South Africa's Top 50 Most Valuable Brands

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THE ANNUAL REPORT ON SOUTH AFRICA’S 50 MOST VALUABLE BRANDS | JULY 2014

Mandela: Still South Africa’s most valuable brand.

2 | BRANDFINANCE® SOUTH AFRICA’S 50 MOST VALUABLE BRANDS | JULY 2014

Contents

The BrandFinance® South Africa’s 50 Most Valuable Brands is published by Brand Finance plc, in partnership with Brand South Africa and Brand Africa, and is the only study to rank the top 50 most valuable brands in South Africa

3 FOREWORD

4 A CATALYST FOR SOUTH AFRICA’S GROWTH & A WINNING NATION

5 MANDELA: STILL SOUTH AFRICA’S MOST VALUABLE BRAND

6 BRAND VALUATION FRAMEWORK: HOW WE GET THERE AND THE METHODS WE USE

8 SOUTH AFRICA’S TOP 10 MOST VALUABLE BRANDS

10 SOUTH AFRICA’S TOP 10 STRONGEST BRANDS

11 SOUTH AFRICA’S WINNERS AND LOSERS

12 THE VALUE OF REGISTERING YOUR BRAND

13 BRAND EXPANSION: DON’T FORGET THE LEGAL CHALLENGES

14 THE WORLD’S MOST POWERFUL BRAND

15 THE WORLD’S MOST VALUABLE BRAND

17 TOP BRAND VALUE BY COUNTRY

18 METHODOLOGY

19 SOUTH AFRICA’S TOP 50 MOST VALUABLE BRANDS

20 ABOUT BRAND FINANCE

21 GLOSSARY

Contents

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THE ANNUAL REPORT ON SOUTH AFRICA’S 50 MOST VALUABLE BRANDS | JULY 2014

JULY 2014 | BRANDFINANCE® SOUTH AFRICA’S 50 MOST VALUABLE BRANDS | 3

South Africa’s commemoration of 20 years of democracy presents us with an ideal opportunity to not only assess the state of the South African nation brand but also the Top 50 most valuable brands that help drive it.

Simon Anholt, who is regarded as the father of nation branding has said that “national image has more to do with national identity and the politics and economics of competitiveness.”

A nation brand therefore represents the entirety of all perceptions of a nation in the minds of stakeholders including: people, place, culture/language, history, food, fashion, famous faces (celebrities) and global brands.

A country’ products and services are also a critical competence and measure used by investors and consumers to rate the country’s appeal and attractiveness. A nation’s brands are purveyors of the identity, image and attributes of a country and therefore go a long way in the nation brand building and promotion process. South Africa has many corporate brands that are blazing the trail both on the continent and abroad, contributing to strong and positive associations of the nation across the globe. In turn, they build the attractiveness profile of the country for inward investment, “visitability” and skills.

An analysis of various research indices shows that after 20 years of democracy, South Africa’s global reputation remains stable and strong. In large, the measure the strength of the country’s reputation is attributable to some of its global corporate, product and service brands – most of which appear in our Top 50.

The latest BrandFinance Nation Brands Index further demonstrates that

South Africa’s national brand value has increased by 116% over the past 5 years from US$ 125m in 2009 to US$ 270m in 2014. South Africa’s strong performance is also supported by its ranking amongst the worlds’ nations, improving from 36th position globally in 2009 to 29th in 2014.

It is therefore befitting that South Africa continues to rank as a top destination not only for tourism but also inward investment.

In this regard, the recent AT Kearny FDI Confidence Index ranks South Africa 13th globally, the only African country to be in the top 25 in the world while the EY Africa Attractiveness Survey attests to South Africa’s standing as the top destination for FDI projects on the continent. The country attracted 142 projects in 2013, Kenya comes second with 68 projects; Nigeria comes third with 58 projects; and Ghana comes 4th with 58 projects as well.

The announcement of South Africa’s Top 50 brands in 2013/14 therefore is an important driver of our nation brand reputation and competitiveness. South Africa is committed to positioning itself in the global marketplace as a destination of choice for inward flows of investment and capital. This will contribute to our national priorities of economic growth, job creation and sustainable development.

Brand South Africa congratulates the Top 50 Brands for 2013/14 and expresses our appreciation to you for playing your part towards growing South Africa and contributing to our overall competitiveness.

Miller MatolaCEO, Brand South Africa

Foreword

Miller Matola,CEO - Brand South Africa


BrandFinance Africa - Chairman

Not surprisingly, the top South African brands in the BrandFinance South Africa Top 50 are in financial services and mobile/technology. South Africa has certainly distinguished itself as the pan-African leader in these categories, among others, with MTN the standard bearer Most Valuable pan-African brand. Among the BrandAfrica 100 Most Valuable Brands in Africa, South Africa leads Africa with a 72% share, compared to Nigeria at 26% and Kenya at 2%.

It also comes as no surprise that more than half of the brands have a significant presence beyond South African borders. While Nigeria has the highest GDP in the continent, South Africa dominates the branding landscape across Africa – with 80% of the Top 50 all essential staples in a continent that is turning the corner from being a consumer to becoming a creator. It is estimated that if intra-Africa trade is increased by 1%, it will generate $50bn in revenues. With its experience in building and creating portfolios of world-class brands, South Africa is in a good position to play a leading role in that African renaissance.

The brands of a nation are not only a vector of its image, but a catalyst for its wealth too. There is empirical evidence that the value of the brands with the top nations has an almost direct correlation with their GDP.

That South Africa is not among the six African nations in the Top 10 fastest growing economies globally (Economist) and not

one of the three African frontier markets that are recognized to offer high returns and improving economic institution (Botswana (#2), Rwanda (#5) and Ghana (#10)) (Foreign Policy Magazine’s Baseline Profitability Index) is a challenge that South Africa needs to address if it is to remain the most admired African nation, and competitive with fellow African and BRICS nations.

A thriving ‘Made in South Africa’ and entrepreneurship spirit are what built South Africa’s wealth, reputation and competitiveness – and the BrandFinance South Africa Top 50 brands. For Africa and certainly for South Africa to grow independent, create jobs and reduce inequality, it will need to invest in the attributes that built these brands – on top of increasing intra-Africa trade - to challenge global brands in Africa.

The pan-African dominance, global reputation and success of the Top 50 shows that South Africa has the creativity, skill and experience to continue building great brands and a great, growing nation. Top 50 brands are a catalyst for South Africa’s growth and a winning nation – and Africa.

‘Top 50 brands are a catalyst for South Africa’s growth and a winning nation.’Thebe Ikalafeng, Chairman – Brand Finance AfricaFounder – Brand AfricaGroup CEO – Brand Leadership GroupTrustee – Brand South Africa

BrandFinance Africa - MD

Nelson Mandela’s former lawyer, Ismail Ayob, once claimed the icon was second only to Coca-Cola in terms of global recognition.

