The Top 50 Brand Portfolios in the GCC

Brand Finance ® GCC Brands

Coverage of the GCC top 50 brand port folios in Gulf Market ing Review GCC Brand Port folios 50

38 Gulf Marketing Review October 2011

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October 2011 Gulf Marketing Review 39

GMR Exclusive: Working with Brand Finance ME we reveal the winners and losers in 2011’s Top 50 Corporate GCC Brands survey.

ThE only Way is up...

Brand Finance is an independent brand valuation consultancy which publishes an annual study of the top 50 portfolio brands in the GCC.

In this feature we look at how the brands performed this year compared to 2010 and how they stack as an indicator of short- to medium-term growth potential.

The region is largely dominated by family-owned and government-controlled enterprises. Most brands are domiciled in the UAE and Saudi Arabia. Unsurprisingly Bahrain and Oman feature less.

Brand selection was restricted by lack of financial information, which is gener-ally only available for publicly quoted companies. Because of this some strong Gulf brands don’t appear as they are pri-vately held or reliable financial data is unavailable.

As was the case in 2010, banking and telecos continue to dominate, while prop-erty declined dramatically. Telecos and, to a certain extent, banks have recovered from the crisis in much better shape and faster than other sectors.

Since the start of the global financial recovery, many regional brands have in-creased their brand value (BV) through strategies such as international expansion, disposals, focusing on core competencies and brand repositioning.

According to David Haigh, Brand Fi-nance’s global CEO, consumer-orientated brands were the most buoyant.

The top 50This year’s top 50 GCC BV of $37.9bn is up seven per cent from 2010’s $35.9bn.

The Brand Value Enterprise Value (BV/EV) ratio measures how ‘hard’ the brand is working, ie how much value the brand adds to the EV.

This year seven per cent of the total GCC Enterprise Value comprises BV, which is consistent with the result in 2010 (seven per cent).

Brand portfoliosThe UAE and Saudi Arabian brands continue to dominate with about 70 per cent of the BV.

Brands portfolio

Winners Change in BV(Us$ millions)

Etisalat 783 Qtel 584 al rajhi Bank 582 Mobily 448 samba financial Group 317 national Bank of abu dhabi 307 Emirates nBd 295 riyad Bank 290 first Gulf Bank 234 stC 222

losers Change in BV(Us$ millions)

saudi Electricity Co. -806 Zain -596 Kuwait finance House -422 petro rabigh -351 americana -341 taQa -236 dp World -91 agility -69 Emaar properties -57 Emirates integrated telco -48

Source: Brand Finance plc 2011



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top 50 ME Brands (Us$ Millions) – Brand splits

ranking 2011 ranking 2010 Brand sector domicile Brand Value 2011 Brand rating 2011 Enterprise Value Brand Value / Enterprise Value (%) Brand Value 2010 Enterprise Value

2010*Brand Value / Enter-prise Value 2010 (%)

