Welcome_inside_2010
Welcomeinside
Y early Summary FY09
Comments FY09&FY10
IKEA?Group
THIS IS THE IKEA GROUP 3MIKAEL ’S MESSAGE 12
FY09 CONSOLIDA TED FINANCIAL ST A TEMENTS 16
IKEA A T A GLANCE FY10
24
CONTENTS
2
CONTAC T iNfOrmAT iON
Corporate Communications iKEA Group +46 709 936376
iKEA.pr@https://www.wendangku.net/doc/fa16928096.html,
s t e m s B .V . 2010
Growing up in the Swedish 20th century has influ-enced our products as well as our value-system. The strong social development during this period, such as democratisation, dramatic improvements in living conditions and women’s rights, including a child care system for all, have shaped us and our way of interacting with customers and co-workers. We continue to learn from, and develop with, co-workers, customers, suppliers and other partners in 41 countries. Everyone can see our Swedish roots – but hear the accent of each of these coun-tries, too.
Based on a deep knowledge of people’s lives at home, iKEA offers good quality, durable and func-tional home furnishing products for everyday life today. We are completely committed to our vision to create a better everyday life for the many people. This commitment extends to our suppliers and all who work for them. The iKEA Way on Purchasing Products, materials and Services (iWAY*) is the iKEA Supplier Code of Conduct. it states the iKEA minimum requirements relating to the Environ-ment and Social & Working Conditions, including the prevention of child labour. iWAY and all of its activities are dependent upon co-operation, mutual trust and respect between the supplier and iKEA.
Throughout the years, we have been fortunate to attract highly skilled and motivated co-workers who have made iKEA one of the most successful home furnishing companies in the world. Our work-places are not for people with big egos. Togetherness is important. At iKEA, we can always get a helping hand from colleagues. We take responsibility, learn from our mistakes and share our experience and knowledge with each other. That’s how we grow together – co-workers and suppliers.
We have always avoided wasting resources – to be able to offer low prices, we need to have low costs. initially, flat packs and smart ways of trans-port were invented to save money. Over the years, we have learnt that saving money and the environ-ment usually go hand in hand and rarely conflict with each other. During the past 10 to 15 years, we have developed our Sustainability Programme
A LiTTLE ABOUT US
IKEA has its roots in Sm?land, historically one of Sweden’s poorest regions, so hard work and econ-omising with resources have always been part of our heritage. We’ve been making a lot out of very little for more than 60 years.
where we work on responsible forestry, water treat-
ment, cotton grown in a more sustainable way and many more projects, together with partners such as WWf.*
Current iKEA social projects in partnership with UNiCEf , UNDP and Save the Children will have benefited 100 million children by the end of 2015.
The iKEA company culture, built on our values, is the basis for all that we do. We are always “on the way” and constantly see possibilities to improve for the future.
The main financial principles of the iKEA Group are created to make sure we have financial stability, independence and flexibility. This gives us the opportunity to expand from our own resources and make long-term decisions. Over the past number of years, interest in iKEA has increased, following our rapid global expansion. in December 2009, the board decided to present, every year, a summary and comments on our financial results and the most important developments.
Sustained profitability gives us resources to grow further and offer a better everyday life for more of the many people. That is what we do with our profits – grow!
Welcome to read more about us at iKEA!
s t e m s B .V . 2010
”Our interest in peOple’s lives at hOme is the sOurce Of all Our business.”
holistic programmes addressing health, education and the empowerment of women in rural areas in india and Pakistan. in addition, the foundation is actively involved in global emergency relief work and also supports initiatives to promote design. During 2010 the foundation expects to donate an estimated 45 million EUrO.
The iKEA Group franchises the iKEA concept from inter iKEA Systems B.V. in the Netherlands, which is the franchisor of all iKEA stores world-wide – both stores inside the iKEA Group and stores owned and run by franchisees outside the iKEA Group.
