THE BRAND Flnance TOP 100 Slngapore BRANDS REPORT
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THE BRAND FINANCE TOP 100 SINGAPORE BRANDS REPORT 2014 on Singapore’S inTANGIBLE ASSETS AND BRANDS Designed by Sedgwick Richardson For over a decade, Brand Finance has been dedicated to the measurement of brand strength and value. INTANGIBLE ASSETS 28 Background on Intangible OVERVIEW Asset Value FEATURE REPORT CARD 2014 32 02 SINGAPORE 2014 Highlights AS AN IP HUB 15 FOR ASIA Singapore’s 04 FEATURE Top 10 Most 36 Foreword Valuable Brands NATION BRANDS METHODOLOGY 2013 06 16 ADDITIONAL Introduction 44 INFORMATION Singapore’s Report Card New 07 on the International Top 100 Brands Standard on 54 Singapore’s Brand Valuation Glossary Report Card of Terms on Intangible 22 FEATURE Assets 50 Top 100 Brands INTEGRATED 56 REPORTING 08 AND BRAND About Brand Finance Should 24 FEATURE PERFORMANCE Singapore be WHY ARE Concerned PUBLISHED 52 57 with Intangible BRAND Contact Details Asset Value? VALUATION Explanation OPINIONS SO of Methodology DIFFERENT? 09 FEATURE 58 GETTING Transparency A GRIP ON in Brand INTANGIBLES Valuation 59 FEATURE BRAND SCORECARD CONTENTS THE BRAND FINANCE 2014 HIGHLIGHTS CORPORATE SINGAPORE NOTABLE SECTOR: BANKING NOTABLE SECTOR: TELECOMMUNICATIONS The enterprise value of corporate Singapore at the end of 2013 was increased to US$505 billion, up from US$464 billion in December 2012 but it still stays below the 2010 level when it had reached an all-time high of US$534 billion. The total value of Singapore’s 100 largest brands and brand portfolios in 2014 is US$40.20 billion, representing a marginal decrease over last year’s study as compared to 14% and 11% growth in the 2013 and 2012 studies. OCBC had the maximum gain against the top 10. It not only gained 4 places to be ranked in the top 5, it also had the maximum brand value increase of US$614 million NEW ENTRANTS TO TOP 100 Overall, only 32% of Singapore amongst the top 10 ranked brands. listed value is contributed by Intangibles compared to a global average of 53%. It is alarming that the intangibles value, the PERFORMANCE HIGHLIGHT intangible ratio and overall top 100 band value have all declined over previous years. The top 6 companies Overall, 5 of the top 10 by Enterprise Value are segments by EV had below all amongst the top 10 average performance companies by Brand Value. (less than 32%) for the Although Singapore Airlines was ranked at number These have fallen down intangibles. 13 by Enterprise Value, it retained the title of being from 7 companies in 2013 the second Most Valuable Singapore Brand further with Genting moving out illustrating the strength of strong brand and the of the top 10 rankings. intangible value contribution. 2 THE BRAND FINANCE TOP 100 SINGAPORE BRANDS REPORT 2014 THE BRAND FINANCE 2014 HIGHLIGHTS CORPORATE SINGAPORE NOTABLE SECTOR: BANKING NOTABLE SECTOR: TELECOMMUNICATIONS Banking although in a strong No.1 position with an EV of Telecommunications sector also had the highest disclosed US$117 billion has gained across both the tangibles and intangibles of US$9 billion. intangible value. Their current intangible value contribution is at 30%. Banking, though with the highest contributor of the overall enterprise value and the highest disclosed goodwill had the total intangibles value of only 30% against the EV, just below the national average of 32%. Telecommunications sector has the highest EV to BV ratio with an intangibles value of over 72% of the EV. This demonstrates NEW ENTRANTS TO TOP 100 the strong brand equity and intangible growth compared to the overall average of 32%. PERFORMANCE HIGHLIGHT Entertainment industry was a strong third with 59% Genting Singapore has continued the fall of brand value intangibles value closely and is now out of the top 10 brands. followed by Engineering & Construction at 58% intangible value. The high percentage in the Engineering and Construction industry could be attributed to future contracts and people as important intangibles. This year, there were a total of 8 new entrants in the top 100 brands. Compared to only 2 last year. At the back of strong growth in the pawn industry, MoneyMax and Valuemax group, both recently listed companies entered straight at 79 and There are 20 brands across the 71 respectively. rankings with a high double digit BV:EV ratio of 20% and above. OVERVIEW 3 THE BRAND FINANCE FOREWORD Brand Finance is dedicated to using brand valuation as an input for strategic decisions and driving organisational performance. The transition into an intangible driven Over the past decade, Brand Finance has been economy has never been as prominent as dedicated in helping companies track and it is today. Companies at the forefront of measure their investments in their intangible innovation have been the biggest winners asset portfolio. in this years’ Global 500. Eight of the top ten Most Valuable Global Brands (Apple, Certain steps can be undertaken to ensure Samsung, Google, Microsoft, Verizon, AT&T, that an economic value driven strategy occurs amazon.com and IBM) are in technology throughout the organisation, mush after the related industries, where