It was a sweeping, generalized statement of course, not based on research, or any of the methodologies we use to assess a brand’s value.

Coco-Cola has spent hundreds of millions over the decades buying its visibility between our TV programmes, in our magazines, on billboards and on branded fridges.

Mandela’s image on the other hand has been given equally extensive exposure by the world’s media in much the same places (except the branded fridges perhaps). And it was free.

But this recognition, as we know, is only one aspect to a brand’s make up. The rest is developed and formulated in a far more difficult place for a media buyer to access: a consumer’s grey matter.

Seth Godin, US marketer and author, describes a brand as: ‘… the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium,

make a selection or spread the word, then no brand value exists for that consumer.

So the consumer is in control; forming the brand to fit their purposes. The Brand Owner. Every brand should remember that it’s not the emotional and psychological relationship a brand has with its customers, it’s the emotional and psychological relationship the customers have with the brand, that shapes it and allows it to exist.

And like consumers use a brand to define themselves, we as South Africans use Mandela to do the same. Mandela became so iconic because he was/is the brand every South African wants to believe in; one of forgiveness, reconciliation, kindness, respect, love, equality and colour blindness.

Can you put a value to the emotions of an entire nation? Even a world? Probably not.

At the end of the day, the Mandela brand has much for us to buy in to, but little for us to buy.

‘Mandela: Still South Africa’s Most Valuable Brand’Ollie Schmitz, Managing Director,Brand Finance South Africa


BrandFinance - CEO

The Brand Finance approach to brand valuation involves valuing ‘brands’ at three different levels, each reflecting the different definitions of ‘brand’ commonly used in the market place.

1. BRANDED BUSINESS VALUE

Our process begins by valuing the ‘branded business’ trading under the subject brand IP (trademarks and associated intellectual property). Some users of brand valuations, particularly for commercial purposes, really mean branded business value when they talk about understanding the value of their ‘brand’. They are really interested in the Fair Market Value of the subject branded business as a whole, including the value of all tangible and intangible assets owned by the business. One of these is the brand IP rights which can be valued as a separable, transferable legal asset.

Such ‘brand’ valuations are usually

employed by corporate finance people for buying, selling and rationalising ‘brand’ portfolios, as Unilever famously did in its ‘Path to Growth’ strategy in the 1990s.

Where the branded business in question

operates under a monolithic brand like Vodacom or MTN, all revenues fall under just one customer facing brand. In this case the Branded Business Value is the same as the Enterprise Value of the organisation as a whole.

If the branded business is just one in a

portfolio of customer facing brands, like Castle or ABSA, we identify the revenues specific to the subject branded business and value that individual brand separately from the rest of the brand portfolio.

This explains why Castle, Carling, Hansa product brands all appear separately in the Brand Finance table with their own branded business and brand values. If we added all the individual SABMiller brands together the result would be the portfolio brand value of the SABMiller Group, while the sum of the individual branded business values would be the Enterprise Value of the entire SABMiller Group.

In determining the individual Branded

Business Values and the combined Enterprise Value we use a number of valuation techniques including analysis of the market value of shares and corporate debt on traded stock and debt capital markets. In the case of our published league tables we place most reliance on this market based approach. However, when we conduct internal studies for clients we may also compare volatile market based values with benchmarks of comparable transactions and intrinsic valuations, using discounted cash flow analysis.

From this analysis we start with the entire

value of the subject branded businesses. We subsequently compare the value of the brand IP asset alone as a percentage of the value of the host branded business. This gives a percentage of total value in the branded business that is attributable to the subject brand IP asset.

2. BRAND CONTRIBUTION In every branded business the bundle

of brand IP rights which we refer to as the ‘brand’ has a favourable effect on the value of that branded business. Brand IP favourably affects the behaviour of all key stakeholder groups - customers, consumers,

‘Brand Valuation Framework: how we get there and the methods we use.’David Haigh, CEO,Brand Finance plc


BrandFinance - CEO

distributors, retailers, suppliers, staff, financiers, governments, media and other stakeholders. This results in economic benefit to the branded business, incrementally increasing the value of the business.

Our task as brand valuers is to

research and understand the level of brand equity that exists within each stakeholder group, to measure the brand preference strength flowing from the brand equity and then demonstrate how brand preference favourably affects specific revenues and costs of the subject branded business.

The total economic uplift effect of

the brand IP on the branded business - as the result of its influence over the behaviour of the different stakeholder groups - is known as the total Brand Contribution to the business. The Brand Contribution is greater than the amount which can be allocated to the brand IP alone and legally transferred. The transferrable brand IP asset value is a percentage of the total Brand Contribution to the business.

3. BRAND VALUE Brand Contribution to the Branded

Business is higher than the specific Brand IP asset value. This may seem odd. However, it stems from the fact that in the real world, companies bring together various tangible and intangible assets to make a successful and profitable enterprise. While each of these assets alone has a market value, their combined value is higher than the sum of the market values of the individual assets. If this were not the case the operating company would not bother to operate. The surplus from bringing all the various tangible and intangible assets together is the operator’s profit and is often referred to as Licensee Value or Business Goodwill. The operating company is effectively a licensee of all the different assets, paying third parties for their use and making a return for its shareholders from doing

so. One of the assets licensed in to create a successful branded business is the brand IP. In many instances the brand IP is actually owned by a third party and is licensed into the subject business to create an operating surplus. For example, McDonalds, Coca Cola, Virgin, Shell, Nestle and many others operate on a licensing model. The brand IP commands a market price for both connected and unconnected parties and this is usually expressed as a Royalty Rate for the use of the brand IP. The higher the Brand Contribution resulting from the brand IP the higher the Royalty Rate which can be charged by the brand Licensor. We use market arm’s-length royalty rates to determine the value of the brand IP assets or ‘brands’ which appear in our published league tables.

The amount that a Licensor can

capture in an arm’s-length royalty for the use of the brand IP, is a genuine economic asset that can be bought, sold and transferred as an asset. Unlike Brand Contribution which is trapped inside the operating company, and cannot be transferred separately from the business, the brand IP value is easily bought, sold and transferred as a legally recognisable stream of intangible earnings. This is why we define ‘brand’ as the economic value attributable to the stream of royalties flowing from the subject brand IP. This methodology, widely recognised and preferred by accountants, auditors, tax planners and lawyers is known as Royalty Relief, because by virtue of owning its brand a company is relieved from paying royalties it would otherwise pay away to a third party brand IP owner.

THE ISO BRAND VALUATION STANDARD

The International Standards

Organisation (ISO) states in ISO 10668 (Standard on Monetary Brand Valuation) that having legally audited and identified the subject ‘brand’ IP asset the valuer must fully understand the behavioural impact of the brand on the stakeholder groups. By doing so the valuer is then

able to estimate the full benefit that the branded business obtains from the effect of the brand IP on its different stakeholders. This knowledge must then be used to determine the transferrable monetary asset known as ‘brand’.

