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Annual Summary & Sustainability Report FY20

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Annual Summary & Sustainability Report FY20 Annual Summary & Sustainability Report FY20 Ingka Group (Ingka Holding B.V. and its controlled entities) A better life at home in a year like no other IKEA Retail Business ANNUAL SUMMARY & SUSTAINABILITY REPORT FY20 Contents Ingka Group Our Covid-19 response 2 In March 2020, Ingka Group launched a We are Ingka Group range of emergency actions in response to 4 About Ingka Group the coronavirus pandemic. EUR 26 million 6 A message from Jesper Brodin in FY20 was granted to support communities 8 Our Coronavirus pandemic response impacted by the pandemic. Additionally, we provided income stability for our co-work- ers, including extended parental leave for Growing from our Swedish roots 12 parents with children home from school. Our business Driven by the IKEA vision to create a better everyday life for 14 IKEA Retail - Our business transformation the many people, we bring the IKEA Brand to millions of homes. Read more on pages 8-10. 16 Our Life at Home research We’re united by our culture, values and entrepreneurial spirit. 18 Fast-tracking transformation of stores and services Togetherness, simplicity, cost-consciousness and caring for 22 A more affordable and sustainable IKEA people and the planet, are some of the values that drive us to 24 Our omnichannel transformation constantly innovate and improve our way of working. 28 Our retail expansion - Ingka Group openings in FY20 30 Our retail expansion - making big moves in big cities Passionate about life at home 32 Making sustainable living affordable We’re passionate about life at home; about bringing well- Leaping from AR to AI Redefining life at home 34 Ingka Investments: Investing in purpose-led growth designed, functional, durable, affordable and sustainable 38 Ingka Centres: Creating new meeting places in cities and online home furnishing solutions to people with big dreams and thin Ingka Investments has acquired Geomagical We believe that home is the most important wallets. In a year when home has become even more central Labs, a leading developer of 3D and visual place in the world. In a year when we spent to the lives of the many, we’ve worked even harder to meet the AI solutions for interactive home furnishing more time at home than ever, the seventh 42 changing needs of our customers, whether it’s online, through inspiration. By making it possible to scan your IKEA Life at Home Report explores how the Creating a people movement our customer service or in our IKEA stores. By continuing the home with a smartphone and see in photo- events of this year have changed our relation- 44 Our people strategy largest transformation in IKEA history, we will reach more realistic 3D how it would look with any IKEA ships to home, and how they will inform the 46 Caring for our people customers in more ways, with the products and services they furniture, Geomagical offers an enhanced way we live in the future. 48 Living our values want, at prices they can afford. digital meeting that makes designing your 50 Building skills for the future home a fun, inspiring and instantly accessi- Read more on pages 16-17. 52 Going all in on equality Making sustainable living affordable ble experience. Resourcefulness has always been part of our DNA. And we want 56 to have a positive impact on people and the planet – not only Read more on page 35. People and planet positive by going all-in to contribute to the IKEA ambition to be circular 60 Healthy and sustainable living and climate positive, but also by making healthy and sustainable 70 Circular and climate positive living attractive and affordable for as many people as possible. 84 Fair and inclusive 94 Sustainability governance and management Shaping the future of a better life at home We’re curious about the world around us, and want to make Custom designed DUGGREGN 96 a positive difference in people’s lives. As we continue our trans- LED wall lamp Financial performance and governance formational journey, we’re determined to lead home furnishing electric trucks retail into the future – engaging with even more people with € ,95 98 A message from Juvencio Maeztu our affordable, well-designed and sustainable home furnishing In FY20 we completed testing of two 19 100 Our financial year FY20 solutions for a better life at home. It inspires us even more today types of electric vehicle prototypes, 102 Taxes than ever before. developed for IKEA in collaboration 103 Consolidated income statement with Renault and MAN. These projects 104 Consolidated balance sheet - Assets are part of a wide range of initiatives Investing for our climate and partnerships to meet our 100% 105 Consolidated balance sheet - Equity and liabilities zero-emission goal. 106 Ownership structure and governance With continued investments