Management / Lego builds up sales and profits

Lego builds up sales and profits

Lego has continued to capture the imagination of children after figures today showed the world's best-selling toy firm boosted sales and profits.


Helped by interest linked to the Warner Brothers film The Lego Movie, the Danish toymaker saw profits lift 15 per cent to 7 billion Danish krone (£686 million) last year. Sales rose by 13 per cent to 28.6 billion Danish krone (£2.8 billion).

The privately-owned firm, which overtook Barbie doll-maker Mattel to become the world’s best-selling toy firm last year, added that sales were boosted by strong demand for its Lego City, Star Wars and Technic lines.

It said it sold 62 billion Lego elements last year, amounting to 102 Lego bricks for every person in the world.

Amid double digit sales growth in the UK, France, Russia, China as well as its largest market, the US, the company estimates that more than 85 million children across the world played with Lego during 2014.

The group, which employs over 14,700 staff, added that it had no product recalls for the fifth year running.

Chief executive Jorgen Vig Knudstorp said: “Our ability to innovate and reinvent the Lego play experience every year is vital for our success.”

It added its operating margin was 33.9 per cent last year.

Independent analyst Louise Cooper said: “That is an extraordinarily high profit margin for a business that essentially extrudes commoditised coloured plastic into different shaped bricks.

“A brilliant company to make such a high profit margin from making basic plastic shapes.”

The firm said its three best selling Lego sets last year were Police Station, Mindstorm and Heartlake Shopping Mall.

The group said it expects continued sales growth in 2015.

The Lego business was founded in 1932 by Ole Kirk Kristiansen. The company passed from father to son and is now owned by Kjeld Kirk Kristiansen, a grandchild of the founder.

The name is an abbreviation of the two Danish words ”leg godt”, meaning ”play well”. The brick in its present form was launched in 1958.

Photo from the Press Association


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