The parent company of Swedish furniture retailer IKEA has reported stable operating income and continued investment as sales increased.
According to its latest FY22 results, Ingka Group saw sales grow by 5.7% to EUR 42 billion across its three businesses (IKEA Retail, Ingka Investments and Ingka Centres). Operating income was stable at EUR 2 billion.
“I am proud of the efforts of all co-workers, and I would like to thank them for their dedication during what has been an unpredictable and challenging period,” said Juvencio Maeztu, Deputy CEO and CFO Ingka Group (IKEA).
“Our financial performance has been solid, considering the challenges the world is facing, and reinforces the resilience the business has. We managed to grow, invest and overall, it is a positive financial result. This provides a good base for the challenges and opportunities ahead.”
Ingka Group continued to invest in its business transformation, its stores, distribution and customer fulfilment networks, the digital customer experience and Meeting Places (shopping centres) and continued its sustainability investments in renewable energy and forestry, amounting to a capital expenditure of EUR 2.1 billion, plus acquisitions of EUR 0.5 billion.
In parallel, the company has continued to invest in utility scale renewable energy, totaling EUR 0.3 billion in FY22, and this year the business produced 40% more renewable energy than it consumed. Also, in FY22 Ingka Group committed to investments of over EUR 0.8 billion in renewable energy projects, in Europe and Asia.
As previously reported, Ingka Group recorded IKEA retail sales of EUR 39.5 billion for FY22. Overall, 52 new IKEA locations opened their doors in FY22, while new Ingka Centres Meeting Places were opened in Toronto and London and construction started in India. The company increased its footprint in responsible forestry with investments in the USA, the Baltics, Romania and New Zealand.
Ingka’s net income reduced substantially to EUR 0.3 billion, mainly due to the development in our financial market investments (FMI). This was not connected with normal day-to-day retail operations. During the year, rising interest rates meant lower bond values in our FMI, in line with the world’s financial markets. The net income was also impacted by the effects of scaling down operations in Russia.
In FY22, Ingka corporate income tax amounts to EUR 0.5 billion. The overall tax bill, including other taxes and duties is EUR 1 billion. Without the impacts in our FMI portfolio, which increased our effective tax rate, the normalized tax rate is stable in the 25-30% band.
As Ingka Group looks ahead, the company is acutely aware of supporting the many people through the global financial challenges currently affecting households.
“Given our consistent operating income, increased revenue, continued profits and added investment across operations, we are well placed to deal with the current economic conditions. We are planning to invest a similar amount in climate and business transformation as we have in previous years. We remain dedicated to serving the many people to live a better everyday life. Our great people, strong culture and values form our foundations, and we look optimistically to the future,” says Maeztu.