IKEA Profile 2012X

COMPANY PROFILE

Ikea Group

REFERENCE CODE: 6878C795-4BCB-4C85-A319-6F33C508FD80PUBLICATION DATE: 30 Apr 2012www.marketline.comCOPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED.

COMPANY OVERVIEW

Ikea Group (Ikea or ‘the group’) is an international home products retailer that sells furniture,accessories, and bathroom and kitchen items. As of August 31, 2011, the group had a total of 287stores in 26 countries, most of them located in Europe, North America, Asia and Australia. IngkaHolding BV, which is wholly owned by Stichting Ingka Foundation, is the parent company for theIkea group of companies. The foundation is owned by the Kamprad family. Ikea is headquarteredin Delft, the Netherlands and employs 131,000 people.

The group recorded revenues of E25,173 million (approximately $34,960.3 million) during the financialyear ended August 2011 (FY2011), an increase of 6.9% over FY2010. The operating profit of thegroup was E3,592 million (approximately $4,988.6 million) in FY2011, an increase of 12.4% overFY2010. The net profit was E2,966 million (approximately $4,119.2 million) in FY2011, an increaseof 10.3% over FY2010.

KEY FACTS

Ikea GroupHead OfficeOlof Palmestraat 1NL 2616 LN DelftNLD

46 709 936376Phone

31 15 215 3838Fax

http://www.ikea.comWeb Address

25,173.0Revenue / turnover(EUR Mn)

AugustFinancial Year End

131,000Employees

Ikea Group Page 3© MarketLine

Ikea GroupCompany Overview

BUSINESS DESCRIPTION

Ikea is a global retailer of Scandinavian designed furniture and accessories. The parent companyof the Ikea Group of companies is Ingka Holding, a private Dutch-registered company, which, inturn, is owned by Stichting Ingka Foundation. The Stichting Ingka Foundation was established in1982 by Ingvar Kamprad and the ownership of this foundation lies with the Kamprad family. TheIkea trademark and concept is owned by Inter Ikea Systems, another private Dutch company, butnot part of the Ingka Holding group. The parent company of Inter Ikea Systems is Inter ikea Holdingwhich is registered in Luxembourg.

Ikea is a vertically integrated furniture group. Ikea's industrial group constitutes Swedwood, Swedspanand IKEA Industry Investment and Development (IIID). This industrial group is engaged in activitiessuch as production from forestry, sawmilling, board manufacturing and furniture production. Swedwoodhas 33 production units in 10 countries and Swedspan has five production units in five countries.IIID is an advisory and investment service company. Ikea also operates 26 distribution centers and11 customer distribution centers in 16 countries. These centers supply goods to Ikea stores. Ikeaalso has 29 trading service offices in 25 countries and 1,018 suppliers in 53 countries.

The group offers a range of furniture for living rooms, bed rooms, kitchens and children's rooms.Ikea offers fabric sofas, leather sofas, armchairs, sofa beds, rattan seating, book cases, extra covers,cabinets, sideboards, shelving units, wall shelves, CD and DVD storages, TV solutions, and coffeetables and side tables for living rooms. For the bedroom, the group offers beds, mattresses,comforters, pillows, linens, curtains and wardrobes. The group's kitchen offerings include built-inkitchens, free standing kitchens, kitchen accessories and appliances. For children, Ikea offers nursingand changing tables, sleeping, eating, storage and playing accessories.

All Ikea stores have customer restaurants that offer a choice of local dishes. Most stores also havea food shop, the Swedish Food Market, which sells Swedish delicacies such as meatballs, pickledherring, crisp bread, and lingonberry jam. The range includes nearly 90 products which are soldunder the Ikea food brand. Many Ikea stores also have a play area named Smaland for childrenaged four to 10 years.


Ikea GroupBusiness Description

HISTORY

Ikea was founded by Mr. Ingvar Kamprad in 1943. The group originally sold pens, wallets, pictureframes, table runners, watches, jewellery and nylon stockings.

By 1947, the group started stocking furniture produced by local manufacturers. Ikea's first furniturecatalogue was launched in 1951. The group launched its first furniture warehouse in 1953 with theintroduction of group designed furniture in 1955, and self-assembly flat packages in 1956. In 1958,the first large scale Ikea store was opened in Almhult, Sweden which at the time contained the largestfurniture display in Sweden.

