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. 

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