Ingka Group Reporting FY23 – Continuing to transform and invest to be ever more affordable, accessible, and sustainable

The past financial year Ingka Group has continued to play its part in putting people and planet at the heart of its transformation, while delivering an ever-better experience for customers. In FY23 the company reduced its climate footprint by 24.3%** while growing the business, compared to the FY16 baseline. This decrease was achieved against a 30.9%** increase in revenue compared to baseline year FY16.   

As part of its business transformation, new investments have been made in digital services, customer fulfilment and across 60 new IKEA locations, as well as increasing its investments in offsite renewable energy by EUR 0.7 billion, totaling EUR 3.8 billion since 2009. 

“This year we celebrated 80 years of IKEA. So much has changed in eight decades, yet we are still guided by the same vision: to create a better everyday life for the many people. That has never been more important or relevant than today. Despite a challenging year our amazing co-workers continued to support the needs and dreams of our customers while we invested into making more products affordable to the many people. One of the highlights are that we managed to reduce our climate footprint while growing the business,” says Jesper Brodin, CEO, Ingka Group.

The report is structured around four key movements***, Better homes, Better lives, Better planet and Better company – which encompass both financial and non-financial performance against a wide range of goals and provides a transparent account of performance, challenges, and achievements over the past year across all parts of the Ingka Group business, IKEA Retail, Ingka Centres and Ingka Investments.   

Throughout the year Ingka Group focused on having a positive impact on everyone its business touches and the good financial performance reported in November gives the company resources to invest back into its business supporting its transformation to become more accessible, affordable and have a positive societal impact. During FY23 over 1000 refugees were supported through the Skills for Employment programme in 22 countries and 99,000 people were supported through the Ingka Group Neighborhoods framework that aims to create long lasting social impact in neighborhoods near IKEA stores and meeting places. 

“The world is facing many challenges – climate change, increasing nature loss and rising inequality, to name a few- but we are determined to be part of the solution. We’ve chosen to stay optimistic and lead with action. During the past year we have continued to transform our operations and expanded our offer of products, services, and solutions to make it easier for our customers to adopt more sustainable habits, including switching to plant based meals with the launch of the IKEA plant dog in 14 markets. It’s also really encouraging that our circular services are becoming increasingly important for customers; in the past year we have doubled the number of customers using our Buyback & Resell service. In our own operations we see continued progress in switching to renewable energy with over 79% of electricity now coming from renewable sources”, says Karen Pflug, Chief Sustainability Officer, Ingka Group.

“While we are proud of our progress and achievements in FY23 much remains to be done. Just like many others we are facing challenges and opportunities on our journey, including advancements in technology, and increasing legislation. However, we will continue to lead with curiosity, courage and commitment to accelerate our actions with biggest impact. By working together, I’m optimistic that we can create a better future for people, planet – and our business,” she adds.

IKEA is committed to the Paris Agreement and to contribute to limiting the global temperature rise to 1.5°C above pre-industrial levels. **** In November 2023 Ingka Group strengthened its climate targets in alignment with the Science Based Target initiative’s Corporate Net Zero standard and submitted these for approval to SBTi, these are now pending approval and will be reported against in FY24. The revised targets set out the company’s commitment to reducing absolute greenhouse gas emissions from the value chain by at least 50% by 2030 (compared to our 2016 baseline) and to reach net-zero emissions by latest 2050 IKEA will reduce absolute emissions by at least 90% – without using carbon offsets. 

The Ingka Group reporting website (on ingka.com) provides a summary of FY23 performance, with progress and challenges and an update against our targets. On the site you can download the full Ingka Group Annual Summary and Sustainability Report FY23 – an overview of highlights, progress, and challenges towards our commitments with detailed data, policies, and frameworks. 

Ingka Group Reporting FY23 highlights include: 

Better planet:  

• The Ingka total climate footprint (scope 1, 2 and 3 emissions) has decreased by 24.3% from FY16 baseline. The decrease was achieved against a 30.9% increase in revenue. This reduction is coming primarily from implementing carbon saving measures, such renewable electricity and energy efficiency; however, changes in our business operations and sales have also contributed.  

• Invested an additional EUR 0.7 billion in Renewable Energy taking the overall total close to EUR 4 billion, that has been invested and committed since 2009. Production is now equal to a mid-size renewable energy production company on a global scale.   

• 79.2% of the electricity Ingka Group used in its operations in FY23 was from renewable sources (74.6% in FY22).  100% renewable electricity consumption across our IKEA stores and Ingka Centres meeting places in 28 countries in FY23 (26 countries in FY22). 

• Continue to reduce operational waste and in FY23 75.9% of operational waste was recycled compared to 75.7% the previous year.  

Better company:  

• In FY23 we grew revenue by 5.4% to EUR 44.3 billion, recording a stable operating income of EUR 2.0 billion (EUR 2.0 billion in FY22). Our normalized tax rate is 28%, amounting to MEUR 700, and the total tax bill including property and other taxes was EUR 1.2 billion. 

• To secure that we make IKEA more affordable, accessible, and sustainable, a large part (FY23 85%) of net income was re-invested in the company. The remaining part (FY23 15%) was paid as dividend to the sole owner of Ingka Group, Stichting INGKA Foundation to provide funding to the IKEA Foundation, a strategic grant-making philanthropy.  

• Ingka Investments invested EUR 1.3 billion in assets such as real estate, renewables, forestry and business development and committed to EUR 1.9 billion.