Ikea began expanding into the rest of Europe and the worldwide market, with a rate of one store peryear opening from 1974 to 1989.

In the 1990s, Ikea consolidated this growth, opening stores in the Middle East, Mainland China andthroughout Europe.The group's first store in Russia opened in 2000. Several major new design lineswere introduced such as furniture aimed specifically at children.

The group, in 2001, established its own rail operations through Ikea Rail AB. In the same year, Ikeamoved its head office from Humlebaek in Denmark to Leiden in the Netherlands. In 2004, the group’srail operations were taken over by an external company. Ikea opened its first store in Lisbon, Portugalin the same year.

Ikea opened its first store in Japan in 2006. Also in 2006, Ikea launched its own food label. In 2007,Ikea recalled Parodi and Apelsin glass vases due to faulty base. In the same year, the group launchedits new website. The group opened new stores in Russia, the UK and Germany in 2007.

Ikea recalled a number of products in 2008. The group recalled IRIS ALVIN tents due to lack offermacorda application to the cords. Ikea also recalled accessory drawers KVIBY due to threat ofinjury during installation and usage. Further in the year, Ikea recalled baby sleeping bag NARNSLIG,spotlight wall / clamp femton on safety grounds. Ikea opened a new distribution center in Tacoma,Washington in 2008.

In 2009, the group opened 15 stores in 11 countries. In the same year, Ikea cancelled a $1 billioninvestment plan to start retailing in India after the Indian government planned not to raise the 51%foreign ownership cap on single-brand stores to full ownership. In China, Ikea closed three sourcingoffices located in Chengdu, Wuhan, and Xiamen in 2009.

In 2010, Ikea planned to start constructing a 120,000–140,000 square meter shopping and recreationcentre in Volgograd, Russia. In the same year, Ikea acquired its Romanian franchise from MoaroTrading, a Romania-based retailer of home furniture.


Ikea GroupHistory

The group started the construction of its Centennial, Colorado based store in 2010. This store willbe built on 13.5 acres of land and will have a retail space of 415,000 square foot with approximately1,500 parking spaces. later in the year, Ikea announced plans to offer its own banking services inRussia.

In June 2011, the group announced its plans to launch a website in the UAE in the first half of 2012.In July 2011, the group announced plans to open its first store in Bulgaria.The store would be spreadacross an area of 30,000 square meters. In the same month, the group announced plans to develophousing, offices and shops over an area of 30 acres of land located next to the south of the OlympicPark in the UK.The group also announced that Ikea in partnership with ECOtality would offer electriccar charging stations at its stores in 10 of the US cities.

The group, in August 2011, launched a new community photo-sharing website called Share Space(www.theshare-space.com). Users can upload photos of their living spaces to easily find and shareideas.The site also features a new blog, Design by IKEA (www.theshare-space.com/en/Blog), whereusers can share tips and design ideas for home improvement.

In October 2011, the group recalled its BUSA children’s folding tent as the steel wire frame of thetent could break in use. In November 2011, the group recalled its PAX AURLAND glass mirror dooras the mirror glass could detach unexpectedly from the wardrobe door.

In January 2012, the group, in cooperation with the US Consumer Product Safety Commission,voluntarily recalled for repair the ANTILOP high chair as the high chair restraint buckle could openunexpectedly, creating a fall hazard.

The group, in March 2012, announced that it would open its first store in Siberia by the end of 2013.In the same month, Ikea also announced plans to expand further in Siberia by opening five storeswith an investment of E250 million (approximately $330 million).

IKEA expanded into home electronics in April 2012. It launched a new furniture range, UPPLEVA,integrating an LED TV, a sound system with wireless bass speakers, an internet connection andCD, DVD and Blu-ray players—all in one self-assembly piece.


