Ingka Group, the largest IKEA retailer, has announced a positive performance for the fiscal year 2023 (1 September 2022 – 31 August 2023). Despite economic instability, geopolitical challenges, and ongoing effects of the pandemic, the company achieved a 5.4% growth in revenue, reaching Euro 44.3 billion.
Ingka Group increased its investment in renewable energy by Euro 1 billion, bringing the total commitment to Euro 7.5 billion by 2030. The company faced various challenges throughout FY23 but managed to report total revenue of Euro 44.3 billion across its business areas, which include IKEA Retail, Ingka Centres, and Ingka Investments.
Juvencio Maeztu, Deputy CEO and CFO of Ingka Group (IKEA), emphasized the importance of delivering affordability and lower prices to customers amid global challenges. The company aims to make the IKEA range more accessible, with a commitment to lowering prices on various products worldwide.
As part of its financial performance, Ingka Group recorded IKEA retail sales of Euro 41.7 billion for FY23 and outlined plans to invest over Euro 4.5 billion in the next three years in multiple markets. The company continues to transform its stores to enhance fulfillment capacities, adapting to changing customer needs as a modern omnichannel retailer.
In terms of financials, Ingka Group reported a corporate income tax of Euro 0.7 billion globally, with a normalized tax rate remaining in the 25-30% band at 28%. Co-workers of Ingka Group are set to receive a total of Euro 311 million in performance-based bonuses through the One IKEA Bonus program, reflecting the good results in FY23. Additionally, Euro 103 million will be allocated to co-workers' pension funds through the global loyalty program "Tack!".
Ingka Group's net income for FY23 was Euro 1.5 billion, a significant increase from Euro 0.3 billion in FY22. The company plans to reinvest 85% of the net income back into the business to fulfill the IKEA vision, while the remaining 15% will be paid as a dividend to the Stichting INGKA Foundation, the company's sole owner with a charitable purpose.
The Stichting INGKA Foundation supports the IKEA Foundation, an independent strategic philanthropy focusing on addressing the challenges of poverty and climate change. Ingka Investments announced an additional Euro 1 billion investment in Energy Transformation, contributing to the existing commitment of Euro 6.5 billion into renewable energy by 2030. This investment aims to support innovation and transitional technologies beyond energy production.
Ingka Group has already invested and committed close to Euro 4 billion in renewable energy, including wind farms, offshore wind development, and solar parks in Australia, Finland, and Italy. The company's commitment to renewable energy now totals Euro 7.5 billion, with recent projects such as the Cameron Storage battery storage project in Texas.
Furthermore, Ingka Group plans to retrofit 150-200 IKEA stores, shopping centers, warehouses, distribution centers, offices, and other buildings with renewable heating and cooling systems to reduce greenhouse gas emissions. The company is making substantial investments in existing properties until 2030, ensuring new properties are equipped with renewable heating and cooling systems.
Juvencio Maeztu highlighted that Ingka Group currently produces more renewable energy than it consumes across its operations. The investments in renewable heating, cooling, and other sustainable initiatives are critical steps toward reducing the company's greenhouse gas emissions in alignment with science and the Paris Agreement's 1.5°C pathway.
The full details of Ingka Group's FY23 Annual Summary and Sustainability Report, including the company's total climate footprint and goals, will be published in January 2024. The report will evaluate performance based on the pillars of Better homes, Better lives, Better planet, and Better company.
