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New entrant ARAMCO named Middle East’s most valuable B2B brand, following world’s biggest IPO

  • Amazon makes history as first brand in Brand Finance Global 500 ranking to exceed US$200 billion value mark and retains title of world’s most valuable brand for third consecutive year
  • Saudi Aramco is the Middle East’s most valuable B2B brand, valued at US$46.8 billion, according to latest report by Brand Finance on world’s 500 most valuable brands
  • Etisalat most valuable B2C brand in Middle East, retaining title for 3rd year running, only telecom brand to maintain AAA rating in region
  • ADNOC breaks $US10 billion mark and crowned Middle East’s fastest growing brand
  • Ferrari retains pole position as world’s strongest brand with Brand Strength Index (BSI) score of 94.1 out of 100 and elite AAA+ rating

View the full Brand Finance Global 500 2020 report here

London - Davos, 22nd January 2020

Defending its position as the world’s most valuable brand for the third consecutive year, Amazon has broken the so far unattainable US$200 billion brand value mark, according to the latest Brand Finance Global 500 report launched at the World Economic Forum in Davos today. Following 18% growth from US$187.9 billion last year, Amazon’s brand value has now reached US$220.8 billion, over US$60 billion more than Google’s and US$80 billion more than Apple’s.

The world’s largest online marketplace, Amazon has also branched out into cloud computing, artificial intelligence, consumer electronics, digital streaming, logistics, and is looking to enter other industries. With a diverse product and service portfolio, and thanks to continued investment in fast-growing sectors and innovative technologies, Amazon is not only the leader of today, but also seems primed for tomorrow.

Nevertheless, the majority of Amazon’s revenue still comes from retail, and challenges to the growth of the company’s core operations may result in brand value stagnation in the future. In November 2019, it was announced that Nike would no longer be selling its merchandise on the platform, to develop its own direct sales channels. Amazon may have to contend with other big brands following Nike’s lead, which would undermine its reputation as the ‘Everything Store’. Another potential sticking point is the future of Amazon’s international business. From environmentalist opposition in Europe, to backlash from local retailers in India, to saturation of China’s e-commerce market by Alibaba and its subsidiaries – matching globally the status that Amazon enjoys in the US, may prove difficult.

David Haigh, CEO of Brand Finance, commented:

“The disrupter of the entire retail ecosystem, the brand that boasts the highest brand value ever, Amazon continues to impress across imperishable consumer truths: value, convenience, and choice. Today, Amazon’s situation seems more than comfortable, but what will the roaring twenties hold in store?”

Saudi Aramco strikes oil

With a brand value of US$46.8 billion, Saudi Aramco is the most valuable among the 44 new entrants in the ranking. The publication of the Saudi Arabian oil and gas company’s financials at the time of the IPO allowed for its brand to be included in Brand Finance’s annual study for the first time. Placing 24th globally, Saudi Aramco also claims the title of the most valuable brand in the Middle East and Africa.

The IPO has proven to be successful for the brand as Saudi Aramco raised US$25.6 billion, making it the largest ever to date. Even after navigating through recent attacks on two of its oil processing sites, it is now the world’s most valuable listed company, comfortably ahead of tech titans Apple and Microsoft. Saudi Aramco is focused on leveraging its strength in upstream, while growing its downstream operations through acquisitions, both in Saudi Arabia and key global markets. The company must now focus on developing international perceptions of the brand in order to open it up further for partnerships and investment.

The IPO has proven to be successful for the brand as Saudi Aramco raised US$25.6 billion. Even after navigating through recent attacks on two of its oil processing sites, it is now the world’s most valuable listed company, comfortably ahead of tech titans Apple and Microsoft. Saudi Aramco is focused on leveraging its strength in upstream, while growing its downstream operations through acquisitions, both in Saudi Arabia and key global markets. The brand must now focus on developing international perceptions of the brand in order to open it up further for partnerships and investment.