Ikea GroupHistory

KEY EMPLOYEES

BoardJob TitleName

Senior ManagementPresident and Chief Executive OfficerMikael Ohlsson

Senior ManagementManaging Director, Ikea of SwedenTorbjorn Loof

Senior ManagementGlobal Retail ManagerNoel Wijsmans

Senior ManagementVice President and Chief Financial OfficerSoren Hansen

Senior ManagementGlobal Corporate Communications ManagerHelen Duphorn

Senior ManagementChief Sustainability OfficerSteve Howard

Senior ManagementGlobal Supply Chain ManagerJesper Brodin

Senior ManagementGlobal Human Resources ManagerPetra Hesser


Ikea GroupKey Employees

KEY EMPLOYEE BIOGRAPHIES

Steve Howard

Board: Senior ManagementJob Title: Chief Sustainability OfficerSince: 2011

Mr. Howard has been the Chief Sustainability Officer at Ikea Group since 2011. He serves as theChief Executive Officer at The Climate Group, an independent non-profit NGO, which he co-foundedin 2003. Before founding The Climate Group, he worked 15 years with large corporations, NGOsand UN bodies on environmental and sustainability issues.

Petra Hesser

Board: Senior ManagementJob Title: Global Human Resources ManagerSince: 2011

Ms. Hesser has been the Global Human Resources Manager at Ikea Group since 2011. She beganher career at Ikea in 1984. From 1995 to 2001 she served as a Director for Human ResourcesDevelopment in the center of Ikea Germany. From 2002 to 2006, she was the Managing Director atIkea in the Netherlands.


Ikea GroupKey Employee Biographies

MAJOR PRODUCTS AND SERVICES

Ikea Group is an international home products retailer that sells furniture, accessories, and bathroom and kitchen items. The group’s key products include the following:

Products:

Living room furnitureBedroom furnitureKitchen furnitureChildren's room furniture

Services:

RestaurantsPicking and deliveryHome deliveryAssembly and installationKitchen planningOffice planningHome furnishing advice

Brands:

Ikea


Ikea GroupMajor Products and Services

REVENUE ANALYSIS

Ikea Group

The group recorded revenues of E25,173 million (approximately $34,960.3 million) during the financialyear ended August 2011 (FY2011), an increase of 6.9% over FY2010. For FY2011, Europe, thegroup's largest geographic market, accounted for 79% of the total revenues.

Ikea generates revenues through a single business segment: sale of furniture goods (100% of thetotal revenues during FY2011).

Revenues by segment

In FY2011, the sale of furniture goods segment recorded revenues of E25,173 million (approximately$34,960.3 million), an increase of 6.9% over FY2010.

Revenues by geography

Europe, Ikea's largest geographical market, accounted for 79% of the total revenues in FY2011.Revenues from Europe reached E19,886.7 million (approximately $27,618.6 million) in FY2011, anincrease of 6.9% over FY2010.

North America accounted for 14% of the total revenues in FY2011. Revenues from North Americareached E3,524.2 million (approximately $4,894.4 million) in FY2011, a decrease of 0.2% overFY2010.

Russia, Asia and Australia accounted for 7% of the total revenues in FY2011. Revenues from Asiaand Australia reached E1,762.1 million (approximately $2,447.2 million) in FY2011.


Ikea GroupRevenue Analysis

TOP COMPETITORS

The following companies are the major competitors of Ikea Group

Furniture Brands InternationalStanley Furniture Company, Inc.John Lewis Partnership plcArgos LimitedHowden Joinery Group PlcHabitat UK LimitedLevitz FurnitureReid Furniture LtdWal-Mart Stores, Inc.ABC Home Furnishings, Inc.Asda Stores LimitedAshley Furniture Industries, Inc.


Ikea GroupTop Competitors

COMPANY VIEW

A statement by Mikael Ohlsson, the President and Chief Executive Officer at Ikea Group, is givenbelow. The statement has been taken from Ikea Group’s Yearly Summary for FY2011.

Welcome to the 2011 IKEA Yearly Summary. In times when many nations and people face economicchallenges, our vision of creating a better everyday for the many people is more relevant than ever.We are constantly engaged in learning about the different ways people experience life at home andwhat their needs are. And we know people are becoming more value conscious. We develop ourrange for people with normal incomes. To make it possible to furnish functionally, individually andsustainably – even when the economy is tight.We strive to become more accessible through loweringour prices, improving our stores, opening new stores and adding new services that make it easierfor our customers to buy at IKEA. Home is the most important place in the world and we want tostimulate people’s interest and knowledge in home furnishing.

Continued growth

During the year we have been fortunate to continue to grow. Our total sales increased by 6.9% andour existing stores grew with 2.7%.We have gained market share in more or less all markets. Despiteprice increases for many raw materials, we have lowered prices to our customers with 2.6%, whilethe quality of our products has improved. This is due to lower costs through our complete valuechain, inside IKEA and with our suppliers. The cost savings we make, we pass on to our customers– thereby strengthening IKEA’s competitiveness.

