Ingka Group, the largest IKEA retailer, today reports a good performance for FY23[1]. The IKEA vision to create a better everyday life for the many people continues to guide the business as it grows revenue by 5.4% to EUR 44.3 billion, alongside recording a stable operating income. The company has also increased its renewable energy commitment by EUR 1 billion, to total EUR 7.5 billion by 2030.
“As wallets for many people are getting thinner, a top priority is to deliver affordability and lower prices to our customers, making the IKEA range more accessible for many more people. The low price is a part of our DNA and we are lowering prices on many products, around the world”
– Juvencio Maeztu, Deputy CEO and CFO Ingka Group (IKEA)
Economic instability, geopolitical volatility, and the continued after-effects of the pandemic made for challenging moments in FY23. However, the Group’s total revenue reached EUR 44.3 billion (FY22: EUR 42 billion) across its three business areas [2]: IKEA Retail, Ingka Centres and Ingka Investments.
“It has been yet another unique and challenging year. I feel extremely proud to deliver against our objectives as we work to create: Better homes, Better lives, Better planet and a Better company now and for the long term. I am extra proud of the hard work from our colleagues for the financial performance as we use these resources to keep reinvesting in achieving the IKEA vision,” said Juvencio Maeztu, Deputy CEO and CFO Ingka Group (IKEA).
“As wallets for many people are getting thinner, a top priority is to deliver affordability and lower prices to our customers, making the IKEA range more accessible for many more people. The low price is a part of our DNA and we are lowering prices on many products, around the world.
We remain devoted to serving our customers and offering home furnishing inspiration and solutions to support people’s dreams and needs in life at home. During global challenges, we especially need to be financially fit. Here we are inspired by our founder Ingvar Kamprad to think in generations and the importance of a long-term vision,” adds Maeztu.
Juvencio Maeztu, Deputy CEO and CFO Ingka Group (IKEA)
As previously announced, Ingka Group recorded IKEA retail sales of EUR 41.7 billion for FY23, and highlighted its investment plans of more than EUR 4.5 billion over the next three years in several markets. The company is also continuing to transform stores to increase fulfilment capacities. As a modern omnichannel retailer, it is constantly assessing changing customers’ needs to ensure they can interact with IKEA whenever, however and wherever they want.
In FY23, Ingka’s corporate income tax was EUR 0.7 billion (FY22 EUR 0.5 billion) globally. The normalized tax rate remained in the 25-30% band, at 28%.
Ingka Group’s co-workers will receive a total of EUR 311 million in performance-based bonus as part of the global One IKEA Bonus programme, following the good results in FY23. Additionally, a total of EUR 103 million allocation to co-worker’s pension funds through the company’s global loyalty programme “Tack!”.
The company’s net income was EUR 1.5 billion (FY22: EUR 0.3 billion). Maeztu says: “All Ingka co-workers can be proud that they contribute. Our profit is meaningful as it can only go two ways. In FY23, 85% of the net income is being re-invested back into the business to fulfil the IKEA vision of a better life for the many people. The remaining 15% will be paid as dividend to the company’s sole owner, the Stichting INGKA Foundation, which has a charitable purpose to provide funding to the IKEA Foundation.”
The IKEA Foundation is an independent strategic philanthropy that focuses on the two biggest threats to children’s futures – poverty and climate change. They look after people and the planet by working on issues such as renewable energy, agriculture, circularity, refugees, climate action and emergencies.
EUR 44.3 billion FY23 Revenue
EUR 2 billion FY23 Operating Income
Today’s announcement by Ingka Investments of an additional EUR 1 billion investment in Energy Transformation, adds to the previous commitment to invest EUR 6.5 billion into renewable energy by 2030. It is earmarked for innovation and transitional technologies that go beyond energy production and support the wider energy transition, such as energy storage, hydrogen as energy carrier and grid infrastructure. This brings the total commitment to the renewable energy sector to EUR 7.5 billion.
Of this amount, close to EUR 4 billion has already been invested and committed, including during FY23 when the company invested in wind farms, offshore wind development and solar parks in Australia, Finland and Italy. In early FY24, the company’s first-ever battery storage project, Cameron Storage, in Texas was announced and operations started in October. It was the first project as part of the Energy Transformation commitment.
Additionally, Ingka Group will also retrofit 150-200 IKEA stores, shopping centres, warehouses, distribution centres, offices and other buildings with renewable heating and cooling to reduce its greenhouse gas emissions. Heavy investment will take place in existing properties until 2030 while new properties will be equipped with renewable heating and cooling systems.
Maeztu added: “Today we produce more renewable energy than we consume across our operations and we are going one step further with our renewable energy commitment. Upgrading our buildings with renewable heating and cooling is also an important step in reducing greenhouse gas emissions from our own operations. I’m proud we are investing in this journey to ensure we have a better company, working towards a better planet for all. These investments will help us meet our climate commitments and reduce emissions in line with science and the Paris Agreement’s* 1.5°C pathway.”
The Ingka Group FY23 Annual Summary and Sustainability Report will be published in January 2024. The Report will include the company’s total climate footprint and outlines its goals. Performance is evaluated by working to be better in four ways: Better homes, Better lives, Better planet and Better company.
[1] Fiscal year 23: 1 September 2022 – 31 August 2023.
[2] IKEA Retail: Ingka Group is the largest IKEA retailer with IKEA retail operations in 31 markets. It is a strategic partner to develop and innovate the IKEA business and help define common IKEA strategies.
Ingka Centres has around 50 years of experience in shopping centres and today works with over 3,000 brands across its portfolio of 34 meeting places in 13 markets.
Ingka Investments is the investment arm of Ingka Group managing seven different portfolios: Real Estate Investments, Renewable Energy Investments, Forestland Investments, Business acquisitions, Venture Investments, Circular Investments, and Financial Markets Investments.
*IKEA is committed to the Paris Agreement and to contribute to limiting the global temperature rise to 1.5°C above pre-industrial levels. IKEA is committed to become climate positive by 2030 by taking action across the IKEA value chain and beyond. This includes a commitment to halving greenhouse gas (GHS) emissions in absolute terms from the total IKEA value chain by 2030, including emissions reduction, carbon removal and storage. Read more about the IKEA commitment here.
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