- Sustained Increase: Lego Witnesses Boost in Revenues and Profit Margins
Lego keeps seeing over 10% growth in earnings and revenue, enabling them to put money into projects that guarantee a prosperous future for play with their items. The surge in demand for Lego goods in the United States and Europe has caused Lego, a Danish plaything firm from Billund, to boost its income in the first half of 2024 compared to the same period last year by 13% to 31 billion Danish kroner (approximately 4.15 billion euros). Consumer sales climbed by 14%, while net income increased by 16% to 6 billion kroner (roughly 800 million euros), which is around a billion more than in the first half of 2023.
Lego has surpassed its competitors in the toy industry and increased its market share, as stated by the company. Simultaneously, the Lego Group has boosted its investments in strategic initiatives such as sustainability and digitization to encourage short-term and long-term growth. The rate of spending on such initiatives is set to speed up in the second half.
Lego has a powerful presence in pedestrian zones.
"We're really pleased with the outcome," Lego CEO Niels B. Christiansen told the German Press Agency. Despite the toy sector being stationary, the Lego Group has managed to secure market share worldwide. "We have a fantastic momentum, and the Lego brand is currently extremely potent," he noted. The extensive range of Lego products remains captivating for various age groups and interests, resulting in robust demand in the target markets.
As per the company, popular product series include Lego Icons, Lego Star Wars, Lego Technic, Lego City, and Lego Harry Potter. Around 300 new products were added to the selection in the first half alone.
Christiansen also emphasized that the growing number of Lego's physical stores, currently over 1,000 worldwide, is a success factor. While most other businesses have shut their stores and focused more on online shopping, Lego invests in both and can bring the entire Lego universe closer to consumers in the stores, Christiansen said. Although establishing such Lego Stores is initially costly, they operate effectively once established.
Christiansen mentioned that post-COVID-19 pandemic, it was astonishing to see that people worldwide wanted to shop in stores again. Initially, there was speculation about whether everything would shift to online shopping, but this trend reversed after the pandemic.
Germany remains a significant market for Lego. "It is one of the absolute key markets," said Christiansen. The state of the German market has been somewhat volatile over time, but looking at Lego's development over the past five years, he is extremely satisfied.
Christiansen also pointed out that Lego has made significant progress in increasing the ratio of sustainable materials in its products. As of the first half of 2024, 22% of a Lego brick is no longer derived from oil. The brick feels the same in the hand, has the same quality and safety, and has the same durability, Christiansen said.
The transition towards a more sustainable Lego brick has taken ample time and resources, but it's something the Lego CEO is particularly proud of, he hinted. "I'm more proud of this than even our financial results: We've demonstrated that you can achieve meaningful progress with sustainable materials, even for high-quality products like a Lego product."
The European Union, being a significant market for Lego, has contributed to the company's robust demand in the first half of 2024. The Lego Group's strategic investments in sustainability and digitization, which are key initiatives of the European Union, have also aided in securing market share worldwide.
