UAE and KSA brands lead charge ahead of Middle Eastern neighbours in brand value stakes

29 April 2019
This article is more than 1 year old.
  • Emirati and Saudi Arabia each have 19 brands in the top 50 Middle East most valuable brands in 2019
  • ADNOC enters the Middle East 50 as the most valuable brand in the region, valued at US$8.9bn
  • Etisalat Group remains the Most Valuable Portfolio of Brands in Middle East this year exceeding US$ 10 billion barrier, with the Etisalat brand alone worth $8.3bn
  • SABIC up 6.5% to US$4.0bn although all eyes now on fellow Saudi giant ARAMCO
  • Emirates named strongest brand in region, with 85.8 out of 100 brand strength index score

View the full Brand Finance Middle East 50 2019 ranking here

ADNOC is the Middle East’s most valuable brand, with its brand valued at US$8.9 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy. While both the UAE and KSA contribute 19 brands each to the top 50, UAE brands account for 49% in total brand value while KSA brands account for about 31%.

ADNOC clinches top spot

Abu Dhabi National Oil Company (ADNOC) is this year’s new entrant to the Brand Finance Middle East 50 2019 and the most valuable brand in the Middle East, boasting a brand value of US$8.9 billion. ADNOC is forging ahead on its integrated 2030 Strategy, to make its upstream operations more profitable, its downstream operations more valuable and unlocking is a sustainable and economic gas supply. ADNOC entered the global capital markets for the first time two years ago. The Abu Dhabi oil and gas brand is focused on responding to changes in the world’s energy markets and unlocking huge reserves of previously uneconomical gas that will ultimately put the UAE on a path to gas self-sufficiency.

ADNOC has opened its first fuel stations in Dubai and Saudi Arabia, announced plans to increase its oil production capacity to 4 million barrels per day by the end of 2020. These initiatives are part of the 2030 Strategy, which is aimed at balancing market conditions with long-term future growth.

Etisalat boasts valuable portfolio of brands

Valued at US$8.3 billion, up 8% since last year, Emirati telecoms giant Etisalat remains the most valuable B2C brand in the region for the 3rd year in a row. Etisalat Group also boasts the most valuable portfolio of brands, with an important regional presence of networks including Mobily, Ufone, Maroc Telecom, and PTCL, which has exceeded the Middle East’s record of US$10 billion. Operating in 15 countries across Asia, the Middle East, and Africa, Etisalat’s success can also be attributed to its customer loyalty programmes, as well as strategic sports and events sponsorships.

As the premier digital partner of Dubai’s Expo 2020 showcase, Etisalat is preparing to deliver the event’s visitors and delegates with a cutting edge and immersive digital experience. Sports sponsorships provide an international platform through which Etisalat can connect with its loyal customers, sharing and supporting their interests and passions.

David Haigh, CEO of Brand Finance, commented:

“The Middle East is home to so many world class brands which are asserting their presence on both a domestic and regional scale. As the UAE looks ahead to Expo2020, Saudi Arabia races towards its Vision 2030 and Qatar gears up to host the World Cup in 2022, it is ever more important for these home-grown brands to be nurtured and catapulted to the global stage.”

Saudi’s SABIC sees success

Saudi Arabia’s petrochemicals giant SABIC has seen its brand value boosted 6.5% since last year, valued now at US$4.0bn. This success can be attributed to the brand’s continued expansion of investments across China, despite an expected slowdown in the country’s economic growth. SABIC has also continued to raise its presence in Africa which remains a promising lucrative market.

All eyes are now on Saudi ARAMCO which for the first time earlier this month, chose to publicly declare earnings and give a detailed breakdown of its financial performance. ARAMCO announced recently that it would buy a 70% stake in SABIC in a pledge to support the Kingdom’s modernisation campaign and bolster its downstream strategy.

New entrants: brands to watch

This year’s league table has seen a host of notable new entrants from a variety of sectors: education, banking, oil and gas. Emirates Islamic Bank (brand value US$476 million), GEMS Education (US$525 million), NMC Healthcare (US$ 570 million), Arab Bank (US$ 475 million) and Woqod (US$663 million).

Emirates flies high as Middle East’s strongest brand

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. Along with the level of revenues, brand strength is a crucial driver of brand value.

According to this criteria, Dubai’s flagship carrier Emirates is the strongest brand in the Brand Finance Middle East 50 2019 ranking, with a brand strength index (BSI) score of 85.8 out of 100 and a corresponding brand rating of AAA. The airline continues to win praise from its customers for its variety of long-haul routes, world class lounges, superb on-board service and punctuality. Emirates is the world’s largest international airline, with a network that spans 159 destinations in 85 countries, operating one of the world’s youngest wide-body fleets made up of Boeing 777 and Airbus A380 aircraft.

David Haigh, CEO of Brand Finance, commented:

“Growth in the Middle East’s airline market is dependent on a brand fully grasping and meeting the demands of its customer, something which, with the rise of social media, is constantly evolving. Whilst pricing, routes and service remain central to repeat business, airlines such as EK which update their in-flight offering, maintain a modern fleet and uphold high punctuality and safety standards are those which will see solid growth in brand value.”

ENDS

Note to Editors
Every year, leading brand valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 50 most valuable Middle Eastern brands are included in the Brand Finance Middle East 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 Middle East 50 2019 ranking.

Brand Finance helped craft the internationally recognized 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 Committee (IVSC).

The methodology used to produce the annual Brand Finance rankings of the most valuable and strongest brands across all sectors and countries has been certified with the Marketing Accountability Standards Board’s (MASB) Marketing Metric Audit Protocol (MMAP).

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 Contact (English and Arabic):
Sehr Sarwar
Senior Communications Manager
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[email protected]

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

Methodology
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
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.

Media Contacts

Florina Cormack-Loyd
Florina Cormack-Loyd
Senior Communications Manager
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 nearly 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.

Methodology

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.

Disclaimer

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.