investment in brand deals are done. and R&D is important in staying relevant to consumers. The speed of technological 1. Accountability – ensure that all invested change has resulted in a raft of companies funds are accounted for through returns DAVID HAIGH which have become irrelevant and include the on investment analysis Chief Executive, likes of Blackberry, Garmin, Kodak, Nokia, and 2. Credibility – ensure that investments are Brand Finance plc Sony. For the first time this year, the brand linked to organiastional objectives value of Apple climbed above US$100bn, 3. Empowerment – ensure that teams are assisted by rising confidence in the empowered to make their own decisions developed world. with strong justification 4. Strategy planning – ensure that all levels The quantitative easing policies by central of the organisation are consulted, especially banks in Europe, Japan and the United States when undertaking market insight. have helped in the economic recovery. 5. KPI’s setting – Economic returns based Excess cash on the balance sheet of marketing ROI becomes extremely companies and cheaper borrowing costs has critical to assess the success of marketing resulted in greater M&A activity, especially contribution to the bottom line, in hard in pharmaceutical, retail and technology. dollar value terms vs. softer qualitative We expect this to continue towards the KPIs currently measured. end of 2014, however, things could change dramatically if the slowdown in China is faster Valuations is a great tool to evaluate the than expected. Despite the strong credentials returns on investments, aid in monitoring of many technology heavyweights, some and tracking in the long term performance commentators are concerned about the of your investments. overvaluations on the smaller to medium sized end of the technology industry. The NASDAQ is only 18% off the highs reached during the technology boom of 2000. 4 THE BRAND FINANCE TOP 100 SINGAPORE BRANDS REPORT 2014 THE BRAND FINANCE FOREWORD Brand Finance published brand rankings are the world’s only published ranking of ISO compliant brand values. We are in the ideas economy. The economy tangible, financial evidence of their status of intangibles. The balance between tangibles as assets and an indication of the value and intangibles has changed dramatically over generated through the investment in the past 50 years as corporate performance brand equity. is increasingly driven by exploitation of ideas, information, expertise and services rather than We use quantitative market data, detailed physical products. financial information and expert judgement to provide reliable Brand Ratings and Intangibles make up for a significantly large Brand Values. Such an analysis needs to value of an enterprise. Yet, it’s an area of be conducted by product, geographic and least focus amongst the management. While demographic segment to maximise brand marketers do not measure or care much value. While such detailed metrics and SAMIR DIXIT about the intangible assets, the discrepancy financial analysis are beyond the scope of Managing Director, between market and book values shows that the current point in time brand valuations Brand Finance investors do. included in this year’s league table, Asia Pacific however, they are the next natural step in Brand Finance has been researching intangible understanding and developing brand value. assets with an emphasis on brands to help corporations understand brand strength We have also observed that a number of and value. Against the current economic brand valuation consultancies produce brand backdrop, our 2014 study aims to examine value league tables using methods that do the performance of Singapore’s intangible not stand up to technical scrutiny or to the assets and brands. ISO Standards for Brand Valuation. We use methods that are technically advanced, Brand Finance published brand rankings are which conform to ISO Standards and are well the world’s only published ranking of ISO recognised by our peers, by various technical compliant brand values. Brands and brand authorities and by academic institutions. equity affect all stakeholder groups and can confer considerable advantages, such as This annual report pits the best Singapore building customer loyalty, enabling a price brands against one another in the most premium for the branded product, influencing definitive list of brand values available. The the perceptions they have of the branded Brand value accorded to each brand is a business, their preference or loyalty to that summary of its financial strength. Each brand organisation and their behaviour. Consumers has also been given a brand rating, which and customers buy more, for longer, at higher indicates its strength, risk and future potential prices, while suppliers offer better terms of relative to its competitors. business and finance providers invest at lower cost. These and other stakeholder This report provides an opinion regarding the behaviour affect business value drivers to point in time valuations of the most valuable give higher revenues, lower costs and greater Singapore brands as at 31st December 2013.