brand valuation beng beng
TRANSCRIPT
BRAND VALUATION
Andree ChandradinataDhebora W. KinantiFahmi Farashintya
Kenny AlhdrinReza Taufik Hidayat
COMPANY PROFILEOne 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
PRODUCTS
HOW TO VALUATE
INCOME-BASED APPROACHBRAND FINANCE
FinancialData
MarketData
DemandDrivers
RiskFactors
Brand Forecasts
Branded Business Earnings
Brand Value Added
Brand ValueAdded BVAR
Index
brand betaR
Analysis
Brand Value
DiscountRate
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
COUNTING BVA INDEXBRAND 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
COUNTING BVA INDEXAttributes Weighting Relative
ImportanceBrand
DependenceRole 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%
COUNTING BRAND BETA
Brand beta = = = 0.26
2 - Score50
2 - 8750
PRE ASUMPTION
COUNTING DISCOUNT RATEDiscount 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%
COUNTING CASH FLOW OF BRAND EARNINGAssumption• 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 2019Net 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
COUNTING BRAND VALUE2015 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
CONCLUSION
Brand Finance = 2.1 TKelompok = 416 M
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