The Top 50 most valuable brands are worth almost R300 billion, a substantial share of the 400-plus listed companies on the R9 trillion combined JSE market cap. The report provides a measurable, independent account of how well South Africa is doing in building its identity as a winning and growing nation.
Miller Matola, CEO Brand South Africa, says, "The survey sets the benchmark not just for the top 50, but is a baseline for the rest of the brands and serves to guide their growth and development. It locates corporate South Africa and entrepreneurs as central to the reputation and competitiveness of Brand South Africa."
"The survey shows the combined value of South Africa's 50 Most Valuable Brands has increased +8% from 2012 to R292 billion. Whilst the technology sector currently produces the most valuable brands globally (Google, Samsung, Apple), South Africa's most valuable sectors are telecoms and banking. It's a confirmation that connectivity remains a priority on the African continent," says Thebe Ikalafeng, chairman of Brand Finance Africa and founder of Brand Africa and Brand Leadership Group.
Financial accounting and reporting standards require a clear definition of what intellectual property is included in the definition of 'brand'. The company defines brand as the "trademark and associated intellectual property including the word mark and trademark iconography."
The brand value is calculated 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 Royalty Relief approach is used for three reasons: it is favoured by tax authorities and the courts because it calculates brand values by reference to documented third-party transactions; it is based on publicly available financial information; and it is compliant with the requirement under the International Valuation Standards Authority to determine the fair market value of brands.
The Brand Ratings are derived from the Brand Strength Index, which benchmarks the strength, risk and potential of a brand relative to its competitors on a scale ranging from D to AAA. It is conceptually similar to a credit rating.
For the second consecutive year, MTN has emerged as South Africa's most valuable brand.
"MTN is pleased with this honour. We owe the success and growth of our brand to the continued loyalty of our customers, the attractiveness of our innovative products and services and our responsiveness to the needs of our communities. In the past 19 years, our customers have worked with us to build up the MTN brand from a South African brand to one that resonates with nearly 200 million customers in 22 countries today," says Jennifer Forrester, executive for MTN group marketing.
According to the Brand Finance report, at R43bn, the AAA-rated MTN brand is more than twice as valuable as its closest South African competitor is.
The report states that, with a solid financial performance in 2012, its position as most valuable South African brand is safe from any real threat. "The brand seems perfectly poised to go from strength to strength as its footprint increases year-on-year over the continent and into the Middle East."
