Not just for kids: Lego concludes a strong first half with a 21% jump in revenue
Lego reported a 21% revenue increase for the first half of the year, reaching 42 billion Danish krone. The growth is driven by strong sales of new sets, the launch of the Smart Play platform, and key sports partnerships.
Lego, one of the world's largest toy manufacturers, reported a 21% jump in revenue in the first half of the year, against the backdrop of strong sales for botanical sets, Formula 1, and collector sets. For the first six months of the year, the Danish company reported revenue of 42 billion Danish krone ($6.6 billion).
Operating profit climbed by 22% compared to the same period last year to 10.9 billion krone ($1.7 billion), and net profit rose by a third to 8.6 billion krone. During the period in question, the company launched the Smart Play platform — a new technology that includes sensors on the bricks that react to movement, make sounds, and light up. Due to this expansion into technology, Lego tripled the number of software engineers it employs. Furthermore, the company officially announced its collaboration with Pokemon and expanded its presence in the sports world through partnerships with Formula 1 and FIFA.
"The new partnerships also bring us those who until now were not excited by Lego, CEO Niels Christiansen told CNBC. Therefore these partnerships helped us recruit new customers. We also saw that we are able to retain customers well, and we are selling more to existing customers."
In the first six months of the year, Lego launched 332 new sets, a record figure for the company. This is in parallel with the continued production of successful sets from previous years. It is also expanding its factories and recently opened a new factory in Vietnam, and expanded factories in China, Hungary, and Denmark. It is also building a new factory in the USA.
Lego offers sets in a variety of prices. Thus, for "Star Wars" fans, there is one set for $30 from the "The Mandalorian" series, as well as a more complex set containing 2,000 pieces and costing $250. Christiansen emphasized that despite the uncertainty in the macroeconomic environment, the company is experiencing good sales across the entire price spectrum.
"What is really nice is that we are popular among children today, and also among adults, he said. The fact that we are successful in both groups and can cover the entire world of customers and not just one group, is critical, in my opinion."
