IKEA

FACTS & FIGURESTHE IKEA GROUP 2006

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I2006 was a good year for the IKEA Group with sales up by 17 percent and 16 new IKEA stores worldwide.

THE OPENING of the first IKEA store in Japan was one of the high points of the year, with more than 35,000 customers attending the premiere! The move is a natural step for IKEA. I’m convinced that the time is right and that we can live up to the high demands of Japanese customers. Japan is the biggest consumer market after the USA. Most people live in small spaces, so what we offer in the shape of smart storage solutions and prices that are considerably lower than those of our competitors, is ideal for this market.

In 2007 we will be opening another store in Tokyo, and we plan to open more in the next few years. IKEA is planning to open a total of 24 stores in 2007.

A KEY to success is offering the best quality at the lowest price. That’s why IKEA has invested extra resources in quality assurance in the past year – not least with our suppliers who shoulder much of the responsibility for the end product. This work is reflected clearly in our new launches.

THE 2007 IKEA RANGE includes a new furniture series and a unique art project. IKEA STOCKHOLM is a high quality collection containing products for nearly everything in the home, but at a price well below what similar products would cost elsewhere. The IKEA art event series of limited editions of works by six Swedish artists will give thou-

Best qualityat the lowest price

ANDERS DAHLVIG, PRESIDENT AND CEO OF THE IKEA GROUP.

sands of customers the chance to buy their works at a fraction of art gallery prices.

IN 2006 THE FOCUS was on bedrooms and kitch-ens. Over the next year we will be concentrat-ing even more on life in the kitchen with a wide range of everything from complete kitchens to utensils, tableware and glassware in different styles and price brackets. Presenting all the new carefully thought-out kitchen storage solutions will be particularly interesting.

WE’RE NOW AIMING for new targets. The focus for 2007 will centre on four factors:• Reduced prices. • Continued quality assurance at all levels. • Expansion.• Continued focus on social and environ-

mental issues.

Anders Dahlvig, IKEA Group President and CEO.

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NewsFor 2007, a third of our rangeis new! Here are a few of ourexciting new products.

KITCHENS – IKEA wants to make life in the kitchen easier, smarter and more fun! That’s why we’re planning kitchens from the inside out with smart storage and great functionality. New products include co-ordinated kitchen and dining room furniture, cabinets, kitchen utensils, glasses and tableware. Kitchens shouldn’t just be easy to use – they should also be easy to buy. That’s why IKEA has introduced a new service covering everything from finance to installation. We also want to be the best in the world at pots and pans and will be offering an expanded range to cover every need.

IKEA STOCKHOLM is a new collection of more than 80 products: textiles, vases, bookshelves, tables, chairs, sofas, armchairs, lamps and the like. They’re classics of modern design in materials of the highest quality featuring attention to detail and comfort.

TEXTILES AND RUGS will be another major focus area for IKEA in 2007. This year’s textiles are centred on design and Scandinavian identity. Textiles such as blankets, rugs, curtains and cushions help to create unity and comfort in a home. All are co-ordinated to team well with the rest of the range.

BEDROOMS – IKEA will strengthen its bedrooms offer. Women and dreams will be the focus, as the majority of IKEA customers are women. The result is a variety of exciting new products. What’s more, two new series are being launched – Latex mattresses and high-class mattresses made from natural materials.

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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.

For more than 60 years IKEA has worked hard to create a better everyday life for the many people. This work is about constantly trying to do everything a little better, a little simpler and even more efficiently.

AT IKEA WE TALK about low price with meaning. This is about always seeing quality in relation to need for both form and function.

IKEA OF SWEDEN in Älmhult develops the range, which includes 9,500 products. It’s about understanding people, and their lives at home where new needs arise constantly. These needs are, to a large extent, the same the world over, and that’s why IKEA has the same basis of products in all stores. Our target group is most people all over the world, with the focus on families with limited income and living space.

Better, simplerand less expensive

INDIRA bedspread has been sold at IKEA for more than 30 years at the same price, thanks to increased volumes.

WE DESIGN THE PRICE TAG first. That’s the prin-ciple behind all product development at IKEA. It’s about co-operation between people such

as product developers, designers, technicians, purchasers, and those responsible for quality and the environment. The products are designed by both in-house and external designers. Their task is to make the maximum use of raw materials and produc-tion methods to create new products.

IDEAS ARE TESTED as early as the outline stage, with regard to design, function and quality. Just as impor-

tant is to take into consideration the amount of materials used, production opportunities, efficient distribution and environmental influence. And, last but not least: that every-thing is done at the lowest possible price. Hollow legs and particleboard as filling instead of solid wood are just some of the

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methods used to save resources. Products should be economical in the use of resources, easy to transport and prefer-ably made of renewable or recycled materials. Waste created in the manufacturing process should, where possible, be used in the production of other items. Products should be recyclable too.