Brand rating 2010

1 1 Emirates airlines UaE 3,622 aaa- - n/a 3,518 12,131 29% aaa-2 3 Etisalat Cellular telecom UaE 3,390 aa- 22,740 15% 2,607 19,951 13% aa3 5 Qtel telephone-integrated Qatar 2,949 aa 18,067 16% 2,366 4,265 14% aa+4 4 stC telecom services saudi arabia 2,616 a+ 29,151 9% 2,393 32,607 7% a+5 2 Zain Cellular telecom Kuwait 2,293 aa- 20,193 11% 2,889 24,170 12% aa-6 11 al rajhi Bank Commer Banks non-Us saudi arabia 1,504 aa+ 30,919 5% 922 30,899 3% aa7 9 Mobily telecom services saudi arabia 1,423 a+ 12,215 6% 976 10,049 10% a8 10 Emirates nBd regional Banks-non Us UaE 1,238 aa 4,464 28% 943 6,734 14% aa-9 12 national Bank of abu dhabi Commer Banks non-Us UaE 1,142 aa 7,651 15% 835 8,228 10% aa10 8 dp World Whsing&Harbor trans serv UaE 942 a+ 14,394 7% 1,033 13,004 8% aa-11 25 samba financial Group Commer Banks non-Us saudi arabia 792 aa- 15,140 5% 475 13,380 4% a12 17 sabic Chemicals-diversified saudi arabia 791 aa 99,482 1% 639 90,871 1% aa13 27 riyad Bank Commer Banks non-Us saudi arabia 751 aa- 11,290 7% 461 11,720 4% a+14 24 first Gulf Bank Commer Banks non-Us UaE 750 aa+ 5,615 13% 517 7,319 7% aa15 14 nBK Commer Banks non-Us Kuwait 743 aa+ 17,804 4% 685 12,910 5% aa16 18 almarai Co. ltd food-dairy products saudi arabia 738 aa- 7,617 10% 621 6,095 10% aa-17 20 QnB Commer Banks non-Us Qatar 703 aa+ 16,786 4% 545 13,165 4% aa18 6 saudi Electricity Co. Electric-integrated saudi arabia 650 a 31,488 2% 1,457 24,211 6% a+19 n/a industries Qatar Chemicals Qatar 629 a 17,093 2% – – – –20 30 adCB Commer Banks non-Us UaE 584 aa- 3,091 19% 394 2,750 14% a+21 19 du telephone-integrated UaE 599 a- 3,681 7% 572 3,738 15% a22 29 Banque saudi fransi Commer Banks non-Us saudi arabia 507 aa- 9,387 5% 334 8,755 4% a+23 29 saBB Commer Banks non-Us saudi arabia 476 aa- 9,276 5% 400 10,550 4% a+24 22 agility logistics Kuwait 462 a 1,988 23% 531 2,267 23% a+25 31 arab national Bank Commer Banks non-Us saudi arabia 457 aa- 7,140 6% 356 8,233 4% a+26 15 taQa Electric-Generation UaE 449 a- 18,453 2% 685 18,469 4% aa-27 33 Mashreq Commer Banks non-Us UaE 425 aa- n/a n/a 330 3,968 8% a+28 26 Emaar properties pjsc real Estate oper/develop UaE 411 aa- 6,352 6% 468 6,401 7% aa29 40 QiB Commer Banks non-Us Qatar 368 aa- 4,909 7% 241 4,753 5% a+30 34 ahli United Bank Commer Banks non-Us Bahrain 366 aa 4,145 9% 323 2,903 11% aa31 35 dubai islamic Bank Commer Banks non-Us UaE 350 aa- 2,389 15% 315 3,083 10% aa-32 49 Commercial Bank Commer Banks non-Us Qatar 342 aa- 5,305 6% 177 4,430 4% a33 36 Jarir Bookstore retail-office supplies saudi arabia 330 aa- 1,751 19% 300 1,452 21% a+34 13 Kuwait finance House Commer Banks non-Us Kuwait 326 a+ 10,743 3% 748 10,172 7% a+35 16 americana food-Misc/diversified Kuwait 324 a+ 2,753 23% 665 2,470 27% a-36 37 omantel telecom services oman 323 a 2,412 15% 285 2,586 11% a+37 38 dar al arkan real Estate oper/develop saudi arabia 311 a+ 2,808 11% 277 4,046 7% a+38 41 adiB Commer Banks non-Us UaE 305 a 1,874 16% 222 1,701 13% a39 43 Bank Muscat Commer Banks non-Us oman 300 aa 3,007 10% 202 2,566 8% a+40 39 Batelco telecom services Bahrain 292 a 1,990 15% 246 2,245 11% a-41 47 Woqod oil refining & Marketing Qatar 256 a+ 1,268 20% 181 908 20% aa-42 – raKBanK Commer Banks non-Us UaE 245 aa 1,352 18% 132 1,179 11% a+43 – doha Bank Commer Banks non-Us Qatar 224 a+ 2,826 8% 169 2,424 7% a44 – arab Banking Corporation Commer Banks non-Us Bahrain 220 aa- 1,555 14% 159 1,380 12% a+45 50 dubai investments Venture Capital UaE 216 a- 947 23% 174 972 18% a-46 – Union national Bankk Commer Banks non-Us UaE 209 aa- 2,193 10% 144 2,196 7% a+47 45 Burgan Bank Commer Banks non-Us Kuwait 203 aa 2,354 9% 186 1,440 13% a+48 – saudi Hollandi Bank Commer Banks non-Us saudi arabia 196 a 2,938 7% 147 2,999 5% a49 21 petro rabigh Chemicals saudi arabia 189 a+ 12,331 2% 539 15,787 3% a50 n/a air arabia airlines UaE 175 a 598 29% – – – –

wSource: Brand Finance plc 2011



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ranking 2011 ranking 2010 Brand sector domicile Brand Value 2011 Brand rating 2011 Enterprise Value Brand Value / Enterprise Value (%) Brand Value 2010 Enterprise Value

2010*Brand Value / Enter-prise Value 2010 (%)

