Inter IKEA Group Annual Report 2013.pdf

1Inter IKEA

Group

An

nu

al Rep

ort 2013

2 INTER IKEA GROUP 2013

Inter IKEA Group is defined as Inter IKEA Holding S.A. and its subsidiaries

www.inter.ikea.com

Inter IKEA Holding S.A.Registered as a socit anonyme (public limited company)under Luxembourg law with a capital of EUR 300,000,000Registered office: 2, Rue Jean Bertholet

1233 Luxembourg (Luxembourg)Luxembourg Trade and Companies Register B38952

3INTER IKEA GROUP 2013

Index

Management Report 4Message from the Chairman and CEO 4Inter IKEA Group 6Group Structure 7Key figures consolidated (under Lux GAAP) 7 Franchise Division 8Retail Centre Division 10Property Division 12Finance Division 14Corporate Governance 16Main Risks and Uncertainties 17

Consolidated Annual Accounts of Inter IKEA Holding S.A. 18Consolidated balance sheet as of 31st December 2013 18Consolidated Income statement for the year ending 31st December 2013 19Consolidated Cash-Flow statement for the year ending 31st December 2013 20Notes to the Inter IKEA Holding S.A. consolidated financial statements 21Independent Auditors report 28

Consolidated Financial Statementsas of 31st December 2013 and independent auditors report


The overall purpose of Inter IKEA Group is to secure

continuous improvement and a long life of the IKEA

Concept. Inter IKEA Systems B.V. is the worldwide

franchisor and owner of the IKEA Concept and trade marks. The Concept showed again good

strength with a retail sales increase of 4.2% in 2013.

The overall revenues increased by 7.4% to 2.856

in 2013. Franchise fees increased by 1.2% and

other IKEA related revenues increased by 13.5%.

Revenues from our real estate divisions increased

by a modest 4.7%; growth that is mainly related to

the delivery of newly developed properties.

Generally we continued to see a tough busi-ness climate in Europe. In the second half of 2013 some pick-up in the retail activity could be seen, but its still unevenly spread between countries. Demand for IKEA products also improved over the year in Europe. We con-tinue to see strong growth in North America, Asia Pacific and especially in the Middle East.

Most retailers are faced with the challenge of adapting their business to multi-channel retailing; a fast growing consumer demand. More than ever we need to create own oppor-tunities with a long term value building per-spective. With this in mind, our financial inde-pendence is important to us.

The expansion of the Retail Centre Division in Europe remained selective due to market limitations. Through a flexible development approach, we have successfully opened our first centre in Italy, opened two strip malls in Switzerland, Poland and added/refurbished in many locations to strengthen our portfolio. The division is now far advanced in building and leasing the first two centres in China, due to open in 2014. The current development plan is programmed to deliver over 730,000 m2 in the next three years, of which 340,000 m2 will be completed during 2014.

The Property Division has a building program of over 100,000 m2 of offices and hotels and owns over 125 hectares of land for future development. The MOXY Hotel program (Branded by Marriott International and oper-ated by partners) kicked-off in December 2013 with the start of construction of the first hotel at Malpensa Airport (Italy). Sites are being acquired around Europe to fulfil an ambitious expansion plan.

A regulated fund management activity was added to the Finance division, increasing our investment competence by a further 20 co-workers. Generally, the division produced a good return during 2013, thanks to all the patient and persistent work over many years.

Sustainability and CSR remains high on the agenda. The IKEA sustainability direction was launched to all stakeholders operating under the IKEA Brand. A revised Inter IKEA Code of Conduct is being launched to engage all co-workers to an open dialogue, a way to revisit and strengthen connection with our core Inter IKEA values. Actions to minimise the environ-mental impact in our real estate development activities are well on the way.

During December 2013, Inter IKEA Group, through Inter IKEA Systems B.V., donated an

Management reportMessage from the Chairman and CEO


additional 29 million to the Kamprad Family Foundation for Entrepreneurship, Research and Charity, based in Vxj, Sweden. This donation is a follow-up on our commitment to the foundation initiated during 2011.

The 2013 result increased from 446 million in 2012 to 516 million in 2013. The good performance of the Finance division was the main contributor to the increased profit. All other divisions have performed to set plans for the year. Due to rapid expansion and high investments, the Retail Centre and Property divisions contributed with a negative effect on the Group result.

All of this was made possible by all our dedicated co-workers who made 2013 a successful year for Inter IKEA Group.

Sren Hansen, CEO and Mathias Kamprad, Chairman


Our business in briefThe overall purpose of Inter IKEA Group is to secure continuous improvement and a long life of the IKEA Concept. Since this will require investments in both good and bad times, we strive to be financially independent.

In our effort to live up to the purpose, our business is decentralized and organised into four divisions, each with a different role:

The Franchise Division is the core of our business. We have found franchising to be the best way to expand the business based on the IKEA Concept, to keep the Concept together and to maintain an entrepreneurial spirit. Inter IKEA Systems B.V. franchises systems, meth-ods and proven solutions to franchisees world-wide for sale of IKEA home furnishing products under the IKEA trademarks. Inter IKEA Sys-tems B.V. is the owner of the IKEA Concept including the IKEA trademarks. Their role is to control, safeguard and develop the IKEA Con-cept, and to ensure that IKEA Concept know-how is continuously developed, transferred and made available to all IKEA franchisees. This is done in order to serve the many people over generations.

The Retail Centre Division Inter IKEA Cen-tre Group A/S invests in, develops and man-ages retail destinations anchored by IKEA stores. The division creates unique retail and

entertainment destinations, where the shared location creates synergies benefitting the IKEA store, the tenants in the shopping centre and the many people.

The Property Division creates long-term value through property investments. The cor-nerstones of the operations are management of portfolio properties and development of commercial real estate.

The Finance Division supports the goal of maintaining financial independence through long term investments. The division includes fund management, non-listed equity invest-ments and treasury management.

Our strategic investments in Retail Centres as well as our asset management investments in the Property and Finance divisions aim to ensure financial stability and create long term value.

Our heritageThe values and culture of Inter IKEA Group reflect the entrepreneurial spirit of our founder Ingvar Kamprad, who was born and grew up in the Smland region of Sweden. Smlanders have a reputation for being thrifty and innova-tive with a straightforward, no-nonsense approach to problem-solving in general and to business challenges in particular. This Sm-

land legacy is built into Inter IKEA Group cul-ture and values.

In practice, our values encourage a con-stant desire for renewal and a willingness to make change, as well as a cost-conscious mindset in all areas of operation. Trying new solutions, daring to be different, humbleness in approaching our task and simplicity in our way of doing things are also cornerstones of the Inter IKEA culture.

