Sales growth has continued for the LEGO Group although profits dipped in the first half of 2016 due to increased investment. Sales in America were flat, leading to new strategies being developed to revive growth in that market. Sales in Europe continued to grow as they did in Asia. City, NINJAGO and NEXO KNIGHTS were credited as key sales drivers for the company.
- Revenue in the first half of 2016 increased by 10% compared with the same period last year measured in local currency (i.e. excluding the impact of foreign exchange rate changes).
- Revenue for the first half of 2016 increased by 11% in DKK to DKK 15,692m compared with DKK 14,142m for the same period last year.
- Operating profit (profit before financial items and tax) for the first half of 2016 was DKK 4,655m compared to DKK 4,607m for the first half of 2015, an increase of 1% year over year.
- Net profit for the first half of 2016 was DKK 3,489m compared with DKK 3,553m for the first half of 2015.
- Cash flow from operating activities was DKK 3,947m compared with DKK 4,349m during the first half of 2015.
Commenting on the financial result, LEGO Group President and CEO Jørgen Vig Knudstorp says:
“It is our ambition to reach many more children all over the world with fun and creative LEGO experiences and it is exciting for all of us to see that our products are loved and cherished by children globally. Maintaining double-digit growth year on year through more than a decade is a testament to the never ending possibilities that children find in LEGO play, and the result of the hard work of more than 18,000 LEGO colleagues around the world.”
The statement also highlighted investments that the company has been making, including
- The new factory in Jiaxing, China that is currently operating and will be complete in 2017
- An expansion of the factory in Monterrey, Mexico that will increase the variety of processes taking place there
- An expansions of the factory in Nyíregyháza, Hungary that will double the location’s capacity
- 3,500 new staff in the forts half of 2016, bringing the total employees to 18,500
Additionally, the company has been pushing further with sustainability investments, beating the 10% energy efficiency increase planned by achieving a 16% improvement. Plans for making the raw materials used for LEGO products were also highlighted in the press release:
During the first half of 2016, the LEGO Group has continued setting up the Sustainable Materials Centre, announced in 2015. The centre aims to deliver on the LEGO Group’s ambition of ensuring that all raw materials used for manufacturing LEGO products, including packaging, are sustainable by 2030. Approximately 70 of the expected 100 employees who will be working on this exciting challenge are now engaged in the project, and the building to house the Sustainable Materials Centre is currently being designed.