Inter IKEA Group balance sheet

The Inter IKEA Group financial position improved during FY20. Inventories and debts went down, and the equity ratio increased from 39% to 45%. The consolidated balance sheet shows an overview of Inter IKEA Group’s assets, equity, and what is due to suppliers, partners and other organisations.

NRS Table 2 — Note to reader: the included abbreviated financial statements are an a bridged version of the consolidated financial statements of Inter IKEA Holding B.V. as included in the Annual Report for the financial year 2020. An unqualified auditor’s report dated 29 October 2020 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.

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 and intellectual property. These rights were acquired for EUR 11.8 billion. As these rights are expected to provide a positive return over a long period of time, these costs are spread over a period of 45 years.

Tangible fixed assets

Tangible fixed assets include 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 Hotell and Museum, and around 42 factories. Most of the factories are located in Europe. The majority produce IKEA furniture, and two produce components like screws and wooden dowels used to assemble IKEA furniture.

This year new owners took over the Inter IKEA Group manufacturing facilities in Danville, USA and Konstantynow, Poland. The Konstantynow facility continues to supply IKEA customers with chairs made of solid wood.

Inventories and receivables

Inventories mostly consist of IKEA products in warehouses. Inventories reduced dramatically when stores re-opened after the lockdown. While the supply chain mobilised quickly, it took several weeks to restart production and address logistics challenges.

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.

This year Inter IKEA Group supported franchisees by delaying payment obligations for goods sold. The company also extended loans to several IKEA suppliers to ensure they could re-start production after the lockdowns. Money owed under these agreements are reflected in this year’s receivables.

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 1.2 billion during FY20.

Of the EUR 1,731 million profit achieved during FY20, EUR 850 million will be distributed as a dividend to Interogo Holding AG, a holding company that is fully owned by the Interogo Foundation. The remaining EUR 881 million will be added to Inter IKEA Group equity.

Provisions are money set aside for pension commitments, deferred taxes and claims. Provisions decreased this year as a result of the changed funding for the IKEA of Sweden AB pension scheme.

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.

Inter IKEA Group FY20 year in review

FY20 financial results