Inter IKEA Group

Financial Summary
FY21
Introduction

This document summarises Inter IKEA Group’s financial performance Another challenge in FY21 was the steep global rise in transport and
for financial year 2021 (FY21). FY21 is the period from 1 September raw material prices. This created additional costs for the whole IKEA
2020 to 31 August 2021. Since Inter IKEA Group’s financial performance value chain.
is very closely connected to the retail sales performance of our
franchisees, we begin the financial summary there. Inter IKEA Group recorded total revenues of EUR 25.6 billion, including
wholesale sales to IKEA retailers, franchise fees and retail sales from
In FY21, the continuing effects of the global pandemic forced a large the IKEA Delft store, and a net profit of EUR 1.4 billion for FY21.
number of IKEA stores to shut. Some were closed for even longer
periods in FY21 compared to FY20. When most stores re-opened in
late spring, customers returned and in FY21 IKEA stores welcomed €41.3 €39.6 €41.9
775 million visitors. This is below FY20 (825 million visits), causing
a store sales decline of 8%.

Despite lower store sales, total retail sales for FY21 were 5.8% higher FY20 FY21

compared to FY20, driven by online sales and increased interest in

home furnishing. Online sales increased with 73%, and there was high FY19 FY20 FY21
demand for office furniture and other multifunctional solutions for the
IKEA retail sales in billion EUR IKEA retail sales development
home.

3%
FY21 resulted in total IKEA retail sales of EUR 41.9 billion (including
Slovenia
sales of IKEA products, food and services by IKEA franchisees)
Mexico
compared to EUR 39.6 billion in FY20. 26%

Keeping IKEA stores and warehouses stocked has been a challenge.

Supply chain disruptions led to a substantial drop in the availability of
71%
Products sold
through stores

Products sold
online
5
billion website
visits
products that we have yet to recover from. We expect this will continue Services to
customers
far into FY22. Across the IKEA value chain, great efforts will continue to
be made to keep our most popular products in stock. 775 million store visits
FY21 IKEA retail sales and two new markets entered

2 | Inter IKEA Group Financial Summary FY21

Retail development The IKEA
franchise system
Inter IKEA Group works closely with IKEA
franchisees to bring the IKEA retail experience
closer to people – wherever they work, live or IKEA is a franchise business. That means The IKEA franchise system enables
socialise. This means new locations in large
many people and many companies with continuous growth and is built on a model
cities or metropolitan areas, complemented by
an omnichannel offering that meets customer different owners work under one IKEA brand that focuses on lowering costs, creating
needs and provides a seamless and unique – all dedicated to creating a better everyday lower prices and allowing for higher volumes.
customer experience. life for the many people.
IKEA franchisees continue to test new ways of With the global rise in raw material prices
meeting customers in inner cities with smaller The diagram on the next page shows a and other costs related to sourcing and
compact stores. Inter IKEA Systems B.V., the simplified overview of the IKEA franchise supplying products, securing low prices
owner of the IKEA Concept and worldwide
system. Inter IKEA Systems B.V., IKEA is a big challenge, but we continue to do
IKEA franchisor, has added IKEA plan and order
points to its menu of conceptualised customer of Sweden AB, IKEA Marketing & our utmost to deliver on our affordability
meeting points. This means testing is complete Communication AB, IKEA Supply AG and IKEA ambitions.
and IKEA retailers can implement IKEA plan Industry AB are part of Inter IKEA Group.
and order points in their markets. In FY21,
franchisees opened six such locations with
plans to launch many more globally. In total,
Franchising is a system that encourages
around 45 new IKEA locations opened in FY21. everyone to contribute and collaborate.

