Aegon 2014 Dutch brand value ranking
Transcript of Aegon 2014 Dutch brand value ranking
Brand Finance League Tables Summary Results - 2014
March 2014
The world’s only published ranking of ISO compliant brand values
Prepared for Wendel Hofman
Brand value results 2014
2014 2013
Brand Value $5,316m $3,657m
Market Cap $18,498m $10,385m
BV / MC 29% 35%
Brand Rating AA AA
Global 500 Rank 243 323
45%
78%
Brand value 2014 date: 1st January 2014
Market Cap 2014 date: 18 October 2013 (Adjusted by branded revenue)
Product Segmentation (USDm)
Brand rating
Brand value / Market cap %
29%
Value date: 1st January 2014
BV changes due to:
Brand value
$5,316m 45%
AA 74
Global 500 Rank
243 323 2013 2014
Brand Value Dashboard
Brand value 2014 date: 1st January 2014
Market Cap 2014 date: 18 October 2013 (Adjusted by branded revenue)
65%
29%
6%
General Insurance
Investments
Other
18,498
5,316
Market Cap
Brand Value
3,657
5,316
2013 Brand Strength Business Performance
External changes
2014
Methodology & Sources
Brand valuation methodology – ‘Royalty Relief’ BV is a function of brand strength and financial performance. The strength of the brand determines the ‘royalty rate’ which is applied to forecast revenues to derive the brand value
Brand strength expressed as a BSI score out of 100
BSI score applied to an appropriate company-specific royalty rate, derived from a similar sector royalty rate range
Royalty rate applied to forecast revenues to derive brand revenues
Post-tax brand revenues are discounted to a net present value (NPV) which equals the brand value
Brand Support
Brand Equity
Business Performance
Stakeholder Opinion
X = $ Forecast revenues
Brand Strength
Index (BSI)
Brand
‘Royalty Rate’
Brand
revenues
Brand
value
%
Strong brand
Weak brand
X
Brand Support
Brand Equity
Business Performance
Stakeholder Opinion
X = $ Forecast revenues
Brand Strength
Index (BSI)
Brand
‘Royalty Rate’
Brand
revenues
Brand
value
%
Strong brand
Weak brand
X
Brand strength expressed as a BSI score out of 100
BSI score applied to an appropriate company-specific royalty rate, derived from a similar sector royalty rate range
Royalty rate applied to forecast revenues to derive brand revenues
Post-tax brand revenues are discounted to a net present value (NPV) which equals the brand value
The BSI is calculated by benchmarking the brand against competitors across a range of metrics and stakeholders
Brand Strength in the royalty relief calculation
What support is provided/
invested to build the brand?
How do consumers feel about
the brand vs. competitors?
How does the brand perform
on customer & financial
metrics?
How does the brand impact staff, financiers, investors and other external audiences?
The strength of the brand is determined by benchmarking it against competitor brands in a balanced scorecard framework. Brand Strength is measured using a range of measures to quantify the quality and size of the brand across different stakeholder groups.
This chart summarises the conceptual approach of measuring brand strength within a single index.
Our Brand Strength Index (‘BSI’), captures a range of measures across various stakeholders including:
• Consumers
• Staff
• Financial Audiences
• External Audiences
Consumer benchmarking, the biggest driver of brand strength (70% weighting), incorporates measures relating to brand support, brand equity and brand performance relative to competitor brands.
