Top 50 E&C brands could lose US$30bn from COVID-19
The world’s top 50 most valuable engineering & construction brands could lose over US$30 billion worth of brand value as a result of the COVID-19 pandemic, according to the latest Brand Finance Engineering & Construction 50 2020 report. Brand Finance’s analysis shows that the engineering & construction sector is a moderately impacted industry globally and could face a potential 10% loss in brand value.
As with the majority of sectors globally, COVID-19 is undoubtedly going to wreak havoc on the engineering & construction sector in the coming year, through production disruption, broken supply chains and future investment uncertainty.
Looking beyond the engineering & construction sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.
Brand Finance has assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020. The likely impact on brand value was estimated for each sector. The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss) – based on the level of brand value loss observed for each sector in the first quarter of 2020.
CSCEC leads way for Chinese brands
China State Construction Engineering Corporation (CSCEC) has overtaken General Electric (down 14% to US$24.2 billion) to become the world’s most valuable engineering & construction brand, despite recording a 3% drop in brand value to US$24.8 billion.
CSCEC leads the way for a further 10 Chinese brands in the ranking, with a combined brand value of US$89.4 billion, closing the gap behind US brands, which currently dominate the ranking, with 19 featuring with a combined brand value of US$95.1 billion.
Entering the ranking for the first time, in 10th position, is Power China (brand value US$7.7 billion). As one of China’s biggest multinationals, Power China has established itself as a leading enterprise in the hydropower industry both on home soil and internationally.
Leading Chinese cement producer, Conch, is this year’s fastest growing engineering & construction brand, recording an impressive 39% brand value growth to US$3.9 billion. The brand has continued to commission several global projects and celebrated solid revenue growth, which it has attributed to strong sales performances.
Richard Haigh, Managing Director, Brand Finance, commented:
“President Xi Jinping’s Belt and Road Initiative has successfully propelled Chinese engineering and construction brands onto the global stage and has been the main impetus for their solid performances in the Brand Finance Engineering & Construction ranking. These brands’ resilience and strength have been put to the ultimate test, however, as COVID-19 engulfs not only the Chinese but global economy. With life making a slow return to normal across the nation, these brands will hope to bounce back, minimising risk to their brand values in the coming year.”
John Deere bucks trend and enters top 10
Bucking the negative trend in the top 10 is Illinois-headquartered John Deere, recording a 31% brand value increase to US$8.3 billion and simultaneously jumping 6 spots in the ranking from 14th to 8th.
Priding itself as a leader in the delivery of smarter, more efficient and sustainable solutions, the brand continues to strive towards innovative product development. Despite John Deere suffering from the repercussions of the US-China trade war and from the US farm industry slowdown, the brand celebrated record performances in its construction and forestry businesses, marking a record year for sales and operating profit.
Siemens is sector’s strongest
In addition to measuring overall brand value, Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. According to these criteria, Siemens (down 7% to US$20.1 billion) is the world’s strongest engineering & construction brand with a Brand Strength Index (BSI) score of 85.2 out of 100 and a corresponding AAA brand strength rating.
The brand has committed to its Vision 2020+ strategy, focusing on growth in the fields of electrification, automation and digitalisation, and invested nearly €6 billion in R&D in 2019 alone. The brand has scored particularly well on the environment and governance score, a testament to the brand’s environmental protection drive. CEO Joe Kaeser has announced that he hopes to bring forward its current 2030 CO2 neutrality target – a reflection of Siemens’ success thus far.
This success as not come without its difficulties, however, demonstrated by the 7% drop in brand value to US$20.1 billion. Siemens has cited the slowing European and global economy, paired with the slump in the car market, as key contributing factors towards dented profits and forecast revenue.
Note to Editors
Every year, Brand Finance values 5,000 of the world’s biggest brands. The 50 most valuable engineering & construction brands are included in the Brand Finance Engineering & Construction 50 2020 report.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, charts, and more information about the methodology, as well as definitions of key terms are available in the Brand Finance Engineering & Construction 50 2020 report.
Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.