Our spirit is based on a belief that no method is more effective than a good exam-ple. We believe that each co-worker is impor-tant, that all of us have a responsibility, and that it is by working together, tillsammans in Swedish, that we really make a difference.

Our values have proven to be viable in an international context and we strongly believe that they are one of the most important fac-tors behind our achievements. By keeping them alive and well-rooted, it will help us continue to turn future challenges into oppor-tunities.

Inter IKEA Group


Inter IKEA Holding S.A. is the parent company of Inter IKEA Group. The operations of Inter IKEA are decentralised and organised in divi-sions with far-reaching responsibility for their operations and business.

Around the globe, a large number of com-panies operate under the IKEA trademarks. All IKEA franchisees are separate and indepen-dent from Inter IKEA Group. Some of them

share the same founder and a common history and heritage, but are independent companies. A large group of franchisees are owned and operated by INGKA Group. Inter IKEA Group and INGKA Group are separate groups of com-panies and have different owners, board mem-bers and managers.

Group ServicesInter IKEA

Holding Services SA (Belgium)

Interogo Foundation(Liechtenstein)

Inter IKEA Holding S.A.(Luxembourg)

Finance(Various companies and jurisdictions)

PropertyVastint Holding BV

& subsidiaries(The Netherlands)

Retail Centre

Inter IKEA Centre Group A/S & subsidiaries(Denmark)

FranchiseInter IKEA Systems Holding BV & subs.(The Netherlands)

Inter IKEA Group

Group Structure

Key figures consolidated (under Lux GAAP) 2013 2012

Total revenues mil 2,856 2,660

EBITDA mil 911 959

Net profit for the year mil 516 446

Total assets mil 16,059 14,950

Shareholders equity (incl. result of the year) mil 8,039 7,529

Equity ratio % 50% 50%

Co-workers (year average) Nb 1,754 1,644

Financial year starting 1st January and closing 31st December

51%


The businessThe Franchise Division includes Inter IKEA Systems B.V., worldwide IKEA franchisor and owner of the IKEA Concept, including the IKEA trademarks. The division has the overall responsibility to safeguard the continued success of the IKEA Concept throughout the world. The IKEA Concept rests on a firm foundation: a low-price offer in home furnishings.

As the franchisor, Inter IKEA Systems B.V. focuses on expanding the IKEA Con-cept by franchising, developing the IKEA Concept and transferring IKEA know-how to IKEA franchisees. The IKEA franchisees were present on 43 markets as of 31st December 2013.

Franchisee Markets (as of 31st December 2013)

Al-Futtaim Group Egypt, Qatar, United Arab Emirates

Al Homaizi Kuwait

Al-Sulaiman Saudi Arabia

Cebas Australia

Dairy Farm Group China, Taiwan

House Market Group Bulgaria, Cyprus, Greece

IKANO Group Malaysia, Singapore, Thailand

INGKA Group Australia, Austria, Belgium, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, United Kingdom, United States

Mapa Turkey

Miklatorg Group Iceland, Lithuania

Northern Birch Israel

Sarton Group Dominican Republic, Spanish islands

Franchise Division


Inter IKEA Systems B.V. also owns and operates the IKEA store in the IKEA Con-cept Center in Delft, the Netherlands. With the exception of the IKEA store in Delft, all IKEA retailers operate under franchise agreements with Inter IKEA Systems B.V.

IKEA franchisees implement the IKEA Concept by marketing and selling the IKEA product range and operate IKEA stores under franchise agreements with Inter IKEA Systems B.V. The IKEA franchisees have the responsibility to run, manage and develop their local business.

The Franchise Division also includes service companies and companies selling IKEA products to franchisees on certain markets.

Key figures (under Lux GAAP) 2013 2012

IKEA Stores Nb 349 340

Markets Nb 43 40

Total revenues mil 2,615 2,395

Co-workers (year average) Nb 964 954

Market conditions and performance The evolution of revenues is directly linked with the expansion and performance of IKEA franchisees worldwide. A 3% franchise fee on IKEA sales forms the base for the franchise revenues. During 2013, world-wide IKEA sales increased by 1.7% or 4.2% using constant foreign exchange rates to the Euro. Growth in North America, Asia Pacific and Middle East has been substan-tial, whereas Central and South Europe are still facing a challenging economic climate.

Ten new IKEA stores opened during 2013, of which one was a relocated store. Three of the new stores were in new mar-kets: Lithuania, Qatar and Egypt. These first stores on new markets have all been well received by their respective commu-nities. IKEA Vilnius in Lithuania is a first store in the Baltic States and it has already attracted customers from neigh-bouring countries: Latvia, Estonia and Belarus. IKEA Doha in Qatar, which has a diverse customer base, focused efforts on adapting room settings in the store to present IKEA products and home furnish-ing solutions that accurately reflects local home traditions and living situations.

Other businesses have shown mixed performance during 2013. The distribution

of IKEA products, mainly in the Middle East and Far East, increased by more than 20%; reflecting the growth in those regions. The IKEA store in Delft saw a 5% decrease in sales.

Key activitiesDuring 2013, the IKEA Brand turned 70. Founded by Ingvar Kamprad in 1943, IKEA is based on an acronym of his name and the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew-up in Sm-land, Sweden. More than the meaning of the letters, the IKEA Brand represents a way of improving life at home through good quality home furnishing products, that are affordable, functional and well-designed.

One way to share home furnishing inspi-ration is through the IKEA catalogue. In last years edition, the digital catalogue

was developed even further to offer more of the inspiration, ideas and knowledge needed to furnish a home. Popular features of the catalogue application for mobile devices included a possibility to step into a room to view it in 360 and to place IKEA furniture in your own home to see how it fits. The 360 experience and other extended content such as films and images were used 10 million times and one million 3D models were placed in peoples homes.

Inter IKEA Systems B.V. launched The IKEA sustainability direction during the year in order to secure one common approach for all companies operating under the IKEA trademarks. It is a framework for all local and/or franchisee specific sustain-ability strategies, plans and activities.

The division has taken the initiative to open a facility in Shanghai, China, for transferring IKEA Concept know-how. This will support the IKEA expansion in China and other countries in the region.

On 1st September 2013, Torbjrn Lf took over from Thomas Bergstrm as CEO of Inter IKEA Systems B.V.

More information about Inter IKEA Systems B.V., the IKEA Concept and the IKEA franchise structure is available at franchisor.IKEA.com.

