Draft Financial statements

Inter IKEA

Holding B.V.

Annual report

FY22

Inter IKEA Holding B.V. Annual report FY22

Page 2 of 56

Contents

REPORT FROM THE MANAGEMENT BOARD ........................................................................................ 3

CONSOLIDATED BALANCE SHEET AS AT 31 AUGUST 2022 ............................................................... 13

CONSOLIDATED PROFIT AND LOSS ACCOUNT FY22 ......................................................................... 14

CONSOLIDATED CASH FLOW STATEMENT FY22 ................................................................................ 15

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FY22 ................................................. 16

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .............................................................. 17

COMPANY BALANCE SHEET AS AT 31 AUGUST 2022 ........................................................................ 46

COMPANY PROFIT AND LOSS ACCOUNT FY22 .................................................................................. 46

NOTES TO COMPANY FINANCIAL STATEMENTS ............................................................................... 47

OTHER INFORMATION .......................................................................................................................... 53

Inter IKEA Holding B.V. Annual report FY22

Page 3 of 56

REPORT FROM THE MANAGEMENT BOARD

The Management Board of Inter IKEA Holding B.V. hereby presents its annual report for the 12-

month period ended 31 August 2022.

General

Inter IKEA Group

Inter IKEA Holding B.V. (‘the Company’) is the ultimate parent company of the Inter IKEA Group

(‘the Group’). The Company is ultimately controlled by Interogo Foundation.

The Group consists of three core businesses: Franchise, Range and Supply. The three core

businesses work together with franchisees and suppliers to co-create an even better IKEA offer

and franchise system. The aim is to provide franchisees with best possible conditions for

implementing and operating the IKEA Concept, and to create a strong platform for future

expansion and growth.

As at 31 August 2022, 12 franchisees operate more than 500 IKEA locations, including traditional

stores, small stores and pick-up points, plus several test formats. Franchisees implement the IKEA

Concept by marketing and selling the IKEA product range. With the exception of the IKEA Delft

store in the Netherlands, all IKEA stores and test locations operate under franchise agreements

with Inter IKEA Systems B.V. Each franchisee has the responsibility to run, manage and develop

its local business. All franchisees are independent from and unrelated to Inter IKEA Group.

Franchise

Core Business Franchise includes Inter IKEA Systems B.V. – owner of the IKEA Concept and the

IKEA franchisor – and its related businesses. Inter IKEA Systems B.V. continuously develops the

IKEA Concept to ensure its successful implementation in new and existing markets. This enables

IKEA to remain forward-looking in areas such as brand development, retail methods,

sustainability, market potential and expansion. Core Business Franchise also includes IKEA

Marketing & Communication AB, a company that creates and produces IKEA communication for

customers and other IKEA organisations.

Range

Core Business Range includes IKEA of Sweden AB and related businesses. Range works under

assignments from Inter IKEA Systems B.V. and is mainly responsible for developing and designing

the overall IKEA product range, including home furnishings and food.

Supply

Core Business Supply includes IKEA Supply AG, IKEA Industry AB, IKEA Components AB and

related businesses. Inter IKEA Systems B.V. assigns IKEA Supply AG to source, sell and distribute

IKEA products to IKEA franchisees. The majority of IKEA products (89%) is sourced from external

suppliers across the globe. The operational relationships with these suppliers are operated

through purchasing offices, located close to where the suppliers are. IKEA Supply AG manages

and operates the IKEA supply chain together with its wholesale subsidiaries and external business

partners, such as transporters, warehouse providers and custom brokers. Our wholesale

subsidiaries buy IKEA products from internal and external suppliers and sell them to IKEA

franchisees.

Inter IKEA Holding B.V. Annual report FY22

Page 4 of 56

IKEA Industry is a strategic IKEA manufacturer that produces IKEA home furnishing products and

develops unique IKEA capabilities and capacities in relevant parts of the value chain (e.g. material

and manufacturing). Industry produces approximately 11% of the total IKEA range, with its main

focus on wood based furniture. Its operations are conducted through 36 production units that

include forestry, sawmills, as well as production of board material, wood components and ready

furniture.

IKEA Components develops, sources, packs and supplies components such as screws and wooden

dowels that are used to assemble IKEA furniture.

Governance structure

The Group’s governance is also organised through the three core businesses with the risk

management structures, internal control and compliance tailored to their specific business

characteristics. The Group’s governance structure is based on two main considerations: to secure

the growth and development opportunities of the IKEA Brand and the IKEA Concept, and to

guarantee the Group’s independence and ability to maintain a long-term perspective. The legal

structure follows along the lines of governance with separate parent companies for each of the

core businesses. The Company has two main governing bodies: the Management Board and the

Supervisory Board.

Financial information

These financial statements cover the 12-month period from 1 September 2021 to 31 August 2022

(‘FY22’). Comparative figures reflect the 12-month period from 1 September 2020 to 31 August

2021 (‘FY21’).

Profit and loss account

Total operating income in FY22 amounts to EUR 27.6 billion (+7.7% compared to FY21), mainly

generated through sales of goods to IKEA franchisees and through charged franchise fees.

Operating income development is directly linked to the retail sales of all IKEA franchisees

worldwide since these sales drive the Group’s wholesale activities and form the base for the

franchise fees.

In FY22, IKEA retail operations were less impacted by measures related to the Corona virus. Unlike

in FY20 and FY21, most IKEA stores remained open without (severe) restrictions and store

visitation went up compared to the years before. As a result and following retail price increases,

an uplift in store sales is visible, while the online sales remain at a high level. Although there are

still challenges to maintain the supply of furniture to the retailers, the availability of products for

our customers has improved.

While sales grew in value, sales in volumes and number of products sold have not grown. Many

households experience higher cost of living due to inflation and rising energy prices. This leads

to thinner wallets which means fewer people can afford to shop at IKEA today. In FY22, prices for

raw materials, commodities, transportation and logistics continued to increase, creating

additional costs for the whole IKEA value chain and a need for the Group to increase sales prices

to the IKEA franchisees.

Most of our operating expenses comprise cost of raw materials and consumables relating to the

manufacturing and procurement of finished goods. Cost of raw materials and consumables also

include direct transport, storage and handling cost. In FY22 – like in FY21 – an upward trend

resulted in the cost of raw materials and consumables increasing at a faster pace than operating

Inter IKEA Holding B.V. Annual report FY22

Page 5 of 56

income (+10.7% cost increase compared to FY21). The remaining operating expenses include

salary cost, utilities, fixed asset depreciation, rent and other costs related to day-to-day

operations.

The organisation has grown in terms of operating expenses and co-workers during FY22. Firstly,

more people were recruited to manage the supply chain complexities and inefficiencies, including

those connected to the consequences of the war in Ukraine. Secondly, a continued build-up of

resources has taken place to secure capability for the strategic and digital changes needed to

improve the IKEA value chain and the (online) IKEA sales experience.

In February 2022, subsequent to the Russian invasion into Ukraine, the international community

imposed economic sanctions (with the aim to stop most business interactions with Russia). As a

consequence, Inter IKEA Group and its franchisee Ingka Group have been unable to continue

operations. In June 2022, Inter IKEA Group and Ingka Group announced to scale down all business

and operations in Russia and Belarus. Effectively this means that:

• IKEA retail operations in Russia are stopped;

• Import and export to and from Russia and Belarus is stopped and the two purchasing and

logistics offices in Moscow and Minsk will close permanently by the end of 2022;

• IKEA Industry has reduced the workforce in its 4 Russian production units and started the

process of finding new ownership. Expectation is that this will be concluded beginning of

2023.

As a result of the above, the tangible fixed assets (refer to note 5 of the consolidated financial

statements), the supplier financing loans (refer to note 6 of the consolidated financial statements)

and inventories relating to the Russian operations have been impaired and costs have been

provided for. As the underlying (hedged) currency flows for the Russian operations were no

longer valid, these derivatives no longer met the hedging criteria, were settled and transferred

to the profit and loss account. The total combined net impact on the FY22 financial results is not

material.

Financial income comprises income from hedging activities and favourable currency translation

effects. Financial expenses comprise interest expenses connected to long- and short-term loans

as well as unfavourable currency translation effects.

The effective tax rate for FY22 is 23.7%, following the nominal tax rates in the Netherlands,

Sweden and Switzerland where the majority of the Group’s businesses are located. The effective

tax rate increased by 7.7% compared to the previous year, mainly due to significant changes in

the profitability per core business. Given our financial strength, the Group’s businesses did not

make use of pandemic-related government support packages.

In December 2017, the European Commission opened a formal investigation, with their Opening

Decision published on 6 April 2018 which was complemented by their Decision published on 10

July 2020, to examine whether decisions by the tax authorities in The Netherlands with regard to

the corporate income tax paid by one of our subsidiaries, Inter IKEA Systems B.V., comply with

European Union rules on state aid. The Company co-operates and responds to questions which

the European Commission has in relation to this investigation.

At this moment, although management considers the risk of a cash out flow unlikely, it is not

possible to assess a financial impact, if any, of the outcome of this EC investigation. The

aforementioned outcome is not expected to have a material adverse impact on the financial

Inter IKEA Holding B.V. Annual report FY22

Page 6 of 56

position of The Company. The Company is actively monitoring and addressing these

developments and believes that its corporate income tax position is appropriately reflected in the

financial statements.

Net profit for the year amounts to EUR 0.7 billion (FY21: EUR 1.4 billion). The reduction versus

previous year is primarily the result of rising cost of purchasing and transportation which were

absorbed in our financial results to limit sales price increases as much as possible.

Balance sheet

Most of the Group’s balance sheet positions as per 31 August 2022 have not changed significantly

when compared to 31 August 2021. Fixed assets primarily comprise the IKEA Proprietary Rights

(“IP Rights”), relating to the IKEA trademark, protection rights, intellectual property rights and the

rights to the IKEA catalogue, with a book value of EUR 9.4 billion.

The Group owns several property buildings, offices and distribution centres across the world,

including the IKEA Delft store. Additionally, the Group owns 35 IKEA furniture production units,

mostly located in Europe, as well as two factories that produce furniture components (screws,

plugs, etc.). In FY22, investments were made in extending or improving existing production units.

The process of finding new ownership for the 4 Russian production units is expected to be

finalized beginning of 2023. Anticipating this sale, an estimation of the proceeds has been made

and assets have been impaired.

Inventories mostly consist of IKEA products located in, or underway to distribution centres.

Inventory levels were particularly low during FY20 and FY21 as transport constraints in

combination with high customer demand posed a challenge in replenishing inventory to a

desired level. During FY22, the Group increased its inventory levels securing a better availability

of products for our customers. The high purchasing costs are reflected in inventory at the balance

sheet date, leading to a large increase in value.

Receivables mainly relate to IKEA retailers for franchise fees and IKEA products sold and invoiced.

The Group also holds receivables on related parties.

Group equity decreased from EUR 10.1 billion to EUR 9.8 billion in FY22. EUR 850 million will be

distributed as a dividend to our shareholder, reducing retained earnings by EUR 140 million.

Provisions for the majority are recognized for deferred taxes, legal disputes and product related

claims. The non-current liabilities relates to a loan received from Interogo Holding AG. Current

liabilities consist of short-term loans, trade payables and tax payables. The payable to related

parties increased significantly during the year, primarily to fund working capital needs.

Reduced Group equity (before dividend distribution) combined with an increase in our non-

current liabilities result in a decline in equity ratio of 47% in FY21 to 40% in FY22.

Cash flows

The increase in inventory levels to improve the availability of products in combination with high

purchasing cost has led to a negative cash flow from operating activities during FY22. This

negative cash flow, as well as interest payments, tax payments and investments, was funded with

short term financing provided by our non-controlling shareholder, Interogo Holding AG. During

the year, the Group also repaid loans and distributed dividend to Interogo Holding AG.

Inter IKEA Holding B.V. Annual report FY22

Page 7 of 56

The Group monitors its cash position by using a cash flow forecast model to ensure the cash

position is always sufficient to meet the financial obligations towards staff members, creditors,

tax authorities and other third parties. Our credit limits with Interogo Holding AG are sufficient

to continue operations and Interogo Holding AG has confirmed they will fund our working capital

needs for the next financial year as well.

Risk management

Approach

The Group is committed to protect the IKEA Concept and Brand, our co-workers, visitors,

customers, business partners and assets. Steering documents, frameworks, tools and working

methods are in place to embed risk management and compliance activities in day to day

operations:

• IKEA forever parts (vision, business idea, culture & values) are the foundation. The Group

Code of Conduct and Policy House define Group-wide business requirements.

