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Ikea Summary Report FY16

In January 2016 we announced that we would build a full-size store in Halifax 2017 IKEA Catalogue arrives. 05. MAY 2016. IKEA Canada Donates $100



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IKEA news

IKEA PRESS KIT /APRIL 2016 / 3. PH132895. PE583338. TERNSLEV rug flatwoven RM690. The rug is machine woven. 100% polyester. Designer: Paulin Machado.

As IKEA enters our 40th year in the Canadian market,

I'm excited to welcome you to our 2016 Summary

in 1976 with 65 co-workers, we have grown to 12 stores,

6 Pick-up and order points, an eCommerce channel,

2 distribution centres and more than 5,400 co-workers!

HEJ FROM DAVID MCCABE

ACTING PRESIDENT, IKEA CANADA

IKEA continues to thrive in Canada. Fiscal Year 2016 was another stellar year with impressive sales results despite challenging economic times in the retail industry. Overall, our sales grew to $2.05 billion, which represents an increase of 14.2 per cent in total sales. With this phenomenal growth, IKEA is able to further invest in the Canadian economy. In January 2016, we announced that we would build a full-size store in Halifax that journey to double our stores and co-worker base by 2020. We also continued on our mission to make IKEA more accessible to the many Canadians in an affordable and sustainable way, opening 6 Pick-up and order points and introducing a Collection Point in new markets. We are well on our way to becoming a truly leading multichannel retailer and allowing Canadians to shop with IKEA any way they want. As we strive to be a leader in the retail industry, IKEA continues to be proud to offer customers high quality products at prices so low that as many people as possible are able to afford them. And we are not willing to compromise. That's why this year we continued to take bold actions in product safety. We have taken measures to educate major Canadian retailer to only sell cordless window blinds and coverings. The success of IKEA Canada over the past 40 years is due to our loyal customers and co-workers. Thank you for welcoming us into your homes for the past four decades.

Here's to another 40 years and beyond!

Kind regards,

David McCabe

Table of Contents

0 4 Fiscal Year 2016 Milestones

0 6 0 8

Customers

1 0

Life at Home

1 2

Democratic Design

1 4

Sustainability

1 8

Making IKEA Accessible to the Many

2 0

A Great Place to Work

2 4

Looking Ahead to 2017

2 6

IKEA in Canada

2 8

Meet our Management Team

3 0

About IKEA Canada

04

Fiscal Year 2016 Milestones

SEPTEMBER 2015

IKEA

Canadian retailer to only sell

LED bulbs and lighting

OCTOBER 2015

New Distribution Centre

opens in Mississauga, ON

NOVEMBER 2015

IKEA announces

ambition to become more accessible to the many Canadians by doubling number of stores in coast-to-coast expansion

DECEMBER 2015

IKEA Canada opens

point in Quebec City, QC

JANUARY 2016

IKEA Canada

announces a new store stop on the coast-to-coast expansion journey

JULY 2016

IKEA Canada introduces

in Halifax, NS

AUGUST 2016

2017 IKEA Catalogue arrives

05

MAY 2016

IKEA Canada Donates $100,000

to aid in Fort McMurray relief and recovery

FEBRUARY 2016

IKEA ever commercial starring our customers: "Make #everysecond count"

MARCH 2016

IKEA

Canada is

Employers in Canada

by Forbes Magazine 06

Fiscal Year 2016 Business Performance

Fiscal Year 2016* was another extremely successful year for IKEA Canada, cementing our position as a leader in life at home. Total sales for the year reached a record $2.05 billion, an increase of

14.2 per cent on the previous year and the second consecutive year of double digit sales growth.

These results see IKEA Canada continuing to outpace the market. IKEA was the number one contributor to growth in the furniture and home furnishings category, with growth of nearly three

times category growth of 5.1 per cent. Online sales continued to contribute to overall sales movement,

with a 41.3 per cent sales uplift. Encouragingly, online growth complemented store growth, which also saw sales growth of 12.7 per cent in the past year. our stores and on our eCommerce channels. Store visitation increased by 5 per cent to more than

28 million visitors, while online visitation, including both IKEA web and mobile platforms,

reached 88 million visitors in 2016. IKEA Canada's position as a market leader was further strengthened in 2016, with market share

growing by 1 per cent to 9.4 per cent. IKEA sustained national number one share position for the third

year, cementing our position as the preferred furniture and home furnishings choice for Canadians. *September 1, 2015 - August 31, 2016 07

FISCAL YEAR 2016 PERFORMANCE

GROWTH

ON PREVIOUS YEAR

MARKET

SHARE

28 million visitors to IKEA stores

IKEA'S ECONOMIC IMPACT

From property and payroll taxes to the above industry standard compensation we offer our co-workers, IKEA communities in which we operate and on Canada as a whole. An EY report found that, in 2016, IKEA Canada contributed the following to Canada's economy: $1.7

