United Kingdom 150 2017 The annual report on the most valuable British April 2017

Foreword. Contents

steady downward spiral of poor communication, Foreword 2 wasted resources and a negative impact on the bottom line. Definitions 4 Methodology 6 Finance bridges the gap between the and financial worlds. Our teams have Excecutive Summary 8 experience across a wide range of disciplines from and visual identity to tax and Full Tables (GPBm & USDm) 14 accounting. We understand the importance of design, and marketing, but we also Understand Your Brand’s Value 20 believe that the ultimate and overriding purpose of How We Can Help 22 brands is to make money. That is why we connect brands to the bottom line. Contact Details 23

By valuing brands, we provide a mutually intelligible language for marketers and finance teams. David Haigh, CEO, Brand Finance Marketers then have the ability to communicate the significance of what they do and boards can use What is the purpose of a strong brand; to attract the information to chart a course that maximises customers, to build loyalty, to motivate staff? All profits. true, but for a commercial brand at least, the first Without knowing the precise, financial value of an answer must always be ‘to make money’. asset, how can you know if you are maximising your returns? If you are intending to license a brand, how Huge investments are made in the design, launch can you know you are getting a fair price? If you are and ongoing of brands. Given their intending to sell, how do you know what the right potential financial value, this makes sense. time is? How do you decide which brands to Unfortunately, most organisations fail to go beyond discontinue, whether to rebrand and how to arrange that, missing huge opportunities to effectively make your brand architecture? Brand Finance has use of what are often their most important assets. conducted thousands of brand and branded Monitoring of brand performance should be the business valuations to help answer these questions. next step, but is often sporadic. Where it does take place it frequently lacks financial rigour and is Brand Finance’s recently conducted share price heavily reliant on qualitative measures poorly study revealed the compelling link between strong understood by non-marketers. brands and stock market performance. It was found that investing in the most highly branded companies As a result, marketing teams struggle to would lead to a return almost double that of the communicate the value of their work and boards average for the S&P 500 as a whole. then underestimate the significance of their brands Acknowledging and managing a company’s to the business. Skeptical finance teams, intangible assets taps into the hidden value that lies unconvinced by what they perceive as marketing within it. The following report is a first step to mumbo jumbo may fail to agree necessary understanding more about brands, how to value investments. What marketing spend there is can them and how to use that information to benefit the end up poorly directed as marketers are left to business. The team and I look forward to continuing operate with insufficient financial guidance or the conversation with you. accountability. The end result can be a slow but

2. Brand Finance AustraliaGlobalAirlinesUnited Kingdom500 30 100 30February MarchFebruary 150 20162016April 2015 2017 Brand Finance United Kingdom 150 April 2017 3. Definitions

Effect of a Brand on Stakeholders Definitions E.g. + Enterprise Value – the value of the entire enterprise, made up of Directors Potential Middle ‘Branded‘Branded multiple branded businesses Customers Managers Enterprise’Enterprise’

Existing All Other ‘Branded‘Branded + Branded Business Value – the Customers Employees Business’ E.g. Business’ Dove value of a single branded business operating under the subject brand ‘Brand’ Contribution’ Influencers Production + Brand Contribution– The total e.g. Media Brand E.g. economic benefit derived by a Dove business from its brand ‘Brand Value’ Trade Sales Channels + Brand Value – the value of the E.g. trade marks (and relating Dove Strategic marketing IP and ‘goodwill’ Debt Allies & providers attached to it) within the branded Suppliers Investors business

Branded Business Value Brand Contribution Brand Value Brand Strength

A brand should be viewed in the context of the The brand values contained in our league tables In the very broadest sense, a brand is the focus Brand Strength is the part of our analysis most business in which it operates. For this reason are those of the potentially transferable brand for all the expectations and opinions held by directly and easily influenced by those Brand Finance always conducts a Branded asset only, but for marketers and managers customers, staff and other stakeholders about an responsible for marketing and brand Business Valuation as part of any brand valuation. alike, an assessment of overall brand contribution organisation and its products and services. management. In order to determine the strength Where a company has a purely mono-branded to a business provides powerful insights to help However, when looking at brands as business of a brand we have developed the Brand architecture, the business value is the same as optimise performance. assets that can be bought, sold and licensed, a Strength Index (BSI). We analyse marketing the overall company value or ‘enterprise value’. more technical definition is required. investment, brand equity (the goodwill Brand Contribution represents the overall uplift accumulated with customers, staff and other In the more usual situation where a company in shareholder value that the business derives Brand Finance helped to craft the internationally stakeholders) and finally the impact of those on owns multiple brands, business value refers to from owning the brand rather than operating a recognised standard on Brand Valuation, ISO business performance. the value of the assets and revenue stream of the generic brand. 10668. That defines a brand as “a marketing- business line attached to that brand specifically. related intangible asset including, but not limited Following this analysis, each brand is assigned We evaluate the full brand value chain in order to Brands affect a variety of stakeholders, not just to, names, terms, signs, symbols, logos and a BSI score out of 100, which is fed into the understand the links between marketing customers but also staff, strategic partners, designs, or a combination of these, intended to brand value calculation. Based on the score, investment, brand tracking data, stakeholder regulators, investors and more, having a identify goods, services or entities, or a each brand in the league table is assigned a behaviour and business value to maximise the significant impact on financial value beyond combination of these, creating distinctive images rating between AAA+ and D in a format similar returns business owners can obtain from their what can be bought or sold in a transaction. and associations in the minds of stakeholders, to a credit rating. AAA+ brands are exceptionally brands. thereby generating economic benefits/value”. strong and well managed while a failing brand would be assigned a D grade.

4. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 5. Methodology League Table Valuation Methodology Brand Finance Typical Project Approach Brand Finance calculates the values of the 2 Determine the royalty rate range for the respective brands in its league tables using the ‘Royalty brand sectors. This is done by reviewing comparable Relief approach’. This approach involves licensing agreements sourced from Brand Finance’s estimating the likely future sales that are extensive database of license agreements and other attributable to a brand and calculating a royalty online databases. Brand Equity Stakeholder Brand Inputs Performance rate that would be charged for the use of the 3 Calculate royalty rate. The brand strength score is Value Drivers Behaviour Contribution brand, i.e. what the owner would have to pay for applied to the royalty rate range to arrive at a royalty the use of the brand—assuming it were not rate. For example, if the royalty rate range in a brand’s already owned. sector is 0-5% and a brand has a brand strength score of 80 out of 100, then an appropriate royalty 1 2 3 4 The steps in this process are as follows: rate for the use of this brand in the given sector will Brand Audit Trial & Preference Acquisition & Valuation Modelling be 4%. Retention 1 Calculate brand strength on a scale of 0 to 100 based 4 Determine brand specific revenues estimating a on a number of attributes such as emotional proportion of parent company revenues attributable Audit the impact Run analytics to Link stakeholder Model the impact of behaviour on connection, financial performance and sustainability, to a specific brand. of brand understand how behaviour with core financial performance and among others. This score is known as the Brand key financial isolating the value of the brand 5 Determine forecast brand specific revenues using a management and perceptions link to Strength Index, and is calculated using brand data investment on behaviour value drivers contribution function of historic revenues, equity analyst forecasts from the BrandAsset® Valuator database, the world’s brand equity and economic growth rates. largest database of brands, which measures brand 6 Apply the royalty rate to the forecast revenues to equity, consideration and emotional imagery derive brand revenues. attributes to assess brand personality in a category 7 Brand revenues are discounted post tax to a net agnostic manner. present value which equals the brand value. Brand strength Brand Brand revenues Brand value index ‘Royalty rate’ How We Help to Maximise Value (BSI)

6. Build scale through licensing/franchising/partnerships Brand Strong brand investment 5. Build core business through market expansion

4. Build core business through product development Brand

equity Maximising a strong brand 3. Portfolio management/rebranding Group companies

2. Optimise brand positioning and strength Brand Weak brand performance Forecast revenues 1. Base-case brand and business valuation (using internal data), growth strategy Evaluate ongoing performance formulation, target-setting, scorecard and Brand strength BSI score applied to an Royalty rate applied to Post-tax brand tracker set-up expressed as a BSI appropriate sector forecast revenues to revenues are score out of 100. royalty rate range. derive brand values. discounted to a net Current brand and Target brand and present value (NPV) business value business value which equals the brand value.

6. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 7.

Excecutive Summary

Rank 2017: 1 2016: 1 Rank 2017: 6 2016: 6 BV 2017: £ 28,267m BV 2017: £ 9,995m 1 +35% 6 -7% BV 2016: £ 20,970m BV 2016: £ 10,752m United Kingdom Brand Rating: AAA- Brand Rating: AA Rank 2017: 2 2016: 2 Rank 2017: 7 2016: 4 BV 2017: £ 16,777m BV 2017: £ 8,791m 2 -9% 7 -28% BV 2016: £ 18,424m BV 2016: £ 12,213m Brand Rating: AA+ Brand Rating: AAA-

Rank 2017: 3 2016: 3 Rank 2017: 8 2016: 8 BV 2017: £ 8,333m 3 BV 2017: £ 15,898m -1% 8 +1% 150 BV 2016: £ 8,278m BV 2016: £ 16,008m Brand Rating: AA+ Brand Rating: AA

Rank 2017: 4 2016: 5 Rank 2017: 9 2016: 9 BV 2017: £ 7,967m 4 BV 2017: £ 14,491m +29% 9 +9% BV 2016: £ 11,233m BV 2016: £ 7,325m Brand Rating: AA+ Brand Rating: AAA-

Rank 2017: 5 2016: 7 Rank 2017: 10 2016:10 BV 2017: £ 10,265m BV 2017: £ 7,469m 5 +22% 10 +37% BV 2016: £ 8,392m BV 2016: £ 5,447m Brand Rating: AAA Brand Rating: AAA-

