The LEGO Group has seen a strong start to the year, with product sales increasing significantly and profits returning to the level they were at two years ago, despite the company continuing to invest in new factories and sustainability initiatives.
Today, the LEGO Group announced the company’s performance for the first half of 2024. The company’s revenue increased by 13% to DKK 31 billion (£3.5 billion) compared with DKK 27.4 billion £3 billion).
“We are very pleased with our strong performance in the first half. We delivered double-digit growth on the top- and bottom-line and made significant progress on increasing the amount of sustainable materials used in our products,” said CEO Niels B. Christiansen.
“Our portfolio continues to be relevant for all ages and interests, and this is driving significant demand across markets. We used our solid financial foundation to further increase spending on strategic initiatives which will support growth now and in the future to enable us to bring learning through play to even more children.”
In the wider toy industry, sales declined by 1%, but for the LEGO Group, sales increased by 14%. That means that of all the toys sold in the first half of 2024, more of them were LEGO products.
“So far this year, our top performing themes have been a mix of homegrown and licensed themes, including LEGO Icons, LEGO Star Wars, LEGO City, Lego Technic and LEGO Harry Potter,” Niels said in his presentation for the media. “The LEGO Botanical Collection proved very, very popular. We’re maximizing creativity in our portfolio, around half of which is actually new every year. And that’s the same here in the first half. In the first half, we actually launched 297 new sets, proving the endless possibilities of the LEGO System in Play, and of course, the ongoing creativity of our designers.”
Operating profit increased 26% compared to the same period last year, to DKK 8.1 billion (£914 million). That is higher than in 2021, when the company saw sales increase dramatically as people were kept at home due to restrictions in place to prevent the spread of coronavirus. Net profit grew 16 percent to DKK 6.0 billion (£677 million) compared with DKK 5.1 billion (£575 million) in the first half of 2023.
The LEGO Group is continuing to invest as the company seeks sustainable growth. Over the past few years, the digital infrastructure has been expanded and improved to support the ever-growing organisation.
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As part of the company’s digital offering, the LEGO Group owns a stake in Epic Games, the developer and distributor of Fortnite. LEGO Fortnite launched last year and sets inspired by Fortnite games are launching in October.
“We continue to expand the LEGO play experiences on Fortnite with the launch of LEGO Islands and a series of kid and family friendly experiences,” said Niels. “We will bridge digital and physical play with the release now on the first LEGO Fortnite sets here in October of this year. Since LEGO Fortnite launched in November last year, it has engaged over 83 million players.”
Investments in physical factories and distribution centres continue too, with facilities in Vietnam and Virginia, USA under construction and factories in Mexico, Hungary and China expanding.
Niels also highlighted that the cost of using more expensive sustainable materials is not being passed on to consumers. “We’re committed to making products from renewable and recycled materials by 2032 and we have tested over the last year more than 600 materials, with some success.
“In the first half, we made significant and meaningful progress with mass balance, continuing to increase the amount of resin we purchased under the certified mass balance principle to now 30%. This means that an estimate of 22% of the materials that have gone into producing LEGO bricks in the first half come from renewable and recycled sources, replacing virgin fossil or oil-based materials. So as we grew the business in the first half by 13% we actually purchased less virgin fossil based material, so we had to purchase less oil based materials despite growing by 13% – that’s a fantastic achievement and a real milestone on our journey towards 2032.”