CUSTOMERS LIVE WITH our products and should be able to feel confident that they don’t contain substances that can cause allergies or other harmful effects. IKEA always strives to adhere

to the strictest criteria: if laws and regulations for chemicals and other substances are tightened up in any country where IKEA is active, IKEA adopts the new rules in other countries too.

CLOSE CO-OPERATION with our suppliers has resulted in an effective production organisation. IKEA has co-workers on

site around the world who follow production to try out new ideas, negotiate prices, and check quality and social and working condi-tions at suppliers. Being close to suppliers is

Kitchens are becoming an increasingly important place in our homes. IKEA has everything – from complete kitchens to coffee cups.

LÅDIS is a new stackable box made using plastic from IKEA loading ledges used to transport goods.

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important for co-operation to work both practically and in the long-term.

The Swedwood Group is IKEA’s own industrial group which makes wood-based furniture and wooden components. As well as ensuring the avail-ability of important prod-ucts, one of their most important tasks is an increased understanding of production conditions.

EFFECTIVE DISTRIBUTION is an important piece of the jigsaw in achieving a low price. It’s about simplifying and making the path from supplier to customer as cost-effective and environmentally-adapted as possible.

Flatpacks play an important part, as they ensure IKEA is not transporting air, which helps keep costs down and reduce the impact on the environment.

IKEA STORES have everything for the home under one roof: kitchens and bathrooms, sofas and chairs, beds and textiles, rugs and

floors, lamps and plants, and everything in between. By displaying the range in room settings, we want to inspire customers and show them smart solutions, as well as provide tips and ideas for different living situations. IKEA stores also offer help with interior design, delivery, assembly, curtain-making etc.

THE IKEA CATALOGUE is our most important marketing channel. This years’ cata-logue was printed in 175

million copies in 55 editions and 27 languages.

THE INTERNET is an information channel that is being used more and more. During the finan-cial year 2006 IKEA websites attracted 278 million hits all around the world. Shopping on the net accounts for a small but ever-growing proportion of total IKEA sales.

is the number of times our kitchen drawers are pushed in and out to pass our quality tests!

is one of the world’s best-selling sofas. If all the EKTORP sofas sold in a year were lined up, they would reach from Älmhult in Sweden to New York City, USA!

different quality tests were carried out on IKEA products at the development stage alone. More tests are done during production.

TROFAST is a multifunctional piece of storage furniture made from recyclable solid wood.

5,000EKTORP80,000

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Our co-workersThe IKEA vision is to create a better everyday life for the many people. It’s our co-workers around the world who transform this vision into reality. Today IKEA has more than 100,000 co-workers in 44 countries.OUR HUMAN RESOURCE IDEA is simple: to give down-to-earth, straightforward people the opportunity to grow, both as individuals and in their professional roles, so that together we are committed to creating a better every-day life for ourselves and our customers.

AT IKEA WE TALK about co-workers rather than employees. The word co-workers is a better description of the way we see people and their values than employees. Whatever their role, co-workers are an important part of the whole, and it’s only by working together towards the same goals that we succeed.

OUR CORPORATE CULTURE IS ABOUT shared values, such as together, respect, simplicity, and cost-consciousness. IKEA encourages innovation and not being afraid of making mistakes.

Ivan Susak and his colleagues on the IKEA Helpdesk in Älmhult help IKEA co-workers around the world with computer questions.

Elisabet Morgado, a co-worker at the IKEA store in Badalona, Spain.

WANT TO WORK AT IKEA? IKEA is growing fast and will be recruiting lots of new co-workers in the next few years. You can look for jobs on the website:www.IKEA.com.

Co-workers by regionAsia and Australia 3,500

North America 11,000

Europe 89,500

Co-workers by function

Retail 79,800

Purchasing, distribution, wholesale, range and other 11,300

The Swedwood Group 12,900

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At IKEA we talk about low price – but not at any price. This means that all products must be manufactured in a responsible manner with as little effect on the environment as possible.

IKEA SUPPORTS DIFFERENT activities and projects to protect the environment and help create a better everyday life for everyone who works for our suppliers and their sub-contractors. This task is a continuous process and strives for constant improvement. Great progress has been made, but there is still much left to do, both within IKEA and at our suppliers.

INCREASED AWARENESS AND RESPONSIBILITY are important factors in our work on social and environmental issues at IKEA. All co-workers receive basic training in these areas. IKEA also has its own specially trained auditors and environmental co-ordinators. All to ensure that issues concerning the environ-ment and social responsibility form a natural part of our daily work.

