Inter IKEA Group

Financial Summary
FY22
Introduction

This document summarises Inter IKEA Group’s financial performance for

financial year 2022 (FY22). FY22 is the period from 1 September 2021 to
31 August 2022. Since Inter IKEA Group’s financial performance is very
closely connected to the retail sales performance of our franchisees, we
begin the financial summary there.

In FY22, IKEA retail operations were less impacted by measures to

prevent the spread of Covid-19. Unlike in FY20 and FY21, most IKEA stores
remained open without (severe) restrictions and store visitation went up
compared to the two previous years.

The war in Ukraine has also affected the IKEA business and customers.
IKEA retail operations in Russia have stopped and Inter IKEA Group
continues to scale down its presence with full consideration for the many
co-workers, partners and suppliers who have made IKEA successful there
for several years.

Against this background, retail sales developed positively at the start of

the year while increasing purchase and transport costs were absorbed.
In the second half of the year, sales in quantities were negatively affected
by the war in Ukraine and the effects of the energy crisis and inflation.

2 | Inter IKEA Group Financial Summary FY22

Total retail sales for FY22 reached EUR 44.6
billion (EUR 41.9 billion in FY21). This includes
sales of IKEA products, food and services to
customers. Compared to FY21, retail sales €39.6 €41.9 €44.6
grew by 6.5% (+3.5% when adjusted for
currency effects). An uplift in store sales is
visible, while online sales remain at a high
level. Although there are still challenges to
FY21 FY22
maintain the supply of home furnishing
products to the retailers, the availability of
products for our customers has improved.
FY20 FY21 FY22
Whereas we see growth in sales value, sales in
IKEA retail sales in billion EUR IKEA retail sales development
volumes decreased and number of products
sold has not grown.
3%
In FY22, raw material and commodity prices 822 million store visits
also continued to rise, as well as costs related and two new markets entered
to transportation and logistics. In total, this
22% Philippines
created additional costs for the whole IKEA
value chain. These costs were only partly Products sold
through stores
compensated by higher revenues.
75%
Products sold
online

4.3
Inter IKEA Group recorded total revenues
Services to
of EUR 27.6 billion (EUR 25.6 billion in FY21), customers Chile
including wholesale sales to IKEA retailers,
franchise fees and retail sales from the IKEA FY22 IKEA retail sales billion website
visits
Delft store. Net profit is EUR 0.7 billion
(EUR 1.4 billion in FY21).

3 | Inter IKEA Group Financial Summary FY22

 The IKEA
Retail development
franchise system
Inter IKEA Group works closely with IKEA
franchisees to bring the IKEA retail experience
closer to people – wherever they live, work or
IKEA is a franchise business. That means The IKEA franchise system is built on a model
socialise. This means locations in large cities many people and many companies with that focuses on low costs and high volumes
or metropolitan areas and an omnichannel different owners operate under the IKEA to create lower prices.
offering that meets customer needs and
brand – all dedicated to the IKEA vision of
provides a seamless and unique customer
creating a better everyday life for the With the global rise in raw material prices
experience. To complement and improve
online sales channels, a majority of the 38 new many people. and other costs related to sourcing and
customer meeting points opening last year supplying products, securing low prices
were small format stores and Plan and The diagram on the next page shows a remains a big challenge, but we continue
Order points.
simplified overview of the IKEA franchise to do our utmost to deliver on our
There is a strong desire among consumers to system. Inter IKEA Systems B.V., IKEA affordability ambitions.
change their lifestyles for the better. To inspire of Sweden AB, IKEA Marketing &
and enable them to achieve that, we want to
Communication AB, IKEA Supply AG and IKEA
make healthier and more sustainable living
possible for the many people. Many IKEA stores Industry AB are part of Inter IKEA Group.
have implemented the updated Sustainable
living shop which presents solutions and Franchising is a system that encourages
services that allow changes in lifestyle to be

