Brand Finance has recently completed its annual study on the 50 Most Valuable Australian Brands. It is available for download here.
In launching the second study of Australia’s 50 most valuable brand portfolios, Tim Heberden, Managing Director of Brand Finance Australia says:
“Intangible assets represent more than half of the value of corporate Australia, and brands are a significant source of intangible value. Some companies have shrugged off the downturn and added value to their brand portfolios – Woolworths is a prime example and moves into top spot. Unfortunately there is plenty of red ink amongst the Top 50, signifying declines in value. Despite some stand-out performers, Australian brands contribute a lower percentage of enterprise value than top international benchmarks.”
The Winner and Losers?
Brand Value Winners:
Woolworths has surged past National Australia Bank to become the owner of Australia’s most valuable brand portfolio with a value of $6.4 billion. The brand value has growth by more than 5% since the previous study, defying the GFC.
Westpac Bank has moved into second position. This is a result of its acquisition of St. George Bank, and careful management of the brand portfolio and customer satisfaction. It will be interesting to track the impact of the recent rate rise on brand equity and value. The benefit of the brand portfolio is that the St George and BankSA brands have avoided the banana peel.
Wesfarmers’ acquisition of the Coles Group has created Australia’s largest conglomerate and shifted the brand portfolio 42 positions to number 6, with a value of $4.4 billion. The turnaround of Coles and other retail brands is slowly becoming apparent and will boost future performance.
Lion Nathan’s continued focus on long term brand building, and the beer-skew of its portfolio, has increased brand value by 4.6%. This compares favourably to Foster’s decrease of 13.7%. Whilst Foster’s beer brands have thrived, the same cannot be said of its ailing wine division which has continued to struggle.
JB Hi-Fi is an example of a smaller company that has outperformed the market. The brand has taken market share from its competitors and enters the Top 50 in position 40 with a brand value of $357 million.
Brand Value Losers:
Qantas has dropped out of the Top 10, shedding $739 million of brand value. The decline is largely due to the horror year experienced by the airline industry. Qantas remains one of the most successful international airlines, and the value of the group’s brand portfolio is being bolstered by the growth of Jetstar. Marketing to the value conscious consumer through the Jetstar brand has helped Qantas to mitigate the effect of the downturn.
National Australia Bank has dropped from first to third position losing almost 5% of its brand value. Some of the losses relate to its UK brands.
Suncorp Metway’s 21% decline in brand value is not as severe as the decline of its enterprise value. Reinvigorating the brands is one of the many tasks ahead for the new CEO.
Caltex has suffered a 26% decline in brand value reflecting disappointing business performance, particularly a low refining margin. The fact that Caltex has only dropped one place in the table reflects the number of brands that are in the red.