue.co.uk

Brand Dialogue is a member of the Brand Finance plc group of companies

B E C O M E A M E M B E R T O D 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

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

C H A R A C T E R F U L S P A C Ewith

P R I V A T E E V E N T S

3 Birchin Lane, London, EC3V 9B +44 (0)207 389 9410 [email protected] Exchange is a member of the Brand Finance plc group of companies

M E M B E R S ' E V E N T S

F O C U S O 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 M B E R S

R O O M H I R E

M E M B E R S ' C L U B

M E E T I N G S & &

forfor


T: +44 (0)20 7389 9400 E: [email protected] www.brandfinance.com

Brand Finance Network.For further information on our services and valuation experience, please contact your local representative:

Market Contact Email Telephone

Asia Pacifi c Samir Dixit s.dixit@brandfi nance.com +65 906 98 651

Australia Mark Crowe m.crowe@brandfi nance.com +61 282 498 320

Canada Charles Scarlett-Smith c.scarlett-smith@brandfi nance.com +1 514 991 5101

Caribbean Nigel Cooper n.cooper@brandfi nance.com +1 876 825 6598

China Scott Chen s.chen@brandfi nance.com +86 186 0118 8821

East Africa Jawad Jaffer j.jaffer@brandfi nance.com +254 204 440 053

France Bertrand Chovet b.chovet@brandfi nance.com +33 6 86 63 46 44

Germany Holger Muehlbauer h.muehlbauer@brandfi nance.com +49 151 54 749 834

India Ajimon Francis a.francis@brandfi nance.com +44 207 389 9400

Indonesia Jimmy Halim j.halim@brandfi nance.com +62 215 3678 064

Ireland Simon Haigh s.haigh@brandfi nance.com +353 087 669 5881

Italy Massimo Pizzo m.pizzo@brandfi nance.com +39 02 303 125 105

Japan Jun Tanaka j.tanaka@brandfi nance.com +81 90 7116 1881

Mexico & LatAm Laurence Newell l.newell@brandfi nance.com +1 214 803 3424

Middle East Andrew Campbell a.campbell@brandfi nance.com +971 508 113 341

Nigeria Tunde Odumeru t.odumeru@brandfi nance.com +234 012 911 988

Romania Mihai Bogdan m.bogdan@brandfi nance.com +40 728 702 705

South Africa Jeremy Sampson j.sampson@brandfi nance.com +27 82 885 7300

Spain Teresa de Lemus t.delemus@brandfi nance.com +34 654 481 043

Sri Lanka Ruchi Gunewardene r.gunewardene@brandfi nance.com +94 11 770 9991

Turkey Muhterem Ilgüner m.ilguner@brandfi nance.com +90 216 352 67 29

UK Richard Haigh rd.haigh@brandfi nance.com +44 207 389 9400

USA Laurence Newell l.newell@brandfi nance.com +1 514 991 5101

Vietnam Lai Tien Manh m.lai@brandfi nance.com +84 90 259 82 28

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