IKEA owner Ingka Group grows revenue; expands Tesco pick-up; increases energy commitment

Ingka Group, the largest IKEA retailer, has reported a good performance for FY23 with revenues up by 5.4% to EUR 44.3bn, alongside recording a stable operating income.

The company has also increased its renewable energy commitment by EUR 1bn, to total EUR 7.5bn by 2030.

“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.

As previously announced, Ingka Group recorded IKEA retail sales of EUR 41.7bn for FY23, and highlighted its investment plans of more than EUR 4.5bn 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 0.7bn (FY22 EUR 0.5bn) globally. The normalized tax rate remained in the 25-30% band, at 28%.

Ingka Group’s co-workers will receive a total of EUR 311m in performance-based bonus as part of the global One IKEA Bonus programme, following the good results in FY23. Additionally, a total of EUR 103m allocation to co-worker’s pension funds through the company’s global loyalty programme “Tack!”.

The company’s net income was EUR 1.5bn (FY22: EUR 0.3bn). Maeztu adds: “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.

The announcement by Ingka Investments of an additional EUR 1bn investment in Energy Transformation, adds to the previous commitment to invest EUR 6.5bn 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 7.5bn.

Of this amount, close to EUR 4bn 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 commented: “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.”

IKEA has also confirmed it will roll out over 70 more mobile pick-up points at Tesco stores to offer convenient click-and-collect options.

The new service will allow shoppers to collect their online IKEA orders from a designated area in the car park of Tesco stores, with orders over £100 free to collect while others will carry a charge of £5.

The move follows a pilot launch of the scheme last September in Blackburn, Burgess Hill, Cambridge, Dereham, Doncaster, Horwich, Liverpool, Stockport, Peterborough, Basildon, Aylesford and Crawley. The 70 new pick-up points will be located across the UK, with all set to be live by the autumn of 2024.

Jakob Bertilsson, IKEA UK country customer fulfilment manager, said: “This national rollout of mobile pick-up points is an exciting milestone in our partnership with Tesco, which will bring Ikea closer to people across all parts of the UK.”

“As customer shopping behaviours change and evolve, we will continue to grow our service offer to make shopping with Ikea more convenient, accessible, and affordable than ever before.”

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