LEGO Group has revealed a 1% growth in consumer sales and an operating profit growth of 4%. Despite revenue for the period being seen as “flat” when compared to 2017, the group says the result signals “healthy inventory levels”.
According to group CEO Niels B Christiansen, this was due to strong execution by the brand’s market teams and “compelling innovation”. This includes the successful launches of products such as its Jurassic World range, Creator Roller Coaster and Technic Bugatti Chiron. The latter is a collaboration with the Volkswagen owned car brand and recently saw the unveiling of a life-size drive able model made entirely of LEGO bricks called LEGO Technic elements. Christiansen added that the results show that the group is on track to stabilise the business and create long term growth.
“While we are encouraged by the progress we are making, there is more to do, and it will take time to return to sustainable growth,” Christiansen added.
Other top-performing product themes for the brand include LEGO Technic, LEGO Ninjago, LEGO Creator, LEGO BOOST and LEGO Classic. The group’s LEGO City and LEGO Star Wars products also continued to show strong performance.
LEGO also highlighted the growth of LEGO Life its digital platform which allows children to share their LEGO creations in a positive and supportive social media environment. Currently, the platform has more than four million users across nearly 30 countries.
Operating profit for the company was at DKK4.2 billion, compared with DKK4.4 billion in 2017, driven by the impact of the weaker US dollar. Moving forward, the group will reinvest savings from organisation adjustments to product and experience innovation and channel development. It added that it is also encouraged by growth from activities across digital and e-commerce platforms.
“We will continue to work closely with our retail partners and in LEGO-branded retail channels to create great experiences for consumers whenever and wherever they want to shop or play,” Christiansen added.
Continuing to eye China
In China, the brand continued to perform strongly, with revenue growing in double-digits in the first six months of the year. This is compared with markets such as North America which declined slightly due to changes in the retail landscape, and western Europe which saw low single digit growth. Overall, performance in established markets was stable compared with the same period in 2017.
On top of expanding its presence in strategic markets, the brand looks to open two flagship stores in China in the coming year, one in Shanghai in September 2018 and a second in Beijing in early 2019.
The statement added that LEGO will also continue to leverage its partnership with Tencent, following the launch of its video channel in May. This will include a games product launch in the second half of 2018.