· Nestlé maintains pre-eminence as Switzerland’s most valuable brand at CHF18.9 billion
· ABB electrifies the top 10 with 22% brand value growth to CHF8.0 billion
· TAG Heuer is the fastest-growing among Switzerland’s top 50 brands of 2018, with brand value gaining 55% since last year
· Rolex retains title of strongest Swiss brand with 89.3 score out of 100, as watchmaking industry contributes 7 brands to the ranking
Nestlé remains Switzerland’s most valuable brand at CHF18.9 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation and strategy consultancy. Despite not recording any substantial brand value growth, Nestlé remains significantly more valuable than any other Swiss brand, towering CHF10 billion over second-ranked UBS (brand value down 6% to CHF8.6 billion).
In addition to being Switzerland’s most valuable brand, Nestlé again dominated the food industry globally this year as the world’s most valuable brand in the sector. While Nestlé’s brand remained ahead of competitors, its revenue growth was slowed down by challenging sales in both North and South American markets, which can limit brand performance in the future.
ABB electrifies top 10
With a brand history dating back to the 19th century, ABB (brand value up 22% to CHF8.0 billion) enjoyed a year of outstanding brand value growth, compared to other brands in the top 10. Last year was a significant transition year for ABB, as it continued the implementation of its leading strategy to take electricity from any electricity generator to any electricity plug, and to continue automating industries. Complemented by its major sponsorship arrangement with Formula E, the fully electric international FIA motorsport category, ABB is increasingly delivering automation and electrical services in key new mobility sectors.
Brand to watch: TAG Heuer
Although valued at far less than Nestlé, TAG Heuer has emerged as a brand to watch this year and the fastest-growing among the nation’s most valuable brands in the Brand Finance Switzerland 50 league table, recording a remarkable 55% brand value growth to CHF1.5 billion.
TAG Heuer have launched a significant effort to produce smartwatches that build upon the brand’s luxury mechanical expertise, combining the previously parallel product sectors.
In addition, the brand introduced significant online customisation options for buyers, enabling them to choose bespoke watch combinations. This strategy of creating unique customer experience has proved extremely valuable amongst a global shift towards online retailing, allowing the brand to offer a wider variety of products while keeping the costs in check.
Precision and excellence
The watchmaking industry as a whole stands out among other sectors of the Swiss economy by contributing seven world-class brands to the top 50 league table, more than food (6 brands) and banking, insurance, or engineering & construction (5 brands each). Nevertheless, at CHF14.8 billion and accounting for 11% of the combined value of all 50 brands in the ranking, watchmakers are still less valuable than Switzerland’s food (CHF24.0 billion; 18%), banking (CHF17.7 billion; 14%), or insurance (CHF16.2 billion; 12%) sectors.
David Haigh, CEO of Brand Finance, commented:
“The top Swiss brands come from many different sectors, demonstrating the diversity of the modern Swiss economy. World-renowned confectionary, watchmaking, financial services, and engineering brands boost Switzerland’s image as a country that fosters and attracts excellence.”
Rolex retains title of strongest Swiss brand
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands through the Brand Strength Index (BSI) – a balanced scorecard of factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation.
According to these criteria and further adding to the clout of Swiss watch brands, Rolex is Switzerland’s strongest brand, earning an extremely high score of 89.3 out of 100. Despite an 8% drop in brand value to CHF6.2 billion, the Rolex brand has benefitted over the last year from a highly regarded series of innovative product launches, which have built on the brand’s reputation for high quality devices, while also taking advantage of new technologies. This innovative brand strategy ensures that the Rolex brand continues to be highly regarded as a symbol of quality and reliability.
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 50 most valuable brands in Switzerland are included in the Brand Finance Switzerland 50 2018 league table.
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 assessed through a balanced scorecard of factors (such as marketing investment, stakeholder equity, and business performance) and used to determine what proportion of a business’s revenue is contributed by the brand.
Additional insights, more information about the methodology as well as definitions of key terms are available in the Brand Finance Switzerland 50 2018 report.
Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Data compiled for the Brand Finance league tables 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.