Determining strength of the brand amongst stakeholders
Measure Stakeholder
Bra
nd
Str
en
gth
In
dex
Brand
Support
Customer
(70%)
Brand
Equity
Brand
Performance
Stakeholder
opinion
Staff
(10%)
Financial
(10%)
External
(10%)
The BSI Incorporates a range of metrics to determine
overall brand strength relative to competitors
80 / 100
Measure Stakeholder Attribute Score Source
Bra
nd
Str
en
gth
In
dex
Brand
Support
Customer
(70%)
Brand protection 4.2 Novagraaf
Visual Identity 4.5 VI360
Marketing & ad spend 3 Public data
Online reputation 3.2 Meltwater
CEO Score 4.9 Brand Finance
Brand
Equity
Function 4.3 Various (BAV, Havas)
Emotion 3.7 Various (BAV, Havas)
Conduct 3.9 Various (BAV, Havas)
Loyalty 3.5 Various (BAV, Havas)
Brand
Performance
Revenue ($) 4.4 Bloomberg, annual reports
Forecasted Growth (%) 4.0 Bloomberg
Net Income ($) 4.6 Bloomberg, annual reports
Margin (%) 3.4 Bloomberg, annual reports
Web ranking 4.0 Alexa
Tier 1 Cap 4.0 The Banker
Tier 1 Cap % Change 2.8 The Banker
Assets rank 5.0 The Banker
Capital Assets Ratio 2.7 The Banker
Pre-Tax Profits % change 3.6 The Banker
Return on Capital 3.8 The Banker
Return on Assets (%) 3.3 The Banker
Stakeholder
opinion
Staff
(10%)
CEO Score 4.9 Brand Finance
Employee Score 4.3 CSRHUB
Number of Employees 5.0 Bloomberg, annual reports
Employee growth 2.9 Bloomberg, annual reports
Financial
(10%)
CEO Score 4.9 Brand Finance
Credit Rating 4.0 Bloomberg
Buy / Sell / Hold 4.6 Bloomberg
External
(10%)
CEO Score 4.9 Brand Finance
Environmental Score 3.9 Bloomberg
Social Score 4.3 Bloomberg
Governance Score 4.6 Bloomberg
Community - CSRHUB 4.0 CSRHUB
Governance - CSRHUB 4.1 CSRHUB
Environment - CSRHUB 4.0 CSRHUB
Example- Brand strength score:
Peer Average BNP Paribas score
Example Banking BSI
Partner About Contribution BSI score
VI management company helping brands to implement, monitor and control the visual elements of their identity
High level visual identity and management performance assessment benchmarked against industry best practice
Visual identity score
Leading international patent and trademark consultancy
Reviewed over 300 brands across Brand Finance’s Global, Banking and Telecoms league tables
Trademark protection score (input)
Global strategic consultancy specialising in brand and customer insights and analytics
Access to BrandAsset® Valuator database – the largest study of consumer and brand behaviour covering 50,000 brands in 50 countries
Functional, emotional, conduct and loyalty scores (brand equity)
Leading media business who analyse and track the connections brands have with human well-being
Access to Meaningful Brands index covering 700 brands, over 134,000 consumers and 23 countries
Emotional, conduct and loyalty scores (brand equity)
Leading online media monitoring software company
Access to Sentiment Index (online and social reputation tracking) data for the top Global, Banking and Telecoms brands
Sentiment Index score (input)
World’s largest CSR (corporate social responsibility) and sustainability ratings company
Access to CSR ratings and information database covering 8,500 brands
CSR score (outputs)
The leading provider of global company web metrics and analytics
Access to website rankings, unique visitor numbers and pageviews covering thousands of brands
Brand performance
Bloomberg is a major global provider of 24-hour financial news and information
Access to our consolidated financials, forecast financials, and key performance metrics which make up a key part of our BSI
Brand performance and Stakeholder opinion
ktMINE is an interactive intellectual property database that provides direct access to royalty rates, actual license agreements and detailed agreement summaries.
Database consists of more than 15,000 agreements. Royalty rate analysis
IntangibleSpring is an online database of license agreements with royalty rates used for valuation of intangible assets and transfer pricing analysis.
Database consists of more than 12,000 agreements. Royalty rate analysis
Brand Strength Index (BSI) Partners
Note: In case where brands in our league tables are not covered by any of the featured BSI partners,
Brand Finance has relied on other public data sources to corroborate the brand strength score
A range of sources to determine overall brand strength relative to competitors
Featured partners:
Brand Support
Brand Equity
Business Performance
Stakeholder Opinion
X = $ Forecast revenues
Brand Strength
Index (BSI)
Brand
‘Royalty Rate’
Brand
revenues
Brand
value
%
Strong brand
Weak brand
X
Brand strength expressed as a BSI score out of 100
BSI score applied to an appropriate company-specific royalty rate, derived from a similar sector royalty rate range
Royalty rate applied to forecast revenues to derive brand revenues
Post-tax brand revenues are discounted to a net present value (NPV) which equals the brand value
BSI score applied to an appropriate company-specific royalty rate, derived from a similar sector royalty rate range
Royalty rate analysis
Along with internal licensing databases, Brand Finance has partnered with 2 leading licensing database providers to set the royalty rate ranges used in the study
Royalty rate ranges
• ktMINE is an interactive intellectual property
database that provides direct access to royalty
rates, actual license agreements and detailed
agreement summaries.