• Business requirements are further specified in core business steering documents and

implemented in day-to-day operations as suitable in local regulatory contexts.

• Requirements imposed on IKEA franchisees and business partners are reflected in

corresponding agreements, IConduct and IWAY.

• A common risk management methodology is used to identify and assess key risks,

resulting in risk registers and action plans.

• Key internal control and compliance requirements are assessed across three lines of

defence, using self-assessments, compliance reviews and internal audits. These

requirements are also directed at preventing and detecting fraud.

• A Raising Concern Line, incident- and crisis management processes are designed to

detect and manage issues as they occur, and evaluations are performed to enable

learning and continuous improvement.

The Ethics Committee supervises and advises on the response to critical ethical dilemmas and

handling of (potential) critical breaches of the IKEA business requirements. Legal entity Boards,

the Inter IKEA Group Management Team (incl. Management Board) and the Audit Committee

keep oversight and periodically discuss consolidated risk registers and compliance status.

Key risks

Key risks are described below. The Group’s overall risk appetite is low. In areas such as product

quality & safety, business ethics, health and safety & security, the risk appetite is very low.

Business transformation

The Group is on a journey to transform the business in an omnichannel reality. This

transformation will enable us to meet customer expectations and digital growth, which is ever

more important in an increasingly competitive environment, with expanding multichannel

offerings, pure online players and price competitiveness.

Wellbeing & co-worker engagement

Co-worker wellbeing, engagement and leadership has been heavily challenged and stretched due

to geopolitical circumstances, the war in Ukraine, high inflation, organisational changes and

operational supply chain challenges due to the Corona virus. This continues to be a challenge

going forward also in respect of many ongoing business transformation priorities.

Inter IKEA Holding B.V. Annual report FY22

Page 8 of 56

Geopolitics, supply chain disruptions & resource scarcity

Global supply chains face unprecedented pressure and the war in Ukraine has increased that

pressure even more. Increasing scarcity and cost of raw materials are negatively impacting supply

and affordability of our products and the profitability of Inter IKEA Group. Social and regulatory

scrutiny of human rights and ethical sourcing across the supply chain reach new levels. All

examples of risks that require collaboration efforts to prioritise and enable agility, sustainability,

traceability and resilience across the value chain.

Sustainability

The IKEA sustainability strategy is built around three global sustainability challenges: climate

change, workplace inequality and unsustainable consumption. The potential effects of these

challenges are becoming increasingly visible in our business operations, for example through

resource scarcity and energy shortages in factories.

There is also an increasing (legal) demand for companies to demonstrate their environmental

and social contributions in a more comparable and quantifiable way. The EU has issued a new

Corporate Sustainability Reporting Directive (‘CSRD’) that requires companies to publicly report

on their ESG goals and impact, and to disclose the financial risks of climate change. CSRD will be

applicable to the Group as from FY26. With the world facing increasing environmental challenges,

growing public opinion expect that a company’s success should be steered towards positive

outcomes for people and planet, rather than financial growth and profits only. Failing to meet the

requirements of laws, policies and treaties such as the Paris Agreement primarily poses the risk

of brand and reputation damage. In some cases non-compliance can lead to business restrictions

and financial exposures.

More information around these topics are included in the IKEA Sustainability Report and the IKEA

Climate Report.

Digital, information security & data privacy

Adoption of new (digital) ways of working accelerated quickly, such as the use of new

technologies in our range development (e.g. virtual prototyping), more digital interaction and

information sharing with customers and suppliers in an omnichannel reality, and more remote

working between co-workers. At the same time, cybersecurity threats continue evolving; lower

barriers to entry for cyberthreat actors and more aggressive attack methods are all aggravating

the risk. Protecting the business is a complex challenge with many technical, legal, organisational

dimensions that require continuous focus. We are on a journey to transform our digital

capabilities by making significant IT investments and embracing the opportunities from data &

technology while continuously working on improving the way we protect and secure data.

Business ethics, safety & security and regulatory compliance

The Group operates in an international environment where practices vary in different local

settings and, therefore, it is important to conduct business in an ethical manner in accordance

with our code of conduct. Product safety is a top priority and an important basis to build customer

trust. We are committed to sustainable and safe home furnishing and food products for our

customers, safe and secure working environments for our co-workers across the value chain, and

compliance with all regulatory requirements in any of our markets. In close cooperation with our

franchisees and suppliers, the Group has clear processes in place to guarantee compliance with

regulatory requirements in all markets. Despite having the highest standards we recognise the

inherent risk to a breach in any of the above.

Inter IKEA Holding B.V. Annual report FY22

Page 9 of 56

Finance: Reporting & compliance risks

The Group faces financial (reporting & compliance) risks, such as foreign currency exchange,

commodity price increases, credit and tax risks. Increased attention on taxation of multinational

companies is addressed by implementing a Group-wide tax control framework, simplifying the

Group structure and keeping tax, including transfer pricing and transparency high on the Group’s

agenda. The resilience of our financial operations and controls are being stress-tested in times of

supply chain disruptions, pandemic and transformation, further complicated by ever increasing

regulations. It is critical to continue to invest in sustainable financial infrastructures and

capabilities while staying focused on delivery and control of running business. For more details

on the risks regarding financial instruments, we refer to section 15 of the financial statements.

Sustainability

People & Planet Positive strategy

The IKEA sustainability agenda is described in the sustainability strategy “People & Planet

Positive”. The strategy includes sustainability ambitions and commitments leading up to 2030,

addressing the entire IKEA franchise system and value chain.

The IKEA sustainability strategy secures a common sustainability agenda for all stakeholders in

the IKEA value chain with a long-term perspective on the business. Profitability and responsibility

are not opposing forces, on the contrary, they are interdependent. Long-term profitability can

only be ensured by acting in a way that creates positive impact and trust among all stakeholders.

The People & Planet Positive strategy provides a common framework for all trademark users and

units to develop and integrate sustainability tactics and actions into their own business plans, but

gives flexibility for local, market relevant approaches and solutions.

The strategy is built up around three focus areas:

1. Healthy and sustainable living

2. Circular & climate positive

3. Fair & equal

Progress on the People & Planet Positive strategy in all three focus areas is communicated

through the IKEA Sustainability Report and a separate IKEA Climate Report.

Suppliers

The Group has a responsibility to secure good social, environmental and working conditions for

the many people in the IKEA supply chain. The supplier code of conduct IWAY sets out our

minimum requirements on environmental, social and working conditions. It is a starting point for

developing shared values and expectations with our suppliers. Since its inception in 2000, IWAY

has been regularly updated to address emerging social and environmental risks. IWAY entails a

set of requirements applicable to every supplier. IKEA suppliers are responsible for

communicating the content of the IKEA Supplier code of conduct to their employees and sub-

suppliers and ensuring that all required measures are implemented at their own operations.

Co-workers

With the base of IKEA values and leadership, together with compensation and benefits, co-

workers are provided with a safe working environment. The Inter IKEA Group code of conduct

applies to all co-workers within the Group and can be found on our website.

Inter IKEA Holding B.V. Annual report FY22

Page 10 of 56

The Group has presence in many different countries. Equality, inclusion and diversity increase

our understanding of each other. That is why the Group recruits for and embraces diversity –

to engage with co-workers of all ages, backgrounds, mind-sets and perspectives. In an

environment of openness where everyone is important, and feels comfortable to experiment and

try new ways.

Within the Group, women are largely represented in our co-worker and manager base. The

composition of the Management Board and the Supervisory Board is evaluated regularly, taking

into consideration a number of criteria including relevant knowledge and experience, as well as

a balanced gender distribution. All aspects of diversity, equality and inclusion are actively pursued

across the whole Group.

Environmental issues

No material environmental issues occurred during FY22. Especially within the production units,

much attention is given to compliance with environmental regulations through regular

equipment verification and condition checks, and through active air emission monitoring and

documentation.

Development and innovation

The Group continues to invest significant resources to make IKEA more affordable, accessible and

sustainable for customers everywhere with the ambition to reach and interact with 3 billion

people. To make that happen, the Group invests in new ways to shop, more sustainable ways of

working, and an inspiring, functional and affordable IKEA product range.

Meeting the customer

In FY22, IKEA retailers opened three new markets, including the very first store and online channel

in South America. IKEA Santiago de Chile opened on 10 August, and South American expansion

will continue with Colombia and Peru during the coming years. During the last years, Inter IKEA

Systems B.V. supported this opening with (among others) a dedicated team on location in Chile.

There is a strong desire among consumers to change their lifestyles for the better and the Group

wants to make healthier and more sustainable living possible for the many people. A majority of

the IKEA stores have implemented the updated Sustainable living shop which shows solutions

and services to make changes in lifestyle that are easy and affordable, with focus on saving

energy, water and waste; and on prolonging the life of products.

Range development

IKEA product range development delivered many new products this year. Some highlights are

described below.

The iconic BILLY bookcase returned this year in a range of beautiful wood expressions. The

product has undergone rejuvenation and has become more circular, more affordable and easier

to assemble. It has a nail-free back panel to snap in and out of place more easily, thus enabling

customers to disassemble and reassemble as needed. The new bookcases use less plastic

compared to previous versions, and a high-quality paper foil printing technology means less

wood is needed.

BILLY is just one example of an IKEA product that avoids unnecessary material consumption.

Other examples include LACK tables and the PLATSA storage system, which use lightweight

Inter IKEA Holding B.V. Annual report FY22

Page 11 of 56

constructions. Recycled wood will play an even more important role going forward, and IKEA

products will continue to include more and more recycled materials such aluminium, plastics and

textiles. Additionally, the ÅBÄCKEN water nozzle provides an affordable solution to help

customers cut down on water usage at home by up to 95% in mist mode.

Manufacturing and distribution

The Group is constantly looking for new ways to make production more sustainable and energy-

efficient. Almost two-thirds of the IKEA climate footprint is directly connected to the supply chain,

including production at suppliers.

In FY22, IKEA started to phase out plastic from consumer packaging solutions, a phase-out that

will happen in steps, starting with an all new range by 2025, and running range by 2028. With this

phase-out, IKEA aims to reduce plastic waste and pollution, and drive the industry agenda to

develop packaging solutions centred around renewable and recycled materials.

IKEA Industry continues to invest in renewable energy sources. Significant milestones were made

in Poland and China. In May 2022, IKEA Industry Zbąszynek officially launched the construction

process of one of the largest solar farms for own use in Europe with a total capacity of 19 MW. In

August 2022, the factory in Nantong (China) officially opened a new solar installation adding an

extra 4.5 MW of energy production capacity to the existing 3.5 MW solar installation opened in

2015 on the same factory roof. The investments will save energy costs and lower the climate

footprint of IKEA furniture manufacturing.

Outlook for financial year FY23

FY23 will be another challenging year for the Group and the IKEA franchise system. The increasing

purchasing cost and declining sales volumes create an uncertain environment for our business.

Action is taken to address these developments with the goal to keep prices to the customers as

low as possible. Key initiatives that create the most impact for our business will be prioritised and

at the same time, initiatives with lower impact will be paused or stopped. Additionally,

organisational changes will be made to reduce management layers and to create a better and

more focused franchise system.

The expectation is that retail sales will grow in FY23, directly contributing to the Group’s wholesale

revenues and franchise fee income. The Group will be profitable in FY23.

During FY23, while remaining prudent and cost conscious, investments in research activities and

development by the core businesses Franchise, Range and Supply will continue. The Group will

finance these investments from its own funds.