foreign firms. At one level, this is testament to became slightly more constrained, helping to British brands have suffered some dramatic falls European markets. Britain’s strength at developing and managing improve revenues. in their dollar-denominated values this year. Of the desirable brand assets. However more should be 140 of the brands with data for both 2016 and In this context, the sudden devaluation of British done to ensure Britain gets its fair share of the After a drop at the beginning of the year, Brent 2017, 88 have declined in value. On average, the brands leaves them vulnerable to takeovers from spoils for its quality brands. Tighter regulation is Crude nearly doubled in value from early January UK’s top brands lost 6% of their value last year. international buyers. Unilever and both one solution, but another is for management and to the end of December. Its asset disposal program There are a number of reasons behind this, but recently defended bids from the US (from Kraft- shareholders to be fully aware of both the saleable following the completion of its merger with BG has the common factor is the devaluation of sterling in Heinz and Coach respectively), while ITV is value of their brands and the value that those helped to consolidate and strengthen Shell’s the wake of the Brexit vote. reported to have been the subject of repeated brands contribute to the overall business. This brand, which has been upgraded from AA+ to bids. was unable to bring way hasty sales for less than fair value, that AAA- thanks to a Brand Strength Index score This significant loss of brand value should concern the Weetabix brand home after a stronger bid from endanger British jobs, might be avoided.” score of 82. Shell’s longstanding partnership with British policy-makers, brand owners, workers and America’s Post Holdings while world renowned Ferrari continues to deliver returns, with a consumers. Senior politicians have vowed to chip-maker ARM was acquired by Japan’s Though British brands have suffered in terms of demonstrable price attributable to the protect our brand ‘crown jewels’ and Theresa May SoftBank. This spate of acquisitions and the their dollar value, looking at sterling-denominated association with the world’s most powerful auto has promised tougher government scrutiny of prospect of more raises serious questions about figures shows that the majority continue to perform brand. brand acquisitions. However the UK is currently the potential impact on investment and well. Changing the currency almost reverses the one of the most attractive places to buy brands; it employment. decline in fact; 85 of the brands are increasing in Shell invests heavily in campaigns that position it is one of the world centres of the marketing and value in GBP terms. as an innovative provider of the clean energy advertising industry and so a hub of brand David Haigh, CEO of Brand Finance, said: “While solutions of the future. As part of its ‘Make the creation; there is relatively little regulatory scrutiny the impact of Brexit on the broader economy has Shell is Britain’s most valuable brand, with a brand Future’ initiative, Shell enlisted the help of six of takeovers; and workforce restructuring is not lived up to the doomsday scenarios, British value of £28.3 billion, up 35%. Oil prices saw a popstars from around the world for its ‘Best Day of relatively straightforward, particularly compared to brands are clearly vulnerable to takeover by fairly steady increase across 2016 as supply My Life’ video, which became one of the most viral 8. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 9.

Excecutive Summary

Brand Value Over Time UK 150 - Total Brand Value by Sector 2017 30

EY Colour Industry Total Brand % of Total Value (GBPm) Brand Value Telecoms 52,843 16% 25 Telecoms 16% BP Oil & Gas 43,675 13%

Retail 42,250 12% 20 HSBC Banks 37,397 11% Oil & Gas 13% Pro Services 18,385 5% 15 Vodafone Automobiles 16,464 5%

Insurance 15,768 5%

Brand ae Bn 10 Shell Conglomerate 14,328 4% 12% Media 12,767 4% Cosmetics & 5 Personal Care 10,941 3% Others 75,353 22%

Total 335,600 100% 0 2011 2012 2013 2014 2015 2016 2017 ads of 2016. HSBC’s marketing communications have shifted online/offline divide. The continued scandals by 7% and 15% respectively. In contrast Easyjet is to reflect its more focused approach. The ‘World’s surrounding Sports Direct have contributed to a up by 60% to £1.34 billion. As consumer budgets Second placed Vodafone had a more difficult year; Local Bank’ message, conveyed to such great 5% brand value loss. With Mike Ashley facing a for holidays remain tight and people look closer to even when measured in sterling its brand value effect by outgoing Marketing Director Chris Clark Select Committee and heavy media scrutiny over home for their breaks, Easyjet’s brand could add declined (by 9%). Fellow telecoms brand BT fell for so many years has been replaced with the working conditions at its Shirebrook warehouse further value, though even on short haul flights, even further, dropping 28% following its accounting campaigns that now focus more on HSBC’s role in as well as its alleged attempted surveillance of the weakened pound threatens a reduction in scandal and the ongoing Openreach saga to £8.8 facilitating personal and business ambitions. MPs, Sports Direct’s brand dropped in value to foreign travel. billion. £1.16 billion. In contrast ASOS has staged a revival Banks are of course at particular risk from Brexit. after a series of unfortunate events including a Lynx is Britain’s fastest growing brand, up 91% to HSBC, in third place, is also down, though by just Theresa May’s apparent tough negotiating line major warehouse fire. ASOS is benefitting from its £2.1 billion. Unilever decided to ditch the 1%. HSBC is going through a period of may mean that passporting rights are at risk. Stuart international expansion and the exponential increasingly anachronistic ‘lynx effect’ campaign consolidation. At the domestic level, over a quarter Gulliver has indicated that over 1,000 jobs are growth of ecommerce. The retailer’s brand rose that was seen to be out of touch with the modern of its UK branches have been closed in the last likely to be moved to Europe once Brexit takes by 29% over the past year to £710 million. male. It has performed an almost complete two years as digitisation and online banking effect in 2019. Barclays appears to have been reversal of its previous identity, with a series of become more prevalent. Internationally, HSBC’s harder hit, with a jump in its applied discount rate Three airlines made the UK 150 this year, led by new campaigns designed to portray a “radical Brazilian business was sold to Bradesco. The $5.2 reflecting its exposure to the uncertainties of the British Airways with a brand value of £2.9 billion. and progressive view on masculinity”. Despite billion sale represented aBanks $1.7 billion loss which hit operating environment for UK financial services, However the longer term shift towards low cost initial cynicism from marketing pundits, the HSBC’s profitability in11% 2016. Stuart Gulliver will leading to a brand value drop of 7% to £10 billion. airlines combined with weakened consumer approach appears to be paying off. persevere with the cost savings however, having spending power in long-haul locations is evident. achieved economies of $2.8 billion this year. The apparel sector has been marked by a stark British Airways and Virgin Atlantic are both down,

10. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 11.