IKEA PRODUCTS must be manufactured under acceptable working conditions by suppliers who take responsibility for the environment. Suppliers who work with us must follow our code of conduct “The IKEA Way on Purchasing Home Furnishing Products” (IWAY). IWAY specifies the minimum requirements IKEA places on suppliers and what they can expect from IKEA. Suppliers, in turn, must be respon-sible for making sure their sub-contractors fulfil the requirements. These include issues such as working environment, child labour, discrimination, minimum wage, overtime payment, freedom of association and collective bargaining, emissions into air and water, and the handling of waste and chemicals.

IKEA has specially trained auditors who follow up IWAY demands and help suppliers with action plans. We also appoint independ-ent auditors who carry out random checks and verify working methods and results.

IKEA CO-OPERATES with companies, organisa-tions and authorities both globally and locally. Social and environmental responsibility issues are complex and require influence from many parties. That’s why we work with organ-isations such as UNICEF, Save the Children and WWF. The focus is on preventing child labour and supporting responsible forestry in countries where IKEA is operational.

IKEA STRIVES to keep the best interests of the child in focus and works in accordance with the UN Convention on the Rights of the Child (1989). We do not accept child labour and work actively to prevent it occurring. There is a special code of conduct called “The IKEA Way on Preventing Child Labour” that all suppliers and sub-contractors must adhere to.

WOOD MUST COME FROM responsibly managed forests. IKEA does not accept timber from intact natural forests or from forests with a clearly defined high conservation value.

IKEA has particular requirements for tropical hardwoods. They must be certified in accordance with current standards for responsibly managed forests. The long-term goal is for all wood used to make IKEA prod-ucts to come from verified well-managed forests. The only current standard that meets this goal is that of the Forest Stewardship Council (FSC), which works to promote environmentally appropriate, socially respon-sible and economically viable use of the world’s forests.

Social and environmental issues

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1. IKEA and UNICEF work together to prevent child labour in northern India. The project includes alter-native learning centres (ALCs), which help tens of thousands of children to enter the ordinary school system.

2. Illness and disability in families can lead to children being forced to work. That’s why IKEA works with UNICEF and WHO to make sure newborn children and pregnant women in northern India are vac-cinated.

3. IKEA runs develop-ment projects with organisations including WWF to contribute to the responsible management of forests around the world. IKEA also works on comprehensive action plans and, among other things, places demands on suppliers’ purchasing procedures.

4. In co-operation with UNICEF and one of our suppliers, IKEA runs a project that gives women the opportunity to help support their families by embroider-ing cushions. These cushions are then sold as part of the PS GRINDTORP range in IKEA stores.

MORE ON OUR WORK. “Social & Environmental Responsibility Report 2005” describes our work on social and environmental issues in detail. Find it on: www.IKEA-group.IKEA.com

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Ingvar Kamprad, who founded IKEA, talks to co-workers during a visit to Moscow, Russia.

From Älmhult to Tokyo

1943IKEA is founded.

1951The first IKEA catalogue is distributed.

1956Flatpacks – key contributors to low price – are introduced.

1958The very first IKEA store opens in Älmhult, Sweden.

1963The first IKEA store outside Sweden opens in Norway.

1973The first IKEA store outside Scandinavia opens in Switzerland.

1965The IKEA store at Kungens Kurva outside Stockholm, Sweden, opens, and the self-serve concept is born.

1955IKEA starts to design its own products.

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THE NAME IKEA COMES FROM the initials of the founder, Ingvar Kamprad, the farm Elmtaryd, and the village Agunnaryd where he grew up in Småland, Sweden.

Ingvar Kamprad was only 17 when he registered the IKEA name and embarked on his business career selling pens, Christmas cards and packets of seeds. Five years later he introduced the first furniture into the range in the form of RUT armchair.

These humble origins have created the unique IKEA culture founded on values such as respect for money, the will to renew, and the courage to take on responsibility. Self-criticism, humility and the ability to compen-sate for one’s own shortcomings are other cornerstones of the IKEA culture, personified by Ingvar Kamprad himself.

NO-ONE HAS DONE MORE to develop this culture than the founder himself. Ingvar Kamprad retired from his post as Group President in 1986 but continues to work tirelessly for the company as Senior Advisor to the board. He is

also a critical store customer, a watchdog for the IKEA concept and quality, a source of inspiration, and a visionary.

Ingvar Kamprad has always had great faith in human nature and an individual’s ability to create and change. “What we want, we can and will do. Together. A glorious future!” is a motto well known to co-workers from his “Testament of a Furniture Dealer” from 1976.

HIS LIFE’S WORK has contributed greatly to the IKEA vision: “to create a better everyday life for the many people”. It’s a vision founded on a unique blend of humanitarianism and capitalism. The farmer’s son from Småland is today celebrated and acclaimed worldwide as an entrepreneur. But fame has not tempered Ingvar Kamprad’s enthusiasm for making sure customers get a good deal from IKEA. His instinct for practical details is classic and is complemented by an impressive knowledge of furniture design and production. He him-self has said: “No-one has made as many mistakes as I have”.

