Nestlé reigns supreme
Once again, Nestlé is Switzerland’s most valuable brand, its brand value increasing by 1% to CHF19.1 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy. The brand dominates the ranking, its brand value nearly twice as much as second placed UBS (brand value up 21% to CHF10.3 billion).
Nestlé celebrated a boost in organic growth, following stronger performances in the brand’s two largest markets, China and the US. The brand continually strives towards greater product innovation in order to meet the ever-changing consumer trends and has successfully capitalised on the popular vegan and vegetarian health food movements.
Nestlé has also recently bought the rights to sell its products under the Starbucks brand name, opening up vast opportunities globally through Starbuck’s immense power as the world’s biggest coffee chain brand.
Three other brands in the Nestlé portfolio claim spots in the top 50: Nescafé (9th position); Maggi (31st position); and Nespresso (38th position).
About time – Rolex enters top 5 and proves strongest
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. According to these criteria, Rolex is Switzerland’s strongest brand with a Brand Strength Index (BSI) score of 90.0 out of 100 and a corresponding AAA+ brand strength rating.
Luxury watchmaker Rolex has entered the top 5 of Switzerland’s most valuable brands for the first time, following an impressive 27% increase in brand value to CHF8.0 billion.
David Haigh, CEO, Brand Finance commented:
“Swiss brands are synonymous with timeless quality, impeccable style and luxury. It is no surprise that Rolex has broken into the top 5 as it continues to make its presence felt through tactical sporting sponsorships at the most prestigious of sporting events.
Some of the most successful sports professionals are ambassadors for the Rolex brand and as an official timekeeper, the brand retains maximum visibility whenever a tournament or competition is broadcast on the world’s television screens.”
UBS and ABB: non-movers
Financial services giant, UBS, retains second place in the rankings after recording a healthy 21% increase in its brand value. Sitting in third, ABB, has seen a very modest 2% increase in brand value to CHF8.4 billion.
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 50 most valuable and strongest Swiss brands are included in the Brand Finance Switzerland 50 2019 ranking.
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, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Switzerland 50 2019 ranking.
Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Brand Finance is a chartered accountancy firm regulated by ICAEW and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).
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.
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About Brand Finance
Brand Finance is the world’s leading brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a 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 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.
Brand Valuation Approach
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. 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, 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.