Excecutive Summary

Brand Value Change 2016-2017 (GBPm) Brand Value Change 2016-2017 (%) Brand Value Change 2016-2017 (USDm) Brand Value Change 2016-2017 (%)

Shell Shell Shell 7,296 7,296 Lynx Lynx 91% 91% Shell 5,118 5,118 Lynx Lynx 64% 64% BP BP 3,258 3,258 Sunsilk Sunsilk 79% 79% BP BP 1,895 1,895 Sunsilk Sunsilk 54% 54% O2 O2 2,022 2,022 William Hill William Hill 64% 64% O2 O2 1,494 1,494 William WilliamHill Hill 42% 42% EY EY 1,873 1,873 ARM ARM 63% 63% MINI MINI 1,114 1,114 ARM ARM 41% 41% MINI MINI 1,319 1,319 Easyjet Easyjet 60% 60% Lynx Lynx 1,076 1,076 Easyjet Easyjet 38% 38% 3 3 1,160 1,160 Compass GroupCompass Group 58% 58% 3 3 730 730 CompassCompass Group Group 36% 36% ASDA ASDA 1,036 1,036 Foster's Foster's 55% 55% Dove Dove 718 718 Foster'sFoster's 34% 34% 686 Lynx Lynx 1,005 1,005 Scottish WidowsScottish Widows 50% 50% EY EY 686 ScottishScottish Widows Widows 29% 29% 674 Dove Dove 988 988 MINI MINI 46% 46% CompassCompass Group Group 674 MINI MINI 26% 26% 580 Compass GroupCompass Group 715 715 Derby Derby 45% 45% ScottishScottish Widows Widows 580 Derby Derby 25% 25% -514 -514 Twinings Twinings -29% -29% Associated BritishAssociated Foods British Foods -1,444 -1,444 The Co-operativeThe Co-operative -39% -39% AssociatedAssociated British Foods British Foods -517 -517 Babcock Babcock -33% -33% Elsevier Elsevier -1,656 -1,656 Tesco Tesco -42% -42% ElsevierElsevier -758 -758 Barclays Barclays -36% -36% Twinings Twinings -1,668 -1,668 PearsonPearson -45% -45% TwiningsTwinings -778 -778 The Co-operativeThe Co-operative -36% -36% Pall Mall Pall Mall -1,721 -1,721 Lloyds BankLloyds Bank -45% -45% Pall MallPall Mall -788 -788 Thomas CookThomas Cook -38% -38% The Co-operativeThe Co-operative -1,946 -1,946 EE EE -46% -46% The Co-operativeThe Co-operative -824 -824 EE EE -38% -38% Magnum Magnum -2,803 -2,803 Pall MallPall Mall -47% -47% MagnumMagnum -987 -987 Pearson Pearson -40% -40% Babcock Babcock -3,230 -3,230 BarclaysBarclays -48% -48% BabcockBabcock -1,495 -1,495 Pall Mall Pall Mall -46% -46% Hays Hays -3,485 -3,485 HSBC HSBC -54% -54% Hays Hays -1,647 -1,647 Vodafone Vodafone -54% -54% Pearson Pearson -5,989 -5,989 VodafoneVodafone -60% -60% PearsonPearson -3,423 -3,423 BT BT -55% -55% Thomas CookThomas Cook -7,003 -7,003 BT BT -61% -61% ThomasThomas Cook Cook -4000.000000-2285.714286-571.428571-4000.0000001142.857143-2285.7142862857.142857-571.4285714571.4285711142.8571436285.7142862857.1428574571.4285716285.714286 -70 -50 -30 -10-7010-5030-3050-107010 90301105013070 90 110 130 -8000.000000-5928.571429-8000.000000-3857.142857-5928.571429-1785.714286-3857.142857285.714286-1785.7142862357.142857285.7142864428.5714292357.1428574428.571429 -75.0-57.5-75.0-40.0-57.5-22.5-40.0-5.0-22.512.530.0-5.012.547.530.065.047.582.5100.065.082.5100.0 Proportion of brands increasing or decreasing in value (base GBP) Proportion of brands increasing or decreasing in value (USD)

New Colour Industry Number Proportion Colour Industry Number Proportion Brands New 7% Brands Brands Increasing in value 85 57% 7% Brands Increasing in value 52 35%

Brands Decreasing in value 55 37% Brands Decreasing in value 88 59%

New Brands 10 7% Brands Increasing New Brands 10 7% in value Total 150 100% 35% Total 150 100% Brands Decreasing in value 55% Brands Increasing in value 85%

Brands Decreasing in value 59%

12. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 13. Brand Finance Brand Finance United Kingdom 150 (GBPm) United Kingdom 150 (USDm)

Top 150 most valuable British brands 1 - 50. Top 150 most valuable British brands 1 - 50.

