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Saudi Arabian brands accelerate towards Vision 2030

29 April 2019
This article is more than 1 year old.
  • STC leads the charge to defend first place, brand value up 6.7% to US$7.1 billion
  • SABIC is Saudi Arabia’s second most valuable brand, growing 6.5% to US$ 4.0billion
  • Chemicals brand Petro Rabigh breaks into top 10, sees 42.3% growth since last year
  • Al Rajhi bank is Saudi’s strongest brand, with brand strength index score of 82.6 out of 100

View the full Brand Finance Saudi Arabia 50 2019 ranking here

STC is Saudi Arabia’s most valuable brand, as its brand value grew 6.7% over the past year to US$7.1 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy. The report has for the first time been expanded to include 50 Saudi Arabian brands, building on last year’s report valuing 25 brands from the Kingdom.

A digital enabler working towards Vision 2030, the brand is paving the way for 5G activities in the region, having launched its first 5G live network in May last year and more recently announcing that it has successfully made a call using a 5G smartphone – making it among the first in the world.

SABIC sees success

Saudi Arabia’s petrochemicals giant SABIC has seen its brand value boosted 6.5% since last year, valued now at US$4.0bn. This success can be attributed to the brand’s continued expansion of investments across China, despite an expected slowdown in the country’s economic growth. SABIC has also continued to raise its presence in Africa which remains a promising lucrative market. As part of its national effort to enhance cooperation between public and private sectors to support domestic development and enable Saudi Vision 2030, SABIC is at the forefront of providing opportunities for downstream growth across the Kingdom.

All eyes are now on Saudi ARAMCO which for the first time earlier this month, chose to publicly declare its earnings and give a breakdown of its financial performance. ARAMCO announced recently that it would buy a 70% stake in SABIC as part of its downstream expansion strategy.

David Haigh, CEO of Brand Finance, commented:

“Saudi Arabian brands have continued to excel and in turn grow their brand values this year, giving this league table impetus to expand into a rank of 50 brands for the first time. As these brands work towards the common goal of Vision 2030, the results show just how crucial the role of brands are in realising a sound economic future for the Kingdom.”

Petro Rabigh breaks into top 10

A notable performance in this year’s Saudi Arabia 50 comes from chemicals brand Petro Rabigh, growing 42.3% since last year with an impressive US$907 million brand value and entering the Top 10 for the first time. With the help of the world’s largest single-phase integrated refining and petrochemicals complex, Petro Rabigh yields 140 million barrels of petroleum-based products and 5 million tons of petrochemical products per year.

A joint venture between Saudi Aramco and Japan’s Sumitomo Chemical, it is the Middle East’s first producer of several petrochemical products and the sole producer of propylene oxide, which of course provides tremendous opportunities for both local and international investors.

Almarai set for growth

Retaining its fifth-place rank, Saudi Arabian food and beverage manufacturing and distribution brand Almarai is valued at US$ 2.9 billion, while its Brand rating has improved to a AA+ becoming the strongest food brand in the kingdom. Continuing its food chain expansion in Saudi Arabia, the brand has announced its intention to acquire a 100% stake in
Riyadh based Premier Foods, which is the leading producer of value-added halal products.

With the acquisition set to further increase Almarai’s footprint for expansion within the foodservice channel, Almarai has tripled its capacity and provides a comprehensive range of both generic and bespoke products to more than 35 top international restaurant brands. Almarai also launched a no-added-preservatives infant formula of a baby drink which has contributed to the brand’s growing success.

Saudi bank brands to watch

Saudi banking brands which have risen through the ranking in the past year are Alinma Bank and Albilad Bank. The fastest growing Saudi Arabian brand in the ranking is Alinma Bank, with its brand value up 55% since last year to US$ 586 million. Followingly closely behind, Albilad Bank has grown 50% to US$ 347 million.

Alinma Bank is pioneering efforts in the digital banking space, with its new digital banking branch and interactive teller machines (ITMs) which means they have one of the most advanced technical infrastructures in Saudi Arabia. The bank provides customers with a number of 24/7 self-service banking options, which include Alinma Internet, Alinma Phone, Alinma Mobile (WAP) and a suite of applications for smart devices.

Albilad Bank carries a reputation for solid customer service across its network of over 150 branches throughout the country, offering banking to its customer base in Riyadh, Jeddah, Dhahran, Al-Kharj and Tabuk.

Al-Rajhi Bank crowned Saudi’s strongest brand

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. Along with the level of revenues, brand strength is a crucial driver of brand value.

According to this criteria, Riyadh-headquartered banking brand Al Rajhi Bank is the strongest brand in the Brand Finance Saudi Arabia 50 2019 ranking, with a brand strength index (BSI) score of 82.6 out of 100 and a corresponding AAA- brand rating.

The bank was founded in 1957 by four brothers from the prominent Al Rajhi family, a testament to the strength of the family office model. With its network of over 600 branches across the Kingdom, Al Rajhi Bank also has branches in Kuwait and Jordan, and a subsidiary in Malaysia.

Saudi’s new brand entrants

As the league table has expanded to accommodate 50 brands for the first time, it is interesting to take a look at the new entrants. These brands represent a variety of sectors, spanning across B2B sectors such as engineering (Zamil Industrial) and logistics (Bahri), to B2C sectors such as healthcare (Mouwasat), Retail Fuel (Aldrees), Restaurants (Herfy), Retail (Extra, Saco, Farm superstores), and Leisure (Fitness Time).

As more corporates and brands from Saudi Arabia move towards becoming financially and operationally transparent, it is likely that we will see large family owned brands making an appearance on the table in the coming years.


Note to Editors
Every year, leading brand valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 50 most valuable Saudi Arabian brands are included in the Brand Finance Saudi 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, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Saudi 50 2019 ranking.

Brand Finance helped craft the internationally recognized 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 ICAEW and also the first brand valuation consultancy to join the International Valuation Standards Committee (IVSC).

The methodology used to produce the annual Brand Finance rankings of the most valuable and strongest brands across all sectors and countries has been certified with the Marketing Accountability Standards Board’s (MASB) Marketing Metric Audit Protocol (MMAP).

Data compiled for the Brand Finance league tables 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.

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About Brand Finance

Brand Finance is the world’s leading independent brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.

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
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.

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