Lego is no ordinary toy manufacturer. If it were, the company would have to contend with the economic downturn that is affecting industry giants such as Hasbro and Mattel.
Instead, the world’s largest toy maker announced on Wednesday that its net profit rose 16 percent in the first half of the year, allowing it to make up ground in an otherwise weak market.
The Danish company said its revenue rose 13 percent to 31 billion krone ($4.6 billion) in the first half, while net profit rose to 6 billion krone.
“This growth was driven by the Lego Group acquiring a larger stake,” CEO Niels Christiansen said in an interview with AFP.
The results mark Lego’s strongest first half ever and underscore the company’s firepower amid an industry downturn. Andersen highlighted that Lego’s cumulative growth over five years was 85%, while the toy market only achieved 11%.
The group, best known for its plastic building blocks and whose name is an abbreviation of the Danish word “play well” (“Leg godt”), launched around 300 new sets in the first half of 2024 and continued to see higher sales of franchises such as Star Wars and Harry Potter.
The company also recently announced that it is partnering with Nike to jointly develop products and content.
Lego wants to repeat the success of its digital partnership with Epic Games. FortniteAs more people turn to forms of “hybrid gaming,” the company wants to capitalize on that by launching its apps for kids, the CEO said during the conference call.
The Danish family-owned company experienced a surge in interest during the pandemic when people had to stay at home and was able to build on that success. A key factor in Lego’s success was its ability to make toys for all ages and interest levels, from young children to adult enthusiasts. This was the company’s strength, alongside its attention to detail and quality.
“This excellent demand was due to our strong and diverse portfolio,” said CFO Andersen.
Sales grew most strongly in Europe and North America, but more slowly in China. Nevertheless, the company opened 41 new stores worldwide, including its largest location in Southeast Asia in Jakarta, Indonesia.
“There is no market in which we are not looking for new business,” Christiansen said during the conference call.
Lego also celebrated progress in its sustainability efforts in the first six months of 2024.
About a third of the resin used in its building blocks is made from a mix of fossil fuels and renewable or recycled materials, bringing the company one step closer to its goal of making all of its products from more environmentally friendly sources by 2032 at no extra cost to consumers. Lego has committed $1.4 billion to advance this goal over the four years to 2025.
