Denmark

50
2017
The annual report on the most valuable Danish brands
May 2017
Foreword
David Haigh, CEO, Brand Finance
What is the purpose of a strong brand; to attract
customers, to build loyalty, to motivate staff? All
true, but for a commercial brand at least, the first
answer must always be ‘to make money’.
Huge investments are made in the design, launch
and ongoing promotion of brands. Given their
potential financial value, this makes sense.
Unfortunately, most organisations fail to go beyond
that, missing huge opportunities to effectively make
use of what are often their most important assets.
Monitoring of brand performance should be the
next step, but is often sporadic. Where it does take
place it frequently lacks financial rigour and is
heavily reliant on qualitative measures poorly
understood by non-marketers.
As a result, marketing teams struggle to
communicate the value of their work and boards
then underestimate the significance of their brands
to the business. Skeptical finance teams,
unconvinced by what they perceive as marketing
mumbo jumbo may fail to agree necessary
investments. What marketing spend there is can
end up poorly directed as marketers are left to
operate with insufficient financial guidance or
accountability. The end result can be a slow but
2. Brand Finance Global
Australia
Airlines500
Denmark 30
100
5030
February
May
March
February
2017
2016
2016
2015
Contents
steady downward spiral of poor communication, Foreword 2
wasted resources and a negative impact on the
bottom line. Definitions 4
Methodology 6
Brand Finance bridges the gap between the
marketing and financial worlds. Our teams have Executive Summary 8
experience across a wide range of disciplines from
market research and visual identity to tax and Full Table (USDm) 12
accounting. We understand the importance of
design, advertising and marketing, but we also Full Table (DKKm) 13
believe that the ultimate and overriding purpose of
Understand Your Brand’s Value 14
brands is to make money. That is why we connect
brands to the bottom line. How We Can Help 16
By valuing brands, we provide a mutually intelligible Contact Details 17
language for marketers and finance teams.
Marketers then have the ability to communicate the
significance of what they do and boards can use
the information to chart a course that maximises
profits.
Without knowing the precise, financial value of an
asset, how can you know if you are maximising your
returns? If you are intending to license a brand, how
can you know you are getting a fair price? If you are
intending to sell, how do you know what the right
time is? How do you decide which brands to
discontinue, whether to rebrand and how to arrange
your brand architecture? Brand Finance has
conducted thousands of brand and branded
business valuations to help answer these questions.
Brand Finance’s recently conducted share price
study revealed the compelling link between strong
brands and stock market performance. It was found
that investing in the most highly branded companies
would lead to a return almost double that of the
average for the S&P 500 as a whole.
Acknowledging and managing a company’s
intangible assets taps into the hidden value that lies
within it. The following report is a first step to
understanding more about brands, how to value
them and how to use that information to benefit the
business. The team and I look forward to continuing
the conversation with you.
Brand Finance Denmark 50 May 2017 3.
Definitions
Effect of a Brand on Stakeholders
Definitions
E.g. + Enterprise Value – the value of the
entire enterprise, made up of Potential
Directors
Middle
‘Branded
‘Branded multiple branded businesses Customers Managers
Enterprise’
Enterprise’
Existing All Other
‘Branded
‘Branded + Branded Business Value – the Customers Employees
Business’ E.g.
Business’ Lurpak value of a single branded business
operating under the subject brand
‘Brand’
Contribution’ Influencers
+ Brand Contribution– The total e.g. Media Brand Production
E.g. economic benefit derived by a
Lurpak business from its brand
‘Brand
Value’ Trade
Sales
Channels
+ Brand Value – the value of the
E.g.
Lurpak trade marks (and relating
Strategic
marketing IP and ‘goodwill’ Allies &
Debt
attached to it) within the branded providers
Suppliers Investors
business