231,000 225,000
everyone to contribute and collaborate.
easy and affordable. These include a focus on
saving energy, water and waste, prolonging The franchisor has the responsibility to
FY22 IKEA co-workers FY21 IKEA co-workers
the life of products, and healthy and delicious continuously develop the IKEA Concept and around the world around the world
alternative food options. ensure its implementation in new and existing
markets. Franchisees provide valuable input
based on consumer and market insights.
More IKEA facts & figures for FY22 can be found on
about.ikea.com

4 | Inter IKEA Group Financial Summary FY22

 IKEA franchise system and value chain

Inter IKEA IKEA franchisees

Group Expansion
IKEA Inter IKEA Systems Ingka Group
service owner of the IKEA Concept 31 markets IKEA entered two new markets in FY22.
providers and worldwide franchisor This included the first IKEA store in South
IKEA of Sweden
America, which opened in Santiago de Chile.
Al-Futtaim Dairy Farm Ikano Group Miklatorg
develops and designs the 4 markets 4 markets 5 markets 4 markets IKEA Chile also went live with its online
overall IKEA product range
shopping channel and a distribution centre to
IKEA Marketing & Al-Homaizi House Market Sarton Al-Sulaiman make IKEA accessible to the many people in
Communication 3 markets 3 markets 3 markets 2 markets
develops and designs
continental Chile.
communication content
MAPA Northern Birch Falabella Falabella, the newest member to the IKEA
1 market 1 market 1 market
IKEA Supply franchise family, will lead the new market
IKEA sources and distributes
the IKEA product range expansion journey in Colombia and Peru.
product
suppliers
IKEA Industry We also entered the Philippines with both
a strategic IKEA manufacturer IKEA store and online sales, and completed the
openings of Estonia, Oman and Puerto Rico
with the addition of IKEA stores to their existing
online sales.

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
62 markets through a franchise system. Market information is accurate as of 31 August
2022. For more detailed information, please visit inter.ikea.com or about.ikea.com

5 | Inter IKEA Group Financial Summary FY22

About Inter IKEA Group

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

Supply
Supply includes IKEA Supply AG, IKEA
Inter IKEA Industry AB, IKEA Components AB and
Holding B.V.
related businesses. IKEA Supply AG, based
in Switzerland, has received the assignment
from Inter IKEA Systems B.V. to source and
Franchise Range Supply distribute IKEA products to IKEA franchisees.
Most IKEA products (89%) are sourced from
Inter IKEA IKEA of IKEA IKEA
Systems B.V. Sweden AB Supply AG Industry AB external suppliers across the globe. IKEA
Supply AG manages and operates the IKEA
supply chain together with its wholesale
Overview of Inter IKEA Group

