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Because They’re Worth It – World’s Most Valuable Cosmetics Brands Revealed

10 April 2013
This article is more than 10 years old.

Brand Finance, the leading global brand valuation and marketing experts, have released their annual study of the top 50 most valuable cosmetics brands. Despite a very slight brand value fall, Olay holds its dominant position at the top of the BrandFinance® Cosmetics 50 table, with a value of US$11.7 billion.

However, Olay’s lead at the top has shrunk from US$4 billion to $3 billion following the growth of L’Oréal. The French giant has continued its progression up the rankings, having moved from 4th to 3rd last year, it is now 2nd. Brand value growth of US$952 million, more than any other brand, means its total brand value is now US$8.7 billion. L’Oréal’s success hinges on shrewd exploitation of its French heritage. France’s nation brand is synonymous with luxury, helping to drive US$26 billion worth of luxury goods exports in 2012. L’Oréal has contributed to this trend, targeting emerging markets such as Brazil and China to achieve revenue growth of 12% last year.

L’Oréal is followed in the BrandFinance® Cosmetics 50 by Neutrogena, Nivea and Lancôme (3rd, 4th and 5th respectively) which have all recovered well from brand value falls last year. 6th placed Avon is this year’s biggest casualty. Down from 2nd last year, it has lost US$2.7 billion of brand value this year. The US$2.3 billion lost last year means Avon’s brand value is down US$5 billion on 2011 and now stands at just US$5.2 billion. The particularly dramatic brand value falls suggest low levels of investor confidence following a revenue drop of 5% and a loss of US$42.5 million in 2012.

Commenting on the results, Mary-Ellen Field, Chairman of Brand Finance Australia stated “The global beauty industry continues to do, well, beautifully. With the increasing wealth of women in developing economies we have not surprisingly seen the sales of beauty products in these countries growing. Cosmetic halls in department stores throughout the world continue to be exciting places despite growing competition from Internet sales.”


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Michael Josem
Associate Communications Director
Brand Finance
Ed Will
Group Marketing & Communications Director
Brand Finance

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations 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 is a regulated accountancy firm, leading the standardisation 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.


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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