• ktMINE’s database consists of more than 15,000
agreements.
• IntangibleSpring is an online database of license
agreements with royalty rates used for valuation of
intangible assets and transfer pricing analysis.
• IntangibleSpring’s database consists of more than
12,000 agreements.
1. Brand strength expressed as a score out of 100
75
5%
1%
4%
3. Set appropriate royalty rate
2. Score applied to sector royalty rate range
(e.g. 1-5%)
Illustrative
The brand strength (BSI) score is applied to the sector royalty rate range to determine an appropriate brand-specific royalty rate
Set the brand royalty rate
Global
Brand valuation methodology – ‘Royalty Relief’ BV is a function of brand strength and financial performance. The strength of the brand determines the ‘royalty rate’ which is applied to forecast revenues to derive the brand value
Brand strength expressed as a BSI score out of 100
BSI score applied to an appropriate company-specific royalty rate, derived from a similar sector royalty rate range
Royalty rate applied to forecast revenues to derive brand revenues
Post-tax brand revenues are discounted to a net present value (NPV) which equals the brand value
Brand Support
Brand Equity
Business Performance
Stakeholder Opinion
X = $ Forecast revenues
Brand Strength
Index (BSI)
Brand
‘Royalty Rate’
Brand
revenues
Brand
value
%
Strong brand
Weak brand
X
Brand Finance approach
• Businesses are made up of many different assets that
can be valued, one of which can be identified as brand.
• A branded business refers to all businesses operating
under the same brand, as the accompanying chart
illustrates.
• Our role is to help explain the impact that brands have on
the branded businesses they form part of.
• We care about increasing branded business value, not
just brand value.
• When looking at brand value, we first look at the value of
the branded business as a whole.
Brand
Value
Branded Business
Value
Enterprise Value
The Brand Finance approach Bridging the gap between marketing and finance
Brand – Trade marks (i.e. word mark,
logo and strap line registrations),
associated marketing IP (specifically
domain names, trade dress, advertising
copyrights, brand guidelines and
manuals) together with the goodwill
associated with those trade marks and
marketing IP
Enterprise – comprised of
one or many businesses or
assets
Branded Business –
businesses operating under
a particular trade mark
stakeholder effects business value drivers
customers • Greater sales volumes
• Price premiums Revenue & Costs
suppliers
• Lower prices
• Better terms
• Greater willingness to partner
Costs
staff • Lower recruitment costs
• Lower retention costs Costs
financiers
• Lower borrowing costs
• Better repayment conditions
• Higher price earnings ratio
WACC
regulator • More invitations to tender
• Greater propensity to award
Revenue &
Long term growth
media • Influencing the attitudes of direct
stakeholders n/a
public • Influencing the attitudes of direct
stakeholders n/a
ind
ire
ct
dir
ect
Volume
Growth
Gross
Margin
OpEx
CapEx
Curr
ent
Bra
nd &
Busin
ess V
alu
e
We explain how brands impact business value Bridging the gap between marketing and finance
Customer
Brand Perceptions affect
- Price
- Volume
- Repeat
- Share of wallet
- Cross sell
External
Audiences
Brand Perceptions affect
- Distribution terms
- Channel access
- Strategic alliances
- Deal completion
- Licensing
- CSR
Staff
Brand Perceptions affect
- Recruitment
- Retention
- Recommendation
- Morale
- Staff costs
Financial
Audiences
Brand Perceptions affect
- Interest spread
- Share price
- Debt/ Equity ratio
- Risk appetite
- Cost of borrowing
Potential
Customers
Existing
Customers
Influencers
e.g. Media
Trade
Channels
Strategic
Allies &
Suppliers Investors
Debt
providers
Sales
Production
All Other
Employees
Middle
Managers
Directors
brand
Different stakeholders have varying affects on business
value and brand can have an impact on all of them
David Haigh CEO
Brand Finance plc
+44 20 7389 9400
Brand Finance plc is the leading brand valuation and strategy firm, helping companies to manage their brands for improved business results. www.brandfinance.com