Brand Finance logo

Lego Becomes Denmark’s Most Valuable Brand Following ‘Best Year Ever’

12 May 2016
This article is more than 5 years old.

· Lego becomes Denmark’s most valuable brand – value tops US$4.5 billion

· Pandora, ISS and Vestas are strong performers, up 33%, 44% and 32%

Every year, leading brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test. They are evaluated to determine which are the most powerful and the most valuable by country, by industry and against all other brands worldwide. Denmark’s most valuable brands can be found in the Brand Finance Denmark 50.

For the first time, Lego has become Denmark’s most valuable brand. Brand value rose by 16% to US$4.5 billion (31 billion DKK) in what Chief Executive Jorgen Vig Knudstorp described as the company’s ‘best year ever.’ Lego Group’s revenue grew by 25% in 2015 as the company’s products reached an estimated 100 million children. Parents are increasingly putting greater emphasis on toys, like Lego, that inspire learning. It has also benefitted from global blockbuster films like Star Wars: The Force Awakens, though the franchise’s new owner Disney has received a more significant boost to its brand, which helped it to take Lego’s place as the world’s most powerful brand.

Maersk, in second place, experienced a difficult second half of 2015 as its brand value went rose just 2% to US$3.8 billion (26 billion DKK). The transport and logistics company was severely impacted by a widening supply-demand gap across most of its businesses, which led to significant oil price and freight rate reductions. With the oil price expected to remain relatively low for a longer period, Maersk’s brand value is unlikely to rise significantly over the course of this year.

Pandora Jewellery has seen an outstanding 33% growth in its brand value in 2016, seeing its brand value rise from US$1.5 billion to US$2 billion (14 billion DKK). Pandora’s release of the rose gold line has played a significant part in this success, with revenues increasing 36% in the fourth quarter of 2015. The notional royalty rate applied to the brand has also improved significantly. This reflects the increase in the strength of the brand brought about by improving scores for all key consumer metrics (familiarity, consideration, preference, satisfaction and recommendation) this year.

Wind energy brand, Vestas, enjoyed great growth in brand value of the top 50, seeing an increase of 32% to US$939 million (6.5 billion DKK). Vestas is recognised as the industry’s market leader and its wind turbines generate more than 145 million MWh, enough electricity to supply over 80 million Europeans’ residential needs. Its brand value surge has been driven by soaring revenue expectations, both year on year and over the medium term (subsequent 5 years) as well as favourable tax rate changes across its many markets.

ISS has put in another strong performance. Sometimes referred to as ‘the biggest company you’ve never heard of’, the global leading facility services provider brand is nonetheless clearly resonating with the relevant audiences, increasing its brand value by 44% to US$1.9 billion (12.7 billion DKK).

ENDS

Downloads

Media Contacts

Konrad Jagodzinski
Communications Director
Brand Finance
Florina Cormack-Loyd
Associate Communications Director
Brand Finance

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.

Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.

Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.

Methodology

Definition of Brand

Brand is defined 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

Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.

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 Brand Rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach

Brand Finance calculates the values of brands in its rankings 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, while 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 Discount post-tax brand revenues to a net present value which equals the brand value.

Disclaimer

Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.

The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.

Get in Touch

Message