Brand rating 2010

1 1 Emirates airlines UaE 3,622 aaa- - n/a 3,518 12,131 29% aaa-2 3 Etisalat Cellular telecom UaE 3,390 aa- 22,740 15% 2,607 19,951 13% aa3 5 Qtel telephone-integrated Qatar 2,949 aa 18,067 16% 2,366 4,265 14% aa+4 4 stC telecom services saudi arabia 2,616 a+ 29,151 9% 2,393 32,607 7% a+5 2 Zain Cellular telecom Kuwait 2,293 aa- 20,193 11% 2,889 24,170 12% aa-6 11 al rajhi Bank Commer Banks non-Us saudi arabia 1,504 aa+ 30,919 5% 922 30,899 3% aa7 9 Mobily telecom services saudi arabia 1,423 a+ 12,215 6% 976 10,049 10% a8 10 Emirates nBd regional Banks-non Us UaE 1,238 aa 4,464 28% 943 6,734 14% aa-9 12 national Bank of abu dhabi Commer Banks non-Us UaE 1,142 aa 7,651 15% 835 8,228 10% aa10 8 dp World Whsing&Harbor trans serv UaE 942 a+ 14,394 7% 1,033 13,004 8% aa-11 25 samba financial Group Commer Banks non-Us saudi arabia 792 aa- 15,140 5% 475 13,380 4% a12 17 sabic Chemicals-diversified saudi arabia 791 aa 99,482 1% 639 90,871 1% aa13 27 riyad Bank Commer Banks non-Us saudi arabia 751 aa- 11,290 7% 461 11,720 4% a+14 24 first Gulf Bank Commer Banks non-Us UaE 750 aa+ 5,615 13% 517 7,319 7% aa15 14 nBK Commer Banks non-Us Kuwait 743 aa+ 17,804 4% 685 12,910 5% aa16 18 almarai Co. ltd food-dairy products saudi arabia 738 aa- 7,617 10% 621 6,095 10% aa-17 20 QnB Commer Banks non-Us Qatar 703 aa+ 16,786 4% 545 13,165 4% aa18 6 saudi Electricity Co. Electric-integrated saudi arabia 650 a 31,488 2% 1,457 24,211 6% a+19 n/a industries Qatar Chemicals Qatar 629 a 17,093 2% – – – –20 30 adCB Commer Banks non-Us UaE 584 aa- 3,091 19% 394 2,750 14% a+21 19 du telephone-integrated UaE 599 a- 3,681 7% 572 3,738 15% a22 29 Banque saudi fransi Commer Banks non-Us saudi arabia 507 aa- 9,387 5% 334 8,755 4% a+23 29 saBB Commer Banks non-Us saudi arabia 476 aa- 9,276 5% 400 10,550 4% a+24 22 agility logistics Kuwait 462 a 1,988 23% 531 2,267 23% a+25 31 arab national Bank Commer Banks non-Us saudi arabia 457 aa- 7,140 6% 356 8,233 4% a+26 15 taQa Electric-Generation UaE 449 a- 18,453 2% 685 18,469 4% aa-27 33 Mashreq Commer Banks non-Us UaE 425 aa- n/a n/a 330 3,968 8% a+28 26 Emaar properties pjsc real Estate oper/develop UaE 411 aa- 6,352 6% 468 6,401 7% aa29 40 QiB Commer Banks non-Us Qatar 368 aa- 4,909 7% 241 4,753 5% a+30 34 ahli United Bank Commer Banks non-Us Bahrain 366 aa 4,145 9% 323 2,903 11% aa31 35 dubai islamic Bank Commer Banks non-Us UaE 350 aa- 2,389 15% 315 3,083 10% aa-32 49 Commercial Bank Commer Banks non-Us Qatar 342 aa- 5,305 6% 177 4,430 4% a33 36 Jarir Bookstore retail-office supplies saudi arabia 330 aa- 1,751 19% 300 1,452 21% a+34 13 Kuwait finance House Commer Banks non-Us Kuwait 326 a+ 10,743 3% 748 10,172 7% a+35 16 americana food-Misc/diversified Kuwait 324 a+ 2,753 23% 665 2,470 27% a-36 37 omantel telecom services oman 323 a 2,412 15% 285 2,586 11% a+37 38 dar al arkan real Estate oper/develop saudi arabia 311 a+ 2,808 11% 277 4,046 7% a+38 41 adiB Commer Banks non-Us UaE 305 a 1,874 16% 222 1,701 13% a39 43 Bank Muscat Commer Banks non-Us oman 300 aa 3,007 10% 202 2,566 8% a+40 39 Batelco telecom services Bahrain 292 a 1,990 15% 246 2,245 11% a-41 47 Woqod oil refining & Marketing Qatar 256 a+ 1,268 20% 181 908 20% aa-42 – raKBanK Commer Banks non-Us UaE 245 aa 1,352 18% 132 1,179 11% a+43 – doha Bank Commer Banks non-Us Qatar 224 a+ 2,826 8% 169 2,424 7% a44 – arab Banking Corporation Commer Banks non-Us Bahrain 220 aa- 1,555 14% 159 1,380 12% a+45 50 dubai investments Venture Capital UaE 216 a- 947 23% 174 972 18% a-46 – Union national Bankk Commer Banks non-Us UaE 209 aa- 2,193 10% 144 2,196 7% a+47 45 Burgan Bank Commer Banks non-Us Kuwait 203 aa 2,354 9% 186 1,440 13% a+48 – saudi Hollandi Bank Commer Banks non-Us saudi arabia 196 a 2,938 7% 147 2,999 5% a49 21 petro rabigh Chemicals saudi arabia 189 a+ 12,331 2% 539 15,787 3% a50 n/a air arabia airlines UaE 175 a 598 29% – – – –