Rank Rank Brand name Sector Brand value % Brand value Brand Brand Rank Rank Brand name Sector Brand value % Brand value Brand Brand 2017 2016 (GBPm) change (GBPm) rating rating 2017 2016 (USDm) change (USDm) rating rating 2017 2016 2017 2016 2017 2016 2017 2016 1 1 Shell Oil & Gas 28,267 35% 20,970 AAA- AA+ 1 1 Shell Oil & Gas 36,783 16% 31,665 AAA- AA+ 2 2 Vodafone Telecoms 16,777 -9% 18,424 AA+ AA+ 2 2 Vodafone Telecoms 21,831 -22% 27,820 AA+ AA+ 3 3 HSBC Banks 15,898 -1% 16,008 AA+ AAA- 3 3 HSBC Banks 20,688 -14% 24,172 AA+ AAA- 4 5 BP Oil & Gas 14,491 29% 11,233 AA+ AA 4 5 BP Oil & Gas 18,857 11% 16,962 AA+ AA 5 7 EY Pro Services - Commercial 10,265 22% 8,392 AAA AAA 5 7 EY Pro Services - Commercial 13,357 5% 12,672 AAA AAA 6 6 Barclays Conglomerate 9,995 -7% 10,752 AA AA 6 6 Barclays Conglomerate 13,006 -20% 16,236 AA AA 7 4 BT Telecoms 8,791 -28% 12,213 AAA- AAA- 7 4 BT Telecoms 11,439 -38% 18,442 AAA- AAA- 8 8 Tesco Retail 8,333 1% 8,278 AA AA 8 8 Tesco Retail 10,843 -13% 12,499 AA AA 9 9 Sky Telecoms 7,967 9% 7,325 AAA- AAA- 9 9 Sky Telecoms 10,368 -6% 11,060 AAA- AAA- 10 10 O2 Telecoms 7,469 37% 5,447 AAA- AAA- 10 10 O2 Telecoms 9,719 18% 8,224 AAA- AAA- 11 14 ASDA 11 14 ASDA 12 12 12 12 Land Rover 13 11 Lloyds Bank 13 11 Lloyds Bank 14 17 3 14 17 3 15 13 BBC 15 13 BBC 16 28 MINI 16 28 MINI 17 20 Sainsbury's 17 20 Sainsbury's 18 31 Dove 18 31 Dove 19 23 Standard Chartered 19 23 Standard Chartered 20 25 Johnnie Walker 20 25 Johnnie Walker 21 18 Aviva 21 18 Aviva 22 15 EE 22 15 EE 23 30 Unilever 23 30 Unilever 24 21 Marks & Spencer 24 21 Marks & Spencer 25 29 Burberry 25 29 Burberry 26 33 Virgin Media 26 33 Virgin Media 27 19 BHP Billiton 27 19 BHP Billiton 28 27 Prudential (UK) 28 27 Prudential (UK) 29 26 British Airways 29 26 British Airways 30 36 Rolls-Royce 30 36 Rolls-Royce 31 42 Nationwide Building Society 31 42 Nationwide Building Society 32 24 ITV 32 24 ITV 33 22 Halifax 33 22 Halifax 34 16 Pall Mall 34 16 Pall Mall 35 43 BAE Systems 35 43 BAE Systems 36 37 SSE 36 37 SSE 37 32 NatWest 37 32 NatWest 38 35 RBS 38 35 RBS 39 40 Capita 39 40 Capita 40 47 Glaxosmithkline 40 47 Glaxosmithkline 41 45 Holiday Inn 41 45 Holiday Inn 42 50 Aon 42 50 Aon 43 34 Morrisons 43 34 Morrisons 44 49 Boots 44 49 Boots 45 78 Lynx 45 78 Lynx 46 38 Royal Mail 46 38 Royal Mail 47 44 British Gas 47 44 British Gas 48 68 Scottish Widows 48 68 Scottish Widows 49 71 Compass Group 49 71 Compass Group 50 New Rio Tinto 50 New Rio Tinto

14. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 15. Brand Finance Brand Finance United Kingdom 150 (GBPm) United Kingdom 150 (USDm)

Top 150 most valuable British brands 51 - 100. Top 150 most valuable British brands 51 - 100.

Rank Rank Brand name Sector Brand value % Brand value Brand Brand Rank Rank Brand name Sector Brand value % Brand value Brand Brand 2017 2016 (GBPm) change (GBPm) rating rating 2017 2016 (USDm) change (USDm) rating rating 2017 2016 2017 2016 2017 2016 2017 2016 51 59 Rolls- Royce 51 59 Rolls- Royce 52 53 Carphone Warehouse 52 53 Carphone Warehouse 53 57 Dunhill 53 57 Dunhill 54 46 Next 54 46 Next 55 New IHS MARKIT 55 New IHS MARKIT 56 76 Costa Coffee 56 76 Costa Coffee 57 51 Primark 57 51 Primark 58 67 Smirnoff 58 67 Smirnoff 59 65 Delphi Automotive 59 65 Delphi Automotive 60 52 National Grid 60 52 National Grid 61 80 Astrazeneca 61 80 Astrazeneca 62 63 62 63 Bentley 63 58 Legal & General 63 58 Legal & General 64 62 John Lewis 64 62 John Lewis 65 75 65 75 Lipton 66 56 66 56 Waitrose 67 66 Travis Perkins 67 66 Travis Perkins 68 93 Easyjet 68 93 Easyjet 69 55 Bunzl 69 55 Bunzl 70 41 The Co-operative 70 41 The Co-operative 71 86 Johnson Matthey 71 86 Johnson Matthey 72 New Willis Towers Watson 72 New Willis Towers Watson 73 73 Rothmans 73 73 Rothmans 74 91 74 91 Cadbury 75 72 Sports Direct 75 72 Sports Direct 76 54 BUPA 76 54 BUPA 77 82 Jaguar 77 82 Jaguar 78 69 Bank of Scotland 78 69 Bank of Scotland 79 112 Sunsilk 79 112 Sunsilk 80 79 Tate & Lyle 80 79 Tate & Lyle 81 90 Intercontinental 81 90 Intercontinental 82 98 Crowne Plaza 82 98 Crowne Plaza 83 81 B&Q 83 81 B&Q 84 77 Anglo American 84 77 Anglo American 85 89 The Body Shop 85 89 The Body Shop 86 92 Barratt Developments 86 92 Barratt Developments 87 116 William Hill 87 116 William Hill 88 101 Vauxhall 88 101 Vauxhall 89 83 Scottish Power 89 83 Scottish Power 90 94 RSA 90 94 RSA 91 64 Twinings 91 64 Twinings 92 104 Premier Inn 92 104 Premier Inn 93 96 Dettol 93 96 Dettol 94 84 Finish 94 84 Finish 95 48 Pearson 95 48 Pearson 96 108 Sage 96 108 Sage 97 100 Ovaltine 97 100 Ovaltine 98 134 ARM 98 134 ARM 99 88 G4S 99 88 G4S 100 74 Elsevier 100 74 Elsevier

16. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 17. Brand Finance Brand Finance United Kingdom 150 (GBPm) United Kingdom 150 (USDm)

Top 150 most valuable British brands 101 - 150. Top 150 most valuable British brands 101 - 150.