ISO permits a number of specific

methodologies to be used when valuing a brand. In our opinion, some of these methodologies are too narrow as they focus on the effect of the brand on only one stakeholder group. For example, the Price Premium and Volume Premium methodologies measure the favourable effect of the brand on customer purchasing habits alone. We believe these methodologies are too narrow in scope to capture the full value of the brand to the business.

By contrast the Income Split and

Royalty Relief methodologies flow from a more holistic understanding of how the brand affects the whole business. In our view Income Split is a robust way of identifying and quantifying the total Brand Contribution or brand uplift to the business. But it tends to over-estimate the transferrable brand asset value. Under the International Accounting Standards an asset is defined as a legal right producing future economic benefits that can be legally transferred separate from the business.

We believe that the Royalty Relief

methodology is the best method for identifying this value. It is based on the way brands are managed in the real world and the real arm’s-length rates paid for the specific brand IP asset. It provides not only an opinion on the absolute capital value of the subject brand IP, but also a recommended royalty rate for licensing the brand in the real world.


South Africa’s Top 10 Most Valuable Brands

Rank 2014

Rank 2013

Brand Parent Company Industry Group BV 2014 (ZAR m)

Brand Rating 2013

EV 2013 (ZAR m)

BV/ EV BV 2013 (ZAR m)

Brand Rating 2013

EV 2013 (ZAR m)

BV/ EV

1 1 MTN Mtn Group Ltd Telecommunications 56 338 AAA- 410 612 14% 43 066 AAA- 299 910 14%

2 3 SASOL Sasol Ltd Chemicals 20 808 AA 344 087 6% 18 372 AA 251 869 7%

3 2 Vodacom Vodacom Group Ltd Telecommunications 18 296 AA 185 163 10% 19 386 AA+ 173 184 11%

4 4 Standard Bank Standard Bank Group Ltd Banks 16 695 AA+ 114 896 15% 14 200 AA+ 56 102 25%

5 5 ABSA Barclays Africa Group Ltd Banks 12 806 AA- 114 110 11% 12 411 AA 114 866 11%

6 6 Nedbank Nedbank Group Ltd Banks 12 518 AA 100 511 12% 10 920 AA 80 067 14%

7 8 First National Bank FirstRand Ltd Banks 11 060 AAA- 117 405 9% 9 487 AAA- 62 704 15%

8 10 Mediclinic Mediclinic Int. Ltd Healthcare-Services 9 583 AA+ 83 755 11% 8 061 AA- 74 321 11%

9 18 Investec Investec Plc Diversified Finan Serv 9 505 AA- 65 837 14% 5 678 AA- 51 129 11%

10 7 Woolworths Woolworths Holdings Ltd Retail 9 436 AA+ 36 795 26% 10 778 AA+ 46 009 23%

1 MTNIt’s been another year where MTN continues to widen the gap between itself and it’s nearest competitor with an incredible 31% increase in value, showing businesses around the world what can really be achieved on the African continent if you have knowledge and respect for the local conditions.

2 SASOLKnocking Vodacom off second place with a 13% increase in value is a South African company with activities in 38 countries around the world. Sasol’s expansion into foreign markets – including notable new plants in the US – has yielded solid growth. It can thank a weakened rand value for its success too.

3 Vodacom It’s been a competitive year in the mobile communications sector, with price wars over data particularly zealous. And the big loser has been Vodacom, reflecting in a 6% loss of its brand value. Next year the com-pany will be a fixed line provider too, perhaps reversing its fortunes.

4 Standard Bank Retaining its position ahead of its rivals, and increasing in value more than any of them too, Standard Bank has bounced back from a 21% fall last year. The brand is as strong as ever: it was ranked first in the Sunday Times Top Brands survey despite having the most expensive account charges in 2013.

5 AbsaAbsa, or Barclays as it is known in the rest of Africa, has seen a moderate increase of 3% in its 2013 brand value. Still, this can be seen as a positive move forward following its 2012 decrease of 17%. The bank has spent less on advertising (R324m) in 2013 than any of the big four and is a lowly fourth in terms of brand value growth: connected?

BV - Brand Value EV - Enterprise Value

South Africa’s Top 10 Most Valuable Brands have changed little in the past year, albeit for a little jostling for position. Investec joins this elite club with an aggressive global expansion drive that has meant banks now take 5 of

the 10 places. Cementing its position at the top, MTN’s continued sharp growth is a sign that Africa may have it’s first homegrown superbrand to rival those on other continents.



6 NedbankAnother strong year of value growth for Nedbank, but at 15% not as formidable as last years 20%. In SA the bank continues to attract new customers with new products supported by large advertising spends. The brand is looking to spread into more Southern and East African countries and partner pan-African bank Ecobank in West and Central Africa during 2014.

7 FNBMarch 2013 to February 2014 saw FNB spend R550m on advertising – the most of the big four. A large price to pay for their 17% increase in brand value? The money pushes its ‘help’ strategy, encouraging its custom-ers to make a difference in the communities around them. There’s nothing a South African loves more than a brand that cares about its country.

8 MediclinicA 19% increase in brand value and 2 place jump to 8th indicates another successful year for the SA hospital group. Its local and international hospitals all treated more patients and new beds plus infrastructure are in development. With over 60% of its revenue from overseas, the group benefitted from the rand’s 20% decline.

9 InvestecWith a mighty 67% increase in brand value and the sort of heroic jump (18th last year to 9th this) that you’d expect to see at one of the brand’s sponsored sports events, Investec is threatening to turn our Big Four banks into a Big Five. Hockey, cricket, rugby, swimming, golf, show jumping, horseracing, sailing, mountain biking … Investec is fast becoming the Red Bull of financial services.

10 WoolworthsWoolworths’ drop in the Most Valuable Brands list with a decrease of 12% is due to its once in-store brand Country Road being split out of the main brand. Woolworths continues to make bold acquisitions, moves and strategies across Africa and the South Hemisphere as it relentlessly pursues retail store omnipotence.


