Equinor remains Norway’s most valuable brand, with its brand value growing by 12% to NOK 77.2 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy. Equinor’s rebranding process from Statoil last year was a bold step for the energy giant, raising questions about the long-term success of the reshaped brand. However, contrary to some market expectations, Equinor’s financial performance over the past year remained stable, suggesting a promising outlook for the updated brand identity.
Statoil’s rebrand reflected its ambition to become a broader energy company. While the Equinor brand symbolises a significant turn in corporate strategy, it has retained much of Statoil’s residual brand equity with key stakeholders.
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. According to these criteria, Equinor’s Brand Strength Index (BSI) score saw a slight decline from 85.4 to 81.1 out of 100, resulting in a rating downgrade from AAA to AAA-. Nevertheless, the brand is still stronger than any other in the Brand Finance Norway 10 ranking.
David Haigh, CEO of Brand Finance, commented:
“Equinor’s rebranding represents a pivot to embrace sustainable energy solutions in a new economy. The early signs are encouraging for Equinor, and while the true long-term success of the rebranding project will take time to evaluate, the entire Equinor team can be proud of their efforts and results so far.”
Telenor dials down
Telenor remains Norway’s second-most valuable brand, despite a significant drop in brand value (down 16% to NOK 48.0 billion). Telenor, like many telecommunications providers across the world, is facing the challenge of the increasing commoditisation of their core carrier services and the need to implement new technologies requiring significant capital investment, such as the 5G mobile telephony. Telenor has to strive to be more than just pipes to carry exciting global brands such as Amazon, Netflix, and Facebook, and to engage in more value-added services to grow future revenues.
Yara is Norway’s fastest-growing brand
Yara (brand value up 34% to NOK 10.3 billion) is the fastest-growing brand in the Brand Finance Norway 10 ranking this year, jumping from 5th place to 4th and overtaking Norwegian (brand value down 7% to NOK 7.5 billion). Yara’s brand value hike has come from organic revenue growth and improved brand strength. Conversely, Norwegian’s brand has hit significant turbulence from financial troubles, which almost caused the airline to enter bankruptcy. As a result, Norwegian suffered the biggest hit to brand strength of any brand in the Brand Finance Norway 10 ranking, from 82.9 to 69.9 out of 100 and a corresponding rating downgrade from AAA- to just AA.
Kongsberg Group enters ranking
Kongsberg Group (brand value NOK 3.2 billion) was ranked in the Brand Finance Norway 10 ranking for the first time, led by the company’s work in the aerospace and defence sector. This iconic brand has faced a number of key brand challenges since its partial privatisation, with allegations of misconduct around large government contracts. As it continues to develop and deliver a range of high-technology products, protecting and building its brand value will be key to the success of the group in the future. Kongsberg’s entrance has pushed XXL (brand value down 24% to NOK 2.8 billion) to 10th place. XXL has lost significant brand value due to repeatedly failing to meet revenue expectations.
Brand Finance Nordic 50 2019: Sweden dominates
Looking at the classification in the wider region, Swedish brands have claimed one in every two positions in the Brand Finance Nordic 50 ranking and six out of the top 10 spots, with Ikea crowned most valuable (up 17% to NOK 179.9 billion), H&M in second (down 12% to NOK 132.6 billion), and Volvo in third (up 15% to NOK 115.1 billion).
Engineering and construction leads among sectors with 10 brands included in the ranking. Sweden’s Skanska is the highest ranked in 20th, with a brand value of NOK 19.1 billion, followed closely by Vestas, in 21st position, with a brand value of NOK 18.7 billion. Other notable sectors across the region are banking with 7 brands and retail with 5 brands.
Only four brands from Norway feature in the Brand Finance Nordic 50 rankings, fewer than from Sweden (24), Denmark (16), or Finland (6). Two Norwegian brands, however, are included in the top 10, with Equinor named 5th and Telenor 7th most valuable across the region.
Note to Editors
Every year, Brand Finance values 5,000 of the world’s biggest brands. The 10 most valuable Norwegian brands are included in the Brand Finance Norway 10 2019 ranking, and the 50 most valuable brands across the Nordic countries are included in the Brand Finance Nordic 50 2019 ranking.
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 Norway 10 2019 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.
Communications Director, Brand Finance
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About Brand Finance
Brand Finance is the world’s leading independent brand valuation consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands.
Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Brand Finance is a chartered accountancy firm regulated by the Institute of Chartered Accountants in England and Wales (ICAEW), and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).
Brand Finance’s brand value rankings have been certified by the Marketing Accountability Standards Board (MASB) through the Marketing Metric Audit Protocol (MMAP), the formal process for validating the relationship between marketing measurement and financial performance.
XY01 is a next generation strategic branding consultancy that combines brand management and technology leadership with the agility and speed of a startup. The highly international team based out of Oslo is comprised of transformation and branding leaders, technology and growth strategists, trend and intelligence experts, and strategic designers. Collectively, the team has worked with transforming businesses and unlocking brand-driven growth in more than 30 countries.
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.
Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Brand revenues are discounted post-tax to a net present value which equals the brand value.