Branded Business Value Brand Contribution Brand Value Brand Strength

A brand should be viewed in the context of the
business in which it operates. For this reason
Brand Finance always conducts a Branded
Business Valuation as part of any brand valuation.
Where a company has a purely mono-branded
architecture, the business value is the same as
the overall company value or ‘enterprise value’.
In the more usual situation where a company
owns multiple brands, business value refers to
the value of the assets and revenue stream of the
business line attached to that brand specifically.
We evaluate the full brand value chain in order to
understand the links between marketing
investment, brand tracking data, stakeholder
behaviour and business value to maximise the
returns business owners can obtain from their
brands.
The brand values contained in our league tables
are those of the potentially transferable brand
asset only, but for marketers and managers
alike, an assessment of overall brand
contribution to a business provides powerful
insights to help optimise performance.
Brand Contribution represents the overall uplift
in shareholder value that the business derives
from owning the brand rather than operating a
generic brand.
Brands affect a variety of stakeholders, not just
customers but also staff, strategic partners,
regulators, investors and more, having a
significant impact on financial value beyond
what can be bought or sold in a transaction.
In the very broadest sense, a brand is the focus
for all the expectations and opinions held by
customers, staff and other stakeholders about an
organisation and its products and services.
However, when looking at brands as business
assets that can be bought, sold and licensed, a
more technical definition is required.
Brand Finance helped to craft the internationally
recognised standard on Brand Valuation, ISO
10668. That defines a brand as “a marketing-
related intangible asset including, but not limited
to, names, terms, signs, symbols, logos and
designs, or a combination of these, intended to
identify goods, services or entities, or a
combination of these, creating distinctive images
and associations in the minds of stakeholders,
thereby generating economic benefits/value”.
Brand Strength is the part of our analysis most
directly and easily influenced by those
responsible for marketing and brand
management. In order to determine the strength
of a brand we have developed the Brand
Strength Index (BSI). We analyse marketing
investment, brand equity (the goodwill
accumulated with customers, staff and other
stakeholders) and finally the impact of those on
business performance.
Following this analysis, each brand is assigned
a BSI score out of 100, which is fed into the
brand value calculation. Based on the score,
each brand in the league table is assigned a
rating between AAA+ and D in a format similar
to a credit rating. AAA+ brands are exceptionally
strong and well managed while a failing brand
would be assigned a D grade.

4. Brand Finance Denmark 50 May 2017 Brand Finance Denmark 50 May 2017 5.
Methodology
League Table Valuation Methodology Brand Finance Typical Project Approach
Brand Finance calculates the values of the 2 Determine the royalty rate range for the respective
brands in its league tables using the ‘Royalty brand sectors. This is done by reviewing comparable
Relief approach’. This approach involves licensing agreements sourced from Brand Finance’s
estimating the likely future sales that are extensive database of license agreements and other
attributable to a brand and calculating a royalty online databases.
Brand Equity Stakeholder Brand
rate that would be charged for the use of the 3 Calculate royalty rate. The brand strength score is Inputs Performance Contribution
Value Drivers Behaviour
brand, i.e. what the owner would have to pay for applied to the royalty rate range to arrive at a royalty
the use of the brand—assuming it were not rate. For example, if the royalty rate range in a brand’s
already owned. sector is 0-5% and a brand has a brand strength
score of 80 out of 100, then an appropriate royalty 1 2 3 4
The steps in this process are as follows:
rate for the use of this brand in the given sector will Brand Audit Trial & Preference Acquisition & Valuation Modelling
be 4%. Retention
1 Calculate brand strength on a scale of 0 to 100 based
4 Determine brand specific revenues estimating a
on a number of attributes such as emotional Audit the impact Run analytics to Link stakeholder Model the impact of behaviour on
proportion of parent company revenues attributable
connection, financial performance and sustainability, of brand understand how behaviour with core financial performance and
to a specific brand.
among others. This score is known as the Brand management and perceptions link to key financial isolating the value of the brand
5 Determine forecast brand specific revenues using a investment on behaviour value drivers contribution
Strength Index, and is calculated using brand data
function of historic revenues, equity analyst forecasts brand equity
from the BrandAsset® Valuator database, the world’s
and economic growth rates.
largest database of brands, which measures brand
6 Apply the royalty rate to the forecast revenues to
equity, consideration and emotional imagery
derive brand revenues.
attributes to assess brand personality in a category
7 Brand revenues are discounted post tax to a net
agnostic manner.
present value which equals the brand value.
Brand strength Brand Brand revenues Brand value
index ‘Royalty rate’ How We Help to Maximise Value
(BSI)

6. Build scale through licensing/franchising/partnerships

Maximising a strong brand

Brand Strong brand
investment 5. Build core business through market expansion

4. Build core business through product development

Brand
equity 3. Portfolio management/rebranding Group companies

2. Optimise brand positioning and strength

Brand
Weak brand
performance Forecast revenues 1. Base-case brand and business valuation
(using internal data), growth strategy
Evaluate ongoing performance
formulation, target-setting, scorecard and
Brand strength BSI score applied to an Royalty rate applied to Post-tax brand tracker set-up
expressed as a BSI appropriate sector forecast revenues to revenues are
score out of 100. royalty rate range. derive brand values. discounted to a net Current brand and Target brand and
business value business value
present value (NPV)
which equals the
brand value.
6. Brand Finance Denmark 50 May 2017 Brand Finance Denmark 50 May 2017 7.