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$57m

Qtel

Mobily

$260mEmirates’ global advertising budget for 2010

Amount Emaar lost in Brand Value in 2010

The third most valuable GCC brand with a BV of $2.95bn

Smartphone and tablet PC usage contributes 20 per cent to total revenue



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COVER STORY

Top brand porTfolios by counTry

brand sector bV 2011 br 2011 EV bV / EV 2011 (%) bV 2010 EV 2010 bV/EV

2010 (%) br 2010

bahRainahli united bank banks 366 aa 4,145 9% 323 2,903 11% aabatelco Telecoms services 292 a 1,988 15% 246 2,245 11% a-arab banking corp banks 220 aa- 1,555 14% 159 1,380 12% a+KuwaiTZain cellular Telecoms 2,293 aa- 20,193 11% 2,889 24,170 12% aa-nbK banks 743 aa+ 16,558 4% 685 12,910 5% aaagility logistics 462 a 1,988 23% 531 2,267 23% a+Kuwait finance House banks 326 a+ 10,743 3% 748 10,172 7% a+americana food 324 a+ 1,393 23% 665 2,470 27% a-burgan bank banks 203 aa 2,354 9% 186 1,440 13% a+uaEEmirates airlines 3,622 aaa- n/a n/a 3,518 12,131 29% aaa-Etisalat cellular Telecoms 3,390 aa- 22,740 15% 2,607 19,951 13% aaEmirates nbd banks 1,238 aa 4,464 28% 943 6,734 14% aa-national bank of abu dhabi banks 1,142 aa 7,651 15% 835 8,228 10% aadp World commercial services 942 a+ 14,394 7% 1,033 13,004 8% aa-first Gulf bank banks 750 aa+ 5,615 13% 517 7,319 7% aaadcb banks 584 aa- 3,091 19% 394 2,750 14% a+du Telecoms services 524 a- 7,271 7% 572 3,738 15% aTaQa Electric 449 a- 18,453 2% 685 18,469 4% aa-Mashreq banks 425 aa- n/a n/a 330 3,968 8% a+Emaar properties real Estate 411 aa- 6,352 6% 468 6,401 7% aadubai islamic bank banks 350 aa- 2,389 15% 315 3,083 10% aa-adib banks 305 a 1,874 16% 222 1,701 13% araKbanK banks 245 aa 1,352 18% 132 1,179 11% a+dubai investments Venture capital 216 a- 947 23% 174 972 18% a-union national bank banks 209 aa- 2,193 10% 144 2,196 7% a+

Only two property brands remain: Emaar and Dar Al Arkan.

Emaar lost $57m in BV to $411m in 2010 and has a lower brand rating of AA-. It fared better than other property companies. However its hotels, in line with Dubai tourism, performed much better than ex-pected. It expanded internationally, which now accounts for more than 10 per cent of revenues. International expansion is forecast to compensate for declining revenue in Dubai. Dar Al Arkan increased its BV to $34m and moves up one slot to 37.

Telecos Telecos are operating in a region reaching maturity with projected CAGR of six per

cent, compared to 2010 and 2015, and to a historical CAGR of 28 per cent from 2005 to 2010.

Domestic operations remain impor-tant as they account for the bulk of rev-enues, forcing telecos to adopt a number of strategies.

Etisalat and STC are pursuing brand expansion; Zain is focusing on key markets and improving brand loyalty, while Qtel is consolidating its brand portfolio.

The common aim among telecos is the pursuit of next-generation networks and services. Middle Eastern countries could surpass European countries in adopting LTE led by Saudi Arabia, the UAE and Bah-rain. Consequently, broadband has become

the battleground for brand growth. This is driven by the expanding data market, underpinned by the fast-growing global handset and media device segment.

bankingThe sector is recovering due to improved economic growth driven by high oil prices and various government initiatives.

Some banks are performing better depending on the country in which they operate.

Qatar, for example, is witnessing runa-way growth driven by higher economic growth, sky-high public spending and lower systemic risks. Overall, banking brands have performed well with an in-crease in brand value of $3.4bn.

Top brand analysisEmirates is the most valuable GCC brand for the fifth consecutive year, with an

The two remaining real estate brands in the top 50 are Emaar and Dar Al Arkan.

Source: Brand Finance plc 2011. Reference: BV = Brand Value; BR = Brand Rating; EV = Enterprise Value

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estimated BV of $3.62bn, a three per cent increase.

This is driven by a 25 per cent growth in passenger revenues and important strides in the long haul passenger market.

Secondly, the focus on brand building and ability to match forecasted demand with a continuous investment in onboard service made a significant contribution. The brand rating has remained at AAA-, while maintaining its position as the only airline in the top 50.

Emirates has one of the young-est fleets so it is not burdened with high maintenance or replacement costs, while its perception as a dynamic carrier attracts business and first-class passengers, from which it makes most of its profit.

Its massive order book for the next 10 years of Airbus A380s and 190 aircraft means it is projected to record double-digit

passenger growth, leaving competitors such as British Airlines and Singapore Airlines trailing in its wake.

Continued investment in quality for both premium and standard level customers has built brand loyalty across the board.

With tourism recovering in Dubai, the brand links with Emirates should help it achieve its short-term growth targets. It has taken advantage of its perception as an Asian airline and capitalised on the reputation of carriers such as Singapore Airlines and Cathay Pacific for excellent customer service.

In addition to having an open skies policy, it operates wide-body aircraft and flies mostly long haul, which lowers its per-seat-mile costs.

Last year it awarded its $260m global advertising budget to Amsterdam-based Strawberry Frog, which is currently roll-

ing out a new brand platform across 80 markets as the national airline for Du-bai. Ultimately it aims to be one of the world’s most recognised global names, increasing its marketing focus on DM, digital and event marketing.

Emirates also spends substantial amounts on sports marketing, includ-ing sponsorships.

One of its biggest challenges is open-ing enough routes quickly enough to ensure the new airplanes are used ef-ficiently. There is also a risk of spreading its resources too thin and encountering a quality-based challenge.