FRANCHISE DIVISION

millions

10,000

15,000

20,000

25,000

30,000

20132012201120102009

IKEA Retail Sales consolidated in Euros


Retail Centre Division

The businessThe Retail Centre Division Inter IKEA Centre Group A/S (IICG) was established in 2001 and develops and manages retail destinations for the many people, anchored by IKEA stores. IICG creates unique retail and entertainment destinations where both the IKEA store and tenants benefit from the synergy created by the retail centre and the IKEA store being located side by side. This, ultimately, enhances the cus-tomers shopping experience.

IICG has a clear long-term approach to management and continuity, which means every decision taken focuses on driving long-term value for retail partners and shoppers.

Inter IKEA Group is the majority owner of IICG with a 51% ownership. The remaining 49% is owned by INGKA Group.


Leased centres Nb 32 30

Developed markets Nb 9 9

Developed centres Tm2 1,189 1,105

Centres under development (3 years) Tm2 737 635

Total assets mil 3,093 2,394

Total revenues mil 162 204


PL,DE,ES, CZ, FR, SK, PT, IT, CH,

32%16%13%12%6%6%6%5%4%

Developed square meters 31 Dec. 2013


RETAIL CENTRE DIVISION

The drop in revenues from previous year is mainly related to the sale of shopping centres in Austria during 2012. On a like for like basis, rental income increased by 2.2% during 2013.

Market conditions The decline in retail sales across Europe, 0.2% during 2013, has been more pro-nounced in Southern Europe. Food sales have declined more than non-food. Multi-channel retailing continued to gain ground over physical stores, forcing shopping centres to find new business solutions. The downward pressure on rent levels remained a challenge throughout 2013, especially in non-prime locations. Even though many European markets are showing signs of stability, some even a positive turnaround, the redefinition of the retail landscape will continue to pressure retail destinations to adapt.

The expansion plan is closely linked with the opening of new IKEA stores in Europe and China. While putting a foot-

step into the Chinese market, the Euro-pean expansion perspective has become highly selective due to market conditions.

Key activitiesIn 2013, two new strip malls were open, one in Rothenburg (Switzerland) and one in Poznan (Poland) as an add-on to an existing retail destination. A first shopping centre was successfully opened in Villesse (Italy) and an existing shopping centre, Wola Park in central Warsaw (Poland) was acquired. The reconstruction of a section of Ostrava (Czech Republic) shopping cen-tre was also completed during the year.

The developments in Europe are cur-rently on the reconstruction of a shopping centre in Wroclaw (Poland), the construc-tion of a shopping centre in Lbeck (Ger-many) and the construction of two addi-tional retail parks in Germany.

Three shopping centres are being built in China: Wuxi, Beijing and Wuhan. Together they represent 392 Tm2, where Wuxi and Beijing are scheduled to open in

2014, followed by Wuhan in 2015. The increased number of co-workers during the year was solely dedicated to China.

Sustainability is under increased focus on matters related to environment, eco-nomic and social well-being. The reduction of CO2 emissions has been prioritised, where initial actions led to a reduction of energy and water consumption. Each market is working on finding renewable energy sources. The polish subsidiary, with the most significant portfolio in oper-ation, already made the conversion to renewable sources during 2013.

Retail centres are actively working in becoming an integrated part of their community and engage in local social initiatives.

Furthermore, IICG is preparing to certify new constructions using known interna-tional standards (LEED / BREEAM) as an ambition to align with best practice in the industry within the next years to come.


Property Division

The businessThe Property Division Vastint Holding B.V. (Vastint) was established in 1989 in the Netherlands. The goal of the Property Division is to create long-term value through property investments. The mar-kets are defined in order to achieve critical mass and concentration.

The cornerstones of the operations in the Property Division are the management of portfolio properties and the develop-ment of commercial real estate, including residential development and sales. There is no development of IKEA stores con-ducted within the Property Division.

The Property Division actively manages developed properties in six countries: the Netherlands, Poland, Belgium, Lithuania, Latvia and the United Kingdom. Sites for future development are owned in Poland, Lithuania, Latvia, Romania, Germany, Italy and the United Kingdom.


Leased buildings Nb 41 40

Developed markets Nb 6 6

Developed properties Tm2 428 418

Under construction Tm2 104 42

Total assets mil 927 838

Total revenues mil 57 43


Total revenues increased by 33% during the year, mainly as a result of completed projects/refurbishments during 2012 and 2013 in the Netherlands, Poland, Latvia and Lithuania.

NL, PL, BE, LT, LV,

62%20%9%6%3%

Developed square meters 31 Dec. 2013

Futuris apartment building in the centre of Riga, Latvia.


PROPERTY DIVISION

Market conditions The uncertainty in the European office and residential sector continued throughout 2013. The market remained fragmented due to a variety of economic conditions in different countries. As a general trend, investment activities have increased, while take-up and new supply is stabiliz-ing. Activities within the hospitality sector continued to grow throughout Europe.

Key activitiesThe development activities within the Property division include land acquisition, master planning, detailed design, con-struction and leasing.

Currently over 125 hectares of land is owned for future planning and develop-ment. The most recent acquisitions were in Poland, Italy, Germany and the United Kingdom.

During 2013, two office properties located in Amsterdam (Netherlands) and Brussels (Belgium) were acquired for redevelopment. A logistic centre in Utrecht (Netherlands), as well as the

majority of the Futuris apartments in Riga (Latvia), were sold.

The properties under construction at year end are: Hotel Atlas Arena Amster-dam, Offices & Hotel Gdynia Waterfront, Offices & Hotel Business Garden Poznan, Offices G12 Vilnius, Industrial building Corzano and a MOXY Hotel at Malpensa airport.

An organisation is specifically dedicated to the development of the hospitality sec-tor. The division is dedicated to build a large program of MOXY Hotels (branded by Marriott International) in the coming years. Sites are being secured around Europe to fulfil this program. The first MOXY Hotel will open during 2014 at Mal-pensa airport (Italy). All hotels will be operated by third parties.

Environmental and sustainability fac-tors continue to be important for tenants, landlords and investors. The Property Division is working towards social, eco-nomical and environmental solutions that are sustainable in the long term.

All new buildings and refurbishments should have an adequate level of environ-mental certification according to interna-tionally recognised standards (LEED / BREEAM). During 2013, Hotel Atlas Arena Amsterdam received a BREEAM Good pre-certification, Offices Business Garden Poznan and Business Garden Wroclaw received LEED Gold pre-certification and Offices Brama Portowa Szczecin received LEED Gold certification.


Finance Division

The businessThe Finance Division supports the Inter IKEA Group goal of maintaining financial independence through long term invest-ments.