South Africa’s Top 10 Strongest Brands

In search of the strongest brands

Rank 2014

Rank 2013


Brand Rating 2014

EV 2014 (ZAR m)

BV/ EV(%)

2014

BV 2013 (ZAR m)

Brand Rating

2013

EV 2013 (ZAR m)

BV/ EV Change in BV (%) 2013-14

7 8 FNB Firstrand Ltd Banks 11 060 AAA- 117 405 9% 9 487 AAA- 62 704 15% 17%

1 1 MTN Mtn Group Ltd Telecommunications 56 338 AAA- 410 612 14% 43 066 AAA- 299 910 14% 31%

9 7 Woolworths Woolworths Holdings Ltd Retail 9 436 AA+ 36 795 26% 10 778 AA+ 46 009 23% -12%

17 19* Carling Black Label SABMiller Plc Beverages 6 798 AA+ 68 597 10% 5 398 AA 64 212 8% 26%

4 4 Standard Bank Standard Bank Group Ltd Banks 16 695 AA+ 114 896 15% 14 200 AA+ 56 102 25% 18%

15 15* Castle SABMiller Plc Beverages 6 985 AA+ 71 639 10% 6 085 AA+ 67 059 9% 15%

8 10 Mediclinic Mediclinic International Ltd Healthcare-Services 9 583 AA+ 83 755 11% 8 061 AA- 74 321 11% 19%

20 16 Sanlam Sanlam Ltd Insurance 5 266 AA 98 175 5% 5 986 AA- 89 984 7% -12%

22 21* Mr Price Mr Price Group Ltd Retail 4 961 AA 28 038 18% 4 443 AA- 25 152 18% 12%

21 26* Hansa Pilsener SABMiller Plc Beverages 5 113 AA 55 035 9% 3 774 A+ 51 517 7% 35%


When calculating the strength of a brand we aim to benchmark competitors on a range of metrics across 3 key pillars of brand strength; Brand Support, Brand Equity, and Brand Performance. Where possible we also conduct this exercise from a variety of key stakeholder’s points of view, for example consumers, staff, and financial audiences.

Brand value is simply a point in time valuation of the brand’s future earnings discounted to a net present value; Brand strength on the other hand is an index scored out of 100 points summarising the performance of the brand on a number of quantitative (economic performance) and qualitative (brand equity) measures verses its competitors. Some brands will naturally try to appeal to a mass audience at the risk of losing quality, while others focus on quality, in which instance they are in a position to charge a premium i.e. Shoprite Checkers targeting a wider audience at lower prices, while Woolworths targets a smaller audience at a premium.

So while it is not surprising to see some of the most valuable brands are also some of the strongest (they generally have to be doing something right to reach the top, for example MTN) there are also many instances where we find that bigger (more valuable) is not always stronger. For example, FNB is rated as the strongest brand in South Africa, while Standard Bank is the most valuable banking brand.

This years table of the strongest South African brands shows 5 new brands compared to last year including Mr. Price and Mediclinic. Perhaps surprisingly pushed outside the top ten are SA icons Discovery and SASOL, illustrating that, as discussed, far more factors contribute to a brand’s strength than merely its monetary value.


South Africa’s Winners and Losers

Rank 2014

Rank 2013


Brand Rating 2014

EV 2014 (ZAR m)

BV / EV (%) 2014 (ZAR m)

BV 2013 (ZAR m)

Brand Rating

2013

EV 2013 (ZAR

m)

BV / EV (%) 2014 (ZAR m)

Change in BV % 2013-14

BIGGEST GAINERS

41 49 Steinhoff Steinhoff Intl Holdings Ltd Holding Companies-Divers 2 504 AA- 147 590 2% 1 496 A+ 86 415 2% 67%

42 18 Investec Investec Plc Diversified Finan Serv 9 505 AA- 65 837 14% 5 678 AA- 51 129 11% 67%

12 17 Multichoice Naspers Ltd-N Shs Media 8 817 A+ 189 344 5% 5 841 A+ 108 540 5% 51%

20 22 Sappi Sappi Limited Forest Products&Paper 6 260 A+ 42 199 15% 4 424 A 29 926 15% 42%

36 45 Rainbow Chicken Rainbow Chicken Ltd Food 2 747 AA- 12 262 22% 1 952 A 9 327 21% 41%

45 48 Imperial Imperial Holdings Ltd Holding Companies-Divers 2 133 AA- 44 742 5% 1 547 A+ 52 081 3% 38%

44 47 Rand Merchant Bank Firstrand Ltd Banks 2 296 AA 25 232 9% 1 694 AA- 2 896 58% 36%


26 31 Wesbank Firstrand Ltd Banks 4 090 AA- 52 648 8% 3 022 AA- 12 609 24% 35%

1 1 MTN MTN Group Ltd Telecommunications 56 338 AAA- 410 612 14% 43 066 AAA- 299 910 14% 31%

BIGGEST LOSERS

50 46 Sasko Pioneer Foods Ltd Food Service 1 581 AA 10 997 14% 1 817 A+ 8 939 20% -13%

48 43 Santam Santam Ltd Insurance 1 812 AA- 21 235 9% 2 077 AA- 20 961 10% -13%



46 42 Game Massmart Holdings Ltd Retail 2 035 A 5 601 36% 2 211 A 8 773 25% -8%

3 2 Vodacom Vodacom Group Ltd Telecommunications 18 296 AA 185 163 10% 19 386 AA+ 173 184 11% -6%

14 11 Spar Spar Group Limited/The Food 7 243 AA 20 391 36% 7 592 AA- 18 199 42% -5%

11 9 Shoprite Shoprite Holdings Ltd Retail - Food Specialists 8 896 AA- 36 101 25% 9 286 AA- 40 551 23% -4%

17 12 Pick'n Pay Pick N Pay Stores Ltd Retail 6 902 A+ 21 783 32% 7 073 A+ 18 598 38% -2%

27 23 Truworths Truworths Int. Ltd Retail 3 983 AA- 27 386 15% 3 976 AA- 35 059 11% 0%


The Winners and Losers tables this year hold a mirror up to South Africa’s continuing economic downturn. In the Top Ten Winners table – whose increases in brand value range from 31% to an incredible 67% – there are eight different sectors represented.

Some have worldwide diversified assets that shield them from the worst here at home, such as Steinhoff (67% increase) and Investec (67% increase), whilst others sell products for the more well-off section of our society who are more immune to the economic woes (MultiChoice – 51%, Wesbank – 35%). The success of SAB’s Hansa Pilsner brand can probably be put down to their huge advertising activity over the last few years. But in a year where food retailers have struggled and the debate about cheap foreign chicken imports was increasing, Rainbow Chickens position as the 7th biggest gainer (41%) is impressive. Analysts expect the company’s revenue to increase 20% per year, and the brands Enterprise Value (EV) has also

increased 31%. These factors along with their increased stake acquisition in Foodcorp could be what’s contributed to the jump in their overall Brand Value.

On the subject of food retail; six of the bottom ten losers are in the food retail sector. This is reflective of a South African consumer whose spending power is decreasing monthly – the price of essential goods and services is increasing higher than their earnings. The result? They are putting less in their supermarket trolleys every week. The exception in this group is Woolworths, whose negative brand value has been mainly down to its separation of the Country Road brand into a stand-alone entity.

Winners and losers


Adams & Adams

“If Coca-Cola were to lose all of its production-related assets in a disaster, the company would survive. By contrast, if all consumers were to have a sudden lapse of memory and forget everything related to Coca-Cola, the company would go out of business”

This famous quote, by a Coca-Cola executive, succinctly sums up how valuable a brand name can become and the implicit value of registering a brand as a trade mark.

There are many benefits of owning a trade mark registration. Not only does it make it easier and less costly to enforce your rights against infringing parties but your trade mark is also, legally speaking, an asset which acquires value through use and, if registered, becomes a tradable commodity. It can be pledged or hypothecated, for instance, to secure finance from a bank.

