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 like patents, concepts and intellectual property. Intangible fixed assets form much of Inter IKEA Group overall assets.
Most Inter IKEA Group intangible fixed assets are so-called proprietary rights for the IKEA trademarks, intellectual property and catalogue. Inter IKEA Group purchased these rights for EUR 11.8 billion. As a positive return is expected for a long period, these costs are spread over a period of 45 years, which started in 2012.
Tangible fixed assets
Tangible fixed assets are things like real estate and equipment that you can physically touch and feel. Inter IKEA Group tangible fixed assets are mainly factories and distribution centres.
Inter IKEA Group owns several offices and distribution centres, the IKEA Delft store, the IKEA Hotel and Museum, and around 40 factories. Most of the factories are in Europe. The majority produce IKEA furniture, and two produce components like screws and wooden dowels used to assemble IKEA furniture.
This year Inter IKEA Group sold two factories and closed one other. In most cases co-workers have remained in the same factories under new ownership or moved to new jobs in other nearby factories with support from the Inter IKEA Group.
Inventories and receivables
Inventories mostly consist of IKEA products in warehouses. Last year inventory levels were higher than normal due to lower than expected sales. Inter IKEA Group took measures this year to lower inventory levels, reducing their overall value.
Receivables is money owed to the Inter IKEA Group by business partners. Most receivables are for franchise fees and products sold and invoiced to IKEA franchisees.
Group equity, provisions and liabilities
Equity is the capital invested by shareholders of the Inter IKEA Group plus accumulated profits over time. Equity increased with EUR 1 billion during FY19.
Of the EUR 1,485 million profit achieved during FY19, EUR 850 million will be distributed as a dividend to Interogo Holding AG. The remaining EUR 635 million will be added to Inter IKEA Group equity.
Provisions are money set aside for pension commitments, deferred taxes and claims. Liabilities are money owed to others. Most Inter IKEA Group non-current liabilities, which are due over a long period of time, consist of loans from Interogo Holding AG (a non-controlling shareholder). As in FY19, Inter IKEA Group will continue to repay EUR 500 million each year. Current liabilities are short-term loans, money due to suppliers and the current portion of long-term loans from Interogo Holding AG.