The division is built around three core areas: Non listed holdings in funds, co-

investments and direct investments Treasury management Fund management

Each of the above parts of the Finance division is managed by separate teams with special skill sets and an organisation of its own.


Inter IKEA Group assets under management mil 2,341 2,081


Market conditionsThe world economic growth levelled at 2.9% during 2013, where the most advanced economies grew by 1.3% and emerging economies by 4.5%. Stock mar-kets recovered strongly during the year in anticipation of improved economic growth within mature economies. As a conse-quence, yields have tightened signifi-cantly on a wide variety of assets.

Mature markets are still facing signifi-cant challenges to rebalance their econo-mies. The investment environment will remain challenging in the short to medium term.


Investments activitiesThe majority of Inter IKEA Group assets under management are invested in Europe and North America. The non listed equity investments represent around 40% of the portfolio.

The investments in non listed compa-nies continued to increase during the year. More than ever, good companies lack sup-port and have a need for financial backing to expand and develop. This provides a relevant investment opportunity in the current economic climate.

The remaining Inter IKEA Group assets under management are held as part of the Group treasury management (bonds, money market funds, deposits, etc.), pro-ducing modest returns.

At the start of 2013, the Group acquired a regulated fund manager established in Luxembourg, thus adding 20 specialist co-workers to the overall competence.

Fund management provides investment management and advice to Interogo Foundation.

Non-Euro investments are hedged back to back to the Euro using foreign exchange swaps.


Corporate Governance

ShareholderInter IKEA Holding S.A. is owned by Interogo Foundation, an enterprise foundation (Unternehmensstiftung) registered under Liechtenstein law.

For more information about Interogo Foun-dation, please visit the Inter IKEA Group web-site, www.inter.ikea.com.

Board of DirectorsOn 31st December 2013, the board of Inter IKEA Group had five non-executive members: Mathias Kamprad (Chairman) Hans Gydell (Vice Chairman) Staffan Bohman Lennart Sten Birger Lund

Directors are elected at the general share-holder meeting and are normally appointed for a period of six years.

The responsibility for the day-to-day manage-ment of the company is delegated to Sren Hansen, the CEO. The board meets four times per year, has a formal schedule of matters reserved for it, including approval of the annual overall budget, significant acquisitions and dis-posals, and the Groups financial statements.

Divisional BoardsBoard of directors meetings are held for each division three times per year. The boards are generally composed of the Group CEO, the man-aging director for each division, a selected panel of Group executives and external members.

The divisional boards are supported by advisory boards and investment committees where appropriate.

Audit CommitteeThe board of directors has assigned an audit committee to oversee financial reporting and disclosure, and to oversee regulatory compli-ance and corporate governance. The audit committee reports to the board of directors

of Inter IKEA Holding S.A. and meets two times per year. The committee is composed of Staffan Bohman (chairman of the committee) and Hans Gydell. The CEO, the CFO and the principle external audit partner are permanent invitees.


Main risks and uncertainties

The company faces certain risks associ-ated with its business and sectors in which it operates.

As a global franchisor of the IKEA Retail Concept, franchise fee earnings are closely related to the expansion of the worldwide furniture market and the success of IKEA franchisees on their respective markets. The IKEA Concept has proven to be resil-ient in most markets, since market share of IKEA products increased in the most affected regions since 2008.

Since the start of the global financial and economic crisis in 2008, furniture markets in mature economies declined, but North America and some parts of Europe are progressively showing growth again. The high level of unemployment in Europe and a general contraction on con-sumers ability to spend remains a key concern. The southern European market is still contracting on average as austerity measures to reduce public deficits are being implemented.

Around 55% of the franchise fees are earned outside the euro zone, where the euro is the companys reporting currency. As a result, the company is exposed to the volatility of foreign exchange market.

Distribution of IKEA products in the Middle East, Asia Pacific and Southeast Europe offers a yearly price guarantee to IKEA franchisees for all products con-tained in the IKEA Catalogue. During the guarantee period, manufacturing or trans-port prices can fluctuate and affect the profitability of this operation. There is no foreign exchange risk for this activity, because all related currencies flows are hedged on a yearly basis.

The Retail Centre Division is exposed to the retail performance on European mar-kets where it operates. With the progres-sive decline of retail sales since 2008, many tenants have encountered financial difficulties over the years, but this situa-tion has now stabilised. Signing new ten-ants continues to be challenging on most

markets and rent levels have continued to compress, although the level of vacancies has remained stable. This situation affected the profitability of centres in operation and consequently the market value of the asset base. An impairment of 32.8 million on tangible assets has been taken during 2013.

The Property Division is mainly exposed to the office and hotel market and to a lesser extent the residential sector in Europe. After years of decline, both in take-up and supply, the market has now stabilised. The Netherlands market, with high office vacancies, remains the most challenging market for the division, where 62% of the portfolio is invested. All other countries have offered sustainable condi-tions for the development of its activities. An impairment of 4 million on tangible assets has been taken during 2013.

The Finance Division is exposed to the sovereign debt market in Europe. The investment strategy is limited to the high-

est rating quality amongst a limited num-ber of European countries. The division is also globally invested in non-listed equity funds, co-investments and direct invest-ments. Besides the risks inherent to equity investments, a significant portion of the portfolio is invested in USD and SEK. The currency risk is managed through various hedge instruments (currency loans or swaps).

Through a strict financing policy, the Inter IKEA Group has limited exposure to bank financing (around 4% of total assets).

Luxembourg, 15 May 2014

The board collectively


Consolidated balance sheet as of 31st December 2013

ASSETS Notes2013

( 000s)2012

( 000s)

Non-current assets

Intangible assets 4 9,000,000 9,000,000

Leased Land 5 179,639 210,799

Tangible assets 6 3,550,050 2,795,061

Property, Plant and equipment 2,908,864 2,218,827

Tangible assets under construction 641,186 576,234

Shares in undertakings linked by virtue of particip. Interests 7 101,478 101,842

Total non-current Assets 12,831,167 12,107,702

Current assets

Inventories 8 8,832 8,049

Trade receivables 529,886 460,334

Amounts due within one year 529,886 460,334

Amounts due after more than one year

Other debtors 202,956 114,437

Amounts due within one year 122,306 98,601

Amounts due after more than one year 80,650 15,836

Transferable securities 9 2,163,844 1,918,581

Cash at bank and in hand 290,898 312,288

Total current Assets 3,196,416 2,813,689

Deferred charges 31,210 28,431

Total Assets 16,058,793 14,949,821

The accompanying notes form an integral part of these consolidated annual accounts.