Executive Summary

Denmark 1 6
Rank 2017: 1 2016: 1 Rank 2017: 6 2016: 6
BV 2017: $7,597m BV 2017: $2,137m
+68% +15%
BV 2016: $4,520m BV 2016: $1,853m
Brand Rating: AAA+ Brand Rating: A

2 7

50
Rank 2017: 2 2016: 3 Rank 2017: 7 2016: 12
BV 2017: $3,728m BV 2017: $1,528m
0% +63%
BV 2016: $3,742m BV 2016: $939m
Brand Rating: A+ Brand Rating: A+

3 Rank 2017: 3 2016: 4

BV 2017: $3,599m
BV 2016: $2,844m
+27%
8 Rank 2017: 8 2016: 7
BV 2017: $1,520m
BV 2016: $1,527m
+0%

Brand Rating: AA+ Brand Rating: AA-

4 Rank 2017: 4 2016: 2

BV 2017: $3,397m
BV 2016: $3,782m
-10%
9 Rank 2017: 9 2016: 14
BV 2017: $1,488m
BV 2016: $865m +72%
Brand Rating: A+ Brand Rating: A+

5 Rank 2017: 5 2016: 5

BV 2017: $2,903m +42%
BV 2016: $2,048m
10 Rank 2017: 10 2016: 11
BV 2017: $1,451m
BV 2016: $954m
+52%
Brand Rating: AAA- Brand Rating: A+

Lego tops the table with a brand value of
US$7.6billion. Lego is also the strongest brand,
not just in Denmark, but globally.
Lego scores highly on a wide variety of BSI
metrics such as familiarity, loyalty, promotion,
marketing investment, staff satisfaction and
corporate reputation. The building blocks for
Lego’s brand strength have always been present,
however in the last few years this strength has
been enhanced through a combination of
strategic partnerships and licensing deals.
The Lego Movie in 2014 and the Lego Batman
Movie last year were both critical and commercial
successes, providing not just immediate revenue
but also an unrivalled marketing tool. Further
releases are planned for the next few years,
which will continue to build the brand whilst
contributing significantly to Lego’s already vast
licensing income. Video game partnerships have
had a similar effect. The combination of Lego
8. Brand Finance Denmark 50 May 2017
and Star Wars in particular has been irresistible
to the public.
Geographic expansion has also provided Lego
with many opportunities for growth. Lego opened
its first factory in Jiaxing, China, in 2014, as well
as a new Asian Head Office in Shanghai. China
does present risks; Lego cannot rely on the
nostalgia or awareness it has enjoyed in Europe
and the US for decades, making success there
uncertain. However, domestic scandals over the
safety of children’s products leave fertile ground
for a foreign firm with a reputation for reliability,
quality and child development.
Though Lego will always draw its strength from
the simplicity of its tangible products, it is also
responding to the digital era. Lego Boost, set to
launch in August, allows children to turn Lego
creations into programmable robots using a
smartphone app. Meanwhile Lego Life enables
kids to post pictures of their proudest creations
or imagine new ones, making Lego a profoundly
social and personal experience.
Arla is 2nd, with a brand value of US$3.7billion.
The dairy industry is experiencing severe
overproduction, lowering prices and squeezing
margins. The differentiating power of brand is
therefore more critical than ever. Arla is working
hard to leverage its brand and to reinforce it.
Several campaigns have been launched recently
in both the UK and US. Its UK campaign invited
people to ‘Eat Monday for Breakfast’, promoting
the idea that Arla products help people start their
week with energy, enthusiasm and ambition rather
than the usual resignation and dread. US$30
million has been invested in the ‘Live Unprocessed’
campaign to position the brand as a champion of
natural, healthy eating, in contrast to competitors
such as Kraft. Children were asked to imagine
what processed food ingredients ‘rBST’, ‘Xanthan’
and ‘Sorcic Acid’ look like. The response was to
portray them as monsters or aliens. Their ideas
were turned into animations to emphasise their
apparent ghoulishness.
Pandora remains in 5th place with a 42% increase
in brand value to US$2.9billion. The UK and the
US are currently its two largest markets but
Pandora is achieving rapid global expansion. It
opened its first store in India and has also targeted
China, having set up an e-commerce site and
storefront on Tmall (a Wechat rival), targeting a
younger demographic than its average western
customer.
Per Aarsleff has had the largest fall in brand value,
dropping 38% to US$162million. Operating profits
are lower than expected and shares have fallen
10% due to delayed or allegedly, poorly executed
projects. However, things could improve in the
coming year or two, with multimillion projects from
Banedanmark to be completed in 2019.
Brand Finance Denmark 50 May 2017 9.

