Last week, the LEGO Group shared its performance report from the first half of 2021. Consumer sales grew 36%, revenue grew 46% to DKK 23 billion, operating profit grew 104% to DKK 8 billion, and net profit grew 140% to DKK 6.3 billion. Also, free cash flow was strong at DKK 5.8 billion, and the company made market share gains globally, as well as at their largest markets. With the LEGO Foundation, donations of DKK 1.5 billion went to support children’s development via learning through play. Details below.
Billund, September 28, 2021: The LEGO Group today reported first-half earnings for the six months ending June 30, 2021. Revenue for the period grew 46% to DKK 23 billion compared with the same period in 2020. Consumer sales grew 36%, outpacing the toy industry and driving market share growth globally and in all major markets.
Operating profit was DKK 8 billion, an increase of 104% compared with the first half of 2020, despite an ambitious program of strategic investments to support growth in the long term.
The LEGO Group CEO, Niels B. Christiansen said: “We are very pleased with the progress we made across all areas of the business during the first half. Our performance was driven by strong demand for our portfolio, which has attracted new builders to the LEGO brand. Our year-on-year growth benefited from fewer COVID-related restrictions compared with 2020 as our factories operated uninterrupted and the majority of retail stores re-opened. We also saw the benefits of multi-year investments in e-commerce, product innovation, and a global supply chain network. Our strong financial performance now allows us to accelerate strategic investments in sustainability and digitalization. We are especially grateful for our amazing team. Despite all the challenges and uncertainties of the past six months, they worked extraordinarily hard to bring play to more families around the world.”
ALL MARKET GROUPS GREW DOUBLE DIGITS
All market groups delivered double-digit consumer sales growth, which was driven by excellent execution and a diverse portfolio that appealed to builders of all ages and interests. Top-performing themes included LEGO City, LEGO Star Wars, LEGO Harry Potter, LEGO Creator Expert, and LEGO Technic.
Operating profit more than doubled despite significant investments in major long-term initiatives such as a new retail store format, e-commerce capabilities, an enterprise-wide digital transformation, and efforts to make products and operations more sustainable. Operating profit was also offset by increased freight and raw material costs.
Christiansen said: “As we look ahead to the second half of 2021, we continue to see strong demand for our products. Longer-term, we expect top-line growth to stabilize to more sustainable levels as people return to pre-pandemic spending patterns. This trend, combined with our plans to accelerate re-investments into the future of the business, is expected to result in more normalized profit levels moving forward. Our investments are designed to create a sustainable future for the business and advance our mission to have a positive impact on children and the world they will inherit. Digitalization and sustainability will have an especially critical play in this, and we are extremely pleased with the progress our teams are making in these areas. We will also continue to develop our play experiences and brand expression so that LEGO play is diverse and welcoming for all.”
BUILDING A SUSTAINABLE FUTURE
The company made progress against its ambition to create more sustainable products. In June, it unveiled a prototype brick made from recycled single-use PET bottles, an important step in reducing its reliance on non-renewable raw materials. It also completed a successful trial of paper bags designed to replace single-use plastic in boxes and will begin phasing in the new paper packaging from early 2022. This development ensures the Group remains on track to make all packaging 100% sustainable by 2025.
MEMORABLE BRAND EXPERIENCES ONLINE & IN-STORE
The LEGO Group’s investments in its physical and digital retail channels paid off in the first half. E-commerce sales across our own and partners’ platforms grew 50% compared with the same period last year.
The company also launched a new retail store format, which will be introduced to around 60 stores during the second half of 2021. The format was unveiled at the opening of a new flagship store in New York City in June and is designed to create immersive, playful, and memorable brand moments.
The LEGO Group continued to expand its global retail footprint opening more than 60 new LEGO branded stores in the first half of 2021, more than 40 in China. This brings the total number of LEGO retail stores as of June 30, to 737, with 291 of those located in China.
During the second half of 2021, the company will accelerate investments in a multi-year, enterprise-wide digital transformation. New digital platforms, products, and ways of working will support a long-term ambition to digitally enable the LEGO brand to create fantastic experiences for children, shoppers, partners, and employees. Digital talent hubs were opened in Shanghai and Copenhagen in addition to the company’s headquarters in Billund and hub in London to support this effort.
POSITIVE IMPACT ON FUTURE GENERATIONS
The company continued to help children around the world develop via learning through play. More than 1.2 million children benefited from product donations and local community engagement activities.
Year to date, the LEGO Group with the LEGO Foundation, which owns 25% of the LEGO Group, pledged more than DKK 1.5 billion (US$235 million) in donations to agencies that support children and families, especially those in need. This included DKK 940 million (US$150 million) for COVID relief with a focus on children’s health and development, DKK 140 million (US$23 million) to support children’s education, DKK 100 million (US$15.7 million) to agencies working with families impacted in Haiti and Afghanistan, and funding for programs which advance learning through play in communities where the LEGO Group operates.
Christiansen said: “The single biggest motivating force for everyone at the LEGO Group is knowing we can have a positive impact on future generations. Whether it’s in times of acute need or helping a child develop new skills that will last a lifetime, LEGO play and the LEGO brand can, and will, make a difference. We are proud to be in this position and are committed to doing all we can to continue to inspire and develop the builders of tomorrow.”
What do you think? Did you notice any interesting details from LEGO’s half-year report? Feel free to share your thoughts and discuss in the comment section below!
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