Etisalat most valuable B2C brand for 3rd year in a row

While Saudi Aramco is the most valuable B2B brand in the region, Emirati telecoms giant, Etisalat remains the most valuable B2C brand in the Middle East and Africa for the third consecutive year. The brand’s growing role in fulfilling the UAE’s National Innovation Strategy and its dominant influence in shaping the region’s digital future are behind its continued success. As the premier digital and telecommunications partner of the upcoming Expo2020 in Dubai this October, all eyes will be on Etisalat as it prepares to excite the Expo’s expected 25 million visitors with a seamless 5G connectivity that brings the event’s themes to life. Etisalat’s footprint in 16 countries across Asia, Middle East, and Africa makes it home to an impressive portfolio of brands including Mobily, Ufone, Maroc Telecom, PTCL, and Etisalat Misr. Demonstrating a consistent performance over the years, Etisalat retains its titles as the most valuable as well as strongest telecoms brand in the region.

ADNOC smashes US$10 billion barrier

As the Middle East’s fastest growing brand, Abu Dhabi National Oil Company (ADNOC) is the first UAE brand to achieve a brand valuation of more than US$10 billion, a testament to the success of the Group’s ongoing transformation strategy. Since 1971, ADNOC has created thousands of jobs, driven the growth of a diverse knowledge-based economy, and played a key role in Abu Dhabi’s global emergence. ADNOC continues to look for new and innovative ways to maximize the value of its resources, pioneering those approaches and technologies that will ensure it is able to meet the demands of an ever-changing energy market, and continue to have a positive impact on the Abu Dhabi economy for generations to come.

David Haigh, CEO of Brand Finance, commented:

“The Middle East, and in particular the Gulf region, is home to more and more world class brands, as we have observed these powerhouses making their way up our rankings since Brand Finance undertook its first Global 500 study back in 2007. The leadership of these brands are to be commended, especially since both ADNOC and Saudi Aramco’s CEOs are new entrants to our Brand Guardianship Index study of the world’s top 100 CEOs. Etisalat’s role as the official Telecommunication and Digital Services Partner to the upcoming Expo2020 in the UAE is to be commended alongside its recent rollout of the fastest and most robust 5G network in the region.”

Ferrari in pole position again

For the second year in a row, Ferrari, the iconic Italian luxury sports car manufacturer, has retained its position as the world’s strongest brand with a Brand Strength Index (BSI) score of 94.1 out of 100. Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. According to these criteria, Ferrari is the strongest of only 12 brands in the Brand Finance Global 500 2020 ranking to have been awarded the highest AAA+ rating.

Alongside revenue forecasts, brand strength is a crucial driver of brand value. As Ferrari’s brand strength maintained its rating, its brand value grew, improving 9% to US$9.1 billion. Ferrari announced five new models in 2019 and established a manufacturing agreement with the Giorgio Armani Group to help push Ferrari collections into a more premium space. For years, Ferrari has utilised merchandise to support brand awareness and diversify revenue streams, and are now taking steps to preserve the exclusivity of the brand.

“The embodiment of luxury, Ferrari continues to be admired and desired around the world, and its outstanding brand strength reflects this. It is no wonder that many consumers, who might never own a Ferrari car, want a bag or a watch emblazoned with the Prancing Horse, but it is also crucial that the company management remain at the steering wheel of the brand’s future and maintain its exclusive positioning by monitoring the licensing output closely.”

View the full Brand Finance Global 500 2020 report here

ENDS
Note to Editors
Every year, leading independent brand valuation consultancy Brand Finance values the world’s biggest brands. The world’s 500 most valuable brands across all sectors and countries are included in the Brand Finance Global 500 2020 report.

The 2020 iteration of the Brand Finance Global 500 report was launched today at the World Economic Forum in Davos, Switzerland.

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 and charts, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Global 500 2020 report.

Please click here for an infographic on the most valuable B2C and B2B brands by region and an infographic on the fastest-growing brands per region included in the 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.

Media Enquiries
Konrad Jagodzinski
Communications Director
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M: +44 (0)7508 304 782         
k.jagodzinski@brandfinance.com

WEF 2020 Davos Media Enquiries

Sehr Sarwar
Communications Director
M: +44 (0)7966 963 669
s.sarwar@brandfinance.com

Follow us on Twitter @BrandFinance #BFGlobal500 and LinkedIn.

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

Methodology
Definition of Brand
Brand Finance helped 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
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.

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