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It’s All in the Name: Finlandia Named Finland’s Strongest Brand

07 May 2020
This article is more than 3 years old.
  • Top 25 most valuable Finnish brands from Brand Finance Finland 25 2020 ranking stand to lose up to 11% of brand value following devasting COVID-19 pandemic
  • Nokia retains title of nation’s most valuable brand for 5th consecutive year, brand value €8.9 billion
  • Kesko is nation’s fastest growing brand, up 49%
  • In contrast, Stora Enso is Finland’s fastest falling brand, down 22% and dropping 6 spots in ranking
  • Finlandia is nation’s strongest brand, Brand Strength Index (BSI) score 81.6 out of 100

View the full Brand Finance Finland 25 2020 report here

View the Nordic 50 2020 ranking here

As the COVID-19 pandemic wreaks havoc on the global and national economy, Finland’s top 25 most valuable brands could lose up to 11% of brand value cumulatively, a drop of €2.7 billion compared to the original valuation date of 1st January 2020, according to the latest Brand Finance Finland 25 2020 report.

Looking beyond Finland, 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 €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. Based on this impact on enterprise value, Brand Finance estimated the likely impact on brand value 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.

Nokia rings in again as Finland’s most valuable brand

In a newly expanded ranking that showcases Finland’s top 25 most valuable brands, Nokia has claimed the title of Finland’s most valuable brand for the 5th consecutive year. The telecoms giant is also the 4th most valuable brand in the entire Nordic region.

Despite only recording a marginal 6% increase in brand value to €8.9 billion, the brand’s continued investment to deploy cutting-edge 5G technology is expected to pay off in the coming year, putting Nokia in a prime position to compete with its peers. The brand has cited supply chain issues - a result of the lockdown in China - as a reason for dented sales in Q1 2020. However, the brand will be hoping the return to normality in China could offset some of this damage.

Savio D’Souza, Director, Brand Finance commented:

“The telecoms industry is one of the few sectors in the economy that should see limited impact as a result of COVID-19. In fact, telecoms brands have the opportunity to embrace the working from home revolution, which has led to extraordinary demand for remote working resources and connectivity. No doubt Finland’s leading brand Nokia will be hoping to embrace this shift in attempt to offset the predicted sales slump.”

Kesko is fastest growing at home & across region

Following an impressive 49% brand value increase to €1.2 billion and simultaneously jumping two places in the ranking to 5th spot, Kesko is the fastest growing brand in Finland and the fastest growing brand in the Nordic region.

The Helsinki-headquartered trader – specialising in groceries, building & technical, and car trade – has celebrated record results over the previous year, with net sales up 3%. This boost in brand value is testament to the brand’s continued focus on its growth strategy, to align all divisions of the business, and the successful implementation of its customer centric approach.

Kesko has already been negotiating the changing car trade market, which has slowed as a result of growing environmental concerns and uncertainty around car taxation. With pressure increasing from the COVID-19 pandemic, Kesko has already had to issue a profit warning. Despite demand for food remaining high, this is unlikely to offset the drop in demand for its other core businesses.

Stora Enso drops 6 positions

In contrast, manufacturer Stora Enso is the fastest falling brand in the ranking, its brand value decreasing 22% to €665 million, and dropping 6 positions from 5th to 11th. Stora Enso’s profits have slumped continually over the previous few years as the brand faces a multitude of issues, from significantly lower prices and lower paper volumes to Brexit uncertainty.

A three-week labour strike at the beginning of the year was predicted to damage Stora Enso’s profits by up to €11 million a week. This, combined with the unprecedented uncertainty surrounding COVID-19, which has already resulted in thousands of temporary layoffs, marks a difficult journey ahead for the pulp and paper manufacturer.

Ones to watch: Neste and Supercell

Oil & gas brand Neste (up 15% to €1.5 billion) is a key brand to watch in this year’s ranking. The brand is firmly established as the 3rd most valuable brand in Finland and its 10% brand value growth marks a solid performance that is likely to continue in the future. Strategic expansion into renewable products - including renewable aviation and renewable polymers and chemicals - is expected to bolster the brand’s burgeoning reputation for sustainability.

The highest new entrant into the ranking in 4th position is mobile gaming brand Supercell, with a brand value of €1.2 billion. Chinese internet giant Tencent acquired majority control over the Clash of Clans and Clash Royale maker last year. At its peak in 2018, Clash of Clans was bringing in a staggering US$1.5 million a day.

Cheers to Finlandia as nation’s strongest

In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, Finlandia (brand value €340 million) is Finland’s strongest brand with a Brand Strength Index (BSI) score of 81.6 out of 100 and a corresponding AAA- brand strength rating.

As one of the world’s top ten selling vodka brands, Finlandia, has cemented its position as a leader in key markets – most notably Poland, where the brand accounts for 50% of all vodka sales. Finlandia has celebrated strong CSR scores, a result of parent company Brown–Forman’s continued commitment to and support of the United Nations Global Compact and the Sustainable Development Goals.

Brand Finance has calculated that spirits brands could potentially lose up to 10% of their brand value, however, following the coronavirus pandemic, as brands suffer with bar and pub closures as well as travel restrictions, which are significantly impacting airport sales.

Brand Finance Nordic 50 2020: Standout Sweden

Swedish brands dominate the Brand Finance Nordic 50 2020 ranking, claiming one in two positions, with a combined brand value of €89.2 billion, equating to 58% of the total brand value. Ikea (down 9% to €17.6 billion), Volvo (up 20% to €15.3 billion) and H&M (down 13% to €12.5 billion) have retained the top 3 positions in the ranking. Six brands from Finland feature, compared with 25 from Sweden, 14 from Denmark and 5 from Norway.

Brand Finance has calculated that Nordic brands could stand to lose up 13% of their brand values, however, as a result of the COVID-19 pandemic, equating to €19.3 billion.

View the full Brand Finance Finland 25 2020 report here

View the Nordic 50 2020 ranking here

Note to Editors

Every year, Brand Finance values 5,000 of the world’s biggest brands. The 25 most valuable Finnish brands are included in the Brand Finance Finland 25 2020 report.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

Additional insights, charts, and more information about the methodology, as well as definitions of key terms are available in the Brand Finance Finland 25 2020 report.

Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

Media Contacts

Penny Erricker
Communications Executive
Brand Finance

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.

Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.

Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.

Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.

Definition of Brand

Brand is defined 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 Strength

Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.

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 Brand Rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach

Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It 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 brand owner 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, while 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 Discount post-tax brand revenues to a net present value which equals the brand value.

Disclaimer

Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based 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 study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.

The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.

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