Jesper Brodin: Thank you. Thank you. Thank you. I feel terrible. I have a PowerPoint. Uh Cory, so I don't know what to do now. Uh but listen, I I think um for a couple of moments, I would take the opportunity uh uh to actually try to give a couple of images of culture uh the tension, the harmony and all of it. Um let me start um eight years as CEO, a little bit more. Uh I had 30 years in IKEA last uh August and you know what happened? I got an email from myself congratulating me to 30 years in IKEA and here comes the culture part offering me three extra days of vacation. Now I I can't remember the the company who was on the stage before talking about costconciousness but that sets the level I think for all of us.

Now um I wanted to take uh I wanted to bring a couple of uh bad pictures from my own iPhone as well but just to share how does actually culture look like and for me there are a couple of things we can talk about but for me it's really the notion of that if you're a leader you have to live the culture you have to be the culture. so the first picture I brought is this beautiful uh picture of me doing if you look at our uh files it says we're doing front tweaks in IKEA because we think it's genuinely important for us to follow our decisions in reality. I am absolutely crap at selling kitchens. I I don't know all the mistakes I've done over the years. So, my people recommend I do the dishes. I do that quite well, actually.

Um, and now I tell you a story about culture. This is actually me on the first week of being CEO. I was on a trip around the world to meet a lot of countries, customers, co-workers, and get myself an opinion about where we were as an organization. And this actually happened. So I was doing the dishes and the restaurant manager at this store, he came up to me and said, "Are you actually a manager?" He said to me, and I was doing the dishes, very occupied. I said, "Yes, I have to admit." And then he didn't recognize me. And then he said, "Are you reporting to the Swedish country manager?" And I was doing the dishes. And I said, "No, it's actually the other way around." And he looked at me and he bursted out in laughter hysterically. And then he gave me a hug and he said, "Keep on dreaming." So that's the key for you. There you go.

Now um the interesting thing this is also absolutely the truth. I went on this trip because I felt I think I felt some sort of obligation to show up and meet people. I I was a bit nervous in my role and I for once I didn't want to get lost into the boardrooms and in the head office. So I went out there. When I came back, I had a report, a travel report uh brought to my management group. And at the moment when I shared it, uh actually one of my colleagues said, "That's not a report, it's a strategy." I said, "No, it's a report." He said, "No, it's a strategy." But the interesting thing with the trip was the report was only listening to customers and to co-workers. And we having a very strong culture at IKEA with all its benefits and all its strength um had actually over the years stopped listening. I think our front window became smaller and our back uh review mirror became bigger. So we almost almost missed the digital transformation and the online because back then we were absolutely just analog and I will fast forward in a moment to what happened during the pandemic because actually that trip and that moment uh potentially saved the company.

Jesper Brodin: Um I wanted to talk about this uh man some of you um might recognize him Inva Campra the founder of IKEA. Somebody asked me yesterday what is the name IKEA come from? And actually he was 16 years old when he went to the registrate to form his company. His father had to be with him. He told me this story himself. And then the registrate said, "So what is the company name going to be?" And he had no clue. So he said, "What's your name? Ingvar I Campra K. Where do you come from?" Elmtaryd, Agunnaryd. E, A. So that's IKEA how it was actually started.

Um he passed away nine years ago. And I haven't told this story before, but I think it also says something about uh culture. I was in the boardroom last time I met him uh trying to convince my board to actually make historic investments into digital and that was seen as a problem by the board at the discussion we were having and came in. He could hardly walk, 91 years old. And obviously all the attention went from me to him in the room. And then he stopped and he said, "So what are you doing?" He asked and I I think I was a bit annoyed and I said with trying to solve a probleming then he started crying and he said, "Oh, how wonderful to have a problem." And then he left and that's actually the last time I met him.

Jesper Brodin: Yeah. So um this was not part of my uh job description but this is what happened during the years uh and probably a couple of more things and we could add to the uh I think the weight on the shoulders that are on all leaders of today. I think potentially the generation who's been leading in different position the last 10 years has had more trouble than any of the generations before. So we certainly got our share of of challenges. At IKEA, we decided among all these challenges, we believe and we're happy to speak to it that climate change is going to be the most dramatic and it's based on ethics, if you like, a morality that we are happy to claim as leaders, but also that a majority of our customers and our co-workers are deeply concerned and expect us to take action on it. Third, which I want to talk about, is what we discovered down the road, the economic benefits, which we didn't know when we committed ourselves a few years ago.

So I'm going to skip to uh some of the achievements and I'm not here to to brag about the numbers that we have produced the last years but in the backdrop of all these crisis IKEA has had an incredibly strong path of of growth. There are three real reasons behind it and probably more than I you know will ever know. But the first one I would claim is culture because during crisis IKEA as a constituency I found out during the pandemic uh the benefit of a culture that has invested years and years in acknowledging people to do mistakes. We didn't experience paralysis actually people all over IKEA took action simultaneously. We had to steer up some things. We have to coordinate of course but we had a lot of uh willingness to actually be part of the crisis. So I think uh the 24% growth we see here is mostly dedicated to a bloody strong culture.

