LG Presentation_Msia_League Table 2008 [Compatibility Mode]

7/31/2019 LG Presentation_Msia_League Table 2008 [Compatibility Mode]

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Background

The purpose of this study

is to:

enhance recognition of the

importance of intangible

assets and brands

11 Brand Finance 2008

identify the most valuable,

most productive brands and

brand portfolio of Malaysia

highlight the impact ofintangible assets on

Malaysian companies


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Agenda

1. Intangible Asset Study -

- Global Intangibles Tracker

(GIT)

2. Malaysia Brand League Table

- Methodology


3. Implications for MalaysiaCompanies

- Malaysias Best Rated Brand- Malaysias Most Valuable Brand

- Malaysia Top 10


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The Brand Finance Global IntangibleTracker (GIT) is annual review of theworlds intangible study.

GIT 2007 covers more than 10,000com anies uoted in 32 countries over

Global Intangible Tracker (GIT)


a six year period.

Most extensive study on intangible

assets covering the leading stockmarkets and incorporates 99% ofglobal listed value.


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GIT Approach and Methodology

Brand Finance took the Enterprise Value of each company inthe study, and this was divided into

Tangible Net Assets

Disclosed Intangible Assets

Disclosed Goodwill

Undisclosed Value


Intangible Value refers to the total value of the Enterpriseover and above its Tangible Net Assets.

This includes brands, patents and technology, contracts,customer lists an relationships, copyrights, design rights,confidential information, human capital, workforce


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Graphically .



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Country Comparisons

The U.S. has the highest proportion of intangiblevalue at 75%.

Switzerland has the second highest proportion ofintangible value at 74%.


The five countries with the highest level of disclosed intangibleasset value 2007 : France (25% of total enterprise value),Germany (19%), Belgium (18%), Italy (17%), and the UK (16%).

The five countries with the largest proportion of their value madeup of tangible net assets are S. Korea, Croatia, Turkey, Malaysiaand Japan.


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How did Malaysia fare ?

Malaysia is in 29th

position of the rankingof the intangiblecomponent of enterprisevalue.

7%

36%

60%

70%

80%

90%

100%

Unrecorded Value


Lags behind Australia,UAE, Singapore, HK

Only 43% of Malaysias

listed value iscontributed byintangibles

57%

0%

10%

20%

30%

40%

50%

Malaysia

Disclosed Intangibles

Tangible Assets


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Agenda

1. Intangible Asset Study -

- Global Intangibles Tracker

(GIT)

2. Malaysia Brand League Table

- Methodology


3. Implications for MalaysiaCompanies

- Malaysias Best Rated Brand- Malaysias Most Valuable Brand

- Malaysia Top 10


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Selection Criteria

Brand Finance has valued brands and brand portfolios owned byMalaysian companies listed on Bursa Malaysia

Companies must be of Malaysian origin. Hence, brands likeGuinness-Anchor, Pelikan, Lafarge, KFC etc are excluded.Brands (for e.g. Maxis) are not listed on KLSE, but are of


,

Due to the de-merger of Telekom Malaysia, Brand Finance hasvalued Celcom separately

Many Malaysian conglomerates adopt a monolithic brandingstrategy. We have valued them as an aggregate of individuallisted entities


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Selection Criteria

Brand Portfolio Value has been defined as the value of trademarks and trade mark licenses, together with associated goodwill.

Valuation date is as at 31 Dec 2007


All quantitative data and listed company sources are obtainedfrom Bloomberg, company annual reports, analyst and industryreports, and all publicly available sources

We have used the Relief from Royalty Method


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Branded EnterpriseBranded Enterprise

Summary of our definitions


BrandBrandTrademarks


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Overview of Valuation Approach

Forecastsrevenue

costs

1) Overall market and riskanalysis

Segment A

Segment B

Segment C

3) Financialanalysis


2) Segmentanalysis

Segment A

Segment B

Segment C

Royalty Earnings

Branded or

Brand values

4) Brand Strength/ Royalty Rate

Study

5) DiscountRate


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Understanding value by segment

Geography


Product

Customer


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Brand value mapping (Example)

Domestic

Customers

Retail

Network

Business

Site

Acquisition

Retail

Team

Forecourt

Hardware

Manager

Incentives

Staff

Volume

Price

Growth


Training

Product

Portfolio

Product

R&D

Systems

& Software

Brand

Equity

Promotions

Brand

Building

Profits

Capex

Cashflow

Working

Capital


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RiskAnalysis

Marketdue

diligence

Royalty relief methodology

Sales Forecasts

SegmentAnalysis

ComparableRoyalties

Marginanalysis


Discount rate

Brand Value

Royalty Earnings

oya y

Rate Study BrandStrengthAnalysis


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Relief from Royalty Method

Step 1: Determine forecastrevenue

Step 2: Establish Royalty RateRange

5 key steps


Step 3: Assess the BrandStrength

Step 4: Determine the Discount

Rate

Step 5: Brand Valuation Results


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Determining Brand Strength

Sources:

