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Successful LEGO strategy delivers continued strong growth

In 2012 the LEGO Group increased its revenue by 25% to GBP 2,549 million – nearly triple the sales of 2007. This represents the fifth consecutive year in which the LEGO Group delivered year over year revenue growth in excess of 15%.

Key facts from the LEGO Group’s annual report for 2012, which was published today:

• The year’s operating profit increased to GBP 866 million against GBP 660 million in 2011, an increase of 40%.
• The operating margin increased to 34% from 30% in 2011.
• The year’s net profit increased to GBP 611 million against GBP 484 million in 2011.
• The revenue increased by 25% to GBP 2,549 million against GBP 2,181 million in 2011. In local currency (i.e. excluding the impact of foreign exchange changes) revenue increased 20% year over year.
• The net cash generated from operating activities was GBP 680 million against GBP 430 million in 2011.
• In 2012 the Group paid GBP 208 million in corporate income taxes.
The LEGO Group reporting currency is DKK. Conversion from DKK to GBP is based on an annual average currency rate (however conversion of net cash generated from operating activities is based on year-end currency rate) in 2012 and 2011 respectively.

”It is a highly satisfactory result and better than we expected at the beginning of the year. This is due, first and foremost, to the fact that we were able to develop and launch products that children all over the world have put at the top of their wish lists in 2012,” said Jørgen Vig Knudstorp, Chief Executive Officer of the LEGO Group.

More than 60% of the LEGO Group’s sales are new launches every year.

“As a consequence we have huge demands on our development & supply processes. Year after year, we must be able to predict what will capture the interest of children and deliver this in relevant LEGO products – and in 2012 we succeeded,” said Jørgen Vig Knudstorp.

Production close to core markets
The large demand for LEGO products in 2012 created significant challenges for the LEGO Group’s production, but the company’s strategy of locating its factories close to the core markets in Europe and North America showed its strength.

”Having our packing facilities located geographically close to our core markets and continuously optimising and improving production, means that we can better respond to demand from customers and consumers,” explains Bali Padda, Chief Operating Officer.

Expectations for robust growth in 2013
In 2013 the LEGO Group expects that the global financial development will continue to impact the toy market in general. The financial situation in western and southern parts of Europe, and in North America, will continue to be under pressure, while Asia and eastern parts of Europe are expected to experience robust growth.

In 2013 there are high expectations for the LEGO Group’s major launch – LEGO Legends of Chima – a play theme that takes place in a fantasy world populated by mythological animal tribes.

Based on the LEGO Group’s momentum from 2012, it is therefore anticipated that LEGO sales will continue to grow in 2013, but the challenging global economic situation will result in lower growth rates in 2013 than experienced in 2012. This does not change the fact that the LEGO Group expects a satisfactory result for the full year.

Annual report of 2012 here.