BILLION

total economic output $487

MILLION

labour income $257

MILLION

in federal, provincial and municipal taxes

10,600

direct, indirect and induced jobs supported

88 million visitors

to IKEA.ca and mobile app Source: EY Quantitative Economics and Statistics (QUEST). 08

Customers

Our customers are at the heart of everything we do at IKEA. We work hard to create exceptional experiences whenever, wherever and however they want to shop with us. With this in mind, IKEA continually invests in developing our co-workers and improving our services so we can continue to meet and exceed our customers' expectations. We are proud of our world-class customer support centre and the pivotal role it plays in helping our customers across Canada. In 2016, our support centre had 1.4 million interactions with customers and we are pleased that 75 per cent of all calls were answered within 30 seconds. As IKEA continues to grow, we recognize the importance of making the shopping experience more accessible and enjoyable for many more Canadians. This year, we opened six Pick-up and order points throughout Ontario and Quebec, and introduced a Collection Point location in Halifax, as part of our plan to bring IKEA closer to the many. We also enhanced our online and mobile platforms so we could offer our customers a seamless and inspiring shopping experience - both in store and online.

CUSTOMER SUPPORT CENTRE FACTS AND FIGURES

1.4 million interactions with customers

More than 38,000 interactions on social media

75 per cent of calls answered in 30 seconds

1 million views of website FAQs

- 09 "I want to commend one of your customer service co-workers,

Bonacchi, for a wonderful and

pleasant experience I had with him over the phone. Even though I was searching for a very low ticket item, he provided the type of service one would expect if I was buying an entire kitchen! ... Kudos to IKEA for having such a wonderful employee on the team!"

Sandra

“I picked up my

Collection Point in Halifax

and it went smoothly.

I was in and out in no

time and on my way." - John 10

Life at Home

LEADER IN LIFE AT HOME

As

life continues to change and evolve, it becomes increasingly important for IKEA to understand customers

and to explore what makes a home, so we can continue to improve our business and product offerings.

Over the years, IKEA Canada has gathered extensive knowledge about life at home through customer surveys

and home visits, as well as through research performed by universities and other third-party organizations.

in each local market live at home.

In 2016, our co-workers visited 250 homes across Canada to explore the needs, frustrations and dreams that

people have at home. The insights gathered offer a very real window into local consumers' lives, and help us

to ensure that we offer the necessary range of solutions to make everyday life a little bit better. Insights

gathered from these home visits are also used in our store showrooms across the country, so they accurately

SAFER LIFE AT HOME

Safety is IKEA's top priority and we are committed to taking a leading role in ensuring that Canadian homes are as safe as possible. As part of this commitment, IKEA Canada has made some bold moves in 2016 to raise awareness levels about safety hazards in Canadian homes. retailer to only sell cordless window blinds and coverings. In June 2016, IKEA proactively announced that we would only sell chests of drawers that meet the voluntary

North American ASTM standard requirements on

free-standing stability, raising awareness about the hazards of furniture tip-over in Canadian homes. From product innovation to the high standards we set for ourselves, we continue to look for ways to set a leading example within the industry. IKEA LIFE AT HOME REPORT In

2016, the global IKEA Life at Home

survey was carried out in 12 cities around

Mumbai, New York, Paris, Shanghai,

a Canadian city was included in the survey, and more than 12,000 responses were gathered from Torontonians.

One of the most interesting insights

revealed in the survey was that feelings of home for Torontonians are strongly tied to both taste and smell. This insight was particularly useful as we began planning for our two-year commercial focus: "It Starts with the Food.'' 11 77%
of Torontonians say that eating and drinking with others is their most common activity when spending time at home 66%
say that they cook their favourite meals to create a feeling of home 30%
of Torontonians associate home with a particular smell 1in3

Torontonians agree that there are

foods that taste and smell like home 12

Democratic Design

DESIGN FOR EVERYONE

At IKEA, good design is not just about making things - it's about making things better. We call our approach "Democratic Design," which focuses on achieving the right combination of form, function, quality and sustainability, all while being accessible to the many at a low price. Our product developers of the design process - a unique challenge that keeps us innovating and evolving. and dreams so that we can design solutions that make the everyday a little bit better for everyone. It's not easy, but IKEA has always been about doing things differently.

GOOD DESIGN IS DEMOCRACTIC

FORM FUNCTION QUALITY SUSTAINABILITY PRICE

To make the To make everyday To make To take To make world more life easier and everything last responsibility products beautiful more meaningful longer and age and improve our affordable for more gracefully impact on people the many people and the planet 13 In Fiscal Year 2016, we launched new products and have evolved classic designs, all of which were built on the principles of Democratic Design.