Inter IKEA Holding B.V. Annual report FY22

Page 12 of 56

MANAGEMENT BOARD

Jon Abrahamsson Ring (Chairman)

Martin van Dam

Henrik Elm

Delft, 31 October 2022

Inter IKEA Holding B.V. Annual report FY22

Page 13 of 56

CONSOLIDATED BALANCE SHEET AS AT 31 AUGUST 2022

(before profit appropriation, in millions of EUR)

(See accompanying notes)

Inter IKEA Holding B.V. Annual report FY22

Page 14 of 56

CONSOLIDATED PROFIT AND LOSS ACCOUNT FY22

(in millions of EUR)

(See accompanying notes)

FY22 FY21

Net turnover 27,345 25,534

Change in inventory of finished goods 204 66

Other operating income 29 15

Total operating income (17) 27,578 25,615

Cost of raw materials and consumables 23,404 21,137

Cost of outsourced work and other external costs 247 243

Salaries and wages 954 856

Social charges 235 210

Pension expenses 105 100

Depreciation and amortisation (4,5) 477 522

Impairments of tangible and intangible fixed assets (4,5) 149 -

Other operating expenses 973 691

Total operating expenses (18) 26,544 23,759

Operating result 1,034 1,856

Financial income 250 210

Financial expense 353 361

Financial income and expense (19) (103) (151)

Result before tax 931 1,705

Income tax (20) 221 272

Net result 710 1,433

Inter IKEA Holding B.V. Annual report FY22

Page 15 of 56

CONSOLIDATED CASH FLOW STATEMENT FY22

(in millions of EUR)

FY22 FY21

Operating result 1,034 1,856

Adjusted for:

- Depreciation / amortisation (4,5) 477 522

- Impairments (4,5) 149 (11)

- Changes in provisions (11) (127) (67)

- Changes in financial fixed assets (6) (15) (1)

- Changes in working capital (2,066) 325

Cash flow from business operations (548) 2,624

Interest received 9 8

Interest paid (351) (343)

Income tax paid (322) (398)

Cash flow from operating activities (1,212) 1,891

Investments in:

- Intangible fixed assets (4) (3) (42)

- Tangible fixed assets (5) (233) (187)

Disposals of:

- Tangible fixed assets (5) 13 -

Issuance of debt (6) (16) (10)

Repayment of borrowings (6) 33 9

Cash flow from investing activities (206) (230)

Repayment of long term financing (13) (556) (509)

Disbursement of long term financing (13) 115 -

Short term financing (8,14) 2,882 (364)

Dividend paid (10) (1,000) (850)

Cash flows from financing activities 1,441 (1,723)

Net cash flow 23 (62)

Exchange rate and translation differences on cash 1 (3)

Changes in cash and cash equivalents 24 (65)

Cash and cash equivalents at beginning 160 225

Cash and cash equivalents at end 184 160

Net movement in cash 24 (65)

Inter IKEA Holding B.V. Annual report FY22

Page 16 of 56

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FY22

(in millions of EUR)

FY22 FY21

Net result 710 1,433

Change in unrealised derivatives (25) (57)

Remeasurements of defined benefit pensions plans 7 8

Exchange rate differences 38 33

Other 3 7

Total comprehensive income 733 1,424

Inter IKEA Holding B.V. Annual report FY22

Page 17 of 56

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

Inter IKEA Holding B.V. (‘the Company’), was incorporated on 30 September 1992, is a private

limited liability company under Dutch law and is registered as a financial holding under number

27163852 in the trade register and has its corporate seat at Olof Palmestraat 1 in Delft. Inter IKEA

Holding B.V. is the ultimate parent of a group of companies that together form the Inter IKEA

Group (‘the Group’).

The Company has issued 1 class A share and 125 class B shares. The class A share is held by

Interogo Foundation, entitling Interogo Foundation to voting rights in the General Meeting. This

share does not give right to a share in distributable profits and reserves. The class B shares are

held by Interogo Holding AG. These shares do not entitle the holder to voting rights in the General

Meeting, they only entitle the holder to a share in the distributable profits and reserves.

These financial statements cover the 12-month period which ended at 31 August 2022 (‘FY22’).

Comparative figures reflect the 12-month period which ended at 31 August 2021 (‘FY21’).

2. BASIS OF PREPARATION

Both the consolidated financial statements and the company financial statements have been

prepared in accordance with Title 9, Book 2 of the Netherlands Civil Code. The accounting policies

applied for measurement of assets and liabilities and the determination of results are based on

the historical cost convention, unless otherwise stated in the further accounting principles.

Application of Section 402, Book 2 of the Dutch Civil Code

The Company’s financial information is included in the consolidated financial statements. For this

reason, in accordance with Section 402, Book 2 of the Netherlands Civil Code, the separate profit

and loss account of the Company exclusively states the share of the result of participating

interests after tax and the other results after tax.

Going Concern

The financial statements have been prepared on the basis of the going concern assumption.

3. SIGNIFICANT ACCOUNTING POLICIES

General

Assets and liabilities are measured at nominal value, unless otherwise stated in the further

principles.

An asset is recognised in the balance sheet when it is probable that the expected future economic

benefits, that are attributable to the asset, will flow to the Company and the cost or value of the

asset can be measured reliably. Assets that are not recognised in the balance sheet are

considered as off-balance sheet assets. A liability is recognised in the balance sheet when it is

expected that the settlement of an existing obligation will result in an outflow of resources

Inter IKEA Holding B.V. Annual report FY22

Page 18 of 56

embodying economic benefits and the amount of the obligation can be measured reliably.

Provisions are included in the liabilities of the company. Liabilities that are not recognized in the

balance sheet are considered off-balance sheet liabilities.

An asset or liability that is recognised in the balance sheet, remains on the balance sheet if a

transaction (with respect to the asset or liability) does not lead to a major change in the economic

reality with respect to the asset or liability.

An asset or liability is derecognised in the balance sheet when a transaction results in all or

substantially all rights to economic benefits and all or substantially all of the risks related to the

asset or liability being transferred to a third party. In such cases, the results of the transaction are

directly recognised in the profit and loss account, taking into account any provisions related to

the transaction. If assets are recognised of which the Company does not have the legal

ownership, this fact will be disclosed.

Functional and presentation currency

The financial statements are presented in euros (‘EUR’), which is also the Company’s functional

currency. All financial information in euros has been rounded to the nearest million, unless stated

otherwise.

Assumptions and estimates

The preparation of the financial statements requires management to form opinions and to make

estimates and assumptions that have an impact on the application of principles and the reported

values of assets and liabilities and of income and expenditure. Actual results may differ from

these estimates. Estimates and the underlying assumptions are constantly assessed. Revisions to

estimates are recognised prospectively.

The following accounting policies are in the opinion of management the most critical for the

purpose of presenting the financial position and require estimates and assumptions.

• The useful life of fixed assets;

• Obsolescence of stock;

• Impairments;

• Provisions; and

• Taxation (including uncertain tax positions).

Refer to the accounting policies of the respective balance sheet items for details on the

assumptions made.

Consolidation scope

The consolidated financial statements include the financial information of the Company and its

subsidiaries. Subsidiaries are participating interests in which the Company (and/or one or more

of its subsidiaries) can exercise more than half of the voting rights in the general meeting, or can

appoint or dismiss more than half of the managing directors or supervisory directors.

Newly acquired participating interests are consolidated as from the date that decisive influence

(control) can be exercised. Participating interests disposed of, remain included in the

consolidation until the date of loss of this influence.

For an overview of all subsidiaries included in the Group, reference is made to the listing of

subsidiaries that has been filed by the Company at the Chamber of Commerce.

Inter IKEA Holding B.V. Annual report FY22

Page 19 of 56

Business combinations

A business combination is a transaction whereby the Group obtains control over the assets and

liabilities and the activities of the acquired party. Business combinations are accounted for using

the 'purchase accounting' method on the date that control is transferred to the Group (the

acquisition date). The transaction price is the cash consideration or equivalent agreed as part of

the acquisition, or the fair value of the consideration transferred at the acquisition date.

Transaction costs that are directly attributable to the business combination are allocated to the

transaction price. In case of deferred payment of the consideration, the transaction price is the

discounted value of the consideration.

The Group recognises the identifiable assets and liabilities of the acquired party at the acquisition

date. These assets and liabilities are recognised individually at their fair values, provided that it is

probable that future economic benefits will flow to the Group (assets) or settlement will result in

an outflow of resources embodying economic benefits (liabilities), and the cost or fair value

thereof can be measured with reliability.

Consolidation principles

The consolidated financial statements are prepared by using uniform accounting policies for

measurement and determination of the result of the Group.

In the consolidated financial statements, intragroup shareholdings, liabilities, receivables and

transactions are eliminated. Also, the results on transactions between group companies are

eliminated to the extent that the results are not realised through transactions with third parties

outside the Group and no impairment loss is applicable.

Translation of foreign currencies

At initial recognition, transactions denominated in a foreign currency are translated into the

Company’s functional currency at the exchange rates at the date of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated at the balance

sheet date into the functional currency at the spot exchange rate applying on that date. Exchange

differences resulting from the settlement of monetary items, or resulting from the translation of

monetary items denominated in foreign currency, are recognised in profit and loss in the period

in which the exchange difference occurs. Exempt from this are exchange differences on monetary

items that are part of a net investment in a foreign operation.

Non-monetary assets and liabilities denominated in foreign currency that are measured based

on historical cost, are translated into the functional currency at the exchange rates as at the date

of the transactions.

The assets and liabilities that are part of the net investment in a foreign operation are translated

into the functional currency at the exchange rate prevailing on the reporting date. The income

and expenses of such a foreign operation are translated into euros at the average exchange rate

for the year. Currency translation differences are recognised in the translation reserve within

equity.

Inter IKEA Holding B.V. Annual report FY22

Page 20 of 56

Financial instruments

Financial instruments include trade and other receivables, cash, loans and other financing

commitments, trade payables, other amounts payable and derivative financial instruments.

Financial assets and liabilities are recognised in the balance sheet at the moment that the

contractual risks or rewards with respect to that financial instrument originate. Financial

instruments are derecognised if a transaction results in a considerate part of the contractual risks

or rewards with respect to that financial instrument being transferred to a third party.

Financial and non-financial contracts may contain terms and conditions that meet the definition

of derivative financial instruments. Such an agreement is separated from the host contract and

accounted as a stand-alone derivative if its economic characteristics and risks are not closely

related to those of the host contract, a separate instrument with the same terms and conditions

as the embedded derivative would meet the definition of a derivative, and the combined

instrument is not measured at fair value with changes in fair value recognised in the profit and

loss account. Financial instruments embedded in contracts that are not separated from the host

contract are recognised in accordance with the host contract. Derivatives separated from the host

contract are, in accordance with the measurement policy for derivatives for which no cost price

hedge accounting is applied, measured at cost or lower fair value.

A purchase or sale of non-derivative financial assets according to standard market conventions

is, by class of financial assets and financial liabilities, systematically recognised or derecognised

in the balance sheet on the settlement date (date of transfer).

Financial instruments are initially measured at fair value, including discount or premium and

directly attributable transaction costs. However, if financial instruments are subsequently

measured at fair value through profit and loss, then directly attributable transaction costs are

directly recognised in the profit and loss account at the initial recognition. After initial recognition,

financial instruments are valued in the manner described below.

Loans granted and other receivables

Loans granted and other receivables are carried at amortised cost on the basis of the effective

interest method, less impairment losses. The effective interest and impairment losses, if any, are

directly recognised in the profit and loss account. Purchases and sales of financial assets that

belong to the category loans granted and other receivables are accounted for at the transaction

date.

Trade and other receivables

Receivables are short-term in nature, initially measured at fair value and subsequently at

amortised cost (except for derivatives) less allowance for uncollectible amounts.

Non-current and current liabilities and other financial commitments

Non-current and current liabilities and other financial commitments are measured after their

initial recognition at amortised cost on the basis of the effective interest rate method. The

effective interest is directly recorded in the profit and loss account.

Redemption payments regarding non-current liabilities that are due next year, are presented

under current liabilities.

Inter IKEA Holding B.V. Annual report FY22

Page 21 of 56

Derivatives and hedge accounting

Derivatives are measured at fair value with recognition of all changes in value in the profit and

loss account, except where hedge accounting is used to hedge the variability of future cash flows

that affect the profit and loss account (cash flow hedge accounting).

Cash flow hedge

If cash flow hedge accounting is used, the effective portion of the fair value changes of the

derivatives is initially recognised in other comprehensive income. As soon as the expected future

transactions lead to the recognition of gains or losses in the profit and loss account, the

respective amounts are transferred from the hedging reserve of other comprehensive income to

the profit and loss account. The net result of these gains and losses is recognised as financial

income and expenses.

If a derivative no longer meets the conditions for hedge accounting, expires or is sold, or if the

Company has decided to no longer apply hedge accounting, the hedging relationship is

terminated. The deferred gains or losses recognised at the time of the termination of the hedging

relationship remain in equity until the expected future transaction takes place. If the transaction

is no longer expected to take place, the deferred gain or loss on the hedge recognised in equity

is transferred to the profit and loss account.