etisalatEtisalat is the second most valuable brand with a BV of $3.4bn. It is heavily dependent on its home market as the UAE contributes 78 per cent to revenues. In addition the UAE is highly saturated and penetration

top Brand portfolios By CoUntry

Brand sector BV 2011 Br 2011 EV BV / EV 2011 (%) BV 2010 EV 2010 BV/EV

2010 (%) Br 2010

OManomantel telecoms services 323 a 2,171 15% 285 2,586 11% a+BankMuscat telecoms services 300 aa 3,007 10% 202 2,566 8% a+QaTarQtel Cellular telecoms 2,949 aa 18,067 16% 2,366 4,265 14% aa+QnB Banks 703 aa+ 16,786 4% 545 13,165 4% aaindustries Qatar Chemicals 629 a 34,182 2% – – – –QiB Banks 368 aa- 4,909 7% 241 4,753 5% a+Commercialbank Banks 342 aa- 5,305 6% 177 4,430 4% aWoqod oil&Gas 256 a+ 1,268 20% 181 908 20% aa-doha Bank Banks 224 a+ 2,826 8% 169 2,424 7% aSaudi araBiastC telecoms services 2,616 a+ 29,151 9% 2,393 32,607 7% a+al rajhi Bank Banks 1,504 aa+ 30,919 5% 922 30,899 3% aaMobily Cellular telecoms 1,423 a+ 24,429 6% 976 10,049 10% asamba financial Group Banks 792 aa- 15,140 5% 475 13,380 4% asabic Chemicals 791 aa 99,482 1% 639 90,871 1% aariyad Bank Banks 751 aa- 11,290 7% 461 11,720 4% a+almarai food 738 aa- 7,312 10% 621 6,095 10% aa-saudi Electricity Co. Electric 650 a 31,488 2% 1,457 24,211 6% a+Banque saudi fransi Banks 507 aa- 9,387 5% 334 8,755 4% a+saBB Banks 476 aa- 9,276 5% 400 10,550 4% a+arab national Bank Banks 457 aa- 7,140 6% 356 8,233 4% a+Jarir Bookstore retail 330 aa- 1,751 19% 300 1,452 21% a+dar al arkan real Estate 311 a+ 2,808 11% 277 4,046 7% a+saudi Hollandi Bank Banks 196 a 2,938 7% 147 2,999 5% apetro rabigh Chemicals 189 a+ 12,331 2% 539 15,787 3% a

Source: Brand Finance plc 2011. Reference: BV = Brand Value; BR = Brand Rating; EV = Enterprise Value



levels are the highest in the region at 140 per cent.

Increased competition from du meant decreasing market share and increasing pressure on profit margins.

In spite of this BV has increased by $700m. There has been a shift towards value creation and profitability, infrastructure-sharing, outsourcing, and shared services within the company. With a brand rating of AA- Etisalat has stretched its product offering to innovative new packages and services, such as bundled triple play services, 3D TV and a new fibre-to-the-home network.

Its international market expansion bodes well, accounting for 23 per cent of revenues. A successful rebranding of its Sri Lankan operation was followed by useful results from its Afghanistan operation and it has so far been able to distance itself from the 2G Indian Telecoms scandal that could still threaten its operations in the country.

emirates nBdEmirates NBD is the eighth most valu-able GCC brand overall and the third

most valuable in the UAE, with a BV of $1.24bn.

The bank unveiled its new brand identity in 2009 following the merger of Emirates Bank and NBD in 2007.

Rebranding has meant increased cost efficiencies of marketing a single brand.

The brand has also been leveraged to enable cross-selling along the range of services it now provides. It is one of the few Middle Eastern banks to focus on maintaining a consistent image while also having three distinctive levels of service in its branches. As a result the brand rating has improved to AA from AA- this year, as well as a year-on-year increase in BV of $295m.

Emirates NBD has benefited by associ-ating with Brand Dubai in a similar way to Emirates Airline. It is a sponsor of the Dubai Shopping Festival, for example. Since the rebrand it has maintained the strength of the name through 360-degree marketing reaching all stakeholders through consumer insights, product innovation, internal branding, brand activation, events and sponsorships, local area marketing, digital marketing and communications.

It has navigated the crisis better than its rivals and as markets begin to recover is poised to take advantage of improving economic fundamentals. Key factors driv-ing growth include the return of Asian business investment, better underlying financial performance through lending and credit growth, and sustained high oil and gas prices.

al rajhi BankAl Rajhi Bank is the sixth most valu-able brand in the GCC with a BV of $1.5bn. It updated its brand identity in 2005 and has since leveraged it to strike the right balance between increased com-petitiveness in the local market, while expanding internationally into some of the most active Islamic finance destinations of Malaysia, Kuwait and more recently Jordan. It won a 2010 award for the most outstanding Islamic Bank at the Kuala Lumpur Islamic Finance Forum and this is reflected by a brand Rating of AA+ and a year-on-year increase in its BV of $0.5bn.

STcSTC is the fourth most valuable brand with a BV of $2.6bn, a nine per cent in-crease from 2010. BV rose steadily from $2.1bn since it rebranded in 2008.

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...broadband is turning out to be the next battleground for brand growth.

winning streak: Saudi’s al rajhi Bank was named the most outstanding islamic Bank at the Kuala Lumpur islamic Finance Forum 2010

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It is one of the top advertisers in the GCC, with an estimated annual budget of $130m.

The rebrand was instrumental in re-positioning STC in the domestic market as a multi-play operator with a focus on the youth segment.

While mobile penetration is one of the highest in the region, the most important avenue for growth is broadband which has seen a CARG of almost 123 per cent since 2006.

STC operates fixed lines (next- generation network) as well as mobile communications. This enables it to provide triple-play services in addition to data services for data-hungry smart phones. It is also one of the few companies in the region to invest in a 4G LTE network.