217,000 225,000
The franchisor has the responsibility to
FY21 also saw the last worldwide publication of
the iconic IKEA catalogue after 70 years. Moving
continuously develop the IKEA Concept
FY20 IKEA co-workers FY21 IKEA co-workers
beyond the catalogue allows us to focus our and ensure its implementation in new around the world around the world
time and resources on a better omnichannel and existing markets. Franchisees provide
experience for IKEA customers.
valuable input based on consumer and
market insights.
More IKEA facts & figures for FY21 can be found on
about.ikea.com

3 | Inter IKEA Group Financial Summary FY21

 IKEA franchise system and value chain
Expansion
Between FY19 and the end of FY23, IKEA is
expanding into 17 new markets and opening
an average of 50 new locations per year
(including test locations). All, so customers can
touch and try IKEA products before they buy. At
Inter IKEA IKEA franchisees the end of FY21 IKEA franchisees operated 458
Group traditional IKEA stores in 61 markets as well
IKEA Inter IKEA Systems Ingka Group
as several test locations.
service owner of the IKEA Concept 32 markets
providers and worldwide franchisor Although expansion plans and openings in
IKEA of Sweden
new markets were influenced by the pandemic,
Al-Futtaim Dairy Farm IKANO Group Miklatorg
develops and designs the 4 markets 4 markets 4 markets 4 markets IKEA franchisees have continued to meet new
overall IKEA product range
customers in adapted and safe ways. In FY21
IKEA Marketing & Al-Homaizi House Market Sarton Al-Sulaiman they opened a mix of traditional IKEA stores,
Communication 3 markets 3 markets 3 markets 2 markets
develops and designs
new smaller formats, e-commerce and test
communication content locations.
MAPA Northern Birch Falabella
1 market 1 market
IKEA Supply In FY21 IKEA entered two new markets: Mexico
IKEA sources and distributes
the IKEA product range and Slovenia. The biggest milestone next year
product
suppliers will be the opening of IKEA Chile in Santiago,
IKEA Industry which will bring IKEA to the many people in
a strategic IKEA manufacturer
South America.

In FY22 IKEA franchisees will enter three more

new markets: Puerto Rico, Philippines and
Oman.

This diagram shows a simplified overview of key organisations in the IKEA franchise
system and value chain (excluding subsidiaries) The IKEA retail business operates in
61 markets through a franchise system. This infographic shows a simplified overview.
Market information is accurate as of 31 August 2021. For more detailed information,
please visit inter.ikea.com or about.ikea.com

4 | Inter IKEA Group Financial Summary FY21

Inter IKEA Group
Inter IKEA Holding B.V. is the holding Franchise and environment, market potential and
company of the Inter IKEA Group. Franchise consists of Inter IKEA Systems B.V. expansion. IKEA Marketing & Communication
and its subsidiaries, including IKEA Marketing AB develops and creates IKEA communication
Inter IKEA Group has three core businesses: & Communication AB. Inter IKEA Systems content.
Franchise, Range and Supply. The core B.V. is the worldwide IKEA franchisor and the
businesses work together with franchisees owner of the IKEA Concept (which includes Range
and suppliers to co-create the IKEA offer the IKEA Brand). Inter IKEA Systems B.V. Range includes IKEA of Sweden AB and
and franchise system. Inter IKEA Group continuously develops the IKEA Concept and related businesses. It is responsible for
aims to provide the best possible conditions ensures its successful implementation in designing and developing the overall IKEA
for implementing and operating the IKEA new and existing markets. This enables IKEA product range, including home furnishings,
Concept, and to create a strong platform to remain forward-looking in areas such as food and packaging solutions, under
for growth. brand development, sustainability, people assignment of Inter IKEA Systems B.V.

Supply
Supply includes IKEA Supply AG, IKEA
Industry AB, IKEA Components AB and
related businesses. Inter IKEA Systems
Inter IKEA B.V. assigns IKEA Supply AG to source and
Holding B.V.
distribute IKEA products to IKEA franchisees.

Most IKEA products (89%) are sourced from

Franchise Range Supply external suppliers across the globe. IKEA
Supply AG manages and operates the IKEA
Inter IKEA IKEA of IKEA IKEA
Systems B.V. Sweden AB Supply AG Industry AB supply chain together with its wholesale
subsidiaries and external business partners,
such as transport service providers,
Overview of Inter IKEA Group warehouse providers and customs brokers.