EQUITY AND LIABILITIES Notes2013

( 000s)2012

( 000s)

Equity

Share capital 11/12 300,000 300,000

Share Premium 11/13 4,500,000 4,500,000

Legal Reserve 11 30,000 30,000

Retained earnings 11 2,684,236 2,238,359

Result of the year 11 515,860 445,877

Currency Transl. Adj. 11 9,396 17,667

Minority interests 14 468,717 340,174

Total Equity 8,508,209 7,872,077

Provisions

Provision for deferred taxes 10 27,967 30,559

Other provisions 15 77,688 51,855

Total Provisions 105,655 82,414

Non-current & current liabilities

Amounts owed to credit institutions 16 700,957 581,776

due within one year 109,973 254,151

due after more than one year 590,984 327,625

Trade creditors 288,551 194,571


due after more than one year

Other creditors 6,435,595 6,199,860


due after more than one year 5,780,880 5,850,372

Total non-current & current liabilities 7,425,103 6,976,207

Deferred income 19,826 19,123

Total equity and liabilities 16,058,793 14,949,821

The accompanying notes form an integral part of these consolidated annual accounts.

Consolidated Annual Accounts of Inter IKEA Holding S.A.


Consolidated income statement for the year ending 31st December 2013

INCOME STATEMENT Notes2013

( 000s)2012

( 000s)

Net turnover 2,810,239 2,583,982

Other operating income 45,935 76,143

Operating income 18 2,856,174 2,660,125

Use of merchandise, raw material and consumables (1,539,476) (1,328,201)

Staff expenses (201,174) (167,135)

Value adjustments (156,810) (127,000)

In respect of tangible assets (157,157) (126,860)

In respect of current assets 347 (140)

Other operating charges (203,776) (205,509)

Operating result 754,938 832,280

Financial income 19 236,246 146,712

Financial expenses 20 (437,314) (454,045)

Share in profit/loss in Associates 2,537 (28,264)

Profit on ordinary activities 556,407 496,683

Income tax expense (76,589) (57,615)

Profit of the year before minority interest 479,818 439,068

Attributable to:

Shareholders of the parent company 11 515,860 445,877

Minority interests 14 (36,042) (6,809)

The accompanying notes form an integral part of these consolidated financial statements.


Consolidated Cash-Flow statement for the year ending 31st December 2013

2013 ( 000s)

2012 ( 000s)

OPERATING ACTIVITIES

Profit of the period 515,859 442,761

Minority interests 36,042 3,694

Depreciations, impairments and write-off 156,915 131,221

Provisions 26,874 17,942

Deferred taxes 981 636

Gain / Loss on assets disposals 197,343 90,932

Interests expenses 356,178 363,884

Unrealized fair value adjustments 57,222 15,891

Profit / Loss in Associates 2,537 28,264

Operating cash-flow before working capital changes 876,145 837,035

Inventories 1,689 7,022

Trade and other receivables 69,115 28,135

Other current and non-current assets 3,425 78

Net variation of current assets 70,851 21,035

Trade and other payables 173,783 148,661

Other current liabilities 6,896 4,227

Net variation of current liabilities 180,679 152,888

Other adjustments

CASH-FLOW FROM OPERATING ACTIVITIES 985,973 663,112

2013 ( 000s)

2012 ( 000s)

INVESTMENT ACTIVITIES

Acquisition of tangible fixed assets 967,906 439,224

Disposal of tangible fixed assets 86,492 142,752

Acquisition of financial fixed assets 28,721 24,090

Disposal of financial fixed assets 1,270

Acquisitions / Disposals of short-term investments 121,531 272,177

CASH-FLOW FROM INVESTMENT ACTIVITIES 1,030,396 48,385

FINANCING ACTIVITIES

Increase / Decrease in Capital 171,510 70,804

Dividends paid

Interests paid 356,178 282,884

Increase / Decrease of loans 206,802 281,334

CASH-FLOW FROM FINANCING ACTIVITIES 22,134 493,414

NET CASH VARIATION 22,289 121,313

OPENING VALUE OF CASH ACCOUNTS 312,288 190,917

Non-cash movements on cash accounts 900 58

CLOSING VALUE OF "FREE" CASH ACCOUNTS 290,899 312,288

The accompanying notes form an integral part of these consolidated financial statements.


Notes to the Inter IKEA Holding S.A. Consolidated Financial Statements

Entities Country Ownership, %

Galliford SA BE 100%

Inter IKEA Systems SA BE 100%

Inter IKEA Treasury SA BE 100%

Inter IKEA Centre Switzerland AG CH 51%

Inter IKEA Centre China Co Ltd CN 51%

Inter IKEA Distribution Cyprus Ltd CY 100%

Inter IKEA Holding Ltd* CY 100%Inter IKEA Centre Ceska Republica sro CZ 51%

Inter IKEA Centre Deutschland Gmbh* DE 51%

Inter IKEA Centre Group A/S* DK 51%

Colgardie SA ES 100%Inter IKEA Centre Espana SL ES 51%Inter IKEA Centre France SAS* FR 51%I.F.P.M. Ltd HK 100%Inter IKEA Centre Italia Srl* IT 51%

SIA Larix Property LV 100%

Inter Funds Management SA LU 100%

Inter IKEA Finance SA LU 100%

UAB Pinus Proprius* LT 100%

Equity Estate BV* NL 53%Inter Hospitality Holding BV* NL 100%

Entities Country Ownership, %

Inter IKEA Systems BV "IISBV" NL 100%Inter IKEA Systems Holding BV* NL 100%Landprop Holding BV* NL 100%Pronam BV * NL 100%Vastint Holding BV* NL 100%Vastint Land BV* NL 100%Inter IKEA Centre Polska SA* PL 51%

SwedeCenter Spzoo PL 100%

Inter IKEA Centre Portugal SA PT 51%

Interprime Property SRL RO 100%

Inter IKEA Culture Centre AB SE 100%Inter IKEA Investments AB* SE 100%Inter IKEA Systems Services AB SE 100%Inter IKEA Distribution Far East Ltd SG 100%Inter IKEA Centre Slovensko sro SK 51%UK Landprop Services Ltd UK 100%

Inter IKEA Systems Services inc. US 100%

* These entities represent sub-groups present in AN, AT, BE, CH, CN, CY, CZ, DE, DK, ES, FR, GH, HK, HR, IT, LT, LU, LV, MU, NL, PL, PT, RO, RS, SA, SE, SG, SK, UK, US, VG, ZA.