Executive Summary
Brand Value Over Time The 10 Most Powerful Brands Brand Value Change (USDm)
8 These are the most powerful Danish brands, whose rating is
based on Brand Finance’s Brand Strength Index (BSI). Lego 3,077
Pandora
Pandora 855
7 Danske Bank 756
BSI Score

92.7
DSV 623
Maersk
Vestas 588
6
Coop Danmark 497
ISS 284
Brand Value (USDBn)

5 Danske Bank BSI Score

80.2
Topdanmark 228
Dansk Supermarked 227
Fakta 193
4 Arla
-7 Novo Nordisk
BSI Score Novozymes

77.8
-11
3 -13 Royal Greenland Seafood
Lego
-14 Arla
-26 Carlsberg
2
BSI Score -47 Tulip

1 75.3 -63
-99
-171
ECCO
PER Aarsleff
TDC

0 BSI Score -385 Maersk

2012 2013 2014 2015 2016 2017

73.4 -411.000000
147.714286
706.428571

Brand Value Change (%)

1265.142857
1823.857143
2382.571429
2941.285714
3500.000000

BSI Score
Total Brand Value by Sector 2017
72.3
Lego 3,077 Harmonie 135%
Pandora 855 Topdanmark 81%
Danske Bank 756 God Morgon 75%
DSV 623 DSV 72%
Food BSI Score
Colour Sector Brand Value % of total

71.4
17.6% Vestas 588 Lego 68%
(USD Billion)
Coop Danmark 497 Vestas 63%
Food 8.2 17.6% ISS 284 Ess-Food 56%
Toys 7.6 16.2% Topdanmark 228 H Lundbeck 55%
Dansk Supermarked BSI Score 227 52%

70.9
Coop Danmark
Banks 5.6 11.9% Fakta 193 Top-Toy 50%
Toys Logistics 5.2 11.1% -7 Novo Nordisk 0% Novo Nordisk
16.2% -11 Novozymes -1% Den Gronne Slagter
Retail 3.6 7.7%
-13 RoyalBSI Score Seafood
Greenland -2% Carlsberg
Apparel

Others
3.5

13.1
7.4%

28.0%
-14
-26
-47
Arla

Tulip
70.4
Carlsberg
-4%
-5%
-7%
Novozymes
Tulip
Royal Greenland Seafood
Banks Total 46.8 100% -63 BSI
ECCO Score -10% ECCO