5 | Inter IKEA Group Financial Summary FY21

 IKEA Industry AB is a strategic IKEA Ownership
Manufacturing manufacturer owned by Inter IKEA Group Inter IKEA Group is ultimately owned by
that produces IKEA home furnishing products Interogo Foundation, based in Liechtenstein.
and distribution
and develops unique IKEA manufacturing Interogo Holding AG is a co-shareholder,
Inter IKEA Group is constantly looking for new capabilities in relevant parts of the supply contributing capital and loans to Inter IKEA
ways to make production more sustainable and
chain. IKEA Industry produces approximately Group. Interogo Foundation is the sole
energy-efficient. Almost two-thirds of the IKEA
climate footprint is directly connected to the
11% of the IKEA product range, with a main controlling shareholder in Inter IKEA
supply chain, including production at suppliers. focus on wood-based furniture. Holding B.V.

In FY21, a new programme was launched to

accelerate the transition of 1,600 suppliers to
IKEA Components AB develops, sources,
100% renewable energy. The programme will packs and supplies components, such as 21,298 2,898
first roll out in three of our largest purchasing screws and wooden dowels that are used to
countries: Poland, China and India. Achieving
assemble IKEA furniture.
100% renewable electricity with IKEA suppliers
1,517
in these countries will save 670,000 tonnes
of CO2 emissions per year, equivalent to Other functions 187
approximately 3% of the total climate footprint To support the core businesses, Inter IKEA
of the IKEA value chain. Group includes group functions for People &
IKEA Industry signed an agreement with Meva Culture, Communication, Risk, Finance, Legal
Energy for green electricity production. The and other activities.
technology by Meva Energy generates both
electricity and heating from wood waste
IKEA Älmhult AB, which owns and operates
currently not possible to recycle and is today
either landfilled or incinerated resulting in the IKEA Hotell and IKEA Museum, is also part Supply Range Franchise Other functions

air pollution. Compared to conventional of Inter IKEA Group.

technology, it not only has an increased FY21 full-time equivalent co-workers
electricity output, but also minimises any air per core business
pollution – contributing to clean air.

6 | Inter IKEA Group Financial Summary FY21

 Consolidated income statement
Inter IKEA Group
FY21 financial results In millions of EUR FY21 FY20

Sales of goods 24,282 22,387

The global pandemic affected our operating income in FY21. The Franchise fees 1,273 1,162
biggest cause was the steep increase in transport and raw material
Other income 60 64
prices in the second half of the financial year. The full impact of this
can be seen in the increased costs of goods sold which reflects the Total revenues 25,615 23,613
cost of sourcing, handling and distribution of IKEA products.
Costs of goods sold 21,137 18,860
After financial income and expense, and income taxes, net income
of EUR 1,433 million was substantially lower compared to FY20. The Gross profit 4,478 4,753
Inter IKEA Group consolidated income statement shows a simplified
Operational cost 2,622 2,529
overview of this year’s financial performance.
Total operating income 1,856 2,224
Sales of goods
Sales of goods refers to wholesale sales of IKEA products to IKEA Financial income and expense -151 -201
franchisees. Inter IKEA Group also owns and operates one IKEA store
Result before tax 1,705 2,023
in Delft, the Netherlands. IKEA Delft’s retail sales are also included in
this line item. Income taxes -272 -295

As IKEA franchisees’ retail sales increased in FY21, Inter IKEA Group Results from the sale of entities - 3
wholesale sales went up as well. However, the global transport crisis
challenged us to keep IKEA stores well-supplied throughout Net income 1,433 1,731
the year.

7 | Inter IKEA Group Financial Summary FY21

Franchise fees Inter IKEA Group manufactures about 11% Range development
In a franchise setup, one company pays of the IKEA product range and sources
The healthy IKEA Food range was expanded in
another franchise fees for the right to use the remaining 89% from nearly 1,000
FY21 with the addition of LÄTTLAGAT. Aimed at
its intellectual property. The IKEA franchise external suppliers. This includes both home people who are in a rush or with little time to
offer includes the IKEA trademarks and IKEA furnishing and food products. cook, it offers tasty, well-made food, carefully
Concept. composed in both flavour and nutritional
content. The ready-prepared meals give a
Raw material prices increased dramatically
taste of homemade cooking that is served in
IKEA franchisees pay Inter IKEA Group an in the second half of FY21 following an minutes. Choose between various plant-based
annual fee of 3% over their net sales. In unfavourable combination of scarcity and meat-based balls that can be enjoyed at
return, they are authorised to market and and high demand. This resulted in higher home or at work.

