The LEGO Group’s CEO, Niels B Christiansen, has explained the “sustainable growth” that the company wants to continue going forward.
As the LEGO Group published the latest annual report today, it made for more comfortably reading than last year’s publication. While profit is still down on 2016, it is up on last year, with sales and revenue growing by around 4%.
In the past, the LEGO Group achieved double-digit growth year on year, quickly becoming a significant global competitor to toy giant Mattel. Going forward, the LEGO Group is not expecting such sharp increases in growth, with CEO Niels B Christiansen managing expectations.
“We set out last year to stabilise and get back to growth and start to invest in future long term and growth and that’s what we delivered,” he told CNBC in an interview. “We also started to make investment in innovation, in infrastructure in the company to sustain a longer term growth trajectory. So that is also what we expect is we can keep delivering these single digital growth numbers.”
Despite the closure of Toys R Us in many countries around the world, the LEGO Group increased its market share during 2018. “That’s one of the headwinds that the entire industry has seen throughout 18, and we talk about having bucked the trend and having taken market share – and that is despite those changes in the retail landscape around Toys R Us or even Top Toy in the area of the world I am standing in right now.”
Christiansen sees toy retailers with physical stores as an important part of the retail mix, even as online shopping channels continue to grow. “Still today, these toy specialist retailers, they make up one third of the entire industry, and they are quite uniquely positioned to physically display and show the play experience. A kid coming into a store, getting the physical box in the hands, or sitting down at the play table and playing with bricks – that is very powerful.”