It has retained its brand rating of A+, with potential for improvement in the near future. STC recently expanded into

countries such as Indonesia and Kuwait where revenues doubled year on year. Its presence in Indonesia holds a lot of promise as Indonesians are one of the larg-est set of expatriates – approximately one million – in Saudi Arabia, so it presents a great opportunity to build brand loyalty in a market that is set to become one of the five largest by 2030.

MobilyMobily is the seventh most valuable brand in the GCC, with a BV of $1.4bn and a year-on-year increase of 46 per cent. It is one of the fastest-growing mobile opera-tors in the region and, since its launch in 2005, has been responsible for a number of firsts in Saudi Arabia, such as the Iphone 3G, Blackberry Internet Service, and a series of value-added services to attract new customers.

Its impressive performance has earned it a brand rating of A+.

Mobily’s smartphone and table PC us-age now contribute 20 per cent to total revenue, underscoring the importance of the mobile broadband (this segment has one of the highest margins in the industry) in the region. The provision of network coverage for the tablet market, which is still in its infancy in Saudi Arabia, is expected to produce dramatic growth.

As part of its growth strategy, Mobily has adopted GED (growth, efficiency, dif-ferentiation), to provide integrated teleco services built around fixed and mobile broadband technologies. Following LTE trials last year, it plans to roll out 4G services by the end of this month.

It is also expanding its online presence through social networking platforms, which should help improve its current A+ brand rating.

ZainZain is the fifth most valuable brand in the GCC with a BV of $2.3bn. It has fallen to fifth place primarily due to the sale of its African operations to Bharti Airtel. How-ever it has maintained its brand rating of AA-. This is because the change in its strat-egy to focus more on more profitable and distinct business in the Middle East is

C OVER STORY

Top scores: Mobily has become one of the fastest-growing brands in the region

...telecos and to a certain extent banks have recovered from the crisis in much better shape and faster than other sectors.

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widely seen as positive. Apart from the higher margin Middle East markets, it also operates in rapidly growing economies such as Iraq and Sudan. This means the brand is well balanced between value and growth.

QtelQtel is the third most valuable brand in the GCC with a brand value of $2.95bn.

The Qatari teleco sector has seen simi-lar trends to other GCC markets in that mobile penetration exceeds 100 per cent.

Competition has also meant eroding market share. In response Qtel carried out a brand refreshment in 2010 complemented by new service offerings. The latest tag line, “Fuel Your Senses,” is intended to engage customers in its entire range of entertainment and media services. This positioning is in line with its strategy to develop the lucrative broadband market.

To complement the refreshed brand iden-tity Qtel opened a network of new concept shops. Other enhancements include the launch of a next-day installation service, value-led promotions across the product range, and significant improvements to both the indoor and outdoor 3G network.

The new brand architecture should fa-cilitate better group synergies and leverage efficiencies. This will be key going forward as Qtel is now one of the most diversified telecos in the region, with several rapidly growing brands under its portfolio such as Wataniya, Nedjma, Nawras, Tunisiana, Indosat and Asicaell.

National Bank of Abu DhabiThe National Bank of Abu Dhabi is the ninth most valuable banking brand in the GCC with a BV of $1.1bn. It is one of the most internationally diversified banks in the UAE and is poised to increase as it expands in Malaysia to offer niche prod-ucts and services to the SME segment.

The National Bank of Abu Dhabi is consistently ranked as one of the safest banks in the world which has helped it retain its brand rating of AA.

It is also repositioning its brand to unify itself across all customer touchpoints. This

is possibly in response to the brand being perceived as conservative and protective – even in the boom times. The brand’s growth is bound to be tied to the performance of Abu Dhabi and its diversification of the economy away from oil. The extent of the emirate’s success in implementing this will affect the group’s vision of becoming the world’s best Arab bank.

DP WorldDP World is the 10th most valuable brand in the GCC with a BV of $942m and a few terminal operators. It grew at eight per cent in volume.

The brand is highly exposed to fast-growing, emerging markets and trade growth, with

65 per cent of volume flowing through the Middle East, India and Asia; this is projected to rise this year.

DP World’s brand rating is A+, which is set to improve next year on the back of its £1.5bn investment in the London Gateway Project and its listing on the London Stock Exchange. There is no comparable European-listed player with a focus on emerging markets’ container terminal operations.

Definitions

Definition of brand – Within brand finance literature, we refer to a brand as a trademark or associated intellectual Property (iP). A fuller description of a brand would be a collection of images/ideas representing a producer; such as a name, logo, slogan, and design conveying the essence of the company, product or service.

Brand Value Brand Value is considered to be the net present value of the estimated future cash flows at-tributable to the brand. Brand finance uses the Royalty Relief methodology to value a brand.Brand Value is also referred to as Brand equity.

A brand can be an intangible asset to rationalise the variation between a company’s “book value” and market value. for example, research conducted by Brand finance shows that 62 per cent of the world’s business is intangible. this represents $19.5trn of $31.6trn global market value.

Royalty Relief Royalty Relief is based on the notion that a brand holding company owns the brand and licenses it to an operating company. the notional price paid by the operating company to the brand company is expressed as a royalty rate. the net Present Value (nPV) of all forecast royalties represents the value of the brand to the business.

the attraction of this method is that it is based on commercial practice in the real world. it involves estimating likely future sales, applying an appropriate royalty rate to them and then discounting estimated future, post-tax royalties, to arrive at a nPV.

