The LEGO Group says its financial performance in the first half of 2022 was ‘above expectations’, as consumer sales grew by 13% and revenue climbed to £3.25bn.
In the six months leading up to the LEGO Group’s price increases – implemented in August and September – the company enjoyed significant sales growth in all markets, with the best results in Western Europe, the Asia-Pacific region and the Americas. Its overall revenue grew by 17%, but operating profit was stable at £951m, as the LEGO Group continued to invest in ‘strategic initiatives’.
Among those were expanding its manufacturing capacity with a new carbon-neutral factory in Virginia; growing its global digital team by nearly 40% (as well as opening a new digital hub in Copenhagen); and opening 66 new LEGO Stores worldwide. Net profit was therefore also roughly equal to the same period in 2021 at £746m, while free cash flow dropped from £698m to £458m.
That dip is also attributed in part to offsetting inflation on raw materials, energy and freight. It’s the press release’s only allusion to its recent price increases, which the LEGO Group has already stated were due to ‘increased raw material and operating costs’.
“We got off to a strong start in 2022 and are very satisfied with our performance, which landed above expectations after an exceptional 2021,” said LEGO Group CEO Niels B. Christiansen. “Despite global uncertainties, we continued to deliver higher consumer sales and double-digit top line growth, driven by demand for our strong portfolio and execution by our amazing team.
“Across the world, we celebrated our 90th anniversary and are grateful that after nearly a century LEGO play remains relevant and continues to inspire families and children.”
The LEGO Group says its 2022 portfolio is ‘the largest on record’, with top-performing themes including Star Wars, Technic, LEGO ICONS and CITY, but is still managing expectations for growth in the rest of the year – even while (or perhaps because) retail prices of some its sets have soared by up to £40 in the UK, and up to $70 in the US.
“For the second half of 2022, we continue to see strong demand for our products,” Christiansen added. “Longer-term we expect top line growth to normalise to more sustainable levels. We will also continue to reinvest in our business and accelerate initiatives such as product innovation, digitalisation, production capacity, our retail network and sustainability to maintain momentum and deliver sustainable growth in the long-term.
“These significant investments will position us well in the future to bring learning through play to more children around the world.”