The Lego Group, one of the few large private toy companies to disclose earnings, posted impressive results in the first half of the year, posting double-digit growth.
Lego’s revenue rose 13% to $4.64 billion (DKK 31 billion) in the first half of the year, driven by strong consumer sales and growing market share. Consumer sales grew 14% due to high demand for the company’s diverse product portfolio. The company outperformed the overall toy market and gained market share.
We were very pleased with our strong performance in the first half. We achieved double-digit revenue and profit growth and made significant progress in increasing the use of sustainable materials in our products. Our product portfolio continues to cater for all ages and interests, which is driving significant demand across the market. We leverage our solid financial foundation to further increase spending on strategic initiatives that will support growth now and into the future, allowing us to bring education through play to more children.
— Niels B Christiansen, CEO
Taking a closer look at the numbers, operating profit soared 26% to $1.21 billion (DKK 8.1 billion) on the back of strong revenue growth, despite a planned increase in spending on strategic initiatives. Net profit also increased by 16%, totaling US$897 million (DKK 6 billion).
Free cash flow reached USD 449 million (DKK 3 billion) due to the company’s strong performance. Continued investment in building new factories and expanding existing facilities and offices.
LEGO reported that in its sustainability efforts, 30% of all resin purchased in the first half of the year was mass balance certified, meaning that an estimated average of 22% of renewable and recycled materials were used in the production of LEGO bricks.
Much of LEGO’s success is due to LEGO’s continuous reinvention of itself to adapt to changing consumer preferences and business needs. Its owned retail business, including physical stores and e-commerce, continues to grow, and its footprint enhances brand awareness, thereby generating sales for other retailers. In addition, the company is attracting new customers of all ages by offering innovative themes beyond the building and construction aisles, including high-end vehicle models and plants.
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