Rank Rank Brand name Sector Brand value % Brand value Brand Brand Rank Rank Brand name Sector Brand value % Brand value Brand Brand 2017 2016 (GBPm) change (GBPm) rating rating 2017 2016 (USDm) change (USDm) rating rating 2017 2016 2017 2016 2017 2016 2017 2016 101 70 Babcock 101 70 Babcock 102 New Hellmann's 102 New Hellmann's 103 102 Debenhams 103 102 Debenhams 104 95 104 95 Aston Martin 105 99 Air Wick 105 99 Air Wick 106 107 Taylor Wimpey 106 107 Taylor Wimpey 107 123 Schroders 107 123 Schroders 108 New B&M European 108 New B&M European 109 120 ASOS 109 120 ASOS 110 111 TSB 110 111 TSB 111 103 Centrica 111 103 Centrica 112 114 Persimmon 112 114 Persimmon 113 New Fremantlemedia 113 New Fremantlemedia 114 124 Balfour Beatty 114 124 Balfour Beatty 115 121 Kingsmill 115 121 Kingsmill 116 138 Derby 116 138 Derby 117 61 Thomas Cook 117 61 Thomas Cook 118 125 McLaren 118 125 McLaren 119 130 Intertek 119 130 Intertek 120 110 npower 120 110 npower 121 127 Saga 121 127 Saga 122 85 Magnum 122 85 Magnum 123 126 Rimmel 123 126 Rimmel 124 135 Pentair 124 135 Pentair 125 106 Virgin Atlantic 125 106 Virgin Atlantic 126 131 Rexam 126 131 Rexam 127 145 Rentokil 127 145 Rentokil 128 144 Carillion 128 144 Carillion 129 115 Daily Mail 129 115 Daily Mail 130 122 Argos 130 122 Argos 131 119 Iceland 131 119 Iceland 132 New Peter Stuyvesant 132 New Peter Stuyvesant 133 New P&O Cruises 133 New P&O Cruises 134 143 Metro 134 143 Metro 135 New rentalcars.com 135 New rentalcars.com 136 140 Penguin 136 140 Penguin 137 128 First 137 128 First 138 New Dulux 138 New Dulux 139 118 TalkTalk 139 118 TalkTalk 140 105 Associated British Foods 140 105 Associated British Foods 141 New Old Mutual 141 New Old Mutual 142 149 Grant's 142 149 Grant's 143 New Flora 143 New Flora 144 New Foster's 144 New Foster's 145 109 Booker Group 145 109 Booker Group 146 113 Amec 146 113 Amec 147 132 Petrofac 147 132 Petrofac 148 147 AA 148 147 AA 149 142 John Player Special 149 142 John Player Special 150 97 Hays 150 97 Hays

18. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 19. Understand Your Brand’s Value

Drivers of Change Brand Strength Index 2016 An ideal balanced scorecard of fundamental brand related measures Brand Value Dashboard Three key areas impact Brand Value (EURm) Brand Valuation Assumptions Effective BSI Weighting Attributes 18 131 Underlying economic assumptions used in valuation 34 $707m $882m $10,216m 6.25% Product: R&D expenditure, Widely recognised factors deployed by Brand Capital expenditure Strong brand (EUR) (EUR) Marketers to create brand loyalty and Brand [XXX] Brand Value Brand Value (EUR) Brand value (EURm) Investment Enterprise Value AA+ Investment 25% 6.25% Place: Website Ranking 729 729 Inputs market share. We therefore benchmark 78/100 616 616 650 6.25% People: Number of Employees, €650m €729m €9,399m Employee Growth brands against relevant input measures by Brand 25% Equity X 6.25% Promotion: Marketing expenditure sector against each of these factors. % = Historic brand value performance (EURm) Peer Group Comparison (USDm) $650 Brand Performance Forecast revenues $6,265 2015 Brand Strength Business Performance External Changes 2016 5.00% Familiarity 800 729 Weak brand $ $3,031 7.50% Consideration How do stakeholders feel about the brand 650 $2,328 $1,913 $707 700 607 7.50% Preference vs. competitors? Brand Strength Business Outlook Economic Outlook Customer 35% 7.50% Satisfaction 600 [XXX] [XXX]’s brand strength has increased compared to last year. Brands drive higher revenues. An investor would therefore All future returns are subject to risk. If the risk of not 7.50% Recommendation/NPS • Brand equity accounts for 50% to reflect Revenue Long Term Growth Rate Tax Rate Discount Rate 500 pay more for a brand that makes more money. receiving the forecast returns is higher (increasing the Brand the importance of stakeholder As the brand continues its sustainability drive, [XXX] has discount rate), the brand’s market is not growing as quickly Equity 5.00% Employee Score Licensing payments for the use of a After the explicit forecasts, the brand Forecasted royalties are reduced by Earnings in the future are worth less 320 Staff 5% perceptions to behaviour 400 Brand Value by Product Segment been improving across all CSR scores. It now has the [XXX]’s revenue base and the 5 year forecast growth have as expected (lower long term growth rate) or the tax rate in brand are derived from revenue. will continue to grow. However, it is the tax rate to reflect the actual than consumption now. This rate is 275 highest CSR scores it has had in the last four years across fallen this year, resulting in a loss of $177m USD to total the brand’s regions of operation is higher, then the brand’s 300 Increases or decreases in forecasted unlikely that the company will sustain amount that would be received by therefore used to reduce future 213 Environment, Employees and Governance. brand value. value is reduced and vice versa. 50% 2.50% Credit Rating • Brand Equity is important to all 37% Financial 5% revenue increase or decrease the extraordinary returns into the future the brand owner after tax. earnings to their value today. Nutrition 2.50% Analyst Recommendation stakeholder groups with customers being 200 The premium approach is also leading to significant margin However, it is important to note that this has arisen as a final valuation. so forecast industry growth rates are advantages – positively affecting “performance”. result of the company divesting a number of divisions. the most important 100 Performance Materials 1.67% Environment Score applied. 58% External 5% 1.67% Community Score 0 Other Activities 4% 1.67% Governance Score 2011 2012 2013 2014 2015 2016 2016 2015 2016 2015 2016 2015 5 year Compound Annual Growth Rate Long Term Growth Rate Tax Rate Discount Rate Brand 5 Year Forecast 6.25% Revenue (CAGR) 78 76 2.6% 3.4% Discount Rate 9.1% 8.6% Brand Strength Index Strength Growth Quantitative market, market share and 7% Brand 6.25% % Margin financial measures resulting from the Long Term Growth 3.2% 2.6% 2015 2014 2015 2014 2015 2014 2015 2014 Base Year 8,205 9,570 Performance Outputs 25% 6.25% % Forecast Margin Revenue (EURm) strength of the brand. 6.25% % Forecast Revenue Growth Tax 28.9% 30.2% 25% 2.6% 3.4% -0.8% 3.2% 2.6% +0.6% 29% 30% -1.3% 9.1% 8.6% +0.5%