Enterprise ValueMarket capitalisation + preferred equity + minority interest + total debt (long term and short term) – cash and equivalents = enterprise Value

Headquartered in London, Brand finance plc is an independent intangible asset valuation consultancy, with offices in 22 countries including the UAe. the consultancy publishes an annual study of the top 50 portfolio brands in the GCC.

Gautam Sen GuptaManaging director Brand finance Me

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C OVER STORY

The continuing economic crisis has wiped $6.3trn off the global value of intangible assets, but are there brighter days ahead?

ConCreTe evidenCe

FuRThER paniC in world stock markets has caused a 25 per cent ($6.3trn) reduction in intangible asset values according to the Brand Finance Global Intangible Financial Tracker League Table (GIFT).

Despite the fall an update of the Brand Finance Global 100 brands shows that there has only been a 2.4 per cent drop in their combined value.

Financial brandsFinancial service brands have been hit hardest. Tougher legislation, sluggish activ-ity in the corporate market and ongoing fears regarding exposure to sovereign debt has meant banking and insurance brands suffered. Bank brands in the top 100 have lost $25.9bn from their total brand value

(seven per cent) since January. HSBC has become the world’s most valuable bank brand, keeping a steady position at 10. Bank of America experienced a brand value fall of $5.3bn, taking it down to 14.

Likewise Wells Fargo saw a 12 per cent reduction in brand value.

Santander also fell in the league table, with a reduction of $3.3bn. Insurance brands saw a drop of six per cent, with AXA fairing the worst with a loss of $1.6bn of brand value taking it out of the top 50.

Tech brandsThe crisis has not led to a blanket reduc-tion in brand value, however. Technology and electronics brands are prospering with Google, Apple and Microsoft taking the top

three slots. Apple has increased its value by 33 per cent, making it a more valuable brand than Microsoft for the first time.

Established economiesThe total brand value for the 46 US head-quartered brands declined by two per cent from January.

US brands dependent on their home market suffered bigger losses than global brands such as McDonald’s, Nike and Coca-Cola, which all improved their position.

Japanese brands dropped three per cent due to the tsunami disrupting business.

Europe also felt the pressure with Span-ish brands down 13 per cent and France five per cent. Both are exposed to issues within the financial services sector.

C OVER STORY



About the study

•TheBrandFinanceplc.GlobalIntan-gibleFinancialTrackerLeagueTable(GIFT)isa10-yearstudyoftheintan-gibleassetvaluesofallpublicstockexchangesworldwide

•GIFTisreleasedinJanuaryeachyear,butduetotheexceptionaleconomicconditionswasupdatedinAugust.

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Ranking2011

Ranking2010 Brand Domicile BrandValue

2011Brandrating

2011

1 1 Google UnitedStates 48,278 AAA+2 8 Apple UnitedStates 39,301 AAA3 2 Microsoft UnitedStates 39,005 AAA+4 4 IBM UnitedStates 35,981 AA+5 3 Wal-Mart UnitedStates 34,997 AA6 5 Vodafone Britain 30,740 AAA+7 7 GeneralElectric UnitedStates 29,060 AA+8 14 Toyota Japan 28,800 AA+9 10 At&t UnitedStates 28,354 AA+10 11 hsbC Britain 27,100 AAA11 16 Coca-Cola UnitedStates 26,994 AAA12 18 Samsung SouthKorea 26,578 AAA-13 9 WellsFargo UnitedStates 25,451 AA+14 6 BankofAmerica UnitedStates 25,346 AAA-15 13 hP UnitedStates 24,992 AA+16 12 Verizon UnitedStates 24,687 AA+17 17 McDonald’s UnitedStates 24,211 AAA18 27 Intel UnitedStates 23,491 AA+19 15 Santander Spain 23,403 AAA20 19 Tesco Britain 21,640 AAA

w

WinnersChangeinBVJan-Sept2011

(%)

ChangeinBVJan-Sept2011

($mn)Apple 33 9,758Samsung 24 5,067Intel 23 4,413eBay 18 1,417Amazon 17 3,106BankofChina 16 1,530PetroChina 16 1,308Volkswagen 12 1,525Sberbank 12 1,385McDonald’s 11 2,370

LosersChangeinBVJan-Sept2011

(%)

ChangeinBVJan-Sept2011

($mn)Movistar -24 -3,572Panasonic -24 -2,944Carrefour -18 -2,171BankofAmerica -17 -5,273Bbva -17 -1,769Itaù -16 -2,723Oracle -15 -2,225GoldmanSachs -13 -1,754Cisco -13 -1,505Bradesco 13 -2,397

Source: Brand Finance plc 2011

GLOBALBRAnDSPORTFOLIODeveloping countriesIn contrast, emerging economies includ-ing China, India and South Korea all show strong performances.

In China the total brand value in-creased with two new brands entering the top 100; PetroChina and China Life Insurance Company. Argricultural Bank of China increased brand value by $1.5bn, rising from 99 to 71 in the league table.

Samsung is another notable perform-er, increasing the value of its brand to $26.6bn – up 24 per cent. The South Korean company has not experienced the supply chain disruptions by its Japa-nese competitors and is developing a stronger hold on both the TV and smart phone markets.

Similarly in India TATA moved up the league with a new brand value of $14.8bn at 41 – previously 50.

additional insights• Coca-Colahas reversed thedecline

noted in BrandFinance® Global 500 and is now the 11th most valuable brand. This shift creates a greater lead over its rival, Pepsi ($19.1bn/ 25).