OUR VISION
To create a better everyday life for the many people.
OUR BUSINESS IDEA
To offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.
THE IKEA GROUP
iKEA is a home furnishing company with a fully integrated supply chain, including its own indus-trial groups – Swedwood and Swedspan. The iKEA Group, directly or indirectly, also owns retail centres, always with an iKEA store as unique anchor tenant.
The iKEA Group works in four basic areas: range strategy & product development, produc-tion, supply and retail.
The parent company of the iKEA Group of Companies, iNGKA Holding B.V., is owned by Stichting iNGKA foundation in the Netherlands. The Stichting iNGKA foundation was established in 1982 by the founder of iKEA, ingvar Kamprad, to create an ownership structure and organisation that stand for independence and taking a long-term approach.
The Stichting iKEA foundation is a Dutch charitable foundation, funded by the Stichting iNGKA foundation. Today, the foundation mainly funds initiatives designed to improve the rights of children and youth in the developing world, making it possible for them to ultimately take charge of their own future. Examples of what is being done include the iKEA Social initiative’s
THE PRODUCT RANGE – OUR IDENTITY
The product range is the core of the iKEA business, developed to inspire and to provide solutions to everyday home furnishing needs. When we develop products, our starting point is the idea that, even with a thin wallet, people should be able to create a beautiful home with well designed, functional, safe and healthy products. The key to the success of iKEA is understanding the different living situations and needs of people all over the world. Thorough analysis helps product developers and designers choose what functions, styles and materials to use for a new product so it has the right combination of design, function and quality – all at the lowest price possible.
THE IKEA BUSINESS MODEL
– HOW WE CREATE THE LOW PRICE
iKEA has a unique business model that connects the needs of our customers with the possibilities on the factory floor. With a deep knowledge about life at home and the challenges most of us have with limited space and wallets on one hand and big dreams on the other, iKEA often develops its products directly on the factory floor. The starting point for product developers and designers is always the price. Together with our very skilled suppliers, we make sure to get the most out of the possibilities in the production plants. We adapt the sizes and constructions of our products so we can produce, package and transport them in the most efficient way. We also put a lot of effort into developing materials, to improve them and save resources.
A limited range of articles and big sales volumes make it possible for us to keep costs and prices down. On top of this, our customers contribute to the low prices by collecting, taking home and assembling the products themselves. Today, they can even design their kitchen or ward-robe themselves using our computerised planner tools. We do our part, you do yours – together we save money.
THE IKEA BUSINESS MODEL
– IN PRACTICE
A factory visit opens the door to a new design. iKEA had seen its customers’ need for a small side table, of course at a low price. When our designers were visiting a door factory, they came
LACK
Last year €8.99.This year €4.90.
LACK side table
€4.90
up with an idea for how to make it. Based on how the doors were constructed, they sandwiched a honeycomb paper core between thin but strong wood-based frames – and LACK side tables were born. Being lightweight, they were affordable, environmentally friendly and easy for customers to take home. LACK, a product that fits in any home, became very popular . We sold so many that we could push down costs – and the price. Swedwood now makes a series of LACK furniture using the board-on-frame technique. Thanks to the big volumes sold, we were able to lower the price of the side table even further in 2009 and 2010. A typical business story at iKEA.
s t e m s B .V . 2010
TORBJ?RN L??F
managing Director
iKEA of Sweden
Nationality: Swedish
Age: 45
family: married, three children
iKEA experience:
Product development, Purchasing
– 21 years at iKEA
favourite iKEA product:
BEST? storage
ExECUTIVE MANAGEMENT OF THE IKEA GROUP
11 STRUCTURE OF THE IKEA GROUP OF COMPANIES
Mikael’s Message
offer the best price on the market – we want every- one to be able to shop at iKEA. To manage this, we have to keep costs low.
A growing iKEA needs to pay a lot of attention to staying lean and simple. Therefore, we have launched an extensive programme for a lower cost structure at iKEA, where the gains will be re-invested in lowering the prices to our customers even more.