Conditions for hedge accounting

The Company uses hedge accounting documentation, documenting the specific hedge

relationships in the dedicated treasury management system and regularly assesses the

effectiveness of the hedging relationships by establishing whether the hedge is effective or that

there is no over-hedging.

The Company documents at the inception of the transaction the relationship between hedging

instruments and hedged items as well as its risk management objective and strategy for

undertaking hedge transactions together with methods selected to assess hedge effectiveness.

The Company also documents its assessment, both at hedge inception and on an ongoing basis,

of whether the derivatives that are used in hedging transactions are effective in offsetting

changes in future cash flows (the hedged items). The effectiveness test is performed by

comparing the critical attributes of the hedging instrument with the hedged item, namely

currency pair, maturity date and notional amount. If there is an over-hedge, the related value

based on the lower of cost or fair value is recognised directly in the profit and loss account.

Impairment of financial assets

Financial assets (e.g. long-term loans receivable) are assessed at each reporting date to

determine whether there is objective evidence that they are impaired. A financial asset is

impaired if there is objective evidence of impairment as a result of one or more events that

occurred after the initial recognition of the asset, with negative impact on the estimated future

cash flows of that asset, which can be estimated reliably.

Objective evidence that financial assets are impaired includes default or delinquency by a debtor,

indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status

of borrowers or issuers, indications that a debtor or issuer is approaching bankruptcy, or the

disappearance of an active market for a security.

Inter IKEA Holding B.V. Annual report FY22

Page 22 of 56

The entity considers evidence of impairment for financial assets measured at amortised cost. All

individually significant assets are assessed individually for impairment.

An impairment loss in respect of a financial asset stated at amortised cost is calculated as the

difference between its carrying amount and the present value of the estimated future cash flows

discounted at the asset’s original effective interest rate.

Impairment losses are recognised in the profit and loss account and reflected in an allowance

account against loans and receivables or investment securities held to maturity. Interest on the

impaired asset continues to be recognised by using the asset's original effective interest rate.

When, in a subsequent period, the amount of an impairment loss decreases, and the decrease

can be related objectively to an event occurring after the impairment was recognised, the

decrease in impairment loss is reversed through profit or loss (up to the amount of the original

amortised cost).

Offsetting financial instruments

A financial asset and a financial liability are offset when the entity has a legally enforceable right

to set off the financial asset and financial liability and the Company has the firm intention to settle

the balance on a net basis, or to settle the asset and the liability simultaneously.

Intangible fixed assets

Intangible fixed assets are only recognised in the balance sheet when it is probable that the

expected future economic benefits that are attributable to the asset will flow to the Company and

the cost of that asset can be measured reliably.

Intangible fixed assets are measured at acquisition or development cost, less accumulated

amortisation and impairment losses.

Expenditures made after the initial recognition of an acquired or constructed intangible fixed

asset are included to the acquisition or construction cost if it is probable that the expenditures

will lead to an increase in the expected future economic benefits, and the expenditures and the

allocation to the asset can be measured reliably. If expenditures do not meet these conditions,

they are recognised as an expense in the profit and loss account.

The accounting principles for the recognition of an impairment are included under the section

‘Impairment of fixed assets’.

Proprietary Rights

The Proprietary Rights include the IKEA trademark, protection rights, intellectual property rights

and the rights to the IKEA catalogue.

The IKEA Brand and Concept have shown strong income and cash flow performance over the last

decades. We have the intent and ability to support the IKEA Brand with marketplace spending for

the foreseeable future. Applicable Dutch accounting principles require us to amortise these

Proprietary Rights based on expected economic life. Determining an expected economic life of

the Proprietary Rights requires management assessment and is based on a number of factors,

including: expected usage of the IKEA Brand and Concept, development of our market share,

Inter IKEA Holding B.V. Annual report FY22

Page 23 of 56

expectations on market development, consumer awareness and anticipated future expansion.

Based on these factors, the expected economic life is set at 45 years.

At the end of each financial year, the recoverable amount of the Proprietary Rights is assessed

for impairment, even if there is no indication of impairment.

Development costs

Internally developed software is carried at cost less accumulated amortisation and impairment

losses. Amortisation is calculated using the straight-line method and starts when the software is

ready for usage. Internally developed software is capitalized if the following conditions are met:

the intention exists to complete the asset and after completion to use or sell it (including the

availability of adequate technical, financial and other resources to achieve this), it is probable that

the asset will generate future economic benefits, and the costs during the development phase

can be determined reliably. The useful life differs per software platform. A legal reserve is formed

for the capitalised development costs that have not yet been amortised.

Tangible fixed assets

Tangible fixed assets are recognised in the balance sheet when it is probable that the expected

future economic benefits that are attributable to the asset will flow to the Company and the cost

of that asset can be measured reliably.

Land and buildings, machinery and equipment, construction in progress and other fixed

operating assets are stated at cost less accumulated depreciation and impairment losses. The

cost comprises the price of acquisition or manufacturing, plus other costs that are necessary to

bring the assets to their location and in condition for their intended use. Investment grants are

deducted from the cost of the assets to which the grants relate. Expenditure is only capitalised

when it extends the useful life of the asset. Costs of major rebuilding, repairs or maintenance are

capitalised at cost, when incurred and if the recognition criteria are met, using the component

approach. All other repair and maintenance costs are charged directly to the profit and loss

account.

The Company applies the component approach for tangible fixed assets if important individual

components of a tangible fixed asset can be distinguished from each other. Taking into account

differences in useful life or expected pattern of use, these components are depreciated

separately.

Depreciation is recognised in the profit and loss account on a straight-line basis over the

estimated useful lives of each item of the tangible fixed assets, taking into account any estimated

residual value of the individual assets. Depreciation starts as soon as the asset is available for its

intended use, and ends at decommissioning or divestment. No depreciation is recognised on

land.

Financial fixed assets

Long-term loans receivable

The accounting policies for Long-term loans receivable are included under the heading ‘Financial

instruments’

Deferred tax assets

The valuation of deferred tax assets is explained under the heading ‘Corporate income tax’.

Inter IKEA Holding B.V. Annual report FY22

Page 24 of 56

Impairment of fixed assets

Tangible and intangible fixed assets are assessed at each reporting date whether there is any

indication of an impairment. If any such indication exists, the recoverable amount of the asset is

estimated. The recoverable amount is the higher of value in use and net realisable value. If it is

not possible to assess the recoverable amount for an individual asset, the recoverable amount is

assessed for the cash-generating unit (CGU) to which the asset belongs.

When the carrying amount of an asset or CGU exceeds its recoverable amount, an impairment

loss is recognised for the difference between the carrying amount and the recoverable amount.

If there is an impairment loss for a CGU, the loss is first allocated to goodwill allocated to the CGU.

Any residual loss is allocated to the other assets of the unit pro rata to their book values.

Subsequently, at each reporting date, the entity assesses whether there is any indication that an

impairment loss that was recorded in previous years has been decreased. If any such indication

exists, then the recoverable amount of the asset or CGU is estimated.

Reversal of a previously recognised impairment loss only takes place when there is a change in

the assessment used to determine the recoverable amount since the recognition of the last

impairment loss. In such case, the carrying amount of the asset (or CGU) is increased to its

recoverable amount, but not higher than the carrying amount that would have applied (net of

depreciation) if no impairment loss had been recognised in previous years for the asset (or CGU).

Contrary to what is stated before, at each reporting date the recoverable amount is assessed for

the following assets (irrespective of whether there is any indicator of an impairment):

- intangible assets that have not been put into use yet;

- intangible assets that are amortised over a useful life of more than 20 years (counting

from the moment of initial operation/use).

Disposal of fixed assets

Fixed assets available for sale are measured at the lower of their carrying amount and net

realisable value.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost includes the expenses

for acquisition or manufacturing, plus other expenditure to bring the inventories to their present

location and condition. Net realisable value is based on the most reliable estimate of the sales

proceeds the inventories will generate, less costs still to make. Valuation of purchased goods is

calculated based on the ‘first in – first out’ (FIFO) method which assumes that the goods purchased

first, are the first goods to be sold.

Other receivables

The accounting policies applied for the valuation of other receivables are disclosed under the

heading ‘Financial instruments’.

Cash and cash equivalents

Cash and cash equivalents are measured at nominal value. If cash and cash equivalents are not

readily available, this is taken into account in the measurement.

Inter IKEA Holding B.V. Annual report FY22

Page 25 of 56

Cash and cash equivalents denominated in foreign currencies are translated at the balance sheet

date in the functional currency at the exchange rate valid at that date. Reference is made to the

accounting policies for foreign currencies.

Shareholders’ equity

Financial instruments that are designated as equity instruments by virtue of the economic reality

are presented under shareholders’ equity. Payments to holders of these instruments are

deducted from the shareholders’ equity as part of the profit distribution.

Financial instruments that are designated as a financial liability by virtue of the economic reality

are presented under liabilities. Interest, dividends, income and expenditure with respect to these

financial instruments are recognised in the profit and loss as financial income or expense.

Share Premium

Amounts contributed by the shareholder(s) of the Company in excess of the nominal share

capital, are accounted for as share premium. This also includes additional capital contributions

by existing shareholders without the issue of shares or issue of rights to acquire shares of the

Company.

Translation reserve

Exchange gains and losses arising from the translation of the functional currency of foreign

operations to the reporting currency of the parent are accounted for in this legal reserve. In the

case of the sale of a foreign operation, the associated accumulated exchange differences are

transferred from the translation reserve to the profit and loss account.

Legal reserve

Other legal reserves consist of a legal reserve for capitalised development costs and a legal

reserve for non-distributable profits.

Provisions

A provision is recognised if the following applies:

1. the Company has a legal or constructive obligation arising from a past event;

2. and the amount of the liability can be estimated reliably;

3. and it is probable that an outflow of resources embodying economic benefits will be

required to settle the obligation.

If all or part of the payments that are necessary to settle a provision are likely to be fully or

partially compensated by a third party upon settlement of the provision, then the compensation

amount is presented separately as an asset.

If the time value of money is material and the period over which the cash outflows are discounted

is more than one year, provisions are measured at the present value of the best estimate of the

cash outflows that are expected to be required to settle the liabilities and losses. The provisions

are measured at nominal value if the time value of money is not material or If the period over

which the cash outflows are discounted is no longer than one year.

Provision for deferred tax liabilities

The valuation of deferred tax liabilities is explained under the heading ‘Corporate income tax’.

Inter IKEA Holding B.V. Annual report FY22

Page 26 of 56

Pensions and other post-employment benefits

The Company operates a number of pension plans, which have been established in accordance

with the regulations and practices of the individual countries. The plans include both defined

contribution plans and defined benefit plans. Accounting standard RJ 271 “Employee Benefits”

offers the possibility to apply IFRS EU standards relating to the accounting treatment of pensions

(IAS 19 “Employee Benefits”) in financial statements that have been prepared in accordance with

Part 9, Book 2 of the Dutch Civil Code. This makes the IFRS standard for pension obligations a

factual part of the Dutch guidelines (RJ 271.101). The Company applies IAS 19 to all post-

employment benefits.

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is

provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a

reduction in future payments is available.

Defined benefit plans

The net obligations in respect of defined benefit plans are calculated separately for each plan by

estimating the amount of future benefits that employees have earned in the current and prior

periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using

the projected unit credit method. When the calculation results in a potential asset for the Group,

the recognised asset is limited to the present value of economic benefits available in the form of

any future refunds from the plan or reductions in future contributions to the plan (‘asset ceiling’).

To calculate the present value of economic benefits, consideration is given to any applicable

minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses,

the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding

interest), are recognised immediately in equity. The Group determines the net interest expense

(income) on the net defined benefit liability (asset) for the period by applying the discount rate

used to measure the defined benefit obligation at the beginning of the annual period to the net

defined benefit liability (asset), taking into account any changes in the net defined benefit liability

(asset) during the period as a result of contributions and benefit payments. Net interest expense

and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in

benefit that relates to past service or the gain or loss on curtailment is recognised immediately

in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit

plan when the settlement occurs.

Provision for claims, disputes and lawsuits

A provision for claims, disputes and lawsuits is established when it is expected that the Company

will be sentenced in legal proceedings. The provision represents the best estimate of the amount

for which the claim can be settled, including the costs of litigation.

Non-current liabilities

The valuation of non-current liabilities is explained under the heading ‘Financial instruments’.