• Theautosectorhasalsoperformedwell in the past six months, with crisis-plagued Toyota re-entering the top 10 with a value of $28.8bn.

• In Europe, Germany maintained asteady position, underpinned by a stable economy and strong auto industry including brands BMW, Mercedes Benz and Volkswagen. The UK saw two additional brands enter the top 100; BP and BT.



Reconnecting with customers through online marketing “Go to the people. Learn from them. Live with them” (Lao Tzu)

In an increasingly cluttered and skeptical market, brands are faced with the ongoing challenge of how to maintain and in some cases reconnect with their cus-tomer base. Both international and regional research findings indicate growing mistrust in traditional advertising, whilst the impact of peer group endorse-ment is increasing. Within the banking sector, which is still struggling to recover from neg-ative consumer sentiment over the global financial crisis, the need to rebuild lost trust is even greater.

The online shift Online engagement represents an ideal opportunity to connect with new and existing custom-ers. For Al Rajhi Bank the in-creased online focus is driven by 3 factors:1. Brand Fit: the online platform

provides an ideal opportu-nity for the brand to engage with customers

2. Consumer Insights: tradi-tional engagement with fi-nancial services brands is low relative to other categories and the role of the peer group influencer in the decision making process is high

3. Competition: In an increas-ingly price sensitive market, online activity provides the ideal opportunity for a brand to reinforce its emotive bond through greater interaction

The online journey begins It started with the simple idea of building on the success of the 2010 Ladies Painting Competition (www.paintcompetition.com ). Using customer feedback as the catalyst, the competition was transformed into an online for-

mat for 2011. From a voice of customer perspective, this re-sulted in a more transparent and engaging experience. Not only did the competition exceed all business expectations with a 200% increase in the number of submitted paintings over 2010 (from 1,200 to 2,800 paintings). The approach resulted in the saving of both time and cost with improved levels of consumer engagement.

Paintings from the Competi-tion later inspired the development of an online greeting cards web-site (www.alrajhigreetings.com ), where visitors customize their own messages and send e-greet-ing cards to their friends and family in an environmentally friendly manner. In the first month of the micro-site going live, over 5,000 cards were sent with visitor engagement across multiple markets.

An online interactive initiative supporting personal financing products came in the form of an Online “Tell us your need” Com-petition (www.tellusyourneed.com). Visitors were encouraged to share their stories about fi-nancial difficulties on the micro-site. By using social media more friends and family viewed their story and voted, with the most voted for stories winning. The Competition was a phenomenal learning experience, with over 700 emotive stories and 200,000 unique visitors.

An iterative learning experience The online journey represents a brave new world, one that is treated with a mix of hope and uncertainty by most brands. This journey into the unknown re-quires an open mind and a mindset willing to risk and always learn. To reach success, brands need to embrace both positive and negative experiences, learn from them and treat them as

building blocks. Lessons learned from our online journey include:1. Everyone wants “15 minutes

of fame” Andy Warhol accurately re-

marked that in the future everyone will want their 15 minutes of fame. The future is here and the online world gives every person the chance to broadcast their customized message. There are multiple ways for a brand to give back; the traditional approach is based on prizes for participa-tion. The evolving approach provides a platform for people to showcase and share their achievements, hence giving them their 15 minutes of fame. The ARB Ladies Painting Competition developed this very platform for ladies from across KSA to showcase their fine works of art, resulting in an online community of over 70,000 people.

2. Maximizing customer inter-action

Online campaigns should be engaging but also simple so as to accommodate the low-est possible denominator of targeted visitors. The “Tell us your need” Competition fol-lowed 3 easy steps: step 1: submit your story; step 2: get friends and family to vote for your story; step 3: get the most votes and win. An interesting observation was that some voters converted to becoming participants themselves. This resulted in a viral snowball effect, which optimized par-ticipation and positive engage-ment with the brand.

3. Addressing the ROI question Online engagement is attrac-

tive ROI option on two fronts; 1. from a brand perspective, the potential for real time engagement is high; 2. from a business perspective, the opportunity to measure cam-

paign impact is more precise and time effective than tra-ditional offline media. How-ever, the opportunity is often offset by the lack of historical benchmarks. To overcome this, a phased approach was used to set targets for the “Tell us your need” Competition. The first phase acted as a dry run in setting up achievement campaign metrics. This al-lowed us to develop more accurate metrics for phase 2.

4. Embracing the new com-munication challenge

Traditional media is based on the way one way communica-tion model, with the brand speaking to the audience. Whereas online media presents more of an equal playing field with both brand and audience able to interact, alter and in-fluence thoughts, with the brand often taking the role of facilitator for consumers to engage, exchange thoughts and often reach a consensus based on the key influencers present in the online tribe. For the Online Ladies Paint-ing Competition, engagement was increased by shifting the voting mechanism from expert judges in 2010 to visitor vot-ing in 2011.

5. Breaking down geographical borders With expansion into Malaysia,

Kuwait and Jordan markets, there is a need for both message con-sistency and synergies of adver-tising efforts. The online greet-ing cards website allowed the brand to communicate across borders, with over 5,000 cards sent across multiple markets, a task difficult to achieve using traditional media in a cost ef-fective manner.

Yusuf Jehangir: Head of Market-ing & Corporate Communications, Al Rajhi Bank

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The Top 50 Brand Portfolios in the GCC