More importantly, perhaps, a registered trade mark can be sold like any other asset of a business. An unregistered trade mark cannot be sold separately as it forms part of the goodwill of a business and must therefore be sold as part of a going concern.

A practical example: local Company A has been trading in South Africa for a number of years under the brand X and has registered

X as a trade mark. International Company B, which has used the X trade mark in other countries in relation to the same services provided by Company A in South Africa, wishes to enter the South African market. However, doing so would result in an infringement of Company A’s trade mark. Company A can sell its registered trade mark to Company B and can simply continue its business under a different brand.

Brands can be valued according to different models and, based on such a valuation, a registered trade mark can be reflected as an asset on a balance sheet.

In the words of Jeff Bezos, founder and CEO of Amazon.com, “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well”. Making a small but wise investment now by registering your brand as a trade mark will yield a tradable asset with its own value.

‘The Value of RegisteringYour Brand’Dale Healy Partner

Kareema ShaikAssociate


Adams & Adams

From a legal perspective, brands and branding is often underestimated for their value and legal significance, specifically in a corporate environment. The natural tendency is to believe that tangible assets have value, and could be exploited for a variety of purposes, and the, sometimes, even more valuable intellectual property portfolio, is relegated to a secondary position just because it perhaps is not tangible, and is sometimes seen as more difficult to deal with, and has less benefits for a company’s structuring and corporate structure.

A brand, or to refer to it in its correct legal context, intellectual property (“IP”) has value in the same way as any other tangible asset in a corporate structure. As such, it can be utilised by a company in a variety of ways, to exploit such value. The most obvious way is to make the IP available to subsidiaries and third parties who could utilise the IP in return for a fee (most often a royalty), and in that manner adding to, or creating value. However, in addition, the utilisation of IP for security purposes in financing transactions, or using it as a basis for securitisation structures or even setting up IP specific companies to exploit value, are often under rated or not recognised due to the fact that it is perhaps, for most corporates, a bit of a vague concept.

For South African companies, especially those who are expanding rapidly, the international market has grown significantly since 1994. From this perspective, the commercialisation and protection of IP becomes extremely important as the way in which it should be structured, from an exchange control, tax, protection and structure perspective, could become quite intricate, and if it is not done in a way that preserves the value inherent in that IP, the

consequences could be dire. There are the obvious problems with third parties hi-jacking or utilising IP that is not properly protected in most jurisdictions, but in addition to that, there are challenges of local regulators, such as exchange control and tax. In fact, the revenue authorities have significantly revised legislation in South Africa that governs transfer pricing, royalty withholding taxes, research and development incentives, utilisation of local IP in foreign jurisdictions, to name only a few, and all of these provisions creates a significant challenge to companies wishing to expand their base offshore. Not only does the transfer of the IP itself and the utilisation outside of South Africa need careful consideration, but there are also a number of regulatory provisions to bear in mind to ensure that, from a compliance perspective, there are no nasty surprises at a later stage. If this is not done correctly, a very valuable asset of a company, could be exposed to risk, not only from a value perspective, but also a regulatory and structuring perspective.

‘Brand Expansion: Don’t Forget the Legal Challenges’André Visser Partner


The World’s Most Powerful Brand

Ferrari – The World’s Most Powerful Brand

The BrandFinance Global 500, is an annual study conducted by Brand Finance in which the world’s biggest brands are put to the test and evaluated to determine which are the strongest and most valuable.

In 2014, Ferrari has been named the world’s most powerful brand. The legendary Italian carmaker scores highly on a wide variety of measures on Brand Finance’s Brand Strength Index, from desirability, loyalty and consumer sentiment to visual identity, online presence and employee satisfaction. Ferrari is one of only eleven brands (including Google, Hermès, Coca-Cola, Disney, Rolex and F1 racing rivals Red Bull) to be awarded an AAA+ brand rating and has the highest overall score.

Brand Finance Chief Executive David Haigh states, “The prancing horse on its yellow badge is instantly recognizable the world over, even where roads have yet to reach. In its home country and among its many admirers worldwide Ferrari inspires more than just brand loyalty; its more of a cultish, even quasi-religious devotion. Its brand power is indisputable.”

Last year Ferrari took the bold step of limiting production, capping the number of cars produced each year at 7,000 to protect the exclusivity of the brand. Revenue growth will continue to be driven through personalisation and retail opportunities. With many brands that are powerful in their own right willing to pay handsomely for even fleeting associations with the Ferrari name, licensing and corporate partnerships will continue to be another important and lucrative area.

Though Ferrari is the world’s most powerful brand, being a niche, luxury brand with an officially capped production, it is perhaps unsurprising that it is some way off being the world’s most valuable. With a brand value of US$4 billion, its 350th in the brand value table.


The World’s Most Valuable Brand

Apple –The World’s Most Valuable Brand 3 Years Running

David Haigh believes a AAA Brand Finance rating for Apple underlines the company as a powerful brand. “However”, he adds, “what sets it apart is its ability to monetize that brand, generating multi-billion dollar revenues across a range of product categories. Some of those categories it is largely responsible for creating. For example, though tablets were in use before the iPad, it was the application of the Apple brand to the concept that captured the public imagination and allowed it to take off as a commercial reality.” This is just one of the factors responsible for its US$105 billion brand value; the world’s most valuable brand for the third year in a row.

However, Samsung is challenging Apple’s dominance. The Korean giant has made huge strides this year. Its improving reputation for reliability, a faster pace of innovation and wider range of devices are among many factors that have seen its brand value increase by US$20 billion to US$79 billion this year. Other tech successes include Facebook and Netflix, which has nearly doubled its brand value to appear in the Brand Finance Global 500 for the first time. Its brand value has grown 93% in a year to US$3.2 billion, to make Netflix the 468th most valuable brand. Still operating only in the Americas, Scandinavia and the British Isles, there is huge potential for further growth. Facebook meanwhile has recovered from its problematic IPO, which saw its reputation suffer and its brand value plunge in 2013. This year it

has rebounded, adding 76% to its brand value to bring the total to US$9.8 billion, putting it 122nd. Investor confidence in its long term prospects has returned as revenues from mobile advertising have grown.

Tech brands in general have tightened their grip on the BrandFinance Global 500. Walmart is the only non-tech brand remaining in the top 10. Once the world’s most valuable brand, it now sits in 9th having been overtaken by Amazon. The usurpation of the world’s biggest retail brand by the biggest online retailer represents yet another coup for tech brands over ‘real-world’ businesses.