6 | Inter IKEA Group Financial Summary FY22

Manufacturing subsidiaries and external business partners, Ownership
and distribution such as transport service providers, Inter IKEA Group is ultimately owned by
warehouse providers and customs brokers. Interogo Foundation, based in Liechtenstein.
Inter IKEA Group is constantly looking for new
Interogo Holding AG is a co-shareholder,
ways to make production more sustainable
and energy efficient. Almost two-thirds of the IKEA Industry AB is a strategic IKEA contributing capital and loans to Inter IKEA
IKEA climate footprint is directly connected manufacturer owned by Inter IKEA Group Group. Interogo Foundation is the sole
to the supply chain, including materials that produces IKEA home furnishing products controlling shareholder in Inter IKEA
and production at suppliers. Below are two
and develops unique IKEA manufacturing Holding B.V.
examples of our efforts from the past year.
capabilities in relevant parts of the supply
In FY22, IKEA started to phase out plastic chain. IKEA Industry produces approximately
from consumer packaging solutions. This will
11% of the IKEA product range, with a main
happen in steps, starting with all new range 2 956
by 2025, and running range by 2028. With this focus on wood-based furniture.
phase-out, IKEA aims to reduce plastic waste IKEA Components AB develops, sources, 22 168
2 034
and pollution, and drive the industry agenda packs and supplies components, such as
to develop packaging solutions centred around
screws and wooden dowels used to assemble 173
renewable and recycled materials.
IKEA furniture.
IKEA Industry already consumes only 100%
renewable electricity and continues to invest in
Other functions
renewable energy sources to contribute to the
IKEA climate goals. A significant milestone was Inter IKEA Group also includes group
made in Poland in May 2022 when IKEA Industry functions to support the core businesses,
Zbąszynek officially launched the construction such as Human Resources, Communication,
process for one of the largest solar farms for
Risk, Finance, Legal and other activities.
own use in Europe with a total capacity of 19
MW. This and similar installations save energy IKEA Älmhult AB, which owns and operates Supply Range Franchise Other functions
costs and lower the climate footprint of IKEA the IKEA Hotell and IKEA Museum, is also part
furniture manufacturing. of Inter IKEA Group. FY22 full-time equivalent co-workers
per core business
For an overview of the total IKEA climate
footprint, read more in the IKEA Climate Report.

7 | Inter IKEA Group Financial Summary FY22

Inter IKEA Group
FY22 financial results  
 
   

Our operating income in FY22 was affected by the later stages of 


    
the Covid-19 pandemic. This caused severe disruptions, delays and
  

  #
!% !
%
congestions in supply chains, and elevated purchase prices and
transport costs. The war in Ukraine worsened these disruptions.   
  
%" 
$

The Inter IKEA Group consolidated income statement shows a  
  !" #
simplified overview of this year’s financial performance.
 
    #
!#$ !
"!

After financial income and expense, and income taxes, the net 

 
 
!! 
 $
income of EUR 710 million was substantially lower compared to FY21.

 !
$! !
!$%
This is the result of increased purchase prices and transport costs
which were partly absorbed to limit sales price increases to the IKEA    

! 
#
franchisees as much as possible.
 
  
  
 
$!"
Sales of goods
   
 

   "
Sales of goods refers to wholesale sales of IKEA products to IKEA
franchisees. Inter IKEA Group owns and operates one IKEA store in  

  &  
$"
Delft, the Netherlands. IKEA Delft’s retail sales are also included in
 
    $
this line item. Sales of goods are up following the necessary price
increases on the goods sold to the franchisees and offset the effect  
  # 

of lower volumes. Unlike in FY21, we were no longer able to absorb
the continuous increase in purchasing and transport costs.

8 | Inter IKEA Group Financial Summary FY22

Franchise fees Inter IKEA Group manufactures about 11%
In a franchise setup, one company pays of the IKEA product range and sources the
another franchise fees for the right to use remaining 89% from nearly 1,000 external
its intellectual property. The IKEA franchise suppliers. This includes home furnishing
offer includes the IKEA trademarks and and food products.
IKEA Concept.
Range development
Purchasing costs continued to increase
IKEA franchisees pay Inter IKEA Group an throughout FY22. Costs also rose on the Our old friend and icon – the BILLY bookshelf
– has undergone rejuvenation to become more
annual fee of 3% over their net sales. In back of supply chain inefficiencies and the
circular and easier to assemble. A high-quality
return, they are authorised to operate IKEA first effects of fast-rising inflation. Inter IKEA paper foil printing technology means that less
stores and other sales channels for marketing Group absorbed some of these increased wood is needed, while customers will see a
and selling the IKEA product range. costs, resulting in a large decrease in gross more attractive product with a very competitive
price. The new BILLY range will have a nail-free
profit. Consequently, our supply chain
back panel that snaps in and out of place
As retail sales increased in FY22, franchise activities only recorded very limited profits. more easily, making disassembly and
fee income rose accordingly. Due to the war Our ambition to absorb costs – and not pass reassembly simpler*.
in Ukraine, no franchise fees were collected them on to IKEA franchisees and eventually
We see a positive trend in the sales share
from the Russian and Ukrainian markets customers – was overtaken by a continued between our plant-based and meat-based food
from March 2022 onwards. sharp increase in raw material and transport options. In FY22, sales in IKEA restaurants of
prices. This was due to the scarcity of both HUVUDROLL plant balls and veggie balls rose
Other income from 14% to 17% in sales share, and from 24% to
created by Covid-19 related effects and
27% in the Swedish Food Market. For our veggie
Other income mainly consists of difficulties caused by the war in Ukraine. hot dogs sold in the IKEA Bistro, sales increased
income from marketing materials and from 13% to 15% in sales share for all hot dogs
communication created for, and sold to, sold in IKEA Bistros.
IKEA franchisees. * New BILLY launched in Asia Pacific in July 2022. This will be
followed by other markets starting January 2024.