FURNITURE FOR FLEXIBLE LIVING

In 2016, IKEA products were recognized at the prestigious RED DOT Design Awards, where we won three awards in the Product Design category. One award-winning as well as design, sustainability and even time." Designed by Knut and Marianne easily be moved around the home, meeting different needs in the living room, stores across Canada since August 2015.

VARDAGEN DINNERWARE

In February 2016, we introduced a timeless and traditional collection of VARDAGEN cookware and tableware, designed for preparing and eating. In Swedish, VARDAGEN means "every day," which is just how often the dinnerware is meant to be used. Made in durable, simple and classic stoneware, the collection includes different sized bowls, a serving plate, a side plate, a mug, a teacup and a saucer. The designs are multi-functional and trans-cultural: the VARDAGEN small bowl, for example, is the right size and shape for a rice bowl in Asia and also perfect for a side salad or cereal bowl in other parts of the world. 14

Sustainability

COMMITTED TO OUR SUSTAINABLE FUTURE

At IKEA, we believe in having a positive impact on people and the planet. For many life for the many people. We now want to take even bigger steps to create a more prosperous future for all Canadians. We are working to inspire and enable millions of Canadians to live a more sustainable life at home, by pursuing our own resource and energy independence and striving to create a better everyday life for the people who are touched by our business. We are making great progress, but so much more remains to be done.

ONE OF CANADA'S GREENEST EMPLOYERS

IKEA Canada's commitment to sustainability extends not just to our operations and products, but to our people as well. We are very proud to have been named one of Canada's Greenest Employers for the eighth consecutive year by Mediacorp for our continued commitment to sustainability. This special designation recognizes employers that lead the nation in creating a culture of environmental awareness in their organizations. 15

SUSTAINABLE LIVING. FOR EVERYONE.

At IKEA, we believe that sustainable living

should be affordable for all, and we aim to be the natural destination for a more sustainable life at home. As a result of our efforts to promote solutions for sustainable living in our stores and through our communication channels, we have seen sales of our sustainable living products grow at a rate that is approximately double our total sales growth. This makes us one of the top

IKEA markets in the world for growing sales

of products for sustainable living.

We began Fiscal Year 2016 by celebrating the

complete changeover of our entire lighting retailer. This commitment - to make the most many people - was made in 2012 in our global People & Planet Positive strategy and was achieved on time.

For three years now, IKEA Canada co-workers

have had the opportunity to test at home IKEA products that enable a more sustainable way of life. This year, the program continued with over 100 co-workers taking part, sharing their of sustainable living with all co-workers.

In 2016, we invited our customers to join us

it the Sustainable Living Project. Twenty four households across the country have taken part in this real-life experiment, testing IKEA products in their homes to reduce consumption of energy and water, reduce and sort waste, grow their own food and live a healthier lifestyle. Read their stories at: sustainableliving.ikea.ca 16 CELEBRATING 20 YEARS OF GREENING COMMUNITIES TOGETHER

IKEA Canada is celebrating two decades of partnership with Tree Canada, the country's number one national

tree planting charity. Over the course of this partnership, IKEA Canada has donated over $750,000 and

IKEA Canada co-workers have planted well over 25,000 mature trees and shrubs in the communities where

we operate. To recognize this long-standing partnership, the IKEA team planted 20,000 young trees last year

and the two organizations teamed up on the IKEA Outdoor Classroom contest, providing resources for two

schools to construct and operate outdoor learning spaces.

SUPPORTING CHILDREN IN TIMES OF NEED

When

to help bring families comfort, laughter, play and affection during a time of crisis. These spaces were

established quickly in partnership with Save the Children Canada, alongside other spaces equipped with

change tables and comfortable seating for nursing and new mothers. IKEA

Edmonton also worked with

Edmonton Emergency Relief Services to provide home furnishings to offer immediate relief at evacuee centres in the city.

WELCOMING REFUGEE FAMILIES

At IKEA, we know that home is the most important place in the world. In response to Canada's pledge to

welcome 25,000 Syrian refugees to Canada, IKEA Canada launched a Refugee Support Program with a

commitment of $190,000 of in-kind support to be delivered evenly through each IKEA location across Canada.

The Rassoul family was one of the households to receive support through this program. The family arrived

After enjoying an IKEA breakfast at IKEA Etobicoke, the Rassouls spent three hours with IKEA co-workers

store the family met with store manager Ivana Colatosti, who welcomed them to Canada and presented them with a take-home bag of small items and treats for the children to enjoy. 19 17

RENEWABLE ENERGY EXPANSION COTTON

Through our wind farm in Alberta We have broken ground on All cotton in IKEA products comes and three solar installations in IKEA Halifax, designed as the from more sustainable sources Ontario, IKEA Canada produces most sustainable IKEA store renewable energy equivalent to Initiative, or equivalent standard). more than double our energy future developments. consumption across the country.

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