Rank 2014

Rank 2013

Brand Country Brand Value 2014 (USD bn)

Brand Rating 2014

Brand Value Change (USD bn)

Brand Value Change (%)

Brand Value 2013 (USD bn)

Brand Rating 2013

1 1 Apple US 104.68 AAA 17.38 20% 87.30 AAA

2 2 Samsung South Korea 78.75 AAA 19.98 34% 58.77 AAA

3 3 Google US 68.62 AAA+ 16.49 32% 52.13 AAA+

4 4 Microsoft US 62.78 AAA 17.25 38% 45.53 AAA-

5 10 Verizon US 53.47 AAA- 22.74 74% 30.73 AA+

6 7 General Electric US 52.53 AA+ 15.37 41% 37.16 AA

7 11 AT&T US 45.41 AA 15.00 49% 30.41 AA+

8 8 Amazon US 45.15 AAA- 8.36 23% 36.79 AAA-

9 5 Walmart US 44.78 AA+ 2.48 6% 42.30 AA+

10 6 IBM US 41.51 AA+ 3.79 10% 37.72 AA+

11 15 Toyota Japan 34.90 AAA- 8.92 34% 25.98 AA+

12 9 Coca Cola US 33.72 AAA+ -0.48 -1% 34.20 AAA+

13 20 China Mobile Hong Kong 31.84 AA+ 8.55 37% 23.30 AA

14 n/a T Germany 30.61 AA 9.06 42% 21.54 AA+

15 14 Wells Fargo US 30.24 AAA- 4.20 16% 26.04 AA+

16 13 Vodafone UK 29.61 AAA- 2.60 10% 27.01 AAA

17 21 BMW Germany 28.96 AAA 5.73 25% 23.24 AAA

18 12 Shell Netherlands 28.57 AA+ -1.18 -4% 29.75 AAA-

19 17 Volkswagen Germany 27.06 AAA- 3.40 14% 23.67 AAA-

20 22 HSBC UK 26.87 AAA 4.01 18% 22.86 AAA-

Country Total Brand Value 2014 (USD bn)

Total Brand Value 2013 (USD bn)

Brand Value Change (USD bn)


Number of Brandsin Top 500 -2014

Number of Brandsin Top 500 -2013

Banks 633.1 581.4 51.8 9% 71 64

Technology 615.8 488.7 127.0 26% 44 43

Telecommunications 500.1 385.0 115.1 30% 47 46

Retail 408.9 338.9 70.0 21% 50 50

Conglomerate 313.1 257.9 55.3 21% 16 18

Automobiles 289.7 244.1 45.7 19% 28 28

Oil & Gas 216.0 212.9 3.1 1% 26 24

Insurance 190.9 141.1 49.9 35% 29 27

Media 149.1 120.6 28.5 24% 19 19

Beverages 101.8 88.4 13.4 15% 13 12

Utilities 94.4 86.0 8.4 10% 17 19

Food 86.5 64.4 22.1 34% 14 15

Cosmetics 86.1 67.5 18.5 27% 13 12

Transportation 69.5 53.8 15.7 29% 9 13

Engineering 59.9 51.4 8.5 17% 16 11

Others 552.2 429.6 122.7 29% 88 99

Global 500 4,367.1 3,611.6 755.6 5.73 500 500

The World’s Most Valuable Brands (Top 20)

Total Brand Value by Sector


The World’s Most Valuable Brand

Top Brand Value by Country

Sinking Nokia Takes Finland Down With It

Finland’s only Global 500 brand, Nokia, has finally been squeezed out of the table after years of slow decline at the hands of Apple and Samsung. The BRIC nations of Russia, India and in particular Brazil have fared relatively poorly. The number of Brazilian brands in the table is down from 9 to 5 and those that remain have all lost over 20% of their brand value. MTN continues to be the only South African and African brand to be represented in the Global 500, demonstrating the challenge Africa’s homegrown brands face in making an impact on the world stage. However, international brands are looking to Africa for growth, and particularly at how South Africans brands are penetrating into the continent.

One Indian brand has dropped out of the table and several of those that remain have fallen further down the rankings. Tata, India’s flagship brand is the exception however, climbing to 34th worldwide with a brand value of US$21.1 billion. In contrast to the other BRICs, Chinese brands continue to grow strongly. Huawei and Baidu have both increased their brand values by over 50%. While controversial for their close associations with the Chinese government, both are likely to exert increasing influence around the world in the next few years.

Finally, Japanese brands performed particularly well as President Shinzo Abe’s ‘Abenomics’ programme begins to pay off and global demand for Japanese goods improves. Toyota, Mitsubishi and Honda, Japan’s three most valuable brands have all increased their values by over 30%.

Country Total Brand Value 2014 (USD bn)

Total Brand Value 2013(USD bn)

Brand Value Change(USD bn)


United States 1,908.60 1,614.60 294 18%

Japan 376.7 338.7 38 11%

Germany 324 247 77 31%

France 266 212.5 53.4 25%

Britain 262.1 218.4 43.7 20%

China 229 185.3 43.7 24%

South Korea 152 132.8 19.2 14%

Switzerland 120.8 97.3 23.5 24%

Netherlands 112 93.8 18.2 19%

Spain 76.2 70.6 5.6 8%

Canada 75.4 74 1.3 2%

Hong Kong 69.9 41.5 28.4 68%

Italy 57.2 51.3 5.9 11%

Sweden 54.8 50.5 4.3 8%

Australia 50.3 43.9 6.4 15%

Russia 42.2 46.4 -4.2 -9%

Brazil 37.8 59.9 -22.1 -37%

India 35.7 40.6 -4.9 -12%

Norway 15.8 16.5 -0.7 -5%

Denmark 10.2 7 3.3 47%

Austria 9.6 3.7 5.9 160%

Malaysia 9.2 9.9 -0.7 -8%

UAE 8.9 7.3 1.7 23%

Saudi Arabia 8 3.3 4.7 141%

Mexico 7.8 17.8 -9.9 -56%

Chile 7.4 3 4.4 146%

Singapore 7.3 9.3 -2.1 -22%

South Africa 5.4 5.2 0.2 4%

Luxembourg 4.8 3.8 1 26%

Taiwan 3.8 3 0.7 25%

Thailand 3.7 2.6 1.1 44%

Portugal 3.1 2.8 0.3 11%

Number of Brands in Top 500 - 2014

Number of Brands in Top 500 - 2014

185 185

42 49

32 33

37 31

35 32

27 26

12 14

19 19

12 11

10 10

13 14

7 4

8 8

7 8

8 8

8 8

5 9

5 6

3 3

3 2

2 1

1 2

2 2

2 1

2 4

2 1

2 3

1 1

1 1

1 1

1 1

1 1


Methodology

Royalty relief Brand Finance calculates brand value using the Royalty Relief approach. This approach involves estimating the likely future sales that are attributable to a brand and calculating a royalty rate that would be charged for the use of the brand.

The steps in this process are as follows:

1. Calculate brand strength on a scale of 0 to 100 based on a number of attributes such as emotional connection, financial performance and sustainability, among others. This score is known as the Brand Strength Index.

2. Determine the royalty rate range for the respective brand sectors. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database of license agreements and other online databases.

