Romanian brands demonstrate resilience in challenging economic times
21 May 2024, LONDON- Banca Transilvania has moved up one rank to be named the third most valuable Romanian brand, increasing its brand value by 30% to EUR641 million, according to new data from Brand Finance. Banca Transilvania is also the strongest Romanian brand, achieving an elite AAA+ brand ranking. For the third consecutive year, the banking brand also retains its position among the top ten strongest banking brands globally. Strong financial performance, a commitment to digital transformation, and a relentless focus on customer satisfaction have propelled the bank’s growth this past year.
Dacia remains the most valuable Romanian brand, increasing its brand value by 11% to EUR1.2 billion Dacia is also strengthening its grip over the second-ranked brand eMAG, which has decreased its brand value for the second year running to EUR824 million.
The rebound of Dacia (which briefly lost the top spot to eMag in 2022) reflects the two respective industries’ opposite pre- and post-pandemic evolutions: the automotive market has recovered as people have started to travel again, while online shopping has decreased, despite a shift in consumers' purchasing habits towards online platforms.
Mihai Bogdan, Managing Director, Brand Finance Romania, commented:
While Dacia retains its title as the most valuable Romanian brand, its position at the top doesn’t necessarily reflect a broader trend of older, traditional brands dominating "new economy" brands. In fact, these new brands that have emerged over the past three decades dominate the ranking, both in number and in overall brand value.”
The retail sector demonstrates a varied evolution, with top brands eMag and Dedeman dropping in value, while the sector’s brand value has decreased by 1% overall. Dedeman remains the most valuable brand held entirely by Romanian shareholders, but its brand value decreased by 9% to EUR485 million, dropping down two ranks to 5th position. By contrast, pharma retail brands (Farmacia Tei and Help Net) have grown their brand values.
Despite Romania’s economy experiencing stagnant growth, seeing only a 2% in 2023, the collective value of Romania’s top 50 brands is up 6% from last year to EUR7 billion. This growth reaffirms that branded businesses are continuing to thrive even in challenging economic circumstances.
While Romania's economy has limited ties with Russia and Ukraine, the ongoing war triggered by the Russian invasion of Ukraine is anticipated to continue, potentially leading to unforeseeable disruptions.
New brands – created and developed by entrepreneurs and private companies over the past 30 years – account for over 70% (in number of brands) and 60% of brand value in the latest ranking of the top 50 Romanian brands.
The high value ranking list has recorded a low churn rate over the years, with only a couple of brands moving in and out of top 50 every year. However, this year’s ranking saw dynamic shifts, with three entrepreneurial brands rising to secure a place in the latter half of the ranking; those are QFort in 42nd place, Autonom in 46th place, and LUCA in 48th place.
Inevitably, with each new addition, another brand exits the ranking. Hence, three brands from last year, namely BILKA, CFR, and Bucegi, didn't make it to this year's list.
Mihai Bogdan, Managing Director, Brand Finance Romania, commented:
“The top half of the ranking, dominated by older, established brands, is showing little change – with little movement in the top ten – while the bottom half is more dynamic, and more likely to harbour the bigger brands of tomorrow. However, for most of these brands, whether up or down in the ranking, their restricted stray outside the home market is a limiting factor for their growth.”
In addition to analysing individual brands, the Brand Finance Romania 50 report also ranks the 10 most valuable brand portfolios, calculated for those businesses that deploy more than one brand into the market. These portfolios encompass over 40 well-known local brands, the most valuable of which are also featured individually in the main top 50 ranking. The top 10 portfolios list has remained practically the same since 2017, with smaller contenders not growing fast enough to overtake the incumbents.
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.
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 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 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.
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.
