As IKEA enters our 40th year in the Canadian market, I’m excited to welcome you to our 2016 Summary Report. Since opening our first store in Richmond, BC 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!

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 will create 300 job openings. This is the first step on our coast-to-coast expansion 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 consumers about the dangers of furniture tip-overs and were proud to be the first 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

HEJ FROM DAVID MCCABE ACTING PRESIDENT, IKEA CANADA

Table of Contents

Fiscal Year 2016 Milestones

Fiscal Year 2016 Business Performance

Customers

Life at Home

Democratic Design

Sustainability

Making IKEA Accessible to the Many

A Great Place to Work

Looking Ahead to 2017

IKEA in Canada

Meet our Management Team

About IKEA Canada

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Fiscal Year 2016 Milestones

SEPTEMBER 2015 IKEA becomes first major

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

first Pick-up and order point in Quebec City, QC

JANUARY 2016 IKEA Canada

announces a new store for Halifax, NS - the first

stop on the coast-to-coast expansion journey

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FEBRUARY 2016 IKEA Canada unveils first ever commercial starring

our customers: “Make #everysecond count”

MARCH 2016 IKEA Canada is

named one of the Best Employers in Canada by Forbes Magazine

MAY 2016 IKEA Canada Donates $100,000

to aid in Fort McMurray relief and recovery

JULY 2016 IKEA Canada introduces the first Collection Point

in Halifax, NS

AUGUST 2016 2017 IKEA Catalogue arrives

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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.

Canadians continue to flock to IKEA, with more customers than ever before visiting us both in 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

$1.7 BILLION

total economic output

FISCAL YEAR 2016 PERFORMANCE

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IKEA’S ECONOMIC IMPACT

From property and payroll taxes to the above industry standard compensation we offer our co-workers, IKEA Canada is proud of the financial impact we have on the 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:

28 million visitors to IKEA stores

88 million visitors to IKEA.ca and mobile app

GROWTH ON

PREVIOUS YEAR

Source: EY Quantitative Economics and Statistics (QUEST).

$487 MILLION

labour income

$257 MILLION in federal,

provincial and municipal taxes

10,600 direct, indirect

and induced jobs supported

MARKET SHARE

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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

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“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 first item from the

Collection Point in Halifax and it went smoothly. I was in and out in no time and on my way.”

— John

Life at Home

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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 order for us to reach as many people as possible, we first need to get to know how the many individuals 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 reflect local living situations.

IKEA LIFE AT HOME REPORT In 2016, the global IKEA Life at Home survey was carried out in 12 cities around the world: Berlin, London, Madrid, Moscow, Mumbai, New York, Paris, Shanghai, Stockholm, Sydney, Zurich and, for the first time, Toronto. This was the first time that 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 st