Investing for our future

In a fast-changing world, we at Ingka Investments continue to explore how investments and acquisitions help our business, while at the same time supporting innovation that makes a positive difference to people and the planet.

We come from a strong position of liquidity at Ingka Group, with a traditional financial asset management approach. This has evolved towards a much more dynamic business-driven approach, aiming to support core business development and to secure liquidity for the future.

Our role at Ingka Investments is to ensure the long-term financial strength of Ingka Group through conservative treasury asset management. In addition, through four other investment portfolios, we invest in minority and majority shareholding in order to support our retail business, including digital and customer fulfilment. We also invest in circular economy companies, renewable energy and forests. We align our investments with our business needs and want to make a positive difference in the societies where we invest.

“Take, for instance, our investments in renewable energy and forests,” says Krister Mattsson, Head of Ingka Investments. “Here we’re not only supporting the clean energy transition and responsible forest management, we also balance our financial exposure. Energy and wood are very important resources to us, and our product margins go down if the prices for either increase, so our investments provide us with some protection. We think of it as long-term macro-hedging, as well as sustainable investments.”

Supporting our IKEA business

To keep up with market demands around convenience and innovation, and as a way to access new technology and business models, we will continue to invest in fast-moving, entrepreneurial companies focusing on retail development, customer fulfilment, digitalisation, innovation and circular economy.

We believe that acquisitions will help us to strengthen the IKEA service offer for our customers. An example of this kind of acquisition of TaskRabbit, as Krister explains: “This was a way for us to take a quick step into the sharing economy and an on-demand services platform. If we had developed a similar platform, it would probably have taken much longer considering our scale and size, and we felt this was a better way to access new technology and a new business model supporting services.”

Investing to enable development of sustainable technologies

Founded in 2009, XL is a US-based developer and provider of simple and sustainable fleet electrification solutions for the commercial vehicle market. The company’s electrification solutions are cost-effective solutions that enable commercial and municipal fleets to quickly and efficiently reduce transportation fuel consumption, lower operating costs, and measure performance to meet corporate sustainability goals. XL’s systems deliver up to 25–50% improvement in fuel efficiency, CO2 emissions savings, and 99.9+% fleet uptime on major OEM (Original Equipment Manufacturer) vehicle platforms1. XL’s solutions are compatible with new and existing ranges of commercial fleet vehicles and can be installed by certified installers with no impact on fleet operations and no driver training or infrastructure requirements.
1) Source: www.xlfleet.com

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"At Ingka Group, we want to support innovative companies that are developing new technologies, solutions, and business models to help accelerate the transition toward sustainable transport. Through the investment in XL, we want to enable the company to become a leading provider of electrification solutions for commercial vehicle fleets."

Matt Stanley, Investment Manager Venture and Growth Capital, Ingka Investment

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"At Ingka Group, we want to support innovative companies that are developing new technologies, solutions, and business models to help accelerate the transition toward sustainable transport. Through the investment in XL, we want to enable the company to become a leading provider of electrification solutions for commercial vehicle fleets."

Matt Stanley, Investment Manager Venture and Growth Capital, Ingka Investment

Looking for synergies

Ingka Investments also invests in companies that we don’t aim to integrate into our business. Instead, as we make minority shareholding investments, we look for synergies, which means we can help them with our financial strength, our home furnishing and retail knowledge and our network of invested companies. At the same time, they can also help us. It’s essential to gain new insights in consumer and shopping behaviours, and we’re eager and determined to cooperate with these fast-paced innovators and entrepreneurs to better understand this new landscape.

We view increased digitalisation and sustainability as two major trends that go hand-in-hand. For example, when more sharing platforms come to market, they increase the opportunity to extend the life of IKEA products, or introduce new services that speak to our common values.

“We will make more investments and acquisitions in FY19 and beyond,” concludes Krister, “and in doing so, we’ll always look for new opportunities that are linked to our core business and that add value for our customers.”

Ingka Investments portfolios

1. Business development investments
The primary aim of this portfolio is to invest in and acquire companies that will benefit our core IKEA Retail business, usually through adding a competence or a service that complements our own offer. Our acquisition of TaskRabbit is the clearest signifier of this strategy, as it can offer IKEA customers additional ways to access flexible and affordable service solutions.

2. Venture and growth capital investments
In this portfolio, we make late-stage venture and growth capital minority shareholding investments in innovative companies. This allows us to broaden our investment landscape and diversify our financial risk and return profile. These investments also help us learn from the world around us, and can guide us on how to invest in a more sustainable future. In FY18 we invested in the Swedish company Matsmart, the Estonian company Click & Grow and the UK-based company Homewings.

3. Renewable energy investments
We support our target to produce as much renewable energy as we consume with this portfolio. We invested in new wind farms in Europe in FY18 – including in Portugal and Finland – and own and operate 441 wind turbines in 13 countries. And in FY18 we produced renewable energy equivalent to 81% of the energy used in our global operations.

4. Forestry investments
During FY18 we have further invested in forests. In the IKEA home furnishing supply chain, wood material is, in terms of cost, the second largest resource after energy. So far we’ve invested in forests in the Baltic States, Romania and the USA. As per year-end FY18, we own 182,000 hectares of forest.

5. Treasury asset management (Financial markets investments)
Under this portfolio we invest most of our liquidity. We have four sub-portfolios: a bond portfolio, an equity portfolio, a portfolio with non-investment-grade bonds and an alternative investments portfolio.