A good result – investing in the future

We reached a good financial result for FY11. A result that gives us resources to continue to investin the future. During the year, we opened 7 new stores and relocated 2 old stores in existing markets.We made big investments in many of our existing stores to show our range in the best possible way,to offer a good shopping environment and to secure good working conditions for our co-workers.We develop and design all our approximately 9,500 articles ourselves based on people’s needs,making the most of production conditions and looking for opportunities in materials. This stimulatesinnovation, creativity and development – in some cases small revolutions. We continue to invest inmaterial and technique development as well as production technologies in our industries. This alsoopens up new opportunities to build platforms, create new industrial development and find moresustainable and better ways of distributing our products. We see endless opportunities to find newways of economizing with resources and to eliminate as many unnecessary costs as possible. Allof this is to provide customers with the best possible value. During the year we have also investedin renewable energy. The largest programs include Photovoltaic energy production on the roof ofmany of our stores, as well as purchasing wind parks in several countries. We are, already now,half way to our goal of 100% renewable energy.

Responsible business practices and a sustainable future


Ikea GroupCompany View

Our vision of a better everyday life for the many people can also be seen from a broader perspective.We have great opportunities to inspire our visitors to live a more sustainable life at home and toprovide products for that. We always prioritize healthy and safe products by eliminating hazardousmaterials and we use rigorous safety norms and tests, especially for all Children’s products. Wework on lowering our own emissions and invest in renewable energy sources. Protecting Earth’sresources is an important part of how we operate. We work hard to find sustainable solutions,alternative raw materials, creating more with less, and working conditions at our suppliers.

A better everyday for the people that have the least

Through the IKEA Foundation and in collaboration with partners such as UNICEF, Save the Children,UNDP and UNHCR as well as other NGOs, we continue to contribute to a better everyday life forthe people that have the least. The IKEA Foundation dramatically increased their donations duringFY11 and will contribute to a better life for 100 million people by 2015. Together with our customersthe “one Euro is a fortune activity” gave a record EUR 11 million for additional educational programstogether with our partners.

Our people

Our co-workers are the strength of IKEA and we recruit based on values. We live by them. Webelieve in diversity and inclusion and want our co-workers to mirror our customer base in order tobest understand and serve our customers. We focus much of our attention to our culture, theIKEA-Spirit, competence development and leadership development. This enables us to work in anenvironment where everybody takes responsibility and contributes together. We economize withresources and have a positive outlook on the opportunities, knowing that most things remain to bedone. During the year, I have visited many parts of IKEA all over the world and always met a fantasticspirit and ambition to make IKEA a good contributor to people’s life at home and society. Thank youall! You are the ones that make IKEA special and unique as we are Growing IKEA-Together.


Ikea GroupCompany View

LOCATIONS AND SUBSIDIARIESHead Office

Ikea GroupOlof Palmestraat 1NL 2616 LN DelftNLDP:46 709 936376F:31 15 215 3838http://www.ikea.com

Other Locations and Subsidiaries

IKEA WoodbridgeIKEA West Chester2901 Potomac Mills Circle9500 IKEA WayWoodbridgeWest ChesterVirginia 22192Ohio 45069USAUSA

IKEA Abu Dhabi storeIKEA BelfastYas IslandHolywood ExchangeAbu Dhabi306 Airport Road WestAREBelfast BT3 9EJ

GBR

IKEA AdelaideIKEA Dublin397 Sir Donald Bradman DriveSt. Margaret's RoadAdelaide Airport SA 5950BallymunAUSDublin 11

IRL

IKEA CanadaIKEA Hong Kong586 De TouraineUpper Basement Parklane HotelBoucherville310 Gloucester RoadQuebec J4B 5E4Causeway BayCANHKG

IKEA BrooklynIKEA Alexandra1 Beard Street317 Alexandra RoadBrooklynSingapore 159965New York 11231SGPUSA


Ikea GroupLocations and Subsidiaries

MARKETLINE | 119 FARRINGDON ROAD | LONDON, UNITED KINGDOM, EC1R 3DAT: +44 161 238 4040 | F: +44 870 134 4371 | E: [email protected] | W: www.marketline.com

Documents

IKEA Profile 2012X