Note 1 GeneralInter IKEA Holding S.A. (hereafter Holding SA) is a company incorporated in Luxembourg on 9th January, 1992 (Luxembourg Trade and Com-panies Register B38952) for an unlimited period of time. The consolidated financial statements for the year ending 31st December, 2013 com-prise Holding SA, its subsidiaries and its partici-pating interests (hereafter the Company or the Group) accounted for according to the full or equity consolidation methods. The consolidated financial statements are prepared according to Luxembourg legal and regulatory requirements.

Note 2 Basis for PreparationThe Group accounting year is from 1st January to 31st December.

The consolidated financial statements are presented in thousands of Euros, rounded to the nearest thousand.

The accounting policies set out below are applied consistently to all periods presented in the financial statements.

For comparison reasons, certain reclassifi-cations have been made to the consolidated balance sheet as at 31st December 2012.

Note 3 Group Accounting PoliciesBasis for consolidationSubsidiariesSubsidiaries are entities controlled by Holding SA. Control exists when Holding SA has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Control is presumed to exist when Holding SA, directly

or indirectly through subsidiaries, owns more than half of the voting rights of an entity

Participating interestsParticipating interests are those entities in which Holding SA has a significant influence. Significant influence is presumed to exist when Holding SA owns, directly or indirectly through subsidiaries, between 20 and 50% of the voting rights. The participating interest values include

the share owned by Holding SA in the total recognized gains and losses of Participating interests on an equity accounted basis.

Transactions Eliminated on ConsolidationIntra-group balances and any unrealized gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Entities included in consolidationThe most significant companies contributing to the Inter IKEA Group consolidation


Leased LandA leased land is a long term lease agreement in which the tenant rents and uses the land to erect buildings and infrastructures. The tenant owns the temporary or permanent buildings and infrastructures built upon it.

Leased lands are depreciated over the lease period, which expires between the years 2015 and 2110.

Tangible AssetsTangible assets are stated at cost less accu-mulated depreciation and impairment losses.Depreciation is charged to the income state-ment from the date the asset is available for use, on a straight-line basis over the esti-mated useful lives of each part of an item of property, plant and equipment.

The estimated useful lives are as follows:

Maximum period

Buildings Retail 25 to 40 years

Buildings Other 33 years

Building installations 15 years

Leasehold improvements/leased equipments Lease period

IT equipments 5 years

Furniture, fixtures and fittings 10 years

Land is not depreciated.

InventoriesInventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the First-In-First-Out principle. Inventories include costs incurred in relation to the construction of buildings that are destined to be sold.

fixing the exchange rates which could be obtained at certain dates in the future.

The accounting treatment is as follows: The cost or benefit of the hedge should be

deferred, and recognised over the term of the contract.

Any gain or loss in re-measuring the hed-ging instrument at fair-value is recorded in the income statement with a corresponding effect on the balance sheet under prepay-ment / deferred income as positive, nega-tive fair value hedges.

Any gain or loss on the hedged item attribu-table to the hedged risk is adjusted against the carrying amount of the hedged item and recorded in the income statement.

Intangible AssetsAn intangible asset shall be recognised if, and only if: (1) it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and (2) the cost of the asset can be measured reliably.

The probability shall assess expected future economic benefits using reasonable and sup-portable assumptions that represent manage-ment's best estimate of the set of economic con-ditions that will exist over the useful life of the asset.

An intangible asset shall be measured initially at cost.

Intangible assets with definite useful life are amortized over their respective useful life period.

An intangible asset with an indefinite useful life shall not be amortised but is investigated for impairment on an annual basis by comparing its recoverable amount with its carrying amount. Impairment is recorded whenever there is a per-manent indication that the intangible asset may be impaired.

Reporting CurrencyThe reporting currency of the Group is the EUR.

Foreign currency transactionsTransactions in foreign currencies other than the reporting currency are translated at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the bal-ance sheet date are translated at the foreign exchange rate effective at that date. Foreign exchange differences, arising from the settle-ment of foreign currency transactions or on translation of monetary assets and liabilities, are recognized in the income statement.

Foreign subsidiariesThe financial statements of foreign subsidiaries are translated into EUR at year-end exchange rates for Balance Sheet and average exchange rates for Profit & Loss Accounts. The Equity accounts are kept at historical cost. Resulting differences are recorded under Currency Translation Adjustment in equity.

Hedging policiesThe Group is hedging two kinds of risks: Interest rate risk: The risk that the value of

a financial instrument or loan will fluctuate due to changes in market interest rates. For example, the value of a fixed rate bond or the NPV of a fixed rate loan may vary with movements in market interest rate.

Currency risk: The risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates, e.g. the value of financial liabilities such as foreign currency denominated trade payable may vary with movements in the exchange rate. Transfer of this risk could be achieved by the execution of forward exchange contracts,


Trade and Other ReceivablesTrade and other receivables are stated at cost, less bad debt allowance, which are reversed when the reason for which the allowance was made have ceased to exist.

InvestmentsLiquid investments are measured based on their fair value. Non-liquid investments are measured based on the Lower of Cost or Market (LOCOM) principle.

Gains or losses arising from the change in fair value or losses arising from LOCOM value are recognised in the income statement in the period in which they occur when they are con-sidered by the Board of Directors as permanent.

Deferred chargesDeferred charges are costs relating to a subse-quent accounting period that are capitalized as assets until they are actually used. (e.g. insur-ance premiums, rent, interest charges and sun-dry costs paid in advance, non-consumed costs, maintenance contract fees).

Share CapitalLegal reserveIn accordance with Luxembourg company law, the Company is required to transfer a mini-mum of 5% of its net profit for each financial year to a legal reserve. This requirement ceases to be necessary once the balance on the legal reserve reaches 10% of the issued share capital. The legal reserve is not available for distribution to the shareholders.

DividendsDividends are recognized in the period in which they are declared by the Board of Directors.

Employee BenefitsPension PlansObligations for contributions to pension plans are recognized as an expense in the income statement as incurred.

ProvisionsA provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation.

Trade and Other PayablesTrade and other payables are stated at cost.

Revenue recognitionGoods soldRevenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Rental income Rental income from the tenants is recognised in the income statement on a straight-line basis over the term of the lease.

Finance incomeFinance income comprises interest income on funds invested, dividend income, gains on dis-posal of financial assets, changes in fair value of financial assets, realized foreign currency gains and gains on hedging instruments that are recognised in the income statement. Inter-est income is recognised as it accrues. Divi-dend income is recognised when declared by the Board of Directors or Annual General Meet-ing of the shareholders.