70.3
11.9% -99 PER Aarsleff -10% Maersk
-171 TDC -11% TDC
-385 Maersk -38% PER Aarsleff
-411.000000
147.714286
706.428571
1265.142857
1823.857143
2382.571429
2941.285714
3500.000000 -55.0-29.5-4.021.547.072.598.0123.5
149.0
174.5
200.0
10. Brand Finance Denmark 50 May 2017 Brand Finance Denmark 50 May 2017 11.
Brand Finance Brand Finance
Denmark 50 (USDm) Denmark 50 (DKKm)
Top 50 most valuable Danish brands 1 - 50. Top 50 most valuable Danish brands 1 - 50.
Rank Rank Brand Value Brand Value Brand Brand Rank Rank Brand Value Brand Value Brand Brand
Brand name Sector % Brand name Sector %
2017 2016 (USDm) (USDm) rating rating 2017 2016 (DKKm) (DKKm) rating rating
change change
2017 2016 2017 2016 2017 2016 2017 2016
1 1 Lego Toys 7,597 68% 4,520 AAA+ AAA+ 1 1 Lego Toys 50,326 62% 31,026 AAA+ AAA+
2 3 Arla Food 3,728 0% 3,742 A+ A 2 3 Arla Food 24,697 -4% 25,683 A+ A
3 4 Danske Bank Banks 3,599 27% 2,844 AA+ AA 3 4 Danske Bank Banks 23,844 22% 19,519 AA+ AA
4 2 Maersk Logistics 3,397 -10% 3,782 A+ AA- 4 2 Maersk Logistics 22,501 -13% 25,959 A+ AA-
5 5 Pandora Apparel 2,903 42% 2,048 AAA- AA+ 5 5 Pandora Apparel 19,230 37% 14,058 AAA- AA+
6 6 ISS Pro Services - Commercial 2,137 15% 1,853 A A 6 6 ISS Pro Services - Commercial 14,154 11% 12,717 A A
7 12 Vestas Technology 1,528 63% 939 A+ AA- 7 12 Vestas Technology 10,121 57% 6,448 A+ AA-
8 7 Novo Nordisk Pharma 1,520 0% 1,527 AA- AA 8 7 Novo Nordisk Pharma 10,068 -4% 10,478 AA- AA
9 14 DSV Logistics 1,488 72% 865 A+ AA- 9 14 DSV Logistics 9,857 66% 5,937 A+ AA-
10 11 Coop Danmark Retail 1,451 52% 954 A+ A 10 11 Coop Danmark Retail 9,613 47% 6,549 A+ A
11 8 TDC 11 8 TDC
12 13 Dansk Supermarked 12 13 Dansk Supermarked
13 9 Carlsberg 13 9 Carlsberg
14 New Danfoss 14 New Danfoss
15 10 Tulip 15 10 Tulip
16 16 Lurpak 16 16 Lurpak
17 17 Coloplast 17 17 Coloplast
18 15 Danish Crown 18 15 Danish Crown
19 19 Danepak 19 19 Danepak
20 21 Jyske Bank 20 21 Jyske Bank
21 24 Fakta 21 24 Fakta
22 25 Nykredit 22 25 Nykredit
23 18 ECCO 23 18 ECCO
24 23 Tuborg 24 23 Tuborg
25 20 Den Gronne Slagter 25 20 Den Gronne Slagter
26 27 Topdanmark 26 27 Topdanmark
27 22 Trygvesta 27 22 Trygvesta
28 26 GN 28 26 GN
29 34 DFDS Seaways 29 34 DFDS Seaways
30 31 VELUX 30 31 VELUX
31 32 Rockwool 31 32 Rockwool
32 30 Sydbank 32 30 Sydbank
33 28 Novozymes 33 28 Novozymes
34 35 Rema 1000 Danmark 34 35 Rema 1000 Danmark
35 40 Prince 35 40 Prince
36 New Harmonie 36 New Harmonie
37 39 Spar Nord Bank 37 39 Spar Nord Bank
38 44 Top-Toy 38 44 Top-Toy
39 37 Alm Brand 39 37 Alm Brand
40 41 Steff Houlberg 40 41 Steff Houlberg
41 48 Ess-Food 41 48 Ess-Food
42 43 Yousee 42 43 Yousee
43 38 Royal Greenland Seafood 43 38 Royal Greenland Seafood
44 29 PER Aarsleff 44 29 PER Aarsleff
45 50 H Lundbeck 45 50 H Lundbeck
46 45 CHR Hansen 46 45 CHR Hansen
47 46 Bang & Olufsen 47 46 Bang & Olufsen
48 New God Morgon 48 New God Morgon
49 New DLR Kredit 49 New DLR Kredit
50 New Arbejdernes Landsbank 50 New Arbejdernes Landsbank

12. Brand Finance Denmark 50 May 2017 Brand Finance Denmark 50 May 2017 13.
Understand Your Brand’s Value
Drivers of Change Brand Strength Index 2016
Brand Value Dashboard Three key areas impact Brand Value (EURm)
An ideal balanced scorecard of fundamental brand related measures Brand Valuation Assumptions
Underlying economic assumptions used in valuation
Effective BSI
Weighting Attributes
18 131

$707m $882m $10,216m 34

AA+
6.25% Product: R&D expenditure,
Widely recognised factors deployed by

$
Brand Capital expenditure
[XXX] Marketers to create brand loyalty and Strong brand
Brand Value (EUR) Brand Value (EUR) Enterprise Value (EUR) Investment 6.25% Place: Brand value (EURm) Brand
25% Website Ranking
market share. We therefore benchmark
Investment

€650m €729m
=
Inputs
€9,399m 78/100 729 729

%
650 6.25% People: Number of Employees,

X
616 616
brands against relevant input measures by
$650
Brand
Employee Growth
25% Equity