sell the IKEA product range and operate purchasing costs in FY21. LOKALT is a vibrant collection of handmade
IKEA stores and other sales channels. textiles and ceramics where local traditions
In addition, transport costs went up due meet traditional handicraft. It is the result
of a collaboration with contemporary local
As retail sales increased in FY21, franchise to the limited availability of containers
designers and social entrepreneurs in Jordan,
fee income rose accordingly. and carriers as a result of the pandemic. Thailand and India. Every cushion cover, rug,
To support low prices to customers in basket and bowl creates equality, inclusion
Other income accordance with our affordability ambition, and livelihoods in regions where it is most
Other income mainly consists of income from needed. LOKALT is a collection from IKEA
Inter IKEA Group did not increase wholesale
Social Entrepreneurship, which aims to create
selling the IKEA catalogue (final edition) and prices to the IKEA franchisees, which led to a long-term job opportunities and livelihoods for
other marketing materials created for IKEA lower gross margin. vulnerable groups in a business partnership.
franchisees.
We identified the millions of enthusiastic
gamers across the world as a truly cross-
Cost of goods sold demographic group who have long been
Cost of goods sold describes the total
accumulated costs to manufacture and
15.8% 13.0% overlooked from a life-at-home perspective.
So to design the new IKEA gaming range
gross profit % gross profit % we teamed up with Republic of Gamers to
distribute products. The cost of goods in FY20 in FY21
create the perfect gaming setup solutions and
sold relates to both wholesale and Delft comfortable ergonomic furniture, including all
store sales. the accessories, for a high-performance gaming
experience at affordable prices.

8 | Inter IKEA Group Financial Summary FY21

 Financial income and expense
Financial income and expense are revenue and costs regarding loans,
9%
investments and positions in foreign currencies. Favourable currency
developments partly offset the interest expenses.
45% 20%

Taxation
In FY21 the Inter IKEA Group tax charge was EUR 272 million – equal
to 16.0% of pre-tax income, compared to 14.6% in FY20. This resulted
26%
from lower supply chain profitability due to increased raw material
prices and transport costs.

Staff and Bought services Depreciation/ Other operating Inter IKEA Group’s total tax contribution amounted to EUR 1,916
travel costs amortisation expenses
million and mainly consisted of corporate income tax, custom duties,
VAT and payroll taxes.
FY21 operational cost per category

Operational cost
Operational cost includes co-worker costs, utilities, rent and other
costs related to day-to-day operations. This total went up slightly in Corporate
398
income tax
FY21 to EUR 2,622 million.
Customs 377

Costs rose for recruiting additional staff to handle a complex Other 24

transport and shipping environment in efforts to secure the
VAT 695
availability of products in IKEA markets. Further additional costs
came from building up and securing capabilities to address the Payroll 422

necessary strategic and transformational changes to improve the

whole IKEA value chain.
Taxes incurred Taxes collected

Investments were also made to improve the online IKEA sales

FY21 total tax contribution by type of tax in million EUR
experience and the performance of our retail platforms. The
increases are partly offset by improved efficiency of our operations
and lower travel costs due to global travel restrictions.

9 | Inter IKEA Group Financial Summary FY21

 Consolidated balance sheet
Inter IKEA Group
balance sheet In millions of EUR 31 Aug 2021 31 Aug 2020

Intangible fixed assets 9,711 10,004

Tangible fixed assets 1,702 1,691

The Inter IKEA Group balance sheet positions have not changed
significantly compared to 31 August 2020. Receivables went up,
Financial fixed assets 251 250
liabilities went down, and the equity ratio increased from 45%
to 47%, demonstrating financial strength. Total fixed assets 11,664 11,945