3. Calculate royalty rate. The brand strength score is applied to the royalty rate range to arrive at a royalty rate. For example, if the royalty rate range in a brand’s sector is 1-5% and a brand has a brand strength score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4.2%.

4. Determine brand specific revenues estimating a proportion of parent company revenues

attributable to a specific brand. 5. Determine forecast brand specific

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.

Why we use the royalty relief approachThe Royalty Relief approach is used for three reasons:

1. It is favoured by tax authorities and the courts because it calculates brand values by reference to documented third-party transactions.

2. It can be done based on publicly available financial information.

3. It is compliant with the requirement under the International Valuation Standards Authority to determine the fair market value of brands.

Brand ratingsThese are derived from the Brand Strength Index which benchmarks the strength, risk and future potential of a brand relative to its competitors on a scale ranging from D to AAA. It is conceptually similar to a credit rating.

Brand ratings definitionsAAA Extremely strongAA Very strongA StrongBBB-B AverageCCC-C WeakDDD-D Failing

Valuation Date: All brand values in the report are as at 30 June 2014

Definition of ‘brand’Financial accounting and reporting standards requires a clear definition of what intellectual property is included in the definition of ‘brand’. Brand Finance defines brand as the “Trademark and associated IP including the word mark and trademark iconography”.



Rank 2013

Rank 2012

Brand Parent Company Industry Group BV 2014 (ZAR

m)

Brand Rating 2014

EV 2014 (ZAR m)

BV/ EV BV 2013 (ZAR

m)

Brand Rating

2013

EV 2012 (ZAR

m)

BV/ EV

Change in BV %

(2013-14)

1 1 MTN Mtn Group Ltd Telecommunications 56 338 AAA- 410 612 14% 43 066 AAA- 299 910 14% 31%

2 3 SASOL Sasol Ltd Chemicals 20 808 AA 344 087 6% 18 372 AA 251 869 7% 13%

3 2 Vodacom Vodacom Group Ltd Telecommunications 18 296 AA 185 163 10% 19 386 AA+ 173 184 11% -6%

4 4 Standard Bank Standard Bank Group Ltd Banks 16 695 AA+ 114 896 15% 14 200 AA+ 56 102 25% 18%

5 5 ABSA Barclays Africa Group Ltd Banks 12 806 AA- 114 110 11% 12 411 AA 114 866 11% 3%

6 6 Nedbank Nedbank Group Ltd Banks 12 518 AA 100 511 12% 10 920 AA 80 067 14% 15%

7 8 FNB Firstrand Ltd Banks 11 060 AAA- 117 405 9% 9 487 AAA- 62 704 15% 17%

8 10 Mediclinic Mediclinic Int. Ltd Healthcare-Services 9 583 AA+ 83 755 11% 8 061 AA- 74 321 11% 19%

9 18 Investec Investec Plc Diversified Finan Serv 9 505 AA- 65 837 14% 5 678 AA- 51 129 11% 67%


11 9 Shoprite Shoprite Holdings Ltd Retail - Food Specialists 8 896 AA- 36 101 25% 9 286 AA- 40 551 23% -4%

12 17 MultiChoice Naspers Ltd-N Shs Media 8 817 A+ 189 344 5% 5 841 A+ 108 540 5% 51%

13 14 Netcare Netcare Ltd Healthcare-Services 8 018 AA 40 500 20% 6 257 A+ 51 465 12% 28%

14 11 Spar Spar Group Limited/The Food 7 243 AA 20 391 36% 7 592 AA- 18 199 42% -5%

15 13 Mondi Mondi Ltd Forest Products&Paper 7 074 AA 108 980 6% 6 312 A+ 79 270 8% 12%

16 15* Castle SABMiller Plc Beverages 6 985 AA+ 71 639 10% 6 085 AA+ 67 059 9% 15%

17 12 Pick'n Pay Pick N Pay Stores Ltd Retail 6 902 A+ 21 783 32% 7 073 A+ 18 598 38% -2%

18 19* Carling Black Label SABMiller Plc Beverages 6 798 AA+ 68 597 10% 5 398 AA 64 212 8% 26%

19 20 Telkom Telkom Sa Ltd Telecommunications 6 279 AA 17 436 36% 5 169 AA 12 198 42% 21%

20 22 Sappi Sappi Limited Forest Products&Paper 6 260 A+ 42 199 15% 4 424 A 29 926 15% 42%



23 21 Mr Price Mr Price Group Ltd Retail 4 961 AA 28 038 18% 4 443 AA- 25 152 18% 12%

24 28 Discovery Discovery Ltd Insurance 4 135 AA 42 556 10% 3 602 AA+ 46 739 8% 15%

25 24* Grindrod Grindrod Ltd Transportation 4 109 A+ 18 198 23% 3 922 A+ 11 217 35% 5%

26 31 Wesbank Firstrand Ltd Banks 4 090 AA- 52 648 8% 3 022 AA- 12 609 24% 35%

27 23 Truworths Truworths International Ltd Retail 3 983 AA- 27 386 15% 3 976 AA- 35 059 11% 0%

28 25 Media24 Naspers Ltd-N Shs Media 3 969 AA 74 669 5% 3 774 AA- 62 210 6% 5%

29 29 African Bank African Bank Investments Ltd Diversified Finan Serv 3 826 AA- 12 303 31% 3 391 AA 12 123 28% 13%

30 32 Bidvest Bidvest Group Ltd Holding Companies-Divers 3 504 AA 85 542 4% 2 834 A+ 79 837 4% 24%

31 34 SABMiller SABMiller Plc Beverages 3 322 AA 956 620 0% 2 736 AA 895 461 0% 21%

32 30 Makro Massmart Holdings Ltd Retail 3 258 AA 7 670 42% 3 024 A+ 9 460 32% 8%

33 35 CLICKS Clicks Group Ltd Retail-Drug Store 3 169 AA 9 059 35% 2 702 AA- 8 940 30% 17%

34 33 Liberty Liberty Holdings Ltd Insurance 2 928 AA- 31 851 9% 2 830 A+ 31 564 9% 3%

35 36* Huletts Tongaat Hulett Ltd Holding Companies-Divers 2 876 AA 20 420 14% 2 639 A+ 20 095 13% 9%

36 44 Rainbow Chicken Rainbow Chicken Ltd Food 2 747 AA- 12 262 22% 1 952 A 9 327 21% 41%

37 40 Altech Allied Technologies Ltd Telecommunications 2 691 A+ 11 894 23% 2 278 AA- 9 181 25% 18%

38 39 Checkers Shoprite Holdings Ltd Retail - Food Specialists 2 622 A+ 13 944 19% 2 306 A 15 663 15% 14%

39 43 Life Life Healthcare Group Holdin Healthcare-Services 2 594 AA- 41 133 6% 2 042 A 37 779 5% 27%

40 37 Nampak Nampak Ltd Packaging&Containers 2 532 AA- 25 788 10% 2 452 A+ 24 496 10% 3%

