LEGO reports ‘strong growth’ in 90th anniversary year, with 12% bump in sales

The LEGO Group has announced its financial results for 2022, revealing sales jumped by 12% in its 90th-anniversary year.

Citing a ‘diverse portfolio’ and ‘investments in strategic initiatives’ for the company’s continued growth, the LEGO Group’s CEO Niels B. Christiansen said the momentum seen in previous years has not slowed down. In 2021, revenue grew by 27%, and sales climbed by 22%; in 2022, revenue has increased by 17%, while sales have grown by 12%.

That’s a steadier increase post-pandemic, but still ahead of the wider toy industry. Rival Mattel began implementing a ‘cost-savings program’ earlier this year, laying off dozens of staff, while Funko is currently busy liquidating $30 million of unsold Pop! figures. The LEGO Group, meanwhile, spent 2022 opening 155 new LEGO Stores, expanded its factory operations and saw its net profit jump by 4%.

LEGO Store Zurich Interior

“I am very satisfied with our performance,” said Christiansen. “We achieved double-digit top-line growth and landed the year beyond expectations on the back of exceptional growth last year, and despite challenging market conditions. This was due to our relevant brand, a fantastic, diverse portfolio, inspiring shopping experiences and outstanding execution from our teams.”

Here are the major numbers: sales increased by 12% in ‘all major market groups’, with particularly strong growth in the Americas and Western Europe (this is the first time in a while China hasn’t been singled out as a major growth area); revenue increased by 17% to DKK 64.6 billion (£7.7 billion); operating profit increased by 5% to DKK 17.9 billion (£2.1 billion); net profit increased by 4% to DKK 13.8 billion (£1.6 billion); and free cash flow decreased by 28% to DKK 9.3 billion (£1.1 billion).

The LEGO Group says that drop was ‘driven by increased capital investments in areas such as production capacity’. To better keep up with demand (and improve inventory levels worldwide), the company has started expanding three of its factories, and in 2022 also broke ground on a brand new factory in Vietnam. It’s also announced plans to build a new carbon-neutral factory in the US ‘to meet future demand in the Americas’.

LEGO Vietnam Factory featured

Any fears of that demand tailing off as normality returned in the wake of the pandemic – as has seemingly happened to Funko – will be mitigated to an extent by the growth seen in 2022, even if it isn’t quite at the levels we saw in 2020 and 2021.

Other investments by the LEGO Group have also contributed to the drop in free cash flow, which the company says will continue in 2023. “The momentum we have seen during the past years continued in 2022,” Christiansen added. “It was driven by the investments made during this time which are both paying off now and establishing a foundation for long-term, sustainable growth.

“We plan to accelerate investments in strategic initiatives in the coming years to build long-term relevance and growth of our brand.”

The LEGO Group expects growth to still outpace the global toy market this year, with modest predictions of single-digit revenue growth in 2023.

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Chris Wharfe

I like to think of myself as a journalist first, LEGO fan second, but we all know that’s not really the case. Journalism does run through my veins, though, like some kind of weird literary blood – the sort that will no doubt one day lead to a stress-induced heart malfunction. It’s like smoking, only worse. Thankfully, I get to write about LEGO until then. You can follow me on Twitter at @brfa_chris.

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