Lego Bricks Hot: Company Reports 21% Revenue Growth

The Lego Group experienced a strong start to the year, with revenue increasing by 21% and after-tax profit soaring by 32% in the first half compared to the previous year. CEO Niels Christiansen described the period as better than expected across the board, attributing the success not to a single market or product, but a general positive trend.

Globally, Lego's revenue reached 5.6 billion euros, with profits around 1.15 billion euros. The company capitalized on licensed products, including sets tied to the FIFA World Cup and Formula 1. In total, Lego introduced approximately 330 new sets, featuring items like a 200-euro replica of the World Cup trophy. Sales were also boosted by parents seeking tangible alternatives to screen time for their children, a demand Lego met with its established brand.

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The first half of the year was better than expected across the board. It's not about a specific market, a specific product, theme or thing.

However, Lego faces two significant challenges: oil and China. As plastic is a key component, rising oil prices, potentially influenced by global conflicts, pose an indirect threat. Christiansen noted that while oil prices affect the company, Lego mitigates this by sourcing non-fossil-based raw materials and has managed the situation relatively well. The company is also actively transitioning towards renewable raw materials for its bricks and has intentionally kept prices stable despite inflationary pressures.

In China, Lego's growth has been slower due to sluggish private consumption, and the company has not yet achieved the same market penetration as in Western countries. This contrasts with the overall robust performance driven by other markets and product lines.

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Oil prices affect us, but we buy a lot of raw materials that are not fossil-based and therefore do not correlate with the oil price. We have actually done quite well.