41 49 Steinhoff Steinhoff Intl Holdings Ltd Holding Companies-Divers 2 504 AA- 147 590 2% 1 496 A+ 86 415 2% 67%

42 45* Capitec Bank Capitec Bank Holdings Ltd Diversified Finan Serv 2 366 AA 23 705 10% 1 865 AA- 20 678 9% 27%

43 38 SAA South African Airways Airlines 2 350 A+ 2 325 A+ 1%

44 47 Rand Merchant Bank Firstrand Ltd Banks 2 296 AA 25 232 9% 1 694 AA- 2 896 58% 36%

45 48 Imperial Imperial Holdings Ltd Holding Companies-Divers 2 133 AA- 44 742 5% 1 547 A+ 52 081 3% 38%

46 41 Game Massmart Holdings Ltd Retail 2 035 A 5 601 36% 2 211 A 8 773 25% -8%

47 Cell C Cell C Telecommunications 1 835 A

48 42 Santam Santam Ltd Insurance 1 812 AA- 21 235 9% 2 077 AA- 20 961 10% -13%

49 52 Foschini The Foschini Group Ltd Retail 1 656 AA- 7 209 23% 1 315 AA 7 438 18% 26%

50 46 Sasko Pioneer Foods Ltd Food Service 1 581 AA 10 997 14% 1 817 A+ 8 939 20% -13%



Brand Finance

Brand Finance is an independent global business focused on advising strongly branded organisations on how to maximize value through the effective management of their brands and intangible assets.

Since it was founded in 1996, Brand Finance has performed thousands of branded business, brand and intangible asset valuations worth trillions of dollars.

Brand Finance’s services support a variety of business needs: • Technical valuations for accounting, tax and legal purposes• Valuations in support of commercial transactions

(acquisitions, divestitures, licensing and joint ventures) involving different forms of intellectual property

• Valuations as part of a wider mandate to deliver value-based marketing strategy and tracking, thereby bridging the gap between marketing and finance.

Our clients include international brand owners, tax authorities, IP lawyers and investment banks. Our work is frequently peer-reviewed by the big four audit practices and our reports have also been accepted by various regulatory bodies, including the UK Takeover Panel.

Brand Finance is headquartered in London and has a network of international offices in Amsterdam, Bangalore, Barcelona, Cape Town, Colombo, Dubai, Durban, Geneva, Helsinki, Hong Kong, Istanbul, Lisbon, Madrid, Moscow, New York, Paris, Sao Paulo, Sydney, Singapore, Toronto and Zagreb.

www.brandfinance.com

About Brand Finance OUR SERVICES

At Brand Finance, we are entirely focused on quantifying and leveraging intangible asset value. Our services compliment and support each other, resulting in robust valuation methodologies, which are underpinned by an in-depth understanding of revenue drivers and licensing practice.

ValuationWe perform valuations for financial reporting, tax planning M&A activities, joint ventures, IPOs and other transactions. We work closely with auditors, tax authorities and lawyers. Intangible assets values include, copyright, confidential information, customer relationship, design rights, databases, distribution rights, formulations, good will, liscenses technology trade marks, patents and URLS’s.

Analytics Our analytical services help clients to better understand the drivers of business and brand value. Understanding how value is created, where it is created and the relationship between brand value and business value is a vital input to strategic decision making.

StrategyWe give marketers the framework to make effective economic decisions. Our value based marketing service enables companies to focus on the best opportunities, allocate budgets to activities that have the most impact, measure the results and articulate the return on brand investment.

TransactionsWe help private equity companies, venture capitalists and branded businesses to identify and assess the value opportunities through intangible property and market due diligence.


Glossary

Brand Trademarks and trademark licenses together with associated goodwill.

BrandBeta®Brand Finance®’s proprietary method for determining the strength, risk and future potential of a brand relative to its competitor set.

Branded BusinessThe whole business trading under a particular brand or portfolio of brands, the associated goodwill and all the intangible elements at work within the business.

Brand RatingA summary opinion, similar to a credit rating, on a brand based on its strength as measured by Brand Finance®’s ‘Brand Strength Index’.

Brand ValueThe net present value of the estimated future cash flows attributable to the brand (see Methodology section for more detail).

Discounted Cash Flow (DCF)A method of evaluating an asset value by estimating future cash flows and taking into consideration the time value of money and risk attributed to the future cash flows.

Discount RateThe interest rate used in discounting future cash flows.

Enterprise ValueThe combined market value of the equity and debt of a business less cash and cash equivalents.

Fair Market Value (FMV)The price at which a business or assets would change hands between a willing buyer and a willing seller, neither of whom are under compulsion to buy or sell and both having reasonable knowledge of all relevant facts at the time.

Holding CompanyA company controlling management and operations in another company or group of other companies.

Intangible Asset An identifiable non-monetary asset without physical substance.

Net Present Value (NPV)The present value of an asset’s net cash flows (minus any initial investment).

Tangible ValueThe fair market value of the monetary and physical assets of a business.

Weighted Average Cost of Capital (WACC)An average representing the expected return on all of a company’s securities. Each source of capital, such as stocks, bonds, and other debts, is assigned a required rate of return, and then these required rates of return are weighted in proportion to the share each source of capital contributes to the company’s capital structure.


CONTACT DETAILSBrand Finance is the leading brand valuation and strategy firm, helping companies to measure, manage and maximise the value of their brands for improved business results.

For further enquiries relating to this report, please contact:

David HaighCEO [email protected]

Thebe IkalafengChairman, Brand Finance Africa +27 82 447 [email protected]

Oliver Schmitz Managing Director, Brand Finance Africa +267 72 984 [email protected]

Rupert KempValuation Director, Brand Finance Africa +27 72 459 [email protected]

For further information on Brand Finance’s services, please contact your local representative:

Country Contact Email address

Australia Xander Bird [email protected]

Brazil Gilson Nunes [email protected]

Canada Edgar Baum [email protected]

Croatia Borut Zemljic [email protected]

East Africa Jawad Jaffer [email protected]

France Richard Yoxon [email protected]

Holland Marc Cloosterman [email protected]

Hong Kong Rupert Purser [email protected]

India Unni Krishnan [email protected]

Korea Matt Hannagan [email protected]

Portugal João Baluarte [email protected]

Middle East Hany Mwafy [email protected]

Russia Alexander Eremenko [email protected]

Singapore Samir Dixit [email protected]

Spain Pedro Tavares [email protected]

Sri Lanka Ruchi Gunewardene [email protected]

Turkey Muhterem İlgüner [email protected]

United Kingdom Richard Yoxon [email protected]

USA Elise Neils [email protected]

For all other countries, please contact: E. [email protected] • T. +27 72 459 1743www.brandfinance.com • www.brandirectory.com • www.brandfinanceforums.com

E: [email protected]

Documents

South Africa's Top 50 Most Valuable Brands