Cost of goods sold

Cost of goods sold describes the total 10.6% 13.0%
gross profit % gross profit %
accumulated costs to manufacture and in FY22 in FY21
distribute products. The cost of goods sold
relates both to wholesale and IKEA Delft
store sales.

9 | Inter IKEA Group Financial Summary FY22

 permanently. The consequence of this decision has led to one-time
costs in relation to writing down assets and provisioning of cost.
8%

Financial income and expense

41% 20% Financial income and expense are revenue and costs regarding loans,
investments and positions in foreign currencies. Favourable currency
developments partly offset the interest expenses.

31% Taxation
In FY22, the Inter IKEA Group tax charge was EUR 221 million – equal to
23.7% of pre-tax income, compared to 16.0% in FY21. The effective tax
Staff and Bought services Depreciation/ Other operating
rate increased significantly following low profit in IKEA Supply AG based
travel costs amortisation expenses
in Switzerland, which in turn was due to the high cost of goods and low
gross margin.
FY22 operational cost per category

Inter IKEA Group’s total tax contribution amounted to EUR 1,996 million
Operational cost
and mainly consisted of corporate income tax, custom duties, VAT and
Operational cost includes co-worker costs, utilities, rent and other costs
payroll taxes. Read more in the Inter IKEA Group Tax Report FY22.
related to day-to-day operations.

The organisation grew in its number of co-workers during FY22. This

is due firstly to managing the complexities and inefficiencies of our Corporate
322
supply chain, particularly those effected by the consequences of the income tax
398
war in Ukraine. Secondly, a continued build-up of resources took place Customs 447
to secure capability for the strategic and digital changes needed to 377

improve the IKEA value chain and the (online) IKEA sales experience. Other 26
24

VAT 764
In June 2022, Inter IKEA Group decided to scale down business and 695

operations in Russia and Belarus after nearly a four-month pause. Payroll 437
422
This means that the franchise agreement with the local franchisee is
terminated and that the IKEA Industry business in Russia has reduced
Taxes incurred FY22 Taxes collected FY22
its workforce and started the process of finding new ownership for all
Taxes incurred FY21 Taxes collected FY21
its factories. The import and export of IKEA products to and from Russia
and Belarus has stopped and the offices in Moscow and Minsk will close FY22/FY21 total tax contribution by type of tax in million EUR

10 | Inter IKEA Group Financial Summary FY22

Inter IKEA Group
balance sheet  

 

Most Inter IKEA Group balance sheet positions have not changed 


 

 


significantly compared to 31 August 2021. Inventories and
  

 )
#&) )
'!!
receivables were the exceptions. Here we see the increased cost of
raw materials and transport reflected in the value of inventories and  

 !
&‫ףר‬ !
' "
receivables from franchisees. Our equity ratio went down from 47%    

 "‫עש‬ "%!
to 40% due to increased working capital.
 


