Gifts / Sports & Toys

On September 28, local time, the world-renowned building block brand Lego announced the report card for the first half of this year. With the gradual lifting of epidemic isolation measures around the world, the popularity of physical channels has rebounded, and the group's total retail sales increased by 36% year-on-year. Various financial data have reached historical highs, further consolidating its position as the world's largest toy manufacturer.

▌Main points of performance

Revenue of 23.036 billion Danish kroner (about 3.6 billion US dollars; 23.421 billion yuan), a year-on-year increase of 46%;

Operating profit was 7.951 billion Danish kroner (approximately RMB 8.84 billion), which more than doubled (104%) from last year's 3.899 billion Danish kroner (approximately RMB 3.964 billion);

Net profit reached 6.322 billion Danish kronor (approximately US$1 billion; RMB 6.428 billion), a 140% increase from the 2.634 billion Danish kroner (approximately RMB 2.678 billion) in the same period last year.

It needs to be emphasized that in the first half of 2020 when the epidemic just broke out, Lego’s revenue still achieved a year-on-year growth of 7%. It can be seen that this year’s outstanding results are not due to the low calculation base in 2020, but rather growth of.

Comparing the data of two other toy giants of similar size, Lego’s “terror” profitability can also be seen: Hasbro’s revenue in the first half of the year was US$2.437 billion, and its net profit was less than US$100 million. Although Lego’s operating income is only 50% higher than Hasbro, its net profit is more than 10 times higher. Mattel lost US$118 million in the first half of the year, compared with US$317 million in the same period last year. The loss narrowed by 63%. If the momentum continues, Mattel is likely to turn losses into profits in the second half of this year.

The reason for achieving such a good result, Lego Group CEO Niels B. Christiansen summarized the following points: The main reason is the strong market demand for the company's products. In addition, there are also the company's efforts to coordinate the supply chain: factories maintain uninterrupted production, and this year's physical channels have rebounded due to the relief of the epidemic.

▌Year-on-year growth rates across the world have reached double digits

It is reported that the global market covered by Lego has very strong market demand in the first half of this year. Thanks to the group's diverse market portfolio that can attract consumers of all ages, markets around the world have achieved more than double-digit growth rates. Outstanding product lines include Lego City, Lego Star Wars, Lego Harry Potter, Lego Creative Master and Lego Mechanics.

▌The omni-channel investment has achieved remarkable results

The LEGO Group's investment in omni-channel has achieved good returns in the first half of this year. The total sales of e-commerce platforms (including self-operation and cooperation) increased by 50% year-on-year. In the second half of the year, the group will accelerate the company's long-term digital transformation investment. To this end, Lego currently has 4 digital centers around the world, located at the headquarters in Billund, Denmark and Copenhagen, London, England, and Shanghai, China.

The exploration in new retail has also gone further. In June of this year, it was the first to open the world's first immersive experience flagship store on Fifth Avenue in New York. In the second half of this year, it will introduce about 60 similar stores worldwide.

▍New York New Retail Flagship Store

In addition, more than 60 Lego brand stores were opened in the first half of this year, of which more than 40 are in China. As of June 30, the total number of Lego retail stores reached 737, of which 291 are located in China.

At present, Jiaxing, Zhejiang has the only LEGO Group production plant in Asia, and all the 5 LEGO flagship stores in Asia are currently in the Chinese market. On October 1, the sixth LEGO brand flagship store in Mainland China will open in Guangzhou Grandview Plaza. The Lego theme parks in Shanghai and Shenzhen have also started construction this year... All of these show the Lego Group's emphasis on the Chinese market.

Huang Guoqiang, senior vice president of the Lego Group and general manager of the China region, said in an interview with China News Agency that this year, the Lego Group will have 300 retail stores in China, and the future market layout in China will further tilt to second and third-tier cities.

▌Sustainable projects are progressing smoothly

It is learned that in order to adapt to the global environmental sustainability trend, Lego has also made progress in its efforts to remove plastics and reduce emissions. After testing more than 300 materials, the Group launched Lego bricks made from recycled disposable PET plastic bottles in June to reduce dependence on non-renewable raw materials. In 2022, the plastic used in the product box will be bagged, and all paper bags will be used instead. And plans to achieve 100% use of sustainable environmentally friendly materials in packaging by 2025.