The consolidated balance sheet shows an overview of Inter IKEA Inventories 3,752 3,661
Group’s assets, equity and what is due to suppliers, partners and
Receivables 5,831 5,276
other organisations.
Cash and cash equivalents 160 225
Intangible fixed assets
In general terms, fixed assets are business property intended for Total current assets 9,743 9,162
long-term use. Intangible fixed assets are assets that lack physical
Total assets 21,407 21,107
form like patents, trademarks, copyrights, and other intellectual
property. Intangible fixed assets form much of Inter IKEA Group’s
overall assets.
Group equity 10,115 9,541
Most Inter IKEA Group intangible fixed assets are trademark rights
and other intellectual property rights. Inter IKEA Group purchased Provisions 255 322
these rights for EUR 11.8 billion in 2012. As a positive return is
Non-current liabilities 5,429 5,979
expected for a long period, these costs are spread over a period of
45 years. Current liabilities 5,608 5,265

Total liabilities 11,292 11,566

Equity and liabilities 21,407 21,107

10 | Inter IKEA Group Financial Summary FY21

Tangible fixed assets Of the EUR 1,433 million profit achieved during FY21, EUR 1,000
Tangible fixed assets are things like real estate and equipment million will be distributed as a dividend to Interogo Holding AG, a
that you can physically touch and feel. Inter IKEA Group tangible holding company that is fully owned by the Interogo Foundation.
fixed assets are mainly factories and distribution centres. A new The remaining EUR 433 million will be added to the Inter IKEA
distribution centre in Malaysia went operational in FY21. Group equity.

Inter IKEA Group owns several offices and distribution centres, the Provisions are money set aside for pension commitments, deferred
IKEA Delft store, the IKEA Hotell and IKEA Museum, and around 42 taxes and claims. Liabilities are money owed to others. Most Inter
factories. Most of the factories are in Europe. The majority produce IKEA Group non-current liabilities, which are due over a long period
IKEA furniture, while two manufacture components, such as screws of time, consist of a loan from Interogo Holding AG (a non-controlling
and wooden dowels used to assemble IKEA furniture. shareholder). Current liabilities are short-term loans, money due to
suppliers and the current portion of long-term loans from Interogo
Inventories and receivables Holding AG.
Inventories mostly consist of IKEA products in warehouses. Inventory
levels went down in FY20 and remained low during FY21. Transport
constraints in combination with high customer demand created a
challenge to replenish inventory to a desired level.

Receivables is money owed to the Inter IKEA Group by business

45% 47%
equity ratio in FY20 equity ratio in FY21
partners. Most receivables relate to franchise fees and products sold
and invoiced to IKEA franchisees.

Group equity, provisions and liabilities

Equity is the capital invested by shareholders of Inter IKEA Group plus
accumulated profits over time. Equity increased by EUR 600 million
during FY21.

Note to reader: the included abbreviated financial statements are an abridged version of the consolidated financial statements of Inter IKEA Holding B.V. as included in the Annual Report for the
financial year 2021. An unqualified auditor’s report dated 28 October 2021 was issued on these financial statements. Inter IKEA Holding B.V.’s consolidated financial statements, from which these
abbreviated financial statements have been derived, have been prepared in accordance with Part 9 of Book 2 of the Dutch Civil Code.

11 | Inter IKEA Group Financial Summary FY21

 © Inter IKEA Systems B.V. 2021
For further information, please visit Inter.IKEA.com

Released 14 October 2021 Released 3 November 2021 Coming early 2022

© In ter IKE A Sys tems B. V. 2 0 1 8

People
& Planet
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IKEA SUSTAINABILITY STRATEGY PUBL ISHE D: JUNE 2018

IKEA Facts & Figures FY21 Inter IKEA Group Financial Inter IKEA Inter IKEA Group Inter IKEA Group Tax IKEA Sustainability Report
Summary FY21 Group Annual List of subsidiaries Report FY21
Report FY21 FY21

The IKEA logo and the IKEA wordmark are registered trademarks of Inter IKEA Systems B.V. All copyrights in the pictures used in this document are owned by Inter IKEA
Systems B.V. and may in no way be copied or reproduced without the consent of Inter IKEA Systems B.V.

12 | Inter IKEA Group Financial Summary FY21