The LEGO Group is celebrating a 13 per cent growth in revenue for the year versus 2019, hitting DKK 43.7 billion (almost $7bn) in its year end 2020 results. The Danish toy maker has seen consumer sales grow an impressive 21 per cent over the same period, despite the challenges faced by the pandemic.
LEGO’s CEO has attributed the success to the ‘passion, creativity, and resilience’ of its team who has “worked tirelessly to keep the world playing” over the course of the challenging year.
As a result, LEGO has seen operating profit hit DKK 12.9 billion, an increase of 19 per cent compared to the year prior, while the brand’s global market share grew both across the world and in its largest 12 markets.
Consumer sales in all market groups grew double digits, with especially strong growth in China, the Americas, Western Europe and Asia Pacific.
Growth in operating profit was driven by strong sales and offset by strategic investments and increased distribution costs associated with shipping products globally following the temporary, enforced closure of manufacturing sites in Mexico and China. Net profit grew 19 percent to DKK 9.9 billion, while free cash flow was strong at DKK 11.5 billion.
CEO Niels B Christiansen said: “For the past two years we’ve made large-scale investments in initiatives designed to support long-term growth. In 2020, we began to see the benefits of these, especially in e-commerce and product innovation.
“We will further increase investments during the coming year with a continued focus on innovating play, our brand, digitalisation and developing an omnichannel retail network.”
Some of the best selling themes across the LEGO portfolio for 2020 include LEGO City, LEGO Technic, LEGO Star Wars, LEGO Friends, and LEGO Classic. Meanwhile, the group has seen audiences expand in age demographics, appealing to a cross-generational fan base.
LEGO Super Mario – which blends digital and physical play – was released in August 2020 and became one of the company’s most successful theme launches. Investments in products that blend physical and digital play will continue in 2021 with this month’s release of LEGO VIDIYO which taps into music and play.
Christiansen said: “We know children and adults love the LEGO brick and that will always be the heart of our business. But today’s children are growing up in a digital world and they effortlessly blend online and physical play.
“We are excited to offer them safe, exciting play experiences that are fun and offer new ways to learn and be creative.”
The LEGO