in forestland, wind farms and solar parks, we exceeded 108 Business ethics Expanding in big cities The financial year 2020 (referred to as FY20) of the Ingka Group Read more on page 33. our 2020 goal to produce as much renewable (Ingka Holding B.V. and its controlled entities) refers to the period between 1 September 2019 and 31 August 2020 and the entities In FY20, we opened several new IKEA energy as the energy we consume in our 110 controlled by Ingka Holding B.V. during this time. Ingka Group stores in big cities like Moscow, Seoul and operations. In September 2020, we pledged Indices and appendix operates under franchise agreements with Inter IKEA Systems B.V., Tokyo. We also started to make real estate to invest EUR 600 million more to reach the the worldwide IKEA franchisor. 111 Our compliance with the UN Global Compact investments in city centres, with Ingka In- IKEA ambition to become people and planet 112 Our contribution to the UN Sustainable Development Goals vestments acquiring a building in Paris and positive by 2030. This increases our overall Inter IKEA Systems B.V. is part of Inter IKEA Group, which also 114 About our sustainability reporting includes IKEA range, supply and certain industrial activities. Ingka Centres acquiring inner city malls in investments into sustainability to EUR 3.8 118 Circular and climate positive data Together with Inter IKEA Group and 11 other IKEA franchisees, downtown London and San Francisco. billion since 2009. 122 Women’s Empowerment Principles we improve and develop IKEA to be more relevant and inspiring. 124 Assurance report of the independent auditor On 25 January 2021, Inter IKEA Group will publish the IKEA Sustainability Report, which reports on all companies in the Read more on page 30. Read more on pages 36-37. 126 IKEA Foundation IKEA franchise system and value chain. 3 WE ARE INGKA GROUP | ABOUT INGKA GROUP ANNUAL SUMMARY & SUSTAINABILITY REPORT FY20 We bring IKEA into 3.6 EUR 1.2 billion visits to billion net profit IKEA.com people’s lives (EUR 1.8 billion in FY19) To be reinvested back into our business. IKEA Clean Energy Ingka Group brings the IKEA Brand to 30 countries in order to make millions of homes and lives better. We operate 378 Services in 11 countries IKEA stores, as well as worldwide ecommerce and digital solutions. Our expansion and reach are strengthened by our Sales grew by 90% and our community of clean energy producers and consumers network of meeting places and an active investment arm to support sustainable growth and business transformation. 9.4 million downloads of accumulated savings of over EUR 10 million the IKEA app and 63,000 tonnes of CO2. One brand, many companies IKEA is a franchise business. That means that many people and companies 151 million with different owners work under one IKEA brand, dedicated to one IKEA IKEA Family vision: to create a better everyday life for the many people. The franchisor 378 IKEA stores in 30 countries Inter IKEA Systems B.V. is responsible for continuously developing the IKEA 166,350 members Concept and ensuring its implementation in new and existing markets. co-workers At the end of FY20 we also had: Franchisees like Ingka Group provide valuable input based on consumer 58 smaller formats such as IKEA planning and market insights. studios and IKEA shops in cities Each year, the companies in the IKEA franchise system work together to 45 Ingka Centres meeting places in 15 launch more than 2,000 new products, develop new ways to make shopping countries more convenient, and help more than 800 million people to live healthier, 29 Distribution Centres in 18 countries Our most loyal customers are members more sustainable lives. 54 Customer Distribution Centres in 16 of IKEA Family. More than 29,000 new countries members join every day! Ingka Group – three businesses in one As the largest IKEA franchisee, Ingka Group represents the IKEA Brand through omnichannel retail in a variety of physical and digital formats, gen- erating over 90% of total IKEA Retail sales in FY20. Ingka Holding B.V. is the parent company of Ingka Group, and is based in Leiden, the Netherlands. Ingka Group is made up of three businesses, working closely together: IKEA 39 x 547 EUR 37.4 Retail, Ingka Centres and Ingka Investments. million products saved billion Ingka Group revenue (EUR 39.2 billion in FY19) IKEA Retail IKEA Retail is our core business, and we continue to expand in new and existing countries, with IKEA stores, and new customer meeting points, Total IKEA Retail sales We successfully gave 39 million recovered We have invested in 547 wind distribution units and omnichannel solutions. Every year, we welcome more amounted to EUR 35.2 billion products a second life. 30,5 million pro- turbines and 2 solar farms in than 706 million customers into our 378 IKEA stores in 30 countries, and our (EUR 36.7 billion in FY19).
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