Brand Strength Index

6.25% Promotion: Marketing expenditure sector against each of these factors.
Historic brand value performance (EURm) Peer Group Comparison (USDm) Brand
$6,265 Performance Forecast revenues
729 2015 Brand Strength Business Performance External Changes 2016 5.00% Familiarity
800 Weak brand
$3,031 $2,328 $1,913
7.50% Consideration How do stakeholders feel about the brand
650
700 607
$707
Brand Strength Business Outlook Economic Outlook Customer 35% 7.50% Preference vs. competitors?
7.50% Satisfaction
600
[XXX] [XXX]’s brand strength has increased compared to last year. Brands drive higher revenues. An investor would therefore All future returns are subject to risk. If the risk of not 7.50% Recommendation/NPS • Brand equity accounts for 50% to reflect Revenue Long Term Growth Rate Tax Rate Discount Rate
500 pay more for a brand that makes more money. receiving the forecast returns is higher (increasing the Brand the importance of stakeholder
As the brand continues its sustainability drive, [XXX] has discount rate), the brand’s market is not growing as quickly Equity Staff 5% 5.00% Licensing payments for the use of a After the explicit forecasts, the brand Forecasted royalties are reduced by Earnings in the future are worth less
320 been improving across all CSR scores. It now has the [XXX]’s revenue base and the 5 year forecast growth have as expected (lower long term growth rate) or the tax rate in
Employee Score perceptions to behaviour
400
275 Brand Value by Product Segment brand are derived from revenue. will continue to grow. However, it is the tax rate to reflect the actual than consumption now. This rate is
highest CSR scores it has had in the last four years across fallen this year, resulting in a loss of $177m USD to total the brand’s regions of operation is higher, then the brand’s
50% Increases or decreases in forecasted unlikely that the company will sustain amount that would be received by therefore used to reduce future
300 213 Environment, Employees and Governance. brand value. value is reduced and vice versa. 2.50% Credit Rating • Brand Equity is important to all
Nutrition
37% Financial 5% revenue increase or decrease the extraordinary returns into the future the brand owner after tax. earnings to their value today.
200 2.50% Analyst Recommendation stakeholder groups with customers being final valuation.
The premium approach is also leading to significant margin However, it is important to note that this has arisen as a so forecast industry growth rates are
advantages – positively affecting “performance”. result of the company divesting a number of divisions. Environment Score
the most important
100 Performance Materials 1.67% applied.
58% External 5% 1.67% Community Score
0 Other Activities 1.67% Governance Score
2011 2012 2013 2014 2015 2016 4% 2016 2015 2016 2015 2016 2015
5 year Compound Annual Growth Rate
Brand 5 Year Forecast 6.25% Long Term Growth Rate Tax Rate Discount Rate
78 76 2.6% 3.4% Discount Rate 9.1% 8.6% Revenue
Quantitative market, market share and (CAGR)
7% Strength Growth Brand 6.25% % Margin
financial measures resulting from the 2015 2014 2015 2014 2015 2014 2015 2014
Base Year
8,205 9,570
Long Term Growth 3.2% 2.6% Performance Outputs 25% 6.25% % Forecast Margin
Revenue (EURm) strength of the brand.
6.25% % Forecast Revenue Growth
Tax 28.9% 30.2% 2.6% 3.4% -0.8% 3.2% 2.6% +0.6% 29% 30% -1.3% 9.1% 8.6% +0.5%
25%

Determining the Royalty Rate

Brand Performance Brand Investment In order to apply the Brand Strength Index, a hypothetical royalty rate range needs to be set Competitor Royalty Rates
An ideal balanced scorecard of fundamental brand related measures Proven inputs that drive the Brand Equity and financial results Competitor royalty rates will be different based on different strengths of the brand, having
Following the OECD guidelines, Brand Finance sets the hypothetical brand royalty rate ranges by reference to three tests:
Brand Strength Index different operating segments and company-specific long term affordability
Brand Strength Index
• Comparable Agreements: A search of comparable licensing agreements for brands in each industry is conducted every year. The margin analyses
Brand Investment are then compared against the royalty rates found in these agreements to analyse the importance of brand in the industry and set an appropriate 1.2%
Brand Performance
average industry royalty rate.
10.0
10.0 9.3 1.0%
• Industry Margins: An analysis of 25% to 40% of margins, generally accepted as rules of thumb for licensing rates for all intangible assets in a
8.9 8.9 8.0 company. These rates are adjusted to take into account the importance of brand in a given industry.
8.1 7.7
8.0 0.8% 0.8% 0.8% 0.8%
6.4
6.0 • Affordability: Thirdly, an analysis of the brand’s specific royalties is conducted. If the brand has been able to sustain extraordinary profits over an 0.7%
6.0 5.3
extended time it is likely that hypothetical brand owners would be willing to pay closer to the company’s margins than the industry average. In the 0.6% 0.6% 0.6%
0.6%
5.0 4.0 case of Brand Finance’s League Table models, affordability will be based on the forecast EBIT.
4.0 DSM
[XXX] Best in Class Competitor Average 0.5%
DSM
[XXX] Best in Class Competitor Average 2.0 • Average industry royalty rate ranges can be seen below
2.0
0.0
High
0.0
Effective
Effective Weighting 6.25% 6.25% 6.25% 6.25% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
6.25% 6.25% 6.25% 6.25% DSM BASF Dow Du Pont Akzo Nobel Akzo Nobel
Weighting
Best in
Best in Class [XXX] Du Pont Multiple Akzo Nobel Mid
Class Akzo Nobel Dow Akzo Nobel Du Pont

