Brand Valuation Beng Beng (Mayora)

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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