You can valuate your Brand Valuation with this technique. We give you an example from Beng-Beng.

1. BRAND VALUATION
Andree Chandradinata
Dhebora W. Kinanti
Fahmi Farashintya
Kenny Alhdrin
Reza Taufik Hidayat

2. COMPANY PROFILE
One of the biggest fast moving
consumer goods company in
Indonesia
Established in 1977, with it’s
first factory in Tangerang
Initial Public Offering in 1990
32,93% share owned by
PT. Unita Branindo

3. PRODUCTS

4. HOW TO VALUATE

5. INCOME-BASED APPROACH
BRAND FINANCE
Financial
Data
Market
Data
Demand
Drivers
Risk
Factors
Brand Forecasts
Branded Business Earnings
Brand Value Added
Brand Value
Added BVAR
Index
brand betaR
Analysis
Brand
Value
Discount
Rate

6. STEPS TO VALUATE
Step 1:
Counting BVA Index
Step 2:
Counting Brand Beta Step 3:
Counting Discount Rate
Step 4:
Counting Cash Flow of
Brand Earning

7. COUNTING BVA INDEX
BRAND vs SIGNIFICANT ATTRIBUT
PRICE
PROMOTION
TASTE
TEXTURE
INGREDIENT’S QUALITY
AVAILABILITY
CHOCOLATE LAYER’S THICKNESS
Eating Beng-Beng
in the past year
Online Survey via
Google Form
100 respondents as sample

8. COUNTING BVA INDEX
Attributes Weighting
Relative
Importance
Brand
Dependence
Role of
Branding
Price 71 12.50% 72% 9.00%
Promotion 62 11.05% 86% 9.50%
Taste 92 16.26% 17% 2.76%
Texture 89 15.73% 25% 3.93%
Chocolate Layer's
Thickness 84 14.88% 46% 6.84%
Ingredient's Quality 82 14.52% 28% 4.07%
Availability 85 15.05% 30% 4.52%
BVA Index 40.63%

9. COUNTING BRAND BETA
Brand beta = = = 0.262 - Score
50
2 - 87
50

10. PRE ASUMPTION

11. COUNTING DISCOUNT RATE
Discount Rate = (Equity Risk Premium*Specific Market Sector Risk*
Brand Beta) + Risk Free Rate
• Equity Risk Premium (WACC)
 Weight of Equity: 48%; Weight of Debt: 52% (Annual Report 2015)
 Beta: 1.34; Risk Free Rate: 8.87%
 Specific Market Sector Risk (Cost of Debt): 9.2%
 WACC = 10.21%
• Discount Rate
(10.21% x 9.2% x 0.26) + 8.87% = 9.12%

12. COUNTING CASH FLOW OF
BRAND EARNING
Assumption
• Sales Growth for the next 5 years: 4.4%
• Operating income Growth for the next 5 years: 12.6%
• Beng-Beng Sales Contribution: 5.2%
• Tangible Capital Growth for the next 5 years: 5%
2015 2016 2017 2018 2019
Net Sales 769,626 800,411 832,427 865,724 900,353
Operating Income 96,737 100,607 104,631 108,816 113,169
Tangible Capital Employed 195,835 205,627 215,908 226,703 238,038
Charge of Capital (10.21%) 19,975 21,735 22,821 23,963 25,161
Economic Value Added 76,762 78,872 81,809 84,854 88,008
BVA(40.63%) 31,188 32,046 33,239 34,476 35,758
Tax (24%) 7,485 7,691 7,977 8,274 8,582
Brand Earning 23,703 24,355 25,262 26,202 27,176

13. COUNTING BRAND VALUE
2015 2016 2017 2018 2019
Net Sales 769,626 800,411 832,427 865,724 900,353
Operating Income 96,737 100,607 104,631 108,816 113,169
Tangible Capital Employed 195,835 205,627 215,908 226,703 238,038
Charge of Capital (10.21%) 19,975 21,735 22,821 23,963 25,161
Economic Value Added 76,762 78,872 81,809 84,854 88,008
BVA(40.63%) 31,188 32,046 33,239 34,476 35,758
Tax (24%) 7,485 7,691 7,977 8,274 8,582
Brand Earning 23,703 24,355 25,262 26,202 27,176
Residual Value 413,635
PV of Cash Flow Earning 23,703 22,319 25,262 26,202 27,176
Cumulative PV of Cash
Flow Earning 124,661
PV of Residual Value 291,712
Brand Value 416,373

14. CONCLUSION
Brand Finance = 2.1 TKelompok = 416 M
5x