Top Norwegian brands could lose over NOK 30 billion from COVID-19
As the COVID-19 pandemic wreaks havoc on the global and national economy, Norway’s top 10 most valuable brands could lose up to 14% of brand value cumulatively, a drop of over NOK 30 billion compared to the original valuation date of 1st January 2020, according to the latest Brand Finance Norway 10 2020 ranking.
Looking beyond Norway, 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 R15 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. Based on this impact on enterprise value, Brand Finance estimated the likely impact on brand value 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.
Equinor takes top spot
Equinor has retained the title of Norway’s most valuable brand following a 13% increase in brand value to NOK 87.1 billion. The oil & gas brand posted a strong financial performance last year, citing record high production and reduced costs, despite lower commodity prices.
As with all brands across the sector, however, Equinor is facing turbulent times as the world is engulfed with the coronavirus pandemic. The oil & gas industry has now faced its third price collapse in 12 years and in April 2020, for the first time in history, the price of US oil turned negative. In March, the brand presented an updated outlook for 2020 with plans to cut costs by up to US$3 billion to strengthen its market resilience in response to the pandemic.
Richard Haigh, Managing Director, Brand Finance, commented:
“Despite Equinor posting a solid year, the brand, along with the whole sector is now dealing with unprecedented challenges as the industry remains plagued by the ongoing coronavirus pandemic. With the oil & gas sector in the heavily impacted bracket, brands could lose up to 20% of their value as demand tumbles. Equinor has implemented some severe cost cutting measures in an attempt to weather this storm. Only time will tell how it fares in the coming year.”
Rema 1000 grows 24%
Rema 1000 is Norway’s fastest growing brand, following a 24% brand value increase to NOK 6.4 billion, simultaneously jumping two spots to 6th position. This boost in brand value is largely attributable to the brand’s consistent and solid financial performance.
With 868 stores across the nation and over 20,000 employees, the discount grocery store chain is renowned for its first-rate customer and shopping experience and for making high quality organic products accessible at lower prices.
Telenor rings in as nation’s strongest
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, Telenor (up 20% to NOK 57.5 billion) is Norway’s strongest brand with a Brand Strength Index (BSI) score of 81.7 out of 100 and a corresponding AAA- brand strength rating.
Telenor has performed strongly across key metrics in Brand Finance’s global brand monitor study including price, products, promotion, customer equity, environment, governance and reputation. With a continued focus on its CSR initiatives, the telecoms brand prides itself on its climate change stance, both through supporting the UN Sustainable Development Goals and with its long-term target of reducing its CO2 emissions by 2030.
The telecoms industry is one of the few sectors in the economy that should see limited impact from COVID-19, according to Brand Finance’s analysis. Telenor, along with fellow telecoms brands, has the opportunity to embrace the working from home revolution, which has led to extraordinary demand for remote working resources and connectivity. In response to the crisis, Telenor has launched a range of initiatives to assist government agencies to support businesses and people to cope better with the disruption ensued.
Brand Finance Nordic 50 2020: Standout Sweden
Swedish brands dominate the Brand Finance Nordic 50 2020 ranking, claiming one in two positions, with a combined brand value of NOK 906.3 billion, equating to 58% of the total brand value. Ikea (down 1% to NOK 178.9 billion), Volvo (up 32% to NOK 155.2 billion) and H&M (down 4% to NOK 127.2 billion) have retained the top 3 positions in the ranking. Five brands from Norway feature, compared with 25 from Sweden, 14 from Denmark and six from Finland.
Brand Finance has calculated that Nordic brands could stand to lose up 13% of their brand values, however, as a result of the COVID-19 pandemic, equating to NOK 208 billion.
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 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 Norway 10 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.