Better homes: 

• To make the IKEA home furnishing solutions more accessible and to enable more people to create a better life at home – Opened three new stores, 10 city stores and 47 new plan and order points as well as two new Ingka Centres meeting places. 

• 3.2 billion online and 697 million visits to our customer meeting points (3.8 billion online visits, 680 million visits to our IKEA stores in FY22) 

• Over 650,000 people used one of our online interior design tools to improve their homes. Today 26% of our sales are generated from our digital touch points and we expect this to increase, including rolling out IKEA Kreativ to nine markets. This AI-driven digital design experience enables customers to design and visualise their own living spaces. 375,000 customers used it in FY23. 

• Doubled the number of customers using our Buyback & Resell service that enables customers to sell back IKEA products they no longer need and purchase secondhand IKEA products for a lower price. ​Over 211,600 customers (FY22: 105,000) used our Buyback service to sell back IKEA products they no longer  

• 2.2 million customers used our spare assembly parts service to maintain and repair their IKEA products with 263,000 products sold via As-Is online reservations, a significant increase on the previous year (FY22: 70,000) with more than 45.1 million products were given a second life (FY22: 42.6 million).  

• Introduced Circuit at Ingka Centres, in Birsta City Sweden. Our new circular concept, aiming to inspire and enable visitors to adopt circular habits through services, events and offers. Circuit will be tested in a small number of meeting places in FY24. 

• Our annual IKEA Life at Home Report was based on a survey with more than 37,000 people in 38 countries. We found that people’s concerns about the economy and their health and wellbeing continue to rank highest.   

Better lives: 

• Enabling better lives starts with our co-workers. Many co-workers received a performance-based bonus pay-out for FY23, totaling EUR 311 million. Additionally, EUR 103 million is added to the co-worker loyalty pension fund called “Tack!”. 

• Supported 99,000 people through our social impact programmes in local neighbourhoods and continued to pilot our Neighborhoods framework. The Ingka Group Neighborhoods framework aims to create long lasting social impact in neighborhoods near our stores and meeting places. 

• Across 22 countries 1135 refugees were supported through our Skills for Employment programme  ​and we rolled out the programme to our Ingka Centres business for the first time.  

• Maintained a 50/50 gender balance in our management positions (all levels of management). Although this target was originally for FY22, we continue to measure ourselves against it, reflecting the importance of this issue.

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*The financial year 2023 (referred to as FY23) of the Ingka Group (Ingka Holding B.V. and its controlled entities) refers to the period between 1 September 2022 and 31 August 2023 and the entities controlled by Ingka Holding B.V. during this time. Ingka Group operates under franchise agreements with Inter IKEA Systems B.V., the worldwide IKEA franchisor.

**Our total climate footprint (scope 1, 2 and 3) The climate footprint covers greenhouse gas emissions across Ingka Group operations (scope 1 and 2) and our upstream and downstream value chain (scope 3). The 24.3% overall reduction in our climate footprint from FY16 to FY23 was achieved against a 30.9% increase in revenue. The reduction comes primarily from implementing carbon saving measures; however, changes in our business operations and sales have also contributed.

***Better planet – We only have one planet, the home we all share. We are taking bold steps across our business to reduce our greenhouse gas emissions, minimise resource use and waste, and promote biodiversity and water conservation. We are making it easier for our customers to act too.  

***Better company – We do business with a humanistic outlook, guided by our vision and values, always adapting to a changing world. We invest a large part (85% in FY23) of our net income back into our business. This allows us to be more affordable, accessible and people and planet positive. The remaining part (15% in FY23) of the net income is paid as dividend to the Stichting INGKA Foundation to achieve its charitable purpose by providing funding to the IKEA Foundation, a strategic grant-making philanthropy. Nobody is entitled to the assets of the Stichting INGKA Foundation and no dividend from Ingka Group flows to any individuals. We push to be a fair, inclusive and empowering company with good governance, equal opportunities and respect for human rights across our entire value chain. 

***Better homes – For generations, we have been on a mission to bring inspiring and affordable home furnishings to the many people regardless of wallet size. We are focussing on omnichannel innovation, seamlessly integrating our physical and digital physical channels to bring IKEA to more people, offering affordable products, services and solutions that make healthier and more sustainable living easier. 

***Better lives – People are at the heart of everything we do. We want to take a leading role in creating a fairer and more equal society and improve the lives of the millions of people that interact with, or are impacted by, our company. Starting with our co-workers and supply chain, extending to our customers, neighborhoods, communities, and society at large, we are determined to be a force for good. 

****IKEA is committed to the Paris Agreement and to contribute to limiting the global temperature rise to 1.5°C above pre-industrial levels. This includes a commitment to reducing absolute greenhouse gas (GHG) emissions from the value chain by at least 50% by 2030, compared to a 2016 baseline, and to reach net-zero emissions by the latest 2050 without using carbon offsets. In addition, to become climate positive, we will remove and store carbon through forestry and agriculture along with contributing to additional reductions in society by going beyond our value chain. Read more about the IKEA commitment here.  

About Ingka Group

With IKEA retail operations on 31 markets, Ingka Group is the largest IKEA retailer and represents about 90% of IKEA retail sales. It is a strategic partner to develop and innovate the IKEA business and help define common IKEA strategies. Ingka Group owns and operates IKEA sales channels under franchise agreements with Inter IKEA Systems B.V. It has three business areas: IKEA Retail, Ingka Investments and Ingka Centres. Read more on www.Ingka.com.