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IKEA reports slight rise in full year profits

IKEA’s net profit rose by just 0.4% to €3.3 billion in its 2014 financial year after the retailer allocated hundreds of millions of pounds to its staff loyalty and bonus schemes.

GENERAL MERCHANDISE

IKEA reports slight rise in full year profits

In the year to  31 August, sales in local currencies increased by 5.9% year-on-year to €28.7 billion. Together with the rental income from the company’s shopping centre business, total revenue amounted to €29.3 billion which was a 2.8% rise on the previous year.

IKEA said it gained market share in almost all of its markets and entered the new market of Croatia in the period. Its largest markets for sales were Germany, US, France, Russia and the UK. In addition, there were 716 million visits to the IKEA Group stores and more than 1.5 billion visits to IKEA.com.

Peter Agnefjäll, IKEA president and chief executive, said: ”FY14 was a good year for IKEA. I am happy to see increased growth in all our sales channels; in existing stores, in the opening of new stores and in e-commerce. We reached some important milestones towards becoming energy independent and saw a 58% increase in the sales value of products that enable people to live a more sustainable life at home. Sustainability is an integral part of our business strategy.”

Within its own operations, IKEA produced renewable energy equivalent to 42% of the total energy consumed and aims by the end of 2015 to have invested and committed to invest €1.5 billion in renewable energy projects, mainly offsite wind farms and photovoltaic panels.

During the year, IKEA set aside €200 million for its Tack! staff loyalty programme and increased the amount allocated to the One IKEA Bonus Programme by €98 million.

Agnefjäll added: “A key factor to our strong performance is that we have a long-term view, and don’t aim to maximise short-term profits. We strive to continuously create better products at lower prices to our customers and to make substantial investments in our future.”

 

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