Secondly it comes from the transformation into online. We went from a fully analog company to today do about 30% thereabouts in online. During the pandemic we had 100% online. Note that IKEA at the start of the pandemic had only one market out of 14 up and running on online. We had a plan of two and a half years to scale out online. It took six weeks due to the crisis that we were into.

But the cool thing I wanted to share with you because I think it's less known is that during these years we have actually taken the company from a carbon perspective minus 30%. So, plus 24 in business revenue minus 30% in absolute carbon. And this is not scope one two only what we buy or what we do in the company. This is the full value chain upstream and downstream. And I have brought the numbers to you.

Jesper Brodin: So now somebody talked about nerd nerds before. Now I'm going to get super nerdy here and share with you the equation about this because I find it fascinating. To start with, we were um having all sorts of speculation about what our carbon footprint was until we actually got data. And this is the Paris agreement approximate numbers of IKEA's carbon footprint. It holds a couple of very interesting elements. U first of all most people would think transport was a biggest uh element and it turns out that customers transport or home deliveries is the inefficient one if you like. Um but the transport of flat packs around the world as you can see on the number here is not the biggest one. Raw material and stay with that raw material is actually IKEA's achilles heel if you like both from a carbon point of view.

Now would I transpose the uh cost elements of IKEA's value chain from retail and upstream the numbers will actually resonate quite similar. We have about 36% of our cost today sits in raw material in IKEA production transport retail approximately the same. So what we realized when we looked at these numbers is that if we touch carbon we might actually touch cost.

And it turns out when we uh go a few years down the line what you see is that IKEA has actually managed to reduce carbon in each and every segment of of the journey. Um audited reported numbers. This has led to the minus 30 in totality. Last two years the biggest financial contribution within the P&L has been cost reductions thanks to being climate smart. And I think it's a worth to tell that story in all this mythical environment we have uh about sustainability. I think this is just a gold mine. How do we did we do that? There were not like one single strategy. But of course investments in renewable energies has saved us a lot of money and by the way made us independent on some of the crisis we see today. electrical mobility, innovation within uh materials, circularity, which is still I think one of the biggest opportunities to ripe in the future when more people will share less material of the planet. But here you have it.

Jesper Brodin: Um so um what I wanted to finish with is talking about I wanted to go a little bit pessimistic first. This is not my quote. is somebody I met uh a year ago in in uh uh Geneva actually on a world economic forum meeting. This is like the best pessimist I ever met who said things are much worse than last year but they are much better than next year.

I mean it's just wonderful and I had an argument with this gentleman. I said I like to be a pessimistic because if I'm wrong I'm happy and I didn't argue against that. So I left it but you know what I have chosen to be an optimist and IKEA if you study us we actually have said that optimism is not something that comes to us. It is a choice we are made because we think that makes us solution oriented and I think it's actually how we drive the business.

So I'm going to finish with three things that I picked up over the years. Um, one of the first uh learning being an optimist is that I and we in the management group of IKEA felt that we were almost stuck in being problem solvers with all these issues on our menu. It almost felt embarrassing to talk about dreams and opportunities at the moment. So, we actually agreed and shook hands on that we're going to be good at managing problems, but we will lead from opportunities because that's how the world is created.

Second, I think this is a picture I took uh by the way when we took the world to a forestry to bring activists, people critical to us. Uh our board was is part of this picture as well to go deep on a topic just believing that transparency will make us better. Culture saved IKEA during the pandemic and made us actually a much stronger company and I think the aspect of building culture is probably the most modern effective way of leading with speed of today.

And finally, I think um and I truly believe culture is about allowing visions and dreams to be real. Um when you combine that with the financial power, that's when I think you get the true true power of leading a company from a culture point of view.

I'm going to finish with Oh, it's red now. That's bad. That means I need to wrap it up. I will do. So, the second last time I met our founder, it was we had a a coffee on the porch and we asked him as we used to do. I said, "So, Ingva, how should we think about the future?" And he said, "Oh, you should think long term." He said, he always said that. And then my colleague Yander said, so a genius question. He said, "How long term should we think?" And even I thought and he said 200 years is good.

and I can't get that out of my system really you know but I tell you this when we look at the issues today and we look at what's going to happen in hormones what what happens in the year to come and so on which we need to do um widen your gaze look maybe not 200 years but look 5 10 20 years into the future some things will disappear some politicians will but some of the challenges that we are combating in this time will not unfortunately. So I think that perspective helps us build culture and drive business in a better way.

Thank you for listening.