Billabong is Australia’s hardest working brand

Global surfwear giant Billabong has beaten the likes of Coca-Cola Amatil and Lion Nathan in a new ranking of corporate Australia’s most valuable brands as a share of total enterprise value.

With a brand worth just over $1.6 billion, 41% of the company’s value, Billabong works its brand harder than any other company in the nation, according to research by analyst and adviser firm Brand Finance.

That puts it ahead of Coca-Cola in terms of brand worth, with $3.4 billion worth of brands that make up 39.7% of enterprise value, alcoholic beverage maker Lion Nathan which derives 34% of its total value from brands worth over $2 billion, and Foster’s Groups’ 27.1% share of value from brands worth $4.2 billion.

In terms of absolute value, however, National Australia Bank leads the pack – according to Brand Finance, NAB’s brand is worth $6.4 billion, ahead of Woolworths on just over $6 billion and Telstra on $4.9 billion.

The big share of enterprise value Billabong derives from its brand largely reflects its place in the highly competitive and very brand-conscious global fashion industry, Brand Finance Australia managing director Tim Heberden says.

“If you look at the apparel business, brand and design are so fundamental as drivers of value so that means just to be a player there they have to do branding very well, but that doesn’t always mean they are doing better than a Caltex or other company in a less brand-focused area,” Heberden says.

The performance of the likes of Billabong contrasts with that of more domestically focused businesses. For example, Woolworths’ and Coles’ brands are each worth about 17% of their respective enterprise values, well behind the 27% value achieved by British grocery giant Tesco.

“In some instances it might be Australian businesses haven’t had to rely on brands as much as others because there is less competition; it also could be they just aren’t as savvy at managing brands as the best in the class – it’s not that there aren’t some fantastic brands in Australia, but they could be worked a little harder,” Heberden says.

Brand Finance assesses brand value by using a mix of objective measures, such as the royalties businesses pay to buy licences to use brands in different market sectors, and their own analysis of the value of performance of particular brands. Heberden says brand valuation has become a part of the corporate mainstream in recent years, and not only for the big end of town.

“Where smaller companies are being bought or sold or raising extra capital, especially where they are not tangible asset rich, they really need to illustrate the value of their brands in an objective way and it can be very beneficial in that process,” he says.

Rank	Company	Brand value $ million	Brand rating
1	NAB	6,423	A
2	Woolworths Limited	6,056	A+
3	Telstra	4,889	A+
4	Commonwealth Bank	4,578	A+
5	Foster’s Group	4,240	AA-
6	ANZ Bank	3,746	A+
7	Coca-Cola Amatil	3,432	AA
8	Westbac Bank	3,399	A
9	Coles Group	3,078	A-
10	St George Bank	2,255	AA-
11	Macquarie Bank	2,214	AA-
12	Lion Nathan	2,021	AA-
13	Qantas Airways	1,870	A+
14	Tabcorp Hldngs	1,797	A
15	Suncorp-Metway	1,658	A
16	Billabong	1,619	AA-
17	QBE Insurance	1,437	A-
18	Fairfax Media	1,236	A+
19	Westfield Group	1,137	AA-
20	Leighton Hldgs	1,132	BBB

Rank	Company	Brand value enterprise value	Brand value $ million
1	Billabong	41%	1,619
2	Coca-Cola Amatil	40%	3,432
3	Lion Nathan	34%	2,021
4	Foster’s Group	27%	4,240
5	Seven Network	27%	701
6	David Jones	23%	698
7	Ten Network	18%	515
8	Woolworths Ltd	17%	6,056
9	Coles Group	17%	3,078
10	Tattersall’s	16%	1,040
11	Goodman Fielder	16%	690
12	Tabcorp Hldngs	16%	1,797
13	Caltex Aust	15%	899
14	Qantas Airways	15%	1,870
15	Harvey Norman	14%	852
16	St George Bank	14%	2,255
17	Fairfax Media	13%	1,236
18	Macquarie Bank	13%	2,214
19	NAB	11%	6,423
20	Virgin Blue Hldg	11%	326