!!
# !!
&&$

The consolidated balance sheet shows an overview of Inter IKEA  &
")$ #
'%"
Group’s assets, equity and what is due to suppliers, partners and
   &
) & %
(#!
other organisations.
 


  !($ !&
Intangible fixed assets
 

 !#
#($ )
'$#
In general terms, fixed assets are business property intended for
long-term use. Intangible fixed assets are assets that lack physical 
  
" 
!

form, such as patents, trademarks, copyrights and other

intellectual property.

 )
($' !
!!%

Most Inter IKEA Group intangible fixed assets are trademark rights  !"$ "%%
and other intellectual property rights. Inter IKEA Group purchased
 
  %
%## %
$")
these rights in 2012. The purchase price of EUR 11.8 billion is spread
over 45 years since a positive return is expected for a long period. 
  )
!( %
& (


   
"! 
#



   
" 
!

11 | Inter IKEA Group Financial Summary FY22

Tangible fixed assets Group equity, provisions and liabilities
Tangible fixed assets are things like real estate and equipment that Equity is the capital invested by shareholders of Inter IKEA Group, plus
you can physically touch and feel. Inter IKEA Group tangible fixed accumulated profits over time. Equity decreased by EUR 268 million
assets are mainly factories and distribution centres. during FY22.

Inter IKEA Group owns several offices and distribution centres, the A dividend of EUR 850 million will be distributed to Interogo Holding
IKEA Delft store, the IKEA Hotell, the IKEA Museum and around 42 AG. This will be funded from the EUR 710 million profit achieved during
factories. Most of the factories are in Europe. The majority produce FY22, with the remaining EUR 140 million to be withdrawn from equity.
IKEA furniture, while two manufacture components, such as screws
and wooden dowels used to assemble IKEA furniture. Provisions are money set aside for pension commitments, deferred
taxes and claims.
The process of finding new ownership for the factories in Russia has
started and is expected to be finalised in FY23. Liabilities are money owed to others. Most Inter IKEA Group non-
current liabilities, which are due over a long period of time, consist of a
Inventories and receivables loan from Interogo Holding AG. Current liabilities are short-term loans,
Inventories mostly consist of IKEA products in warehouses and in money due to suppliers and the current portion of long-term loans
transit. Inventory levels went up from unusually low levels in FY21 from Interogo Holding AG. Due to the build-up of inventory during
following Covid-related supply chain disruptions. Significant efforts FY22, our trade payables as well as the short-term loans payable to
were made in FY22 to replenish inventory to the level we need in order Interogo Holding AG have increased.
to better serve our customers.

Receivables is money owed to the Inter IKEA Group by business

partners. Most receivables relate to franchise fees and products sold
and invoiced to IKEA franchisees.
40% 47%
equity ratio in FY22 equity ratio in 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 2022. An unqualified auditor’s report dated 31 October 2022 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.

12 | Inter IKEA Group Financial Summary FY22

For further information, please visit inter.IKEA.com

and may in no way be copied or reproduced without the consent of Inter IKEA Systems B.V.
IKEA Systems B.V. All copyrights in the pictures used in this document are owned by Inter IKEA Systems B.V.
© Inter IKEA Systems B.V. 2022. The IKEA logo and the IKEA wordmark are registered trademarks of Inter
Inter IKEA
Inter IKEA Group Inter IKEA Group Inter IKEA Holding B.V.
Financial Summary Tax Report Holding B.V. List of subsidiaries
Annual report FY22
FY22 FY22 FY22

Inter IKEA Group Financial Summary FY22 Inter IKEA Group Tax Report FY22 Inter IKEA Group Inter IKEA Group List
Annual Report FY22 of subsidiaries FY22

© Inter IKEA Systems B.V. 2022

People
& Planet
Positive

IKEA Sustainability Strategy Published: June 2018. Updated: September 2022

IKEA Year in Review FY22 IKEA Sustainability Report

Will be released in February 2023

13 | Inter IKEA Group Financial Summary FY22