Economic uncertainty, geopolitical upheaval and the ongoing impact of the pandemic made FY23 a challenging period. However, the Group's total revenues reached €44.3 billion (FY22: €42.0 billion) across its three business areas. [2]: IKEA Retail, Ingka Centres, Ingka Investments.
“This has been another unique and challenging year. I am very proud of the achievements we made as we strived to create better homes, better lives, a better planet and a better company now and in the long term. I am particularly proud of the hard work of our colleagues for our financial performance as we use these resources to continue to reinvest in achieving IKEA's vision,” said Juvencio Maeztu, Deputy CEO and CFO of Ingka Group (IKEA).
“With wallets getting thinner for many of us, our number one priority is to offer our customers affordability and low prices and put IKEA products in more people's hands. Low prices are part of our DNA and we are reducing the prices of many of our products around the world.”
“We are committed to serving our customers and providing home furnishing inspiration and solutions to support people's dreams and needs in their home life. With ongoing global challenges, we especially need to be financially healthy. Here we draw inspiration from our founder, Ingvar Kamprad, on the importance of thinking in generations and long-term vision,” adds Maetz.
Juvencio Maettu, Deputy CEO and CFO, Yinka Group (IKEA)
As previously announced, Ingka Group recorded IKEA retail sales of €41.7 billion in FY23 and revealed investment plans of more than €4.5 billion over the next three years across multiple markets. The company also continues to reinvent its stores to increase fulfilment capabilities. As a modern omnichannel retailer, it is constantly assessing customers' changing needs to ensure they can interact with IKEA whenever, wherever and however they want.
Ingka’s worldwide corporate tax expense was EUR 700 million in FY23 (EUR 500 million in FY22). The standardized tax rate remained at 28% within the range of 25-30%.
Following the company's strong performance in FY23, Ingka Group employees will receive a total of €311 million in performance-related bonuses as part of the global One IKEA Bonus program. In addition, a total of €103 million will be allocated to employee pension funds through the company's global loyalty program, Tack!.
The company's net profit was €1.5 billion (2022: €300 million). Maez said: “All Ingka employees are proud of their contribution. It makes sense because our profits only go in two directions. In 2023, 85% of our net profit will be reinvested in the business to realize IKEA's vision of a better life for the many people. The remaining 15% will be paid as dividends to the IKEA Foundation, the sole owner of the company, which has a charitable purpose of funding the IKEA Foundation.”
The IKEA Foundation is an independent strategic charity focused on the two biggest threats to our children's future: poverty and climate change. We protect people and the planet by working on issues such as renewable energy, agriculture, circularity, refugees, climate action and emergencies.
Ingka Investments' announcement today of an additional €1 billion in the energy transformation adds to its previous commitment to invest €6.5 billion in renewable energies by 2030. The investment will go beyond energy production into innovative and transitional technologies that support the broader energy transition, including energy storage, hydrogen as an energy carrier and grid infrastructure, bringing its total commitment to the renewable energy sector to €7.5 billion.
Of this amount, nearly €4 billion has already been invested and committed, including investments the company made in wind farms, offshore wind developments and solar farms in Australia, Finland and Italy during FY23. Early FY24 saw the company's first battery storage project, Cameron Storage in Texas, announced and operational in October – the first project as part of the Energy Transformation Commitment.
In addition, Ingka Group plans to retrofit 150-200 IKEA stores, shopping centres, warehouses, distribution centres, offices and other buildings with renewable heating and cooling to reduce greenhouse gas emissions. Significant investments will be made in existing facilities by 2030 and new facilities will be equipped with renewable heating and cooling systems.
Maez added: “We now produce more renewable energy than we consume across our operations, taking our renewable energy commitments a step further. Upgrading our buildings to renewable energy heating and cooling is also an important step in reducing greenhouse gas emissions from our own operations. I am proud that we are investing in this effort to become a better company and work toward 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.”
Ingka Group's FY23 Annual Overview and Sustainability Report will be published in January 2024. The report will include the company's overall climate footprint and outline its targets. Performance will be measured by its commitment to being better in four ways: Better Homes, Better Lives, Better Planet and Better Company.
[1] Fiscal Year 23: From September 1, 2022 to August 31, 2023.
[2] IKEA Retail: Ingka Group is the largest IKEA retailer with IKEA retail operations in 31 markets. The company is a strategic partner that drives the development and innovation of the IKEA business and helps define a common strategy for IKEA.
Ingka Centres has almost 50 years of experience in shopping centres and currently works with more than 3,000 brands across a portfolio of 34 meeting spaces in 13 markets.
Ingka Investments is the investment arm of Ingka Group which manages seven different portfolios including real estate investments, renewable energy investments, forestland investments, business acquisitions, venture investments, cyclical investments and financial markets investments.
*IKEA is committed to the Paris Agreement and will contribute to keeping global temperature rise to well below 1.5°C above pre-industrial levels. IKEA is committed to taking actions across its value chain and beyond to become a climate-positive company by 2030. This includes a commitment to halve absolute Greenhouse Gas (GHS) emissions from its entire value chain by 2030, including emissions reductions, carbon removal and storage. More information on IKEA's commitments can be found here.
