Following the drop in profits in 2017, the Group is now reporting more positive results again. Above all, the Chinese market and the digital business are growing.

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The Lego Group sees itself confirmed in its realignment. The corporation has increased its sales figures by one percent. This increase in sales at Lego is the right signal after the strong decline in sales last year, according to Niels B. Christiansen’s, CEO of the Lego Group: “Our plan for 2018 is to stabilize the business and invest in sustainable growth. The interim results show that we are on the right track and the first successes confirm our undertaking.” The good sales of the Technic, Ninjago, Creator and Classic product lines in particular contributed to these successes. Lego City and Lego Star Wars also continue to be among the successful product lines of the Lego Group.

Lego sales growth but lower sales in North America

However, the sales increase at Lego cannot hide the challenging environment for the Group. The strong changes in the retail landscape have had an impact on the business result. These include, for example, the closure of Toys“R“Us in the USA, Great Britain and Australia. Sales revenue in North America declined slightly. Excluding currency effects, Lego recorded low single-digit sales growth in Western Europe. Lego continues to grow strongly in China, where sales were in double digits in the first six months of the year. Total operating profit amounted to 4.2 billion Danish crowns (around 560 million euros). Compared to 4.4 billion Danish crowns in 2017, this represents a decline of four percent. Lego sees the weaker US dollar as the cause.

Two new flagship stores will open shortly in China

The Group has aligned its strategy with market figures. While CEO Christiansen will continue to work closely with retail partners, he also implies the future of sales: “We are well positioned to take advantage of new opportunities to delight consumers and buyers across all channels. In particular, the growth from activities in the digital and e-commerce platforms is very encouraging.” The Group is also taking account of the growing popularity in China and is expanding there. A new flagship store is to be opened in Shanghai this fall. A second store is to follow in Beijing at the beginning of 2019. The partnership with Tencent, one of China’s largest online companies, is also to be further expanded.

Lego goes digital

At the same time, Christiansen announces that he will continue to develop Lego in the direction of digitization. One example is Lego Life. On this digital platform, children can share their Lego creations. The offer is growing and now consists of more than four million users in almost 30 countries. CEO-Christiansen plans more: “The Lego gaming experience is about the endless possibilities the Lego brick offers, and we will always focus on that. But we also see how much potential there is to bring the brick to life in a new way, for example by combining digital and physical play. For example, we recently introduced Lego Duplo trains and a Lego Batmobile, which offer new and exciting building and playing possibilities through an app.”

 

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Link: Die Lego Gruppe hat die Finanzergebnisse für das erste Halbjahr 2018 veröffentlicht

Image: Lego

//KH