We continue to expand on existing as well as on new markets. Our expansion means new possibilities for more people – both in terms of improving their lives at home and in opportunities to work for iKEA, directly or indirectly. in march 2010, iKEA romania became part of the iKEA Group and we plan to open stores in Serbia and Croatia in the next few years. i hope that the many people of South Korea will be next to have the possibility to shop at iKEA and, in the long run, the people of india.
Among other developments that i am par-ticularly pleased with are those concerning diversity and sustainability. much remains to be done, of course; but it is rewarding to see that
A year ago, i had the privilege of succeeding Anders Dahlvig as President/CEO of the iKEA Group. The transition was smooth and now we are continuing our journey. As always, iKEA takes reality as the starting point: in people’s lives at home, the possibilities in the factories and our co-workers’ experience from meeting our customers.
We are now one year into our new strategic direction, Growing iKEA – Together! it focuses on growth, mainly through serving our customers even better in the future, so we can give more people possibilities to improve their everyday lives at home. We are on a constant journey to further develop our product range, which is distinctively iKEA but with the local flavour of each market.
To enable the many people to improve their daily lives, we will continue to reduce prices and improve our quality.
Our goal is to be the leader in life at home – to be the first choice for home furnishings. That means providing more inspiration and more relevant ideas and home furnishing solutions for more people, while offering low prices that are afford-able for everyone. it is simply not good enough to
HEJ!
SUNNAN solar cell table lamp
€14.99
today, of our top 200 managers, 40% are women, and we have a great mix of nationalities. We have fantastic co-workers and our co-worker satisfac-tion surveys show very strong results. in many markets we are the “Employer of Choice” and globally we are listed as one of the top 50 most
attractive employers in 2010. Our recruitment is value-based, and we always strive to attract the best people on each market.*
iKEA Social initiative, a part of The Stichting iKEA foundation, whose mission is to improve the rights and life opportunities of the many children, has developed greatly during the past few years. it is estimated that by the end of 2015, 100 million children will have benefited from its current projects, run together with partners such as UNiCEf , Save the Children, the United Nations Development Programme and others.
We are continuing our journey to become a leader towards a low-carbon society. We are focusing on using less materials and on responsible forestry, cotton grown in a more sustainable way and other projects to tackle climate change. in the forestry, cotton and climate change initiatives, we are working in partnership with WWf.
s t e m s B .V . 2010
Our long-term direction states that all iKEA buildings shall be supplied with 100% renewa-ble energy. in line with this, we have decided to invest in solar panels, wind farms and other renewable sources. We currently own 52 wind
turbines, which generate roughly the equivalent of 10% of the electricity consumed by the iKEA Group’s operations, and we are equipping 150 stores and distribution centres with electricity- producing solar panels.
We see sustainability as a catalyst for further innovation and change within iKEA. it will trans-form the way we economise with resources and do business, for future generations and continuing success.
iKEA is always about working together – cus-tomers, co-workers and suppliers.
i warmly thank all of you for the challenging and good years of 2009 and 2010!
Mikael Ohlsson
President & CEO of the IKEA Group
The new, flat-packed
EKTORP sofa is less bulky to transport, reducing the price and the effects on the environment.
EKTORP sofa
€299
s t e m s B .V . 2010
Overall, the main financial principles of the iKEA Group are created to make sure we have financial stability, independence and flexibility. This gives us the opportunity to expand from our own resources and make long-term decisions. To put it very simply – we earn the money before we spend it. We also have decided to own the land and buildings where we operate.
This conservative view on how we finance our business and expansion has consequences for our balance sheet.
fixed assets will continue to grow along with investments in new iKEA stores, warehouses, retail centres and factories.
Cash and securities will always be a big item in our balance sheet, as we intend to continue expanding and will finance most of this expansion with our own money.