Finance expensesFinance expenses comprise interest expenses on borrowings, foreign currency losses, changes on fair value of financial assets, impairment losses recognised on financial assets and losses on hedging instruments. All borrowing costs are recognised in the income statement using the effective interest method.

Value adjustments are mainly related to the activities within the financial assets and invest-ments activities. Those adjustments result from the compliance of the fair market value princi-ple applied to financial instruments, such as bonds, shares, warrants, options.

Income TaxesIncome tax on the profit or loss for the year comprises current and deferred tax.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.


Note 5 Leased land

( '000s)1 Jan. 2013 Disposals

Amor- tisation

Trans- lation

31 Dec. 2013

China 191,052 20,680 4,008 2,816 163,548

Poland 7,400 2,160, 711 4,529

The Netherlands 12,347 785 11,562

Total Leased Land 210,799 22,840 5,504 2,816 179,639

Note 6 Tangible Assets

( '000s)Land &

building Machinery

Other assets, tools &

equipment

Tangible assets under construction Total

At cost

As at January 1 2,799,181 68,960 44,279 576,234 3,488,654

Additions 505,478 7,525 6,451 463,481 982,935

Disposals 128,925 203 2,930 9,080 141,138

Transfers 371,621 2,643 1,039 375,303

Translation adjustment 6,146 467 14,146 20,759

As at December 31 3,541,209 78,925 48,372 641,186 4,309,692

Accumulated depreciation

As at January 1 636,304 30,475 26,814 693,593

Additions 142,476 8,041 7,090 157,607

Disposals 81,941 120 2,040 84,101

Transfers

Translation adjustment 7,287 170 7,457

As at December 31 689,552 38,396 31,694 759,642

Net book value

beginning of year 2,162,877 38,485 17,465 576,234 2,795,061

end of year 2,851,657 40,529 16,678 641,186 3,550,050

Tangible assets are mainly composed of land and buildings managed and devel-oped by the Retail Centre and Property divisions.

The main realisations for the Retail Centre division were: opening of the first shopping centre in Villesse (Italy), opening of two strip malls, one in Rothenburg (Switzerland) and one in Poznan (Poland), acquisition of an existing shopping centre in central Warsaw (Poland), completion of the reconstruction of a portion of a shopping centre in Ostrava (Czech Republic) and the sale of a retail complex in Vienna (Austria) and land use rights in China. The division invested a total amount of EUR 830 million during the year, of which EUR 489 million was on the construction of the first three shopping centres in China. The remaining amount was invested in Europe for the completion of the above described realisations, but also on the present construction of a shopping centre in Lbeck (Germany) and the reconstruction of a shopping centre in Wroclaw (Poland) mainly.

The main realisations of the Property division were: the acquisition of two properties, one in Amsterdam (Netherlands) and one in Brussels (Belgium), to be redeveloped in coming years and the sale of a logistics centre in Utrecht (Netherlands). The division invested EUR 130 million on the above described realisations and also in the construction of a hotel and offices in Gdynia (Poland), hotel and offices in Poznan (Poland), a hotel at Malpensa airport (Italy) and various land acquisitions for future developments.

Impairment was recorded on a shopping centre in Spain for EUR 32 million and on two office properties in the Netherlands for EUR 4 million.

Note 4 Intangible assets In 2012, IISBV, franchisor of the IKEA Concept and subsidiary company, received from an affiliated company a contribution made of the IKEA Trade-marks for a value of EUR 9 billion against a share premium issuance of EUR 3.6 billion and a debt of EUR 5.4 billion.

This intangible asset has an indefinite useful life and is therefore not amor-tized.

In the opinion of the Management, no permanent diminution in value has occurred and therefore no value adjustment was estimated necessary as at 31st December 2013.


Note 10 Provision for deferred taxes Deferred tax liabilities are attributable to the following items:

( '000s) 31 Dec. 2013 31 Dec. 2012

Goodwill 8,228 6,253

Depreciation and amortization 19,739 24,306

Total deferred tax liabilities 27,967 30,559

Note 11 Shareholders equity The movement in equity during the year can be summarized as follow:

( 000s)Balance at

1 Jan. 2013

Result brought forward

Result of the year

Conversion Difference

Balance at 31 Dec. 2013

Share capital 300,000 300,000

Share premium 4,500,000 4,500,000

Legal reserve 30,000 30,000

Retained earnings 2,238,359 445,877 2,684,236

Result of the year 445,877 445,877 515,860 515,860

Currency Transl. Adj. 17,667 8,271 9,396

Total equity 7,531,903 515,860 8,271 8,039,492

Note 8 Inventories( '000s) 31 Dec. 2013 31 Dec. 2012

Raw material and consumables 983 764

Finished goods and goods for resale 5,002 5,029

Assets held for sale 2,847 2,256

Total Inventory 8,832 8,049

Raw material and consumables is mainly composed of paper destined to the printing and publication of the next IKEA Cata-logue. Finished goods for resale comprise IKEA products of the IKEA Concept Store in Delft, the Netherlands. Assets held for sale comprise residential apartments being sold in Riga (Latvia).

Note 9 Transferable securities ( '000s) 31 Dec. 2013 31 Dec. 2012

Hedge funds 18,677 138,582

Non-listed equity investments 801,128 800,466

Government bonds & equivalent 1,344,039 979,533

Total Transferable Securities 2,163,844 1,918,581

Exess liquidity for Inter IKEA Group are held in government bonds & equivalents. The sale of hedge funds and other excess liquidities generated by group divisions during the year explain the increase as at 31st December 2013.

Note 7 Shares in undertakings linked by virtue of participating interests

( '000s) 1 Jan. 2013

Addi-tions

Dis-posal

Trans-lation

31 Dec. 2013

Other invest-ments (gross) 133,033 6,181 1,228 2,608 135,378

Impairment 31,191 2,709 33,900

Total 101,842 3,472 1,228 2,608 101,478

This caption solely comprises investments considered to be permanent.


Note 12 Share capitalAs at 31st December 2013 and 31st December 2012, the sub-scribed capital is represented by 10,000,000 shares fully paid-up of EUR 30 each.

Note 13 Share premiumAs at 31st December 2013 and 31st December 2012, the share premium amounted to EUR 4,500,000,000.

Note 14 Minority interestsThe movement in minority interests during the year can be summarized as follow:

( '000s)Balance at

1 Jan. 2013Result brought

forwardResult of the year

Capital increase

Conversion Difference

Balance at 31 Dec. 2013

Minority interest 346,983 6,809 171,510 6,925 504,759

Minority result fo the year 6,809 6,809 36,042 36,042

Total 340,174 36,042 171,510 6,925 468,717

The most significant minority interest is the 49% participation of Ingka Pro Holding B.V., a company member of the Ingka Group, into Inter IKEA Centre Group A/S (the Retail Centre Division).