Inter IKEA Holding B.V. Annual report FY22

Page 27 of 56

Revenue recognition

Sale of goods

Revenue from the sale of goods is accounted for in net turnover at the fair value of the

consideration received or receivable, net of returns and allowances, trade discounts and volume

rebates. Revenue from the sale of goods is recognised in the profit and loss account when the

significant risks and rewards of ownership have been transferred to the buyer, the amount of the

revenue can be determined reliably, recovery of consideration is probable, the associated costs

and possible return of goods can be estimated reliably, and there is no continuing involvement

with the goods.

Franchise fees

Franchise fees are received for the use of the IKEA trademarks, patents and software. Revenue is

recognised when the amount of the consideration receivable can be determined reliably and

recovery is probable.

Change in inventory of finished goods

Changes in inventories of finished products is related to the manufacturing activities of Core

Business Supply.

Revenue and expenses are allocated to the period to which they relate.

Expenses

Expenses, including interest, are determined with due observance of the aforementioned

accounting policies and allocated to the year to which they relate. Foreseeable and other

obligations as well as potential losses arising before the financial year-end are recognised if

known before the financial statements are prepared and provided all other conditions for the

recognition of a provision are met.

Employee benefits

Employee benefits are charged to the profit and loss account in the period in which the employee

services are rendered and, to the extent not already paid, as a liability on the balance sheet. If the

amount already paid exceeds the benefits owed, the excess is recognised as a current asset to

the extent that there will be a reimbursement by the employees or a reduction in future payments

by the Company.

For benefits with accumulating rights and bonuses, the projected costs are taken into account

during the employment. An expected payment resulting from profit-sharing and bonus payments

is recognised if the obligation for that payment has arisen on or before the balance sheet date

and a reliable estimate of the liabilities can be made.

If a benefit is paid in case of non-accumulating rights (e.g., continued payment in case of sickness

or disability), the projected costs are recognised in the period in which such benefit is payable.

For existing commitments at the balance sheet date to continue the payment of benefits

(including termination benefits) to employees who are expected to be unable to perform work

wholly or partly due to sickness or disability in the future, a provision is recognised.

The recognised liability relates to the best estimate of the expenditure necessary to settle the

obligation at the balance sheet date. The best estimate is based on contractual agreements with

Inter IKEA Holding B.V. Annual report FY22

Page 28 of 56

employees (collective agreement and individual employment contract). Additions to and reversals

of liabilities are charged or credited to the profit and loss account.

The liability for benefits during employment is measured at present value of the expenditure

expected to be required to settle the obligation.

Leasing

The Company may enter into finance and operating leases. A lease agreement under which the

risks and rewards of ownership of the leased object are carried entirely or almost entirely by the

lessee are classified as finance leases. All other leases are classified as operating leases. For the

lease classification, the economic substance of the transaction is conclusive rather than the legal

form.

At inception of an arrangement, the Company assesses whether the lease classifies as a finance

or operating lease.

If the Company acts as lessee in an operating lease, the leased property is not capitalised. Benefits

received as an incentive to enter into an agreement are recognised as a reduction of rental

expense over the lease term. Lease payments and benefits regarding operating leases are

recognised to the profit and loss account on a straight-line basis over the lease term, unless

another systematic basis is more representative of the time pattern of the benefits from the use

of the leased asset.

Financial income and expenses

Financial income is recognised in the profit and loss account on an accrual basis, using the

effective interest rate method. Financial expenses and similar expenses are recognised in the

period to which they belong. Hedge results are recorded in financial income and expense on a

net basis.

Corporate income tax

Corporate income tax comprises the current and deferred corporate income tax payable and

deductible for the reporting period. Corporate income tax is recognised in the profit and loss

account except to the extent that it relates to items recognised directly to equity, in which case it

is recognised in equity, or to business combinations.

Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the

financial year, calculated using tax rates enacted or substantively enacted at the reporting date,

and any adjustment to the tax payable in respect of previous years. If the carrying amounts of

assets and liabilities for financial reporting differ from their values for tax purposes (tax base),

this results in temporary differences. For taxable temporary differences, a provision for deferred

tax liabilities is recognised.

For deductible temporary differences, available tax losses and unused tax credits, a deferred tax

asset is recognised, but only to the extent that it is probable that future taxable profits will be

available for set-off or compensation. Deferred tax assets are reviewed at each reporting date

and reduced to the extent that it is no longer probable that the related tax benefit will be realised.

For taxable temporary differences relating to group companies, foreign branches, associates and

joint ventures, a deferred tax liability is recognised, unless it is probable that the temporary

Inter IKEA Holding B.V. Annual report FY22

Page 29 of 56

difference will not reverse in the foreseeable future. The measurement of deferred tax liabilities

and deferred tax assets is based on the tax consequences following from the manner in which

the Company expects, at the balance sheet date, to realise or settle its assets, provisions, debts

and accrued liabilities. Deferred tax assets and liabilities are measured at nominal value.

Cash flow statement

The cash flow statement is prepared using the indirect method. Cash and cash equivalents

include cash and investments that are readily convertible to a known amount of cash without a

significant risk of changes in value. Cash flows in foreign currency are translated into euros using

the weighted average exchange rate for the reporting period. Currency translation differences

with regard to cash and cash equivalents are presented separately in the cash flow statement.

Receipts and payments of interest and income taxes are presented within the cash flows from

operating activities. Payments of dividends are presented within the cash flows from financing

activities.

Cash flows from derivative financial instruments that are accounted for as fair value hedges or

cash flow hedges, are classified in the same category as the cash flows from the hedged balance

sheet items and are part of change working capital. Cash flows from derivative financial

instruments whereby hedge accounting is no longer applied, are classified in accordance with

the nature of the instrument, from the date at which hedge accounting is ended.

Determination of fair value

The fair value of a financial instrument is the amount for which an asset can be sold or a liability

settled, involving parties who are well informed regarding the matter, willing to enter into a

transaction and are independent from each other.

• The fair value of listed financial instruments is determined on the basis of the exit price.

• The fair value of non-listed financial instruments is determined by discounting the

expected cash flows to their present value, applying a discount rate that is equal to the

current risk-free market interest rate for the remaining term, plus credit and liquidity

surcharges.

• The fair value of derivatives involving the exchange of collateral is determined without

the credit or liquidity surcharges since this risk is mitigated by the collateral exchange.

Related parties and related party transactions

Transactions with related parties are assumed when a relationship exists between the Company

and a natural person or entity that is affiliated with the Company. This includes, amongst others,

the relationship between the Company and its subsidiaries, shareholders, directors and key

management personnel. Transactions are transfers of resources, services or obligations,

regardless whether anything has been charged.

Subsequent events

Events that provide further information on the actual situation at the balance sheet date and that

appear before the financial statements are being prepared, are recognised in the financial

statements. Events that provide no further information on the actual situation at the balance

sheet date are not recognised in the financial statements. When those events are relevant for the

economic decisions of users of the financial statements, the nature and the estimated financial

effects are disclosed in the financial statements.

Inter IKEA Holding B.V. Annual report FY22

Page 30 of 56

4. INTANGIBLE FIXED ASSETS

Movements in intangible fixed assets were as follows:

Proprietary Rights

The Company (through its subsidiary Inter IKEA Systems B.V.), acquired the beneficial interest of

the IKEA Proprietary Rights (“IP Rights”) from Interogo Foundation for a total consideration of

EUR 11,800 million. These Rights include the IKEA trademark, protection rights, intellectual

property rights and the rights to the IKEA catalogue.

Development costs

Development costs relate to various internally developed software to gain economic benefits. The

expected useful life is aligned with the expected economic benefits.

Proprietary

rights

Developm.

costs

Other Total

Balance as at 1 September 2021:

Purchase price 11,800 216 3 12,019

Accumulated amortisation and impairment (2,164) (144) - (2,308)

Carrying amount 9,636 72 3 9,711

Changes in carrying amount:

Additions - - 2 2

Impairments - (57) - (57)

Amortisation (273) (14) - (287)

Balance 9,363 1 5 9,369

Balance as at 31 August 2022:

Purchase price 11,800 216 5 12,021

Accumulated amortisation and impairment (2,437) (215) - (2,652)

Carrying amount closing 9,363 1 5 9,369

Estimated useful life (years) 45 3-5 3

Inter IKEA Holding B.V. Annual report FY22

Page 31 of 56

5. TANGIBLE FIXED ASSETS

Movements in tangible fixed assets were as follows:

Tangible fixed assets carried at cost do not include capitalised interest charges.

Tangible fixed assets include an amount of EUR 18 million (FY21: EUR 19 million), which is pledged

for debts to credit institutions.

Construction in progress is mainly related to the factories and distribution center of Core

business Supply.

Land

and

buildings

Mach.

and

equip.

Constr.

in

progress

Other Total

Balance as at 1 September 2021:

Purchase price 1,418 1,091 104 101 2,714

Accumulated depreciation and impairment (357) (579) - (76) (1,012)

Carrying amount 1,061 512 104 25 1,702

Changes in carrying amount:

Investments 9 32 184 8 233

Disposals (2) (5) (6) - (13)

Translation differences 40 (4) (1) - 35

Transfers 7 67 (89) 3 (12)

Depreciation (69) (110) - (11) (190)

Impairment (47) (42) (3) - (92)

Other - 1 (2) (1) (2)

Balance 999 451 187 24 1,661

Balance as at 31 August 2022:

Purchase price 1,472 1,182 190 111 2,955

Accumulated depreciation and impairment (473) (731) (3) (87) (1,294)

Carrying amount 999 451 187 24 1,661

Estimated useful life (years) 0-25 3-15 N/A Various

Inter IKEA Holding B.V. Annual report FY22

Page 32 of 56

6. FINANCIAL FIXED ASSETS

Movements in financial fixed assets were as follows:

The deferred tax assets relate to deductible temporary differences. It is expected EUR 27 million

will be offset within one year.

The long term loans receivable mainly encompass supplier financing with a gross amount of EUR

87 million (FY21: EUR 99 million), off-set by a provision of EUR 68 million (FY21: EUR 42 million) and

a loan to one of our associates. The current part of the long term loans receivable has been

presented under Receivables which is the gross outstanding amount.

Other financial fixed assets relate to investments in associates.

7. INVENTORIES

A limited part of the trade goods is valued at the net realizable value. All other inventories are

valued at cost.

Deferred

tax

asset

LT loans

receivable

Other Total

Balance as at 1 September 2021: 177 61 13 251

Changes in carrying amount:

Investments - - 15 15

Additions 32 - - 32

New loans - 16 - 16

Used (16) - - (16)

Released (12) - - (12)

Repayments - (9) - (9)

Translation differences - - 1 1

From long-term to current portion - (6) - (6)

Effect of tax rate changes 10 - - 10

Reclassification of assets (7) 7 12 12

Write-off - (26) - (26)

Other 1 1 - 2

Balance 8 (17) 28 19

Balance as at 31 August 2022: 185 44 41 270

FY22 FY21

Raw materials 295 243

Work in progress 67 56

Finished goods 536 332

Trade goods 5,396 3,121

Total 6,294 3,752

Inter IKEA Holding B.V. Annual report FY22

Page 33 of 56

The movement in the provision for obsolescence for inventories is as follows:

8. TRADE AND OTHER RECEIVABLES

The trade and other receivables all have an estimated maturity shorter than one year, with the

exception of the indirect tax receivable of which some 40% is expected to be received after

2-3 years.

The carrying values of the recognised receivables approximate their respective fair values, given

the short maturities of the positions and the fact that allowances for doubtful debts have been

recognised, if necessary.

Receivables on related parties relate to regular notional account receivables with Interogo

Holding AG.

9. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include an amount of EUR 19 million (FY21: EUR 37 million) relating to

guarantees that are not immediately accessible.

10. GROUP EQUITY

For details on shareholders’ equity, refer to note 5 in the Company financial statements.

FY22 FY21

Balance as at 1 September 2021: 137 111

Addition, charged to the profit and loss account 32 47

Write-offs charged against the provision (3) -

Release, credited to the profit and loss account (35) (21)

Balance as at 31 August 2022: 131 137

FY22 FY21

Trade receivables 3,326 2,876

Current portion of long-term loans receivable 131 167

Income tax receivable 71 34

Indirect tax receivable 237 205

Receivable on related parties 2,889 2,287

Derivatives assets 70 50

Prepaid expenses and accrued income 104 137

Other receivables 78 75

Total 6,906 5,831

FY22 FY21

Amortised cost of outstanding receivables 3,336 2,879

Less: allowance for doubtful debts (10) (3)

Trade Receivables 3,326 2,876

Inter IKEA Holding B.V. Annual report FY22

Page 34 of 56

11. PROVISIONS

Movements in provisions can be specified as follows:

The provision for tax expenses is recorded for potential unfavourable outcomes in tax audits and

disputes.