MAIN PRINCIPLES
We continue to focus on the many people with limited resources, and that means we keep improving the prices to our customers by constantly striving to lower costs. During the past 10 years, we have lowered our prices by 2 to 3% per year, on average.
Naturally we pay taxes and fees in accord-ance with laws and regulations, wherever we are present as retailer, manufacturer or in any other role. The effective tax rate varies from year to year, depending on where we grow – in high or low tax countries.
Our profit is either reinvested in our business, for example in new stores or factories, or paid out as dividends to our owner, the Stichting iNGKA foundation for the funding of the Stichting iKEA foundation.
2009 was a tough year. After a longer period of increased costs for energy, food and housing, the economic crisis put further strain on everyone’s income. During this challenging year, we have seen the importance of value for money increasing and, as a result, we have been able to attract even more customers to our stores. During fY09 we opened 15 new iKEA stores.
Total revenue grew by 1.4% to 21.8 billion EUrO, which was equivalent to a growth of 3.1%, when adjusted for currency effects. The growth came entirely from the opening of new stores. Sales in comparable units fell by 1.1% globally in a very difficult market situation.
Despite the modest sales growth, we managed to grow our operating income by 4.4% to a total of 2.8 billion EUrO. The fall in raw material prices and a strong focus on operating expenses supported this development.
Due to the solid operating income, a lower average effective tax rate for the iKEA Group and conservative management of our financial assets, we saw an increase in net income to 2.5 billion
EUrO.Corporate income taxes were unusually low in fY09 and amounted to 384 million EUrO. This
S?REN’S COMMENTS
S?REN HANSEN
Vice President & CfO
s t e m s B .V . 2010
ciation in fY09 amounted to 832 million EUrO. A strong cash flow and good control over stock development further improved our cash position. Combined cash and securities amounted to 14.3 billion EUrO. These financial assets continue to be conservatively invested. There were no financial counterparty losses during the year and we will continue to monitor this exposure closely. This 14.3 billion EUrO will primarily be invested in new stores and markets.
The net income for the year was added to retained earnings and equity. for the last 3 years no dividend has been paid out to our owner, the Stichting iNGKA foundation. Total equity at end of fY09 amounted to 19.7 billion EUrO – the equity represents 53% of the assets. Due to our strong cash position and the difficult situation in the finan-cial markets, we reduced our long-term liabilities by 730 million EUrO.
Profit gives us resources to grow. During 2009, we invested 2.1 billion EUrO in new stores and facilities, out of the 2.5 billion EUrO we earned. This is how we prepare for the future – to make sure that we reach even more of the many people, to offer them a better everyday life at home.
S?ren Hansen
Vice President & CFO of the IKEA Group
was primarily due to a relatively lower result in countries with high income tax rates. Currency movements, a negative result in our industrial groups, a strong result in our asset management and an improved cost of sourcing in our supply chain, all contributed to this development. The sustainable part of these developments will over time benefit our customers in terms of lower prices. The amount paid in tax will fluctuate from year to year depending on the mix of earnings throughout the iKEA Group.
The rise in net income is equivalent to an increase of 11.3% and represents a net income of 11.6% in relation to revenue. Net income has fluctuated be-tween 10% and 13% of revenue in the past 10 years.
The development of our balance sheet is to a large degree driven by investments in new stores, warehouses and retail centres and by our financial principles. The assets are therefore mainly fixed assets and cash/securities, which on the liability side are financed with equity, long-term property loans and short-term liabilities.
fixed assets increased by 527 million EUrO, to a total of 16.8 billion EUrO, mainly due to net investments in property and equipment. The total amount of fixed assets includes 1.6 billion EUrO relating to investments in retail centres. Depre-
The following abbreviated financial statements are an abridged version of the con-financial year 2008/2009 is available through the Dutch Chamber of Commerce.
CONSOLIDATED
INCOME STATEMENT
SEPT 1 – AUG 31
s t e m s B .V . 2010