Determining the Royalty Rate Brand Performance Brand Investment In order to apply the Brand Strength Index, a hypothetical royalty rate range needs to be set Competitor Royalty Rates An ideal balanced scorecard of fundamental brand related measures Proven inputs that drive the Brand Equity and financial results Following the OECD guidelines, Brand Finance sets the hypothetical brand royalty rate ranges by reference to three tests: Competitor royalty rates will be different based on different strengths of the brand, having Brand Strength Index Brand Strength Index different operating segments and company-specific long term affordability • Comparable Agreements: A search of comparable licensing agreements for brands in each industry is conducted every year. The margin analyses Brand Investment Brand Performance are then compared against the royalty rates found in these agreements to analyse the importance of brand in the industry and set an appropriate 1.2% average industry royalty rate. 10.0 1.0% 10.0 9.3 • Industry Margins: An analysis of 25% to 40% of margins, generally accepted as rules of thumb for licensing rates for all intangible assets in a 8.9 8.9 8.0 7.7 company. These rates are adjusted to take into account the importance of brand in a given industry. 8.0 8.1 0.8% 0.8% 0.8% 0.8% 6.4 6.0 • Affordability: Thirdly, an analysis of the brand’s specific royalties is conducted. If the brand has been able to sustain extraordinary profits over an 0.7% 6.0 5.3 0.6% extended time it is likely that hypothetical brand owners would be willing to pay closer to the company’s margins than the industry average. In the 0.6% 0.6% 0.6% 5.0 4.0 case of Brand Finance’s League Table models, affordability will be based on the forecast EBIT. 4.0 [XXX]DSM Best in Class Competitor Average 0.5% DSM[XXX] Best in Class Competitor Average 2.0 • Average industry royalty rate ranges can be seen below 2.0 0.0 High 0.0 Effective Effective Weighting 6.25% 6.25% 6.25% 6.25% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Weighting 6.25% 6.25% 6.25% 6.25% DSM BASF Dow Du Pont Akzo Nobel Akzo Nobel Best in Best in Class [XXX] Du Pont Multiple Akzo Nobel Mid Class Akzo Nobel Dow Akzo Nobel Du Pont Product Place People Promotion [XXX] Revenue Margin % Forecast Revenue Growth % Forecast Margin % Low Relative quality of the brand’s investment in Relative quality of a brand’s Relative quality of the human network Relative quality of the brand’s promotions. its products. The measure can include R&D network. It can include the quality of supporting the brand. This may include the Marketing investment, the quality of visual Akzo Nobel – Paints and spend and capital expenditure. logistical infrastructure available to the size of the support network, its likely future identity and the effectiveness of the [XXX] BASF Dow Du Pont Akzo Nobel - Corporate The brand’s ability to drive a The brand’s ability to drive a The brand’s ability to improve Coatings brand, the quality of its online presence, or growth or the investment in workforce brand’s social media is covered by this volume premium. Implied by price premium. Implied by business prospects across the number and quality of its retail outlets. training and human resources. measure. 78 78 80 80 82 82 current and future revenue. current and future margins. various KPIs

A Brand Value Report provides a complete + Internal understanding of brand Royalty Rates Trademark Audit breakdown of the assumptions, data + Brand value tracking sources and calculations used to arrive at + Competitor benchmarking Analysis of competitor royalty rates, industry Analysis of the current level of protection for the your brand’s value. + Historical brand value royalty rate ranges and margin analysis used to brands word marks and trademark iconography Each report includes expert recommendations determine brand specific royalty rate. highlighting areas where the marks are in need for growing brand value to drive business of protection. performance and offers a cost-effective way to Brand Strength Index + Transfer gaining a better understanding of your position + Licensing/ franchising negotiation + Highlight unprotected marks against competitors. A breakdown of how the brand performed on + International licensing + Spot potential infringement various metrics of brand strength, benchmarked + Competitor benchmarking + Trademark registration strategy A full report includes the following sections against competitor brands in a balanced which can also be purchased individually. scorecard framework. For more information regarding our Brand Value Cost of Capital Reports, please contact: + Brand strength tracking Brand Valuation Summary + Brand strength analysis A breakdown of the cost of capital calculation, Alex Haigh + Management KPI’s including risk free rates, brand debt risk Director of League Tables, Brand Finance Overview of the brand valuation including + Competitor benchmarking premiums and the cost of equity through CAPM. executive summary, explanation of changes in [email protected] brand value and historic and peer group + Independent view of cost of capital for internal comparisons. valuations and project appraisal exercises +44 (0)20 7389 9400

20. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 21. How we can help Contact details

1. Valuation: What are my intangible assets 2. Analytics: How can I improve marketing worth? effectiveness? Contact us Our offices Valuations may be conducted for technical purposes Analytical services help to uncover drivers of demand For brand value report and to set a baseline against which potential strategic and insights. Identifying the factors which drive enquiries, please contact: brand scenarios can be evaluated. consumer behaviour allow an understanding N 2. IO AN of how brands create bottom-line impact. Alex Haigh T A A L Director of League Tables U Y L T Brand Finance A I V C • Branded Business Valuation • Trademark Valuation [email protected] . S • Market Research Analytics • Brand Audits 1 • Intangible Asset Valuation • Brand Contribution Brand & • Brand Scorecard Tracking • Return on Marketing Investment

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Y T . 4 owners of branded businesses get a better deal modelling will identify the best opportunities, [email protected] by leveraging the value of their intangibles. ensuring resources are allocated to those activities which have the most impact on brand and business value. For all other enquiries, please contact: • M&A Due Diligence • Franchising & Licensing • Brand Governance • Brand Architecture & Portfolio Management • Tax & Transfer Pricing • Expert Witness • Brand Transition • Brand Positioning & Extension [email protected] +44 (0)207 389 9400 For further information on Brand Finance®’s services and valuation experience, please contact your local representative: Country Contact Email address Australia Mark Crowe [email protected] Brazil Pedro Tavares [email protected] MARKETING FINANCE TAX LEGAL linkedin.com/company/ Canada Bill Ratcliffe [email protected] brand-finance China Minnie Fu [email protected]

We help marketers to connect We provide financiers and We help brand owners and We help clients to enforce and Caribbean Nigel Cooper [email protected] their brands to business auditors with an independent fiscal authorities to understand exploit their intellectual East Africa Jawad Jaffer [email protected] performance by evaluating the assessment on all forms of the implications of different property rights by providing France Victoire Ruault [email protected] return on investment (ROI) of brand and intangible asset tax, transfer pricing and brand independent expert advice in- facebook.com/brandfinance Germany Dr. Holger Mühlbauer h.mü[email protected] brand based decisions and valuations. ownership arrangements. and outside of the courtroom. Greece Ioannis Lionis [email protected] strategies. Holland Marc Cloosterman [email protected] India Ajimon Francis [email protected] + Branded Business Valuation + Branded Business Valuation + Branded Business Valuation + Branded Business Valuation twitter.com/brandfinance Indonesia Jimmy Halim [email protected] + Brand Contribution + Brand Contribution + Brand Contribution + Brand Contribution Italy Massimo Pizzo [email protected] + Trademark Valuation + Trademark Valuation + Trademark Valuation + Trademark Valuation Malaysia Samir Dixit [email protected] + Intangible Asset Valuation + Intangible Asset Valuation + Intangible Asset Valuation + Intangible Asset Valuation Disclaimer + Brand Audit + Brand Audit + Brand Audit + Brand Audit Mexico Laurence Newell [email protected] Brand Finance has produced this study LatAm (exc. Brazil) Laurence Newell [email protected] + Market Research Analytics + Market Research Analytics + Market Research Analytics + Tax & Transfer Pricing with an independent and unbiased + Brand Scorecard Tracking + Brand Scorecard Tracking + Franchising & Licensing + Expert Witness analysis. The values derived and Middle East Andrew Campbell [email protected] opinions produced in this study are Nigeria Babatunde Odumeru [email protected] + Return on Marketing + Return on Marketing + Tax & Transfer Pricing based only on publicly available Investment Investment + Expert Witness information and certain assumptions Portugal Pedro Tavares [email protected] + Brand Transition + Brand Transition that Brand Finance used where such Russia Alexander Eremenko [email protected] data was deficient or unclear . Brand + Brand Governance + Brand Governance Finance accepts no responsibility and Scandinavia Alexander Todoran [email protected] + Brand Architecture & + Brand Architecture & will not be liable in the event that the Singapore Samir Dixit [email protected] Portfolio Management Portfolio Management publicly available information relied upon is subsequently found to be South Africa Jeremy Sampson [email protected] + Brand Positioning & + Brand Positioning & inaccurate. Spain Lorena Jorge ramirez [email protected] Extension Extension Sri Lanka Ruchi Gunewardene [email protected] + Franchising & Licensing + Mergers, Acquisitions and The opinions and financial analysis expressed in the report are not to be Switzerland Victoire Ruault [email protected] Finance Raising Due construed as providing investment or Diligence business advice. Brand Finance does Turkey Muhterem Ilgüner [email protected] not intend the report to be relied upon UK Alex Haigh [email protected] + Franchising & Licensing for any reason and excludes all liability + Tax & Transfer Pricing to any body, government or USA Ken Runkel [email protected] + Expert Witness organisation. Vietnam Lai Tien Manh [email protected]

22. Brand Finance United Kingdom 150 April 2017 Brand Finance United Kingdom 150 April 2017 23. Contact us.

The World’s Leading Independent Branded Business Valuation and Strategy Consultancy T: +44 (0) 20 7389 9400 E: [email protected] www.brandfinance.com

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