Revenue Margin % Forecast Revenue Growth % Forecast Margin %

The brand’s ability to drive a
volume premium. Implied by
current and future revenue.
Product Place People Promotion [XXX]
Low
Relative quality of the brand’s investment in Relative quality of a brand’s distribution Relative quality of the human network Relative quality of the brand’s promotions.
its products. The measure can include R&D network. It can include the quality of supporting the brand. This may include the Marketing investment, the quality of visual Akzo Nobel – Paints and
spend and capital expenditure. logistical infrastructure available to the size of the support network, its likely future identity and the effectiveness of the [XXX] BASF Dow Du Pont Akzo Nobel - Corporate
The brand’s ability to drive a The brand’s ability to improve Coatings
brand, the quality of its online presence, or growth or the investment in workforce brand’s social media is covered by this
price premium. Implied by business prospects across 78 78 80 80 82 82
the number and quality of its retail outlets. training and human resources. measure.
current and future margins. various KPIs

A Brand Value Report provides a complete + Internal understanding of brand Royalty Rates Trademark Audit
breakdown of the assumptions, data + Brand value tracking
sources and calculations used to arrive at + Competitor benchmarking Analysis of competitor royalty rates, industry Analysis of the current level of protection for the
your brand’s value. + Historical brand value royalty rate ranges and margin analysis used to brands word marks and trademark iconography
Each report includes expert recommendations determine brand specific royalty rate. highlighting areas where the marks are in need
for growing brand value to drive business of protection.
performance and offers a cost-effective way to Brand Strength Index + Transfer pricing
gaining a better understanding of your position + Licensing/ franchising negotiation + Highlight unprotected marks
against competitors. A breakdown of how the brand performed on + International licensing + Spot potential infringement
various metrics of brand strength, benchmarked + Competitor benchmarking + Trademark registration strategy
A full report includes the following sections against competitor brands in a balanced
which can also be purchased individually. scorecard framework. For more information regarding our Brand Value
Cost of Capital Reports, please contact:
+ Brand strength tracking
Brand Valuation Summary + Brand strength analysis A breakdown of the cost of capital calculation, Alex Haigh
+ Management KPI’s including risk free rates, brand debt risk Director of League Tables, Brand Finance
Overview of the brand valuation including + Competitor benchmarking premiums and the cost of equity through CAPM.
executive summary, explanation of changes in a.haigh@brandfinance.com
brand value and historic and peer group + Independent view of cost of capital for internal
comparisons. valuations and project appraisal exercises +44 (0)20 7389 9400

14. Brand Finance Denmark 50 May 2017 Brand Finance Denmark 50 May 2017 15.
How we can help Contact details
1. Valuation: What are my intangible assets
worth?
2. Analytics: How can I improve marketing
effectiveness?
Contact us Our offices
Valuations may be conducted for technical purposes Analytical services help to uncover drivers of demand For brand value report
and to set a baseline against which potential strategic and insights. Identifying the factors which drive
enquiries, please contact:
brand scenarios can be evaluated. 2. A consumer behaviour allow an understanding
IO N Alex Haigh
NA of how brands create bottom-line impact.
AT Director of League Tables

LY
AL Brand Finance

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1. V
a.haigh@brandfinance.com

• Branded Business Valuation
• Intangible Asset Valuation
ICS
• Trademark Valuation • Market Research Analytics • Brand Audits
• Brand Contribution
Brand & • Brand Scorecard Tracking • Return on Marketing Investment
For media enquiries,
Business Value
ION