Available market

research data

Brand Financepanel

External anelBrand

Input

Measures

Brand

Equity

Brand Management

Brand Awareness

Functional Performance

Brand Presence


Sources:

Bloomberg

Historicalperformance

IBES forecasts

S&P Credit Rating

Strength

OutputMeasures

Revenue Growth

Market Share

Brand Preference

Profitability

Analyst Ratings

S&P Rating


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Brand Strength to Brand Rating

Brand Index Brand Rating0 D

5 D

10 DD

15 DDD

20 C

25 CC

30 CCC

35 B

Brand Rating Definitions

Rating DefinitionAAA Extremely StrongAA Very StrongA Strong


45 BBB50 A-

55 A

60 A+

65 AA-

70 AA

75 AA+

80 AAA-

85 AAA

90 AAA+

95 AAA+

100 AAA+

ComputedBrandStrength

Index = 62

BB Under-performingB Weak

CCC Very WeakCC Extremely WeakC Failing


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Malaysias Best Rated Brandwith AA + rating


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BBBAA-AA+ A

Genting Maybank Maxis TNB Malaysian

Airlines

Petronas Sime Darby CIMB TM Resorts World

IOI RHB Capital Alliance Financial Group Kulim Tradewinds

UMW Affin Holdings MMC The Star AirAsia

Malaysias Top 50 Brand Rating


Astro Celcom

YTL Berjaya Group Lion Group Hong Leong Group DiGi Proton

Magnum MISC AmBank UEM KLK PLUS Expressway

Bank Islam EON Bank Group

PPB Setia Hap Seng Boustead WCT Titan Chemicals

SCOMI OSK IJM KPJ Healthcare AmInvestment Sin Chew


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Malaysias Top 50

Malaysias Top 50 largest brandsand brand portfolio amount toMYR64.8bil(US$20bil)

Compare this with Australias Top50 brands at A$80bil (US$70b) and


.

(US$25bil)

Combined value of Top 10 brandaccount for 56% of total brand

portfolio of Malaysias Top 50.

We expect (and hope) to seemore brand creation and

developments effort in future


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Malaysias Top 10

PETRONAS 8.3b 2% A-

Genting 4.2b 12% AA+

Maybank 2.2b 8% AA-

Maxis 3.3b 9% AA-

Brand Value% toEnterprise

Value

Brandrating


TNB 3.2b 5% AA-

Sime Darby 2.9b 6% A

CIMB 2.7b 7% A

TM 2.6b 13% A+

Public Bank 2.5b 7% AA-

Resorts World 2.3b 12% A+


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Beyond the Number


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vities

Relational

MarketingResource

HumanResources C

ustom

erEquity Acquisition

Retention

Cross Purchase

Business

Value

Market ShareMarket Share

rformance

Mapping resources to cash flows

Resources Performance Value


Brand Association

Brand Usage

Brand Commitment

ResourcesandA

cti

Brand Preference

Brand Loyalty

PhysicalResources

TechnologyResource

Organisa-tional

Resources

ProductionResources

Brand

Equity

PerformancePerformance

Sales

NOPAT

CAPEX

Margin Growth

Risk

BrandValue

Volume GrowthVolume Growth

Customer ShareCustomer ShareIn-Market

Pe


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Linking marketing metrics to financials

OutputsIntermediate Measures

Financials

Inputs

Actions Perceptions Behaviour Perceptions


Brand Scorecard

Brand equitymeasures

Activitymeasures

Value andfinancial

measures

Performancemeasures


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IMPACT OF BRANDBranded BusinessValuation Model

Forecast revenues

Customers/Partners:- Gain trust & reputation- Price premium- Increased volume

DIRECT AUDIENCES

Customers/Partners

The brands effect on different stakeholders has a direct impact on the revenue and P&L, and on thelong-term value of the business (we term the overall value of the Wilmar business as the enterprisevalue, which comprises a number of branded businesses)

Brand equity affects branded business (and shareholder) value

Using your Brand to leverage value


Earnings

Costs

Branded BusinessValue

Discount Rate

Financial:Financial:-- reduces riskreduces riski.e. drives down WACCi.e. drives down WACC

Suppliers:Suppliers:-- Improved terms ofImproved terms ofbusiness = improvedbusiness = improvedworking capitalworking capital

- Market share

Internal:Internal:

-- drives downdrives downstaff costs andstaff costs andimproves productivityimproves productivity

Bankers/Investors

Staff

Suppliers


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I can make a whole lotmoney skillfully managing


tangible assets

- Warren Buffet, CEO Berkshire Hathaway


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Contact details

Lucy [email protected]


Brand Finance Consultancy (Singapore) Pte LtdOne North Bridge Road Level 6, Unit 34

Singapore 179094

T : (65) 6336 8691 F : (65) 6337 1209www.brandfinance.com

LG Presentation_Msia_League Table 2008 [Compatibility Mode]

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