costs mainly consist of salaries, benefits, training and social costs.
As per 31 August 2019, Inter IKEA Group employed 26,227 full-time
equivalent co-workers, compared to 26,504 in FY18. Changes are mainly
due to restructuring and the sales of factories.
Operational costs also include expenses to develop new products and
solutions. The costs related to our development and innovation
portfolios amounted to EUR 175 million in FY19. Part of this investment
went to develop products that help people live more sustainable lives
and reduce the IKEA climate footprint.
More than half of the IKEA climate footprint comes from the material
in the products and the production process. To transform into a low
carbon business, IKEA is moving towards recycled and renewable materials
and is pushing for more lightweight construction. In FY19 this required
significant investments to transform the supply chain, sourcing and
Inter IKEA Group also worked closely with retailers to develop new
and different ways to shop the IKEA product range – online, in remote
locations and in city centres (e.g. IKEA La Madeleine in Paris). This
includes new locations closer to where people live, work and socialise.
It also includes a wider range of flexible and affordable services to
make shopping more convenient for IKEA customers.
Financial income and expense
Financial income and expense is revenue and costs regarding
loans, investments and positions in foreign currencies. Inter IKEA Group
paid less interest following repayment of long-term loans in FY19.
Favourable currency developments partly offset the interest expenses.
This year the Inter IKEA Group tax charge was EUR 301 million, around
EUR 45 million more than last year. This equals 17% of pre-tax income,
compared to 15% in FY18. Inter IKEA Group operates in several countries,
with its main activities in the Netherlands, Sweden and Switzerland. As
a result most income tax is paid in these countries.