4. Transactions: Is it a good 3. Strategy: How can I increase please contact:

deal? Can I leverage my the value of my branded business? Robert Haigh

3. S
T

intangible assets? Marketing & Communications

AC

Strategic marketing services enable brands

TR
Director Brand Finance
S

to be leveraged to grow businesses. Scenario

Transaction services help buyers, sellers and
AN
owners of branded businesses get a better deal
by leveraging the value of their intangibles.
• M&A Due Diligence • Franchising & Licensing
• Tax & Transfer Pricing • Expert Witness
MARKETING FINANCE
We help marketers to connect We provide financiers and
their brands to business auditors with an independent
performance by evaluating the assessment on all forms of
return on investment (ROI) of brand and intangible asset
brand based decisions and valuations.
strategies.
+ Branded Business Valuation + Branded Business Valuation
+ Brand Contribution + Brand Contribution
+ Trademark Valuation + Trademark Valuation
+ Intangible Asset Valuation + Intangible Asset Valuation
+ Brand Audit + Brand Audit
+ Market Research Analytics + Market Research Analytics
+ Brand Scorecard Tracking + Brand Scorecard Tracking
+ Return on Marketing + Return on Marketing
Investment Investment
+ Brand Transition + Brand Transition
+ Brand Governance + Brand Governance
+ Brand Architecture & + Brand Architecture &
Portfolio Management Portfolio Management
+ Brand Positioning & + Brand Positioning &
Extension Extension
+ Franchising & Licensing + Mergers, Acquisitions and
Finance Raising Due
Diligence
+ Franchising & Licensing
+ Tax & Transfer Pricing
+ Expert Witness
AT
EG
modelling will identify the best opportunities,
4.TR Y
ensuring resources are allocated to those activities
which have the most impact on brand and business value.
• Brand Governance
• Brand Transition
TAX
We help brand owners and
fiscal authorities to understand
the implications of different
tax, transfer pricing and brand
ownership arrangements.
+ Branded Business Valuation
+ Brand Contribution
+ Trademark Valuation
+ Intangible Asset Valuation
+ Brand Audit
+ Market Research Analytics
+ Franchising & Licensing
+ Tax & Transfer Pricing
+ Expert Witness
• Brand Architecture & Portfolio Management
• Brand Positioning & Extension
LEGAL
We help clients to enforce and
exploit their intellectual
property rights by providing
independent expert advice in-
and outside of the courtroom.
+ Branded Business Valuation
+ Brand Contribution
+ Trademark Valuation
+ Intangible Asset Valuation
+ Brand Audit
+ Tax & Transfer Pricing
+ Expert Witness
r.haigh@brandfinance.com
For all other enquiries,
please contact:
enquiries@brandfinance.com
+44 (0)207 389 9400
linkedin.com/company/
brand-finance
facebook.com/brandfinance
twitter.com/brandfinance
Disclaimer
Brand Finance has produced this study
with an independent and unbiased
analysis. The values derived and
opinions produced in this study are
based only 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 report are not to be
construed as providing investment or
business advice. Brand Finance does
not intend the report to be relied upon
for any reason and excludes all liability
to any body, government or
organisation.
For further information on Brand Finance®’s services and valuation experience, please contact
your local representative:
Country Contact Email address
Australia Mark Crowe m.crowe@brandfinance.com
Brazil Pedro Tavares p.tavares@brandfinance.com
Canada Bill Ratcliffe b.ratcliffe@brandfinance.com
China Minnie Fu m.fu@brandfinance.com
Caribbean Nigel Cooper n.cooper@brandfinance.com
East Africa Jawad Jaffer j.jaffer@brandfinance.com
France Victoire Ruault v.ruault@brandfinance.com
Germany Dr. Holger Mühlbauer h.mühlbauer@brandfinance.com
Greece Ioannis Lionis i.lionis@brandfinance.com
Holland Marc Cloosterman m.cloosterman@brandfinance.com
India Ajimon Francis a.francis@brandfinance.com
Indonesia Jimmy Halim j.halim@brandfinance.com
Italy Massimo Pizzo m.pizzo@brandfinance.com
Malaysia Samir Dixit s.dixit@brandfinance.com
Mexico Laurence Newell l.newell@brandfinance.com
LatAm (exc. Brazil) Laurence Newell l.newell@brandfinance.com
Middle East Andrew Campbell a.campbell@brandfinance.com
Nigeria Babatunde Odumeru t.odumera@brandfinance.com
Portugal Pedro Tavares p.taveres@brandfinance.com
Russia Alexander Eremenko a.eremenko@brandfinance.com
Scandinavia Alexander Todoran a.todoran@brandfinance.com
Singapore Samir Dixit s.dixit@brandfinance.com
South Africa Jeremy Sampson j.sampson@brandfinance.com
Spain Lorena Jorge ramirez l.jorgeramirez@brandfinance.com
Sri Lanka Ruchi Gunewardene r.gunewardene@brandfinance.com
Switzerland Victoire Ruault v.ruault@brandfinance.com
Turkey Muhterem Ilgüner m.ilguner@brandfinance.com
UK Alex Haigh a.haigh@brandfinance.com
USA Ken Runkel k.runkel@brandfinance.com
Vietnam Lai Tien Manh m.lai@brandfinance.com

16. Brand Finance Denmark 50 May 2017 Brand Finance Denmark 50 May 2017 17.
Contact us.
The World’s Leading Independent Branded Business Valuation and Strategy Consultancy
T: +44 (0)20 7389 9400
E: enquiries@brandfinance.com
www.brandfinance.com

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