The Company has recognised a provision for deferred taxes for differences between valuation

principles for financial reporting purposes and for tax purposes mainly related to fixed assets.

The deferred tax liabilities will not be utilized within one year.

For details on the provision for pensions commitments in Sweden, the Netherlands and

Switzerland refer to note 12. The remaining amount is divided over several countries.

The provision in respect of claims, disputes and lawsuits mainly relates to product infringement

claims involving the Company and/or its group companies.

12. PENSION AND OTHER POST-EMPLOYMENT BENEFITS

The Group has a number of defined benefit pension plans, predominantly in the Netherlands and

Switzerland.

There are minimum funding requirements applicable for the pension plans in the Netherlands

and Switzerland as set out by local legislation.

The pension obligations from the three remaining Swedish entities were transferred from PRI to

Alecta during FY22. For most salaried employees in Sweden, the ITP 2 plan's defined-benefit

pension commitments for old-age and family pensions are secured through insurance with

Alecta. According to IAS 19, the pension plan ITP 2 financed through insurance with Alecta is a

defined benefit plan that covers multiple employers. For the financial year ending 31 August 2022,

Pension

Deferred tax

liability

Tax

Legal

Claims

Other Total

Balance as at 1 September 2021: 120 49 25 35 26 255

Changes:

- Provisions made during the year 3 25 - 5 16 49

- Provisions used during the year (21) (9) - - (5) (35)

- Provisions released during the year (96) (7) (13) (19) (3) (138)

- Reclassification to assets - (7) - - - (7)

Balance as at 31 August 2022: 6 51 12 21 34 124

FY22 FY21

Defined benefit obligation - funded plans 163 131

Defined benefit obligation - unfunded plans 58 247

Fair value on plan assets (248) (272)

Effect of asset ceiling 23 -

Net defined benefit liability (4) 106

Inter IKEA Holding B.V. Annual report FY22

Page 35 of 56

the company has not had access to information in order to be able to report its proportional share

of the plan's obligations, plan assets and costs, which meant that the plan was not possible to

report as a defined benefit plan. The ITP 2 pension plan that is secured through insurance with

Alecta is therefore reported as a defined contribution plan. Premiums for the defined-benefit old-

age and family pensions are calculated individually and are dependent on, among other things,

salary, previously earned pension and expected remaining period of service.

The collective consolidation level is the market value of Alecta's assets as a percentage of the

insurance commitments calculated according to Alecta's actuarial methods and assumptions. The

collective consolidation level should normally be allowed to vary between 125 and 175 percent. In

order to strengthen the level of consolidation if it is deemed to be too low, one measure may be

to increase the agreed price for new subscriptions and changes of existing benefits. If the

consolidation level exceeds 150 percent, premium reductions can be introduced. At the end of

June 2022, Alecta's surplus in the form of the collective consolidation level amounted to 185

percent (FY21: 165 percent).

Movement in Net defined benefit liability

The present value of the defined benefit liability is detailed as below:

2022 2021 2022 2021 2022 2021

Balance at 1 September 378 392 (272) (233) 106 159

Included in profit or loss

Current service cost 20 24 - - 20 24

Past service cost 1 (9) - - 1 (9)

(Gain) / loss on settlements (14) (12) - - (14) (12)

Interest cost 4 5 (3) 3 1 8

11 8 (3) 3 8 11

Included in OCI

Remeasurements of defined benefit pensions plans:

- Actuarial loss (gain) arising from:

- demographic assumptions 2 (10) - - 2 (10)

- financial assumptions (103) 21 - - (103) 21

- experience adjustment 10 (1) - - 10 (1)

- Return on plan assets excluding interest income - - 60 (25) 60 (25)

Effect of movements in exchange rates 7 1 (9) - (2) 1

Effect of asset ceiling - - - - 23 -

(84) 11 51 (25) (10) (14)

Other

Contributions paid by the employer (1) (2) (16) (13) (17) (15)

Settlement payments by the employer (91) (32) - - (91) (32)

Settlement payments from plan assets 2 (5) (2) 5 - -

Participation contribution 7 6 (7) (6) - -

Other (1) - 1 (3) - (3)

(84) (33) (24) (17) (108) (50)

Balance at 31 August 221 378 (248) (272) (4) 106

Defined benefit

Fair value of

Net defined benefit

obligation

plan assets

liability (asset)

Inter IKEA Holding B.V. Annual report FY22

Page 36 of 56

Plan assets

The major categories of plan assets of the fair value of the total plan assets are, as follows:

FY22 FY21

Cash and cash equivalents 4 6

Equity instruments 88 100

Debt instruments 113 130

Real estate 40 36

Other 3 -

Total 248 272

The plan assets do not include investments in shares, issued debt or property owned by the

Company. Total plan assets with a quoted market prices amounts to EUR 248 million (FY21:

EUR 272 million).

Defined benefit obligation

Actuarial assumptions

The principal weighted-average assumptions used in determining the defined benefit obligations

are shown below:

FY22 FY21

Discount rate 3.1% 1.3%

Future salary increase rate 2.2% 2.4%

The pre-retirement mortality assumption has been calculated per country, based on generally

accepted mortality tables, such as DUS14 for Sweden and BVG2020 Generational for Switzerland.

The average duration of the defined benefit plan obligation at 31 August 2022 is 20 years (FY21:

25 years).

The Company expects to contribute EUR 17 million to its defined benefit pension plans in FY23.

Sensitivity analysis

Sensitivity analyses (in- and decrease by 0.5%) have been performed on both the discount rate

and the salary increase rate, calculating the present value of the defined benefit obligation as at

31 August 2022.

+50 bp -50 bp +50 bp -50 bp

Present value defined benefit obligation 202 244 224 218

Discount rate

Salary increases

13. NON-CURRENT LIABILITIES

FY22 FY21

Debts to related party 5,414 5,426

Other debts 119 3

Closing Balance 5,533 5,429

Inter IKEA Holding B.V. Annual report FY22

Page 37 of 56

The Group is financed, primarily, by a loan granted by the non-controlling shareholder Interogo

Holding AG relating to the acquisition of the Proprietary Rights; EUR 5,400 million. This loan is

due in December 2023. Interogo Holding AG has confirmed to refinance this loan. Refer to note

15 for more details on interest rates and conditions.

The debts to related party can be further disclosed as follows:

- Remaining duration < 1 year: EUR 14 million

- Remaining duration 1-5 year: EUR 5,414 million

- Remaining duration >5 year: EUR 0 million

The movements in debts to related party can be specified as follows:

14. CURRENT LIABILITIES

Short-term borrowings at different finance institutions bear market interest rates according to

local conditions for currencies involved.

Payable related parties mainly relate to regular notional account borrowing from Interogo

Holding AG amounting to EUR 5,639 million (FY21: EUR 2,196 million). Interogo Holding AG has

confirmed to continue financing working capital needs for at least until 31 December 2023. Refer

to note 15 for more details on interest rates and conditions.

All current liabilities have an estimated maturity shorter than one year.

FY22 FY21

Principal amount 8,603 8,603

Repaid until 31 August (2,625) (2,124)

Outstanding principal amount as per 1 September 5,978 6,479

Repayments (556) (506)

Difference in foreign currency translation 6 5

Outstanding principal amount as at 31 August 5,428 5,978

Current as at 31 August (14) (552)

Non-current as at 31 August 5,414 5,426

FY22 FY21

Current portion of long term debt 14 552

Short-term borrowings 164 110

Payable related parties 5,791 2,308

Accounts payable trade 2,422 1,921

Income taxes payable 52 101

Indirect tax payable 217 155

Payable staff 144 150

Derivatives liabilities 17 13

Bank overdraft - 2

Accrued liabilities and deferred income 240 185

Other Liabilities 119 111

Total 9,180 5,608

Inter IKEA Holding B.V. Annual report FY22

Page 38 of 56

15. FINANCIAL INSTRUMENTS

General

During the normal course of business, the Company uses various financial instruments that

expose it to currency, interest, cash flow, fair value, market, credit and liquidity risks. To control

these risks, the Company has instituted a policy including a code of conduct and procedures that

are intended to limit the risks of unpredictable adverse developments in the financial markets

and thus for the financial performance of the Company.

Credit risk

Credit risk arises principally from the Company’s loans and receivables presented under financial

fixed assets, trade and other receivables and cash and cash equivalents. The maximum amount

of credit risk that the Company incurs is EUR 7,360 million (FY21: EUR 6,242 million), consisting of

EUR 270 million (FY21: EUR 251 million) financial fixed assets, EUR 6,906 million (FY21: EUR 5,831

million) trade and other receivables and EUR 184 million (FY21: EUR 160 million) cash and cash

equivalents. The credit risk is concentrated to trade receivables for EUR 3,326 million (FY21: EUR

2,876 million) which mainly consists of 12 franchisees. Long standing relationships exist with

these counterparties. Furthermore, the Company holds receivables of EUR 2,889 million (FY21:

EUR 2,287 million) on related parties.

Credit risk mitigating aspects

For derivatives traded with banking partners, there is a collateral management process where

the net asset or liability value is exchanged in the form of cash collateral with each counterparty.

At year-end 2022, EUR 238 million was received as collateral against the positive value of

derivative contracts, EUR 404 million was delivered as collateral against the negative value of

derivative contracts.

Interest rate risk and cash-flow risk

The Company runs an interest rate risk on interest bearing assets and liabilities and on the

refinancing of existing loans. For assets and liabilities with variable interest rate agreements, the

Company runs a risk of future cash flows relating to the interest element. For fixed interest rate

loans the Company runs a fair value risk.

The Company has liabilities and receivables with the following interest rates:

- Receivable on related parties EUR 2,889 million (daily floating %, currency specific base

rate minus 5 basis points with a floor of 0%);

- Long-term debt to shareholder EUR 5,400 million (6% fixed EUR);

- Payable related parties EUR 5,791 million via notional account (daily floating %, currency

specific base rate plus 60 basis points).

Currency risk

The Company is exposed to currency risk on:

• Franchise fees: the franchise fees are partly earned outside of the Euro zone, where the

euro is the Company’s reporting currency. From a reporting perspective, the Company is

therefore exposed to the volatility of foreign exchange market. The currency risk run on

the positions is limited, considering the amounts involved and regular settlements

combined.

Inter IKEA Holding B.V. Annual report FY22

Page 39 of 56

• Goods flows: the Company is exposed to foreign exchange rate risks arising from

purchase and sales of goods, freight and indirect materials and services transactions. The

currencies in which these transactions primarily are denominated are CNY, PLN, GBP and

USD. The Company’s exchange rate risk is actively managed by using derivatives

contracts.

At year-end 2022, the total net fair value of the derivatives used to manage exchange risk is

EUR 228 million positive (FY21: EUR 43 million positive).

Hedge accounting is applied with the impact of effective hedging taken to other comprehensive

income of EUR 51 million loss (FY21: EUR 26 million loss). The results of derivatives which did not

meet the hedging criteria are directly reported under result from hedges in the profit and loss

account and amount to EUR 265 million gain (FY21: EUR 7 million gain). The gain mainly relates to

the Russian operations where underlying currency flows were no longer valid after economic

sanctions were imposed by the international community.

The strategy to mitigate the currency risk is centralised and managed by the separate Treasury

function within the Group, which is responsible for mitigating the Group’s financial risks. Based

on the forecasted business plan, the Treasury function determines and is responsible for the risk

management strategy. As a consequence, the Company has opted to recognise the realised

hedge results (gains and losses) in financial income and expenses.

The Company applies derivatives, including currency options and forward exchange contracts to

control its risks. A minimum of 80% of the forecasted foreign exchange exposure should be

hedged within 2 months of setting fixed rates.

In FY22, the result from hedging recognised in the profit and loss account amounted to a gain of

EUR 216 million (FY21: gain of EUR 202 million).

Liquidity Risk

The Company monitors its cash position by using liquidity planning. Management ensures that

the cash position and facilities are sufficient to meet the company’s financial obligations towards

creditors.

