20200403-Brand_Finance-The_annual_report_on_the_most_valuable_and_strongest_Middle_Eastern_brands_16页_7mb

Summary of the Middle East 50 2020 Report

Core Content

The Middle East 50 2020 report is an annual publication by Brand Finance, highlighting the top 50 most valuable and strongest brands in the Middle East. The report assesses the financial impact of the Coronavirus outbreak on brand value and provides insights into sector performance and brand strength.

Key Points

Brand Finance Overview

• Brand Finance is a leading independent brand valuation consultancy, established in 1996.
• It bridges the gap between marketing and finance by quantifying brand value using the Royalty Relief approach, compliant with ISO 10668 and ISO 20671.
• The firm has a broad range of expertise, including marketing, brand strategy, tax, and accounting.
• It offers services such as brand valuation, brand strategy, analytics, and communications.

Brand Value Impact of COVID-19

• The global brand value of the world's biggest companies is estimated to lose up to US$1tn due to the Coronavirus outbreak.
• The aviation sector is the most affected, with losses surpassing those from the 2003 SARS outbreak.
• Brand Finance assessed the impact on Enterprise Value from 1st January 2020 to 18th March 2020, and classified sectors into three categories based on the severity of losses.

Middle East 50 Brands

• The report lists the top 50 most valuable and strongest brands in the Middle East, with 20 Saudi Arabian brands, 17 UAE brands, 9 Qatar brands, and 4 Kuwait brands.
• Saudi Aramco emerged as the most valuable brand in the region with a brand value of US$46.8 billion.
• QNB (Qatar National Bank) is the most valuable bank in the Middle East, with a brand value of US$6 billion, up 20% from 2019.
• ADCB (Abu Dhabi Commercial Bank) is the fastest-growing brand, up 41% since last year to US$2.7 billion.
• Etisalat is the strongest telecoms brand in the Middle East and Africa, with an AAA Brand Rating.

Sector Reputation Analysis

• Airlines rank highest in terms of reputation, with Emirates (7.7/10) and Etihad Airways (7.0/10) leading the sector.
• Insurance and Banks also have strong reputations, with Insurance (6.2/10) and Banks (6.2/10) in second and third place respectively.
• Telecoms rank fourth with a reputation score of 6.1/10.

Brand Valuation Methodology

• Brand Finance uses the Royalty Relief method to calculate brand value, aligning with ISO 10668 standards.
• The process includes:
  1. Calculating Brand Strength Index (BSI) based on marketing investment, stakeholder equity, and business performance.
  2. Determining royalty rates for each industry.
  3. Estimating brand-specific revenues and forecast revenues.
  4. Applying royalty rates to forecast revenues to derive brand value.
• Brand value is calculated as the net present value (NPV) of post-tax brand revenues.

Brand Strength Index (BSI)

• BSI measures brand strength on a scale of 0 to 100, indicating the potential financial impact of a brand.

Brand Royalty Rate

• The royalty rate is determined by applying the BSI score to a sector-specific royalty range.

Brand Revenues

• Brand revenues are calculated by applying the royalty rate to forecast revenues.

Brand Value

• Brand value is derived from post-tax brand revenues, discounted to net present value (NPV).

Key Sectors and Brands

• Oil & Gas: 4 brands, with Saudi Aramco as the most valuable.
• Banks: 22 brands, with QNB and ADCB showing strong growth.
• Telecoms: 6 brands, with Etisalat as the strongest.
• Airlines: 2 brands, with Emirates and Etihad Airways leading in reputation.
• Other Sectors: 11 brands, with varying levels of performance.

Additional Services

• Branddirectory.com: A platform for accessing historical and current brand values, reports, and research.
• Brand Dialogue: A PR agency focused on developing communications strategies to drive brand value.
• Brand Exchange: A members' club for professionals from leading brands in the City of London.
• VI360: A brand identity management consultancy providing practical brand strategy and compliance support.

Conclusion

The report underscores the importance of brand value in driving business performance and financial returns. It highlights the need for marketing and finance teams to work together using a common language of brand valuation to make informed strategic decisions. The Middle East 50 report serves as a valuable tool for brand owners, investors, and stakeholders to understand and leverage the financial value of their brands.