Note 15 Other provisions ( 000s) 31 Dec. 2013 31 Dec. 2012

Provisions for pension 24,823 13,170

Other provision 52,865 38,685

Total Provision 77,688 51,855

Other provisions are mainly composed of risk and uncertainties related to various litigations and by other risks related to the activities of real estate developments.

Note 16 Amounts owed to credit institutions ( 000s) 31 Dec. 2013 31 Dec. 2012

More than 5 years 181,870 121,811

Between 1 to 5 years 409,114 205,814

Less than one year 109,973 254,151

Total amounts owed to credit institutions 700,957 581,776

The majority of the long-term loans are secured by the mort-gages on properties and all bank loans are related to real estate activities.

Note 17 Off balance sheet financial commitments

Group companies have issued guarantees towards third parties for a total amount of EUR 22.1 million (EUR 20.9 million in 2012). The major part of it (EUR 19 million) relates to the dis-posal of retail properties in Austria in 2012.

As at 31st December 2013, the Company has unrealised gains on spots, swaps and forwards on foreign exchange trans-actions for a total amount of EUR 7.9 million (2012: EUR 5.9 million) and unrealised losses amounting to EUR 3.8 million (2012: EUR 8.0 million). The nominal value of transactions amounts to EUR 1,247 million (2012: EUR 1,456 million).

As at 31st December 2013, the Company also has interest pay-ables and receivables related to Interest Rate Swaps: EUR 4.6 million (2012: EUR 21.4 million) payables and EUR 0.1 million (2012: EUR 0.1 million) receivables. The nominal value of trans-actions amounts to EUR 269 million (2012: EUR 680 million).

The Group also has commitments into conditional land purchase agreements for EUR 141.4 million (2012: EUR 126 million) and long term lease for EUR 13.4 million (2012: EUR 13.5 million).


Note 21 EmployeesThe average full time number of employees amount to 1,754 in 2013 (1,644 in 2012).

Note 23 Remuneration to the Board of DirectorsThe remuneration paid in 2013 by the Company and its sub-sidiaries to members of the Board of Directors amounts to EUR 302,556 (EUR 1.39 million in 2012).

Note 24 Subsequent eventsNo major subsequent events to report for the year ended 31st December 2013.

Note 18 Operating income ( 000s) 31 Dec. 2013 31 Dec. 2012

Retail sales 147,096 155,540

Wholesales sales 1,413,285 1,174,600

Media sales 175,674 199,067

Franchise fees 871,217 860,841

Property rental income 202,967 193,934

Service income 28,648 21,557

Gain on disposal of tangible assets 15,477 50,471

Other 1,810 4,115

Total operating income 2,856,174 2,660,125

Retail sales relate to the IKEA Concept Store located in Delft (Netherlands). Wholesale sales relate to the sales of IKEA prod-ucts to IKEA franchisees located mainly in the Middle East and Asia Pacific. Media sales are mainly composed of the sales related to the IKEA Catalogue distributed yearly. Franchise fees are related to the franchising of the IKEA concept and represent a 3% franchise income levied on the worldwide IKEA sales.

Note 19 Financial income ( 000s) 31 Dec. 2013 31 Dec. 2012

Dividend income 7,562 5,762

Interest income 12,659 10,987

Gain on disposal of financial assets 205,644 83,816

Fair value adjustement on current liquid assets 2,495 39,251

Net foreign exchange gain 1,986

Other financial income 7,886 4,910

Total Financial income 236,246 146,712

The significant increase of gains on disposal of financial assets relates to the good performance of investments activities per-formed by the Finance division.

Note 20 Financial expenses ( 000s) 31 Dec. 2013 31 Dec. 2012

Interest expenses 364,968 377,479

Loss on financial assets trading 23,738 43,265

Fair value adjustment on financial assets 41,899 26,867

Net foreign exchange losses 5,627

Other 1,082 6,434

Total financial expenses 437,314 454,045

Note 22 Fees information Fees expensed by the Group during the year 2013 can be broken down as follow:

( 000s) 31 Dec. 2013 31 Dec. 2012

Audit fees 1,282 1,108

Other assurance services 104 28

Tax advisory services 151 334

Other services 83 83

Total audit fees 1,620 1,553


Independent Auditors Report

Report on the consolidated accountsFollowing our appointment by the General Meeting of the Shareholders dated 31st May 2013, we have audited the accompanying con-solidated accounts of Inter IKEA Holding S.A., which comprise the consolidated balance sheet as at 31st December 2013, the consoli-dated profit and loss account and the consoli-dated cash flow statement for the year then ended, and a summary of significant account-ing policies and other explanatory information.

Board of Directors responsibility for the consolidated accountsThe Board of Directors is responsible for the preparation and fair presentation of these consolidated accounts in accordance with Luxembourg legal and regulatory require-ments relating to the preparation and presen-tation of the consolidated accounts and for such internal control as the Board of Directors determines is necessary to enable the pre-paration and presentation of consolidated accounts that are free from material miss tate-ment, whether due to fraud or error.

Responsibility of the rviseur dentreprises agrOur responsibility is to express an opinion on these consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing as

adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated accounts are free from mate-rial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated accounts. The procedures selected depend on the judgment of the rviseur dentreprises agr, including the assessment of the risks of material mis-statement of the consolidated accounts, whether due to fraud or error. In making those risk assessments, the rviseur dentreprises agr considers internal control relevant to the entitys preparation and fair presentation of the consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonable-ness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the consolidated accounts.

We believe that the audit evidence we have obtained is sufficient and appropriate to pro-vide a basis for our audit opinion.

To the Shareholders of Inter IKEA Holding S.A.

OpinionIn our opinion, the consolidated accounts give a true and fair view of the financial position of Inter IKEA Holding S.A. as of 31st December 2013, and of the results of its operations and its cash flows for the year then ended in accor-dance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the consolidated accounts.

Report on other legal and regulatory requirementsThe management report, which is the respon-sibility of the Board of Directors, is consistent with the consolidated accounts.

ERNST & YOUNGSocit AnonymeCabinet de rvision agr

Luxembourg, 15 May 2014

Jeannot Weyer

Inter IKEA Holding SA

For further information please visit the Inter IKEA Group website, www.inter.ikea.com

Inter IKEA Group

Inter IKEA Group Annual Report 2013.pdf

Documents

Transcript of Inter IKEA Group Annual Report 2013.pdf