Fair value

The fair value of most of the financial instruments stated on the balance sheet, including

receivables, cash and cash equivalents and current liabilities, is approximately equal to their

carrying amount. The fair value of the debts to related party as reported under the non-current

liabilities can be specified as follows, in billions:

The fair value is the present value of future cash-flows discounted on the interest rate that would

apply at the balance sheet date for similar loans, including a risk premium for each individual

loan. The average market interest rate applied was 4.14%.

Fair Carrying

value amount

Debts to related party 5.6 5.5

Inter IKEA Holding B.V. Annual report FY22

Page 40 of 56

16. COMMITMENTS AND CONTINGENT LIABILITIES

The commitments can be detailed as follows:

Purchase commitments

The Group has entered into purchase agreements with external suppliers for a total value of

EUR 5,556 million at 31 August 2022 (FY21: EUR 6,260 million). These agreements have different

remaining periods, ranging from 1 to 10 years.

IT Services commitments

The Group has entered into IT services agreements. This agreement includes both ‘Agreed

Services’, such as maintenance, operations and infrastructure and ‘Consultancy Services”. The

commitment for the coming year for these agreements amounts to approximately EUR 77 million

(FY21: EUR 85 million).

Distribution Services Commitments

The Group has entered into agreements covering the services for distribution. These agreements

have different remaining periods, ranging from 1 to 10 years. The commitment for the coming

years for the distribution services amounts to approximately EUR 3,092 million (FY21: EUR 3,007

million).

Construction commitments

Commitments for the construction of tangible fixed assets amount to EUR 49 million at 31 August

2022 (FY21: EUR 4 million) mainly relating to the new Foshan distribution center.

Operating leases – Group as lessee

The Company and its subsidiaries have entered into several other lease and rental agreements

for various periods. Future minimum rental payable under non-cancellable operating leases as at

31 August 2022 is as follows:

Lease payments recognised as expenses in FY22 amount to EUR 23 million (FY21: EUR 19 million).

The contingent liabilities can be detailed as follows:

Guarantees

Issued guarantees towards external parties amounted to EUR 19 million at 31 August 2022 (FY21:

EUR 37 million), mainly relating to national forests and customs office in Poland.

Litigation

The Company is or may become involved in legal proceedings, as well as in investigations (see

also note 11) and disputes with respect to (f.e.) tax and product liability. When no estimate can be

FY22 FY21

< 1 year 17 19

1-5 years 15 33

> 5 years 38 27

Total 70 79

Inter IKEA Holding B.V. Annual report FY22

Page 41 of 56

made of the financial consequences, if any, or if the risk of a future cash outflow is less than

probable, no provisions have been recognised in the balance sheet. Management believes, based

on legal advice, that no pending litigation to which the Company is a party will have a material

adverse effect on the financial position or the results from operations.

Uncertain tax positions

We refer to note 20 of the financial statements.

17. OPERATING INCOME

The breakdown of operating income by revenue categories is as follows:

The geographical distribution of operating income is as follows:

18. OPERATING EXPENSES

Salaries and wages

During FY22, the average number of staff employed with the Group, converted into full-time

equivalents, amounted to 27,331 people (FY21: 25,900 people) of which 26,325 (FY21: 25,034) were

employed outside the Netherlands.

The staffing level can be divided into the following staff categories:

Other operating expenses

The main categories within the other operating expenses are IT (EUR 343 million), general

administrative expenses (EUR 221 million), rent, maintenance and utilities (EUR 198 million), and

other staff expenses (EUR 74 million).

FY22 FY21

Sales of goods 26,148 24,282

Franchise fees 1,285 1,273

Other revenue 145 60

Total 27,578 25,615

FY22 FY21

The Netherlands 1,013 884

European Union 13,477 14,538

Rest of the world 13,088 10,193

27,578 25,615

FY22 FY21

Franchise 2,034 1,517

Range 2,956 2,898

Supply 22,168 21,298

Other functions 173 187

27,331 25,900

Inter IKEA Holding B.V. Annual report FY22

Page 42 of 56

19. FINANCIAL INCOME AND EXPENSE

The financial income and expense can be specified as follows:

20. INCOME TAXES

The applicable weighted average tax rate is 23.7% (FY21: 16.0%), following the nominal tax rates

in the Netherlands, Sweden and Switzerland where the majority of the Group’s businesses are

located. The effective tax rate increased by 7.7% compared to the previous year. This is mainly

due to the decreased profitability in Switzerland (which has a lower nominal tax rate) resulting

from sharp cost increases in the supply chain and the scaled down operations in Russia.

The tax expense recognised in the profit and loss account for FY22 amounts to EUR 221 million

(FY21: EUR 272 million).

The reconciliation between the applicable and the effective tax rate is as follows:

The Group has unrecognised tax loss carry forwards available related to losses incurred in several

countries for approximately EUR 157 million (FY21: EUR 71 million). No deferred tax asset has been

recognised for these tax loss carry forwards due to uncertainty with respect to availability of

taxable profits in the future within the limitations imposed in enacted tax legislation.

FY22 FY21

Interest income 9 8

Result from hedges 216 202

Other financial income 25 -

Total 250 210

Interest expense 351 343

Other financial expense 2 18

Total 353 361

FY22 FY21

Result before tax 931 1,705

Income tax using the applicable tax rate in the Netherlands 240 426

Tax effect of:

- Other applicable tax rates abroad (62) (140)

- Exempt income (5) (6)

- Non-deductible expenses 9 9

(De)recognition of tax losses 36 15

Adjustment for prior periods (12) (6)

Changes in tax rates 2 (11)

Non-reclaimable withholding tax 19 9

Other (6) (24)

Tax expenses 221 272

Inter IKEA Holding B.V. Annual report FY22

Page 43 of 56

In case of a fiscal unity, the companies being part of the fiscal unity are treated as if they were

independently taxable, including accounting of deferred taxes. Recharges between the Company

and its subsidiaries are settled through current account positions.

Uncertain tax positions

Corporate income tax is actively addressed by international institutions and local governments

and the taxation of large multinational companies receives continued media attention. The

Company is also subject to tax audits in various geographies, and is working pro-actively with

local tax authorities.

In December 2017, the European Commission opened a formal investigation, with their Opening

Decision published on 6 April 2018 which was complemented by their Decision published on 10

July 2020, to examine whether decisions by the tax authorities in The Netherlands with regard to

the corporate income tax paid by one of our subsidiaries, Inter IKEA Systems B.V., comply with

European Union rules on state aid. The Company co-operates and responds to questions which

the European Commission has in relation to this investigation. At this moment, although

management considers the risk of a cash out flow unlikely, it is not possible to assess a financial

impact, if any, of the outcome of this EC investigation. The aforementioned outcome is not

expected to have a material adverse impact on the financial position of The Company.

The Company is actively monitoring and addressing these developments and believes that its

corporate income tax position is appropriately reflected in the financial statements.

21. TRANSACTIONS WITH RELATED PARTIES

Related party transactions not on an arm's length basis have not occurred.

Interogo Holding AG

The Company has a regular cash pool and notional account structure for cash management and

various loans from its non-controlling shareholder; Interogo Holding AG.

On 11 December 2011, the Proprietary Rights were acquired. The acquisition price was partly

financed by a long term loan, amounting to EUR 5,400 million, with an interest rate of 6%, to be

repaid in December 2023.

The Company paid a dividend of EUR 1,000 million to the shareholder.

Group companies

Since the company exercises influence on the business and financial policy, all companies

belonging to the Group are treated as related parties.

The remuneration of the managing directors and supervisory directors is included in note 8 of

the Company financial statements.

Inter IKEA Holding B.V. Annual report FY22

Page 44 of 56

22. AUDITOR’S FEES

The following fees were charged by KPMG Accountants N.V. to the company, its subsidiaries and

other consolidated companies, as referred to in Section 2:382a(1) and (2) of the Netherlands Civil

Code.

The fees mentioned in the table for the audit of the FY22 financial statements relate to the total

fees for the audit of the FY22 financial statements, irrespective of whether the activities have been

performed during FY22.

23. SUBSEQUENT EVENTS

There are no significant subsequent events.

KPMG Other

Accountants KPMG Total

EUR x 1,000 N.V. Network KPMG

Audit of financial statements 1,611 1,905 3,516

Other audit engagements 909 170 1,079

Tax-related advisory - 1,098 1,098

Other non-audit services 306 474 780

2,826 3,647 6,473

Inter IKEA Holding B.V. Annual report FY22

Page 45 of 56

MANAGEMENT BOARD SUPERVISORY BOARD

Jon Abrahamsson Ring (Chairman) Anders Dahlvig (Chairman)

Martin van Dam Søren Hansen

Henrik Elm Mathias Kamprad

Véronique Laury

John Olie

Aline Santos

Delft, 31 October 2022

Inter IKEA Holding B.V. Annual report FY22

Page 46 of 56

COMPANY BALANCE SHEET AS AT 31 AUGUST 2022

(before profit appropriation, in millions of EUR)

(See accompanying notes)

COMPANY PROFIT AND LOSS ACCOUNT FY22

(in millions of EUR)

(See accompanying notes)

FY22 FY21

Fixed assets

Financial fixed assets (3) 11,565 11,787

Total fixed assets 11,565 11,787

Current assets

Receivables (4) 25 16

Total current assets 25 16

TOTAL ASSETS 11,590 11,803

Shareholder's equity

Additional paid in capital 7,565 7,565

Other legal reserves 49 82

Other reserves 1,523 1,035

Result for the year 710 1,433

Total shareholder's equity (5) 9,847 10,115

Current liabilities (6) 1,743 1,688

TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES

11,590 11,803

FY22 FY21

Share in net result from part. interests 715 1,441

Other results, net of income taxes (5) (8)

Net result 710 1,433

Inter IKEA Holding B.V. Annual report FY22

Page 47 of 56

NOTES TO COMPANY FINANCIAL STATEMENTS

1. GENERAL

The separate financial statements are part of the FY22 statutory financial statements of the

Company. The financial information of the Company is included in the Company’s consolidated

financial statements.

If no further explanation is provided of items in the separate balance sheet and the separate

profit and loss account, please refer to the notes to the consolidated balance sheet and profit and

loss account.

2. ACCOUNTING POLICIES

The principles for the valuation of assets and liabilities and the determination of the result are

the same as those applied to the consolidated financial statements, with the exception of the

following principles:

Financial instruments

In the separate financial statements, financial instruments are presented on the basis of their

legal form.

Participating interests in group companies

Participating interests where significant influence can be exercised over the business and

financial policy, are valued according to the equity method on the basis of net asset value. If

measurement at net asset value is not possible because the information required for this cannot

be obtained, the participating interest is measured according to the visible equity.

The net asset value is calculated on the basis of the Company’s accounting policies. If the

Company transfers an asset or a liability to a participating interest that is measured according to

the equity method, the gain or loss resulting from this transfer is recognised to the extent of the

relative interests of third parties in the participating interest (proportionate determination of

result). Any loss that results from the transfer of current assets or an impairment of fixed assets

is fully recognised. Results on transactions involving transfer of assets and liabilities between the

Company and its participating interests and mutually between participating interests are

eliminated to the extent that these cannot be regarded as having been realised.

Participating interests with a negative net asset value are valued at nil. This measurement also

covers any long-term receivables on the participating interests that are, in substance, an

extension of the net investment. In particular, this relates to loans for which settlement is neither

planned nor likely to occur in the foreseeable future. A share in the profits of the participating

interest in subsequent years will only be recognised if and to the extent that the cumulative

unrecognised share of loss has been absorbed. If the company fully or partially guarantees the

debts of the relevant participating interest, or if has the constructive obligation to enable the

participating interest to pay its debts (for its share therein), then a provision is recognised

accordingly to the amount of the estimated payments by the Company on behalf of the

participating interest.

Inter IKEA Holding B.V. Annual report FY22

Page 48 of 56

Shareholders’ equity

As per year end, the financial instruments that have the legal form of equity, are presented in the

equity of the separate financial statements. Refer to the accounting policies of the consolidated

financial statements for accounting policies applied.

Share of result of participating interests

The share in the result of participating interests concerns the Company’s share in the results of

the participating interests.

If the Company transfers an asset or a liability to a participating interest that is measured

according to the equity method, the gain or loss resulting from this transfer is recognised to the

extent of the relative interests of third parties in the participating interest (proportionate

determination of result). Any loss that results from the transfer of current assets or an

impairment of fixed assets is fully recognised. Results on transactions involving transfer of assets

and liabilities between the Company and its participating interests and mutually between

participating interests are eliminated to the extent that these cannot be regarded as having been

realised.

The results of participating interests acquired or sold during the financial year are stated in the

consolidated result from the date of acquisition or until the date of sale respectively.

Corporate income tax

The Company is the head of the fiscal unity. The Company recognises the portion of corporate

income tax that it would owe as an independent tax payer, taking into account the allocation of

the advantages of the fiscal unity. Settlement within the fiscal unity between the Company and

its subsidiaries takes place through current account positions.

3. FINANCIAL FIXED ASSETS

The movement in financial fixed assets is as follows:

Other includes movements in the equity of the participating interests relating to IAS19 pensions,

derivatives and exchange rate differences.

In accordance with article 403, Book 2 of the Dutch Civil Code, the Company has guaranteed the

liabilities of Inter IKEA Systems B.V., Inter IKEA Assets B.V., Inter IKEA Developments Holding B.V.,

Inter IKEA Development B.V., Inter IKEA Services B.V. and IKEA Social Entrepreneurship B.V.

Long term

loans

receivable

Investm.

In part.

Interests

Deferred tax

asset

Total

Balance as at 31 August 2021: 0 11,785 2 11,787

Investments 0 38 - 38

Additions 0 - 1 1

Share in result of participating interests 0 715 - 715

Dividends received 0 (992) - (992)

Other 0 16 - 16

Balance as at 31 August 2022: 0 11,562 3 11,565

Inter IKEA Holding B.V. Annual report FY22

Page 49 of 56

Company financial statements of these subsidiaries are therefore not filed at the Trade Register

of the Chamber of Commerce.

For an overview of capital interests, reference is made to the listing of subsidiaries that has been

filed by the Company at the Chamber of Commerce.

4. RECEIVABLES

The receivables all have an estimated maturity shorter than one year.

5. SHAREHOLDERS’ EQUITY

Issued capital

The Company’s issued and outstanding share capital is comprised of 126 shares, each with a par

value of EUR 1,000. The issued and paid-up share capital consists of 1 share class “A” and 125

shares class “B”.

Share premium

The share premium concerns the income from the issuing of shares in so far as this exceeds the

nominal value of the shares (above par income). This also includes additional capital contributions

FY22 FY21

Income tax receivable 15 -

Receivable on participating interests 10 16

Total 25 16

Share Legal Transl. Other Unappr.

premium reserve reserve reserve profit Total

Changes in financial year 2021:

Appropriation of result - - - 1,731 (1,731) -

Net result - - - - 1,433 1,433

Dividend paid - - - (850) - (850)

Addition to legal reserve - 47 - (47) - -

Change in unrealised result derivatives - - - (57) - (57)

Remeasurements of defined benefit pensions plans - - - 8 - 8

Exchange rate differences - - 33 - - 33

Other - - - 7 - 7

Balance as at 31 August 2021 7,565 128 (46) 1,035 1,433 10,115

Changes in financial year 2022:

Appropriation of result - - - 1,433 (1,433) -

Net result - - - - 710 710

Dividend paid - - - (1,000) - (1,000)

Transfer to / from legal reserve - (71) - 71 - -

Change in unrealised result derivatives - - - (25) - (25)

Remeasurements of defined benefit pensions plans - - - 7 - 7

Exchange rate differences - - 38 - - 38

Other - - - 3 - 3

Balance as at 31 August 2022 7,565 57 (8) 1,523 710 9,847

Inter IKEA Holding B.V. Annual report FY22

Page 50 of 56

by existing shareholders without the issue of shares or issue of rights to acquire shares of the

Company.

The share premium mainly relates to acquisition of the Proprietary Rights, which has been

partially financed by a share premium of EUR 6,400 million, and the additional paid in capital

relating to the acquisition of range, supply and production activities.

Legal reserve

Other legal reserves mainly consist of a legal reserve for non-distributable profits in accordance

with local legislation of EUR 51 million (FY21: EUR 46 million) legal reserve for capitalised

development costs for the carrying amount of EUR 1 million (FY21: EUR 72 million).

Translation reserve

Exchange gains and losses arising from the translation of the functional currency of foreign

operations to the reporting currency of the parent are accounted for in this reserve. In the case

of the sale of a participating interest, the associated accumulated exchange differences are

transferred to the profit and loss account. The translation legal reserve of EUR -8 million (FY21:

EUR -46 million) relates to investments in participating interests in various countries.

Other reserves

The financial statements for the reporting year 2022 have been adopted by the General Meeting

on 2 November 2022. The General Meeting has adopted the appropriation of profit after tax as

proposed by the Board of Management.

The dividend relating to FY21 of EUR 1,000 million paid out in December 2021 has been deducted

from other reserve in shareholders’ equity.

Unappropriated profit

The General Meeting of Shareholders will be asked to approve the following appropriation of the

FY22 net result: to add the net result to the other reserve and to pay out an amount of EUR 850

as dividend.

The Company can only make payments to the shareholders and other parties entitled to the

distributable profit in so far as (1) the Company can continue to pay its outstanding debts after

the distribution (the so-called distribution test), and (2) the shareholders’ equity exceeds the legal

reserves and statutory reserves under the articles of association to be maintained (the so-called

balance sheet test). If not, the Company’s management shall not approve the distribution.

6. CURRENT LIABILITIES

Current liabilities mainly relate to short term loans borrowing with Interogo Holding AG (EUR

1,736 million). Refer to note 15 in the consolidated financial statements for more details on

interest rates and conditions.

Inter IKEA Holding B.V. Annual report FY22

Page 51 of 56

7. OFF BALANCE SHEET ASSETS AND LIABILITIES

Fiscal Unity

The Company forms a fiscal unity for corporate income tax purposes together with Inter IKEA

Systems B.V., Inter IKEA Assets B.V., Inter IKEA Developments Holding B.V., Inter IKEA

Development B.V., Inter IKEA Services B.V. and IKEA Social Entrepreneurship B.V.

8. REMUNERATION MANAGEMENT AND SUPERVISORY BOARD

The emoluments, including pension costs as referred to in Section 2:383(1) of the Netherlands

Civil Code, charged in the financial year to the company, its subsidiaries and consolidated other

companies amounted to EUR 2.7 million (FY21: EUR 2.8 million) for previous and current

management board members, and EUR 0.5 million (FY21: EUR 0.5 million) for supervisory board

members.

9. SUBSEQUENT EVENTS

There are no significant subsequent events.

Inter IKEA Holding B.V. Annual report FY22

Page 52 of 56

MANAGEMENT BOARD SUPERVISORY BOARD

Jon Abrahamsson Ring (Chairman) Anders Dahlvig (Chairman)

Martin van Dam Søren Hansen

Henrik Elm Mathias Kamprad

Véronique Laury

John Olie

Aline Santos

Delft, 31 October 2022

Inter IKEA Holding B.V. Annual report FY22

Page 53 of 56

OTHER INFORMATION

Articles of association relating to the allocation of the result

In accordance with its Articles of Association, the Company keeps a Dividend Reserve A and a

Dividend Reserve B. Holders of class A are entitled to Dividend Reserve A and holders of class B

are entitled to Dividend Reserve B. In accordance with Article 4.1.2 of the Articles of Association,

5% of the total aggregate par value of the class A shares is added to the Dividend Reserves A and

the remainder is added to dividend reserve B.

Inter IKEA Holding B.V. Annual report FY22

Page 54 of 56

Independent auditor's report

To: the General Meeting of Inter IKEA Holding B.V.

Report on the audit of the accompanying financial statements

Our opinion

We have audited the financial statements for the year ended as at 31 August 2022 of Inter IKEA

Holding B.V. (hereafter also referred to as ‘the Company’), based in Delft.

In our opinion the accompanying financial statements give a true and fair view of the financial

position of Inter IKEA Holding B.V. as at 31 August 2022 and of its result for the year ended on 31

August 2022 in accordance with Part 9 of Book 2 of the Dutch Civil Code.

The financial statements comprise:

1 the consolidated and company balance sheet as at 31 August 2022;

2 the consolidated and company profit and loss account for the year ended on 31 August

2022;

3 the consolidated cash flow statement for the year ended on 31 August 2022;

4 the consolidated statement of comprehensive income for the year ended on 31 August 2022;

and

5 the notes comprising a summary of the accounting policies and other explanatory

information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on

Auditing. Our responsibilities under those standards are further described in the 'Our

responsibilities for the audit of the financial statements' section of our report.

We are independent of Inter IKEA Holding B.V. in accordance with the Wet toezicht

accountantsorganisaties (Wta, Audit firms supervision act), the 'Verordening inzake de

onafhankelijkheid van accountants bij assurance-opdrachten' (ViO, Code of Ethics for

Professional Accountants, a regulation with respect to independence) and other relevant

independence regulations in the Netherlands. Furthermore, we have complied with the

'Verordening gedrags- en beroepsregels accountants' (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Report on the other information included in the annual report

In addition to the financial statements and our auditor's report thereon, the annual report

contains other information.

Based on the following procedures performed, we conclude that the other information:

— is consistent with the financial statements and does not contain material misstatements;

Inter IKEA Holding B.V. Annual report FY22

Page 55 of 56

— contains the information as required by Part 9 of Book 2 of the Dutch Civil Code regarding

the Report from the Management Board and the other information.

We have read the other information. Based on our knowledge and understanding obtained

through our audit of the financial statements or otherwise, we have considered whether the

other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the

Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less

than the scope of those performed in our audit of the financial statements.

The Management Board is responsible for the preparation of the other information, including

the Report from the Management Board, in accordance with Part 9 of Book 2 of the Dutch Civil

Code, and other information pursuant to Part 9 of Book 2 of the Dutch Civil Code.

Description of the responsibilities for the financial statements

Responsibilities of the Management Board and The Supervisory Board for the financial

statements

The Management Board is responsible for the preparation and fair presentation of the financial

statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the

Management Board is responsible for such internal control as the Management Board

determines is necessary to enable the preparation of the financial statements that are free from

material misstatement, whether due to errors or fraud.

As part of the preparation of the financial statements, the Management Board is responsible for

assessing the company's ability to continue as a going concern. Based on the financial reporting

framework mentioned, the Management Board should prepare the financial statements using

the going concern basis of accounting unless the Management Board either intends to liquidate

the Company or to cease operations, or has no realistic alternative but to do so. The

Management Board should disclose events and circumstances that may cast significant doubt

on the company's ability to continue as a going concern in the financial statements.

The Supervisory Board is responsible for overseeing the company's financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain

sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means

we may not have detected all material errors and fraud during our audit.

Misstatements can arise from fraud or errors and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the economic decisions of users

taken on the basis of the financial statements. The materiality affects the nature, timing and

extent of our audit procedures and the evaluation of the effect of identified misstatements on

our opinion.

Inter IKEA Holding B.V. Annual report FY22

Page 56 of 56

We have exercised professional judgement and have maintained professional scepticism

throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements

and independence requirements. Our audit included among others:

— identifying and assessing the risks of material misstatement of the financial statements,

whether due to errors or fraud, designing and performing audit procedures responsive to

those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis

for our opinion. The risk of not detecting a material misstatement resulting from fraud is

higher than for one resulting from errors, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control;

— obtaining an understanding of internal control relevant to the audit 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 Company's internal control;

— evaluating the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the Management Board;

— concluding on the appropriateness of management's use of the going concern basis of

accounting and based on the audit evidence obtained, whether a material uncertainty exists

related to events or conditions that may cast significant doubt on the Company's ability to

continue as a going concern. If we conclude that a material uncertainty exists, we are

required to draw attention in our auditor's report to the related disclosures in the financial

statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions

are based on the audit evidence obtained up to the date of our auditor's report. However,

future events or conditions may cause the company ceasing to continue as a going concern;

— evaluating the overall presentation, structure and content of the financial statements,

including the disclosures; and

— evaluating whether the financial statements represent the underlying transactions and

events in a manner that achieves fair presentation.

We are solely responsible for the opinion and therefore responsible to obtain sufficient

appropriate audit evidence regarding the financial information of the entities or business

activities within the group to express an opinion on the financial statements. In this respect we

are also responsible for directing, supervising and performing the group audit.

We communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

findings in internal control that we identify during our audit.

Amstelveen, 31 October 2022

KPMG Accountants N.V.

R.J. Aalberts RA