Simplicityis a virtue

1978BILLY bookcase – an IKEA classic – is born.

1985The first IKEA store opens in the USA.

1991IKEA establishes the industrial group, Swedwood.

1995The first IKEA PS collection is launched.

1998IKEA opens its first store in China.

2004IKEA opens its first store in Portugal.

2000IKEA opens its first store in Russia.

2006IKEA opens its first store in Japan.

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The IKEA GroupThe founder of IKEA, Ingvar Kamprad, has been keen to createan ownership structure and organisation that stand for long-termindependence and security. That’s why the Stichting INGKA Foundationwas set up in 1982 and the following organisation developed.

The foundationThe IKEA Group is owned by a foundation – the Stichting INGKA Foundation – which is registered in the Netherlands.

StichtingINGKA Foundation

INGKAHolding B.V.

Parent companyINGKA Holding B.V. is the parent company of all IKEA Group companies. INGKA Holding B.V Supervisory Board: Hans-Göran Stennert (Chairman), Peter Kamprad, Lars-Johan Jarnheimer, Göran Lindahl, Carl Wilhelm Roos, Bruno Winborg, Magdalena Gerger. Ingvar Kamprad (Senior Advisor).

The IKEA GroupThe IKEA Group consists of a number of companies – from the industrial group Swedwood to the retail companies that own the stores in each country.

IKEA Group Management: Anders Dahlvig (Group President and CEO), Ian Duffy, Hans Gydell (Group Vice President), Sören Hansen, Peter Högsted, Lars Gejrot, Pernille Lopez, Mikael Ohlsson, Josephine Rydberg-Dumont, Göran Stark, Werner Weber.

RangeIKEA of Sweden develops the range which comprises some 9,500 products.

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Work within the Group is supported by nine staff units in Holland (IKEA Services B.V.) and Sweden (IKEA Services AB).

IKEA Services B.V.IKEA Services AB

SupplyThe IKEA Group has:45 trading service offices in 31 countries1,300 suppliers in 54 countries26 distribution centres and 10 customer distribution centres in 16 countries.The Swedwood Group has:36 factories and sawmills in nine countries.

RetailThe IKEA Group has 210 stores in 24 countries, and is the largest franchisee of the IKEA concept, which is owned by Inter IKEA Systems B.V.

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IKEA in briefIKEA Group sales for the financial year 2006 (1 September 2005–31 August 2006) totalled 17.3 billion euros.

Sales 1996–2006 (billions of euros)

Top five sales countriesGermany 17%USA 12%UK 9% France 9%Sweden 8%

Top five purchasing countriesChina 18%Poland 14%Italy 8%Sweden 7%Germany 6%

Sales by region Purchasing by region

North America 3%

Asia 28%

Europe 69%

Asia and Australia 3%

North America 17%

Europe 80%

1996 2002 2003 2004 2005 2006

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THE IKEA GROUP OPENED 16 new stores during 2006.In August 2006 there were 237 IKEA stores in 34 countries/territories. The IKEA Group owns 210 IKEA stores in 24 countries. The other 27 stores are owned and run by franchisees outside the IKEA Group in the following 15 countries/territories: Australia (2), United Arab Emirates (2), Greece (2), Hong Kong (3), Iceland (1), Israel (1), Kuwait (1), Malaysia (1), the Netherlands (1), Saudi Arabia (2), Singapore (1), Spain (4), Taiwan (3), Turkey (2) and the USA (1). For a list of all IKEA Group stores, visit: www.IKEA-group.IKEA.com

THE NUMBER OF CO-WORKERS in the IKEA Group is 104,000.

THE IKEA GROUP has operations in 44 countries: 45 trading service offices in 31 countries1,300 suppliers in 54 countries26 distribution centres and 10 customer distribution centres in 16 countries.

THE SWEDWOOD GROUP is the IKEA industrial group, producing wood-based furniture and components. It has 12,900 co-workers and 36 factories and sawmills in nine countries.

THE IKEA RANGE comprises 9,500 products and is the same in IKEA stores all round the world.

THE IKEA CATALOGUE was printed in 175 million copies in 55 editions and 27 languages.

THE IKEA WEBSITES attracted 278 million visitors.

FOR MORE INFORMATION ON IKEA, please visit your local country site via www.IKEA.com or via our corporate website www.IKEA-group.IKEA.com

In 2006, IKEA stores around the world had a total of 458 million visitors.

www.IKEA-group.IKEA.comFacts & Figures – produced in September 2006 by Corporate PR, IKEA Services AB.Printed on non-chlorine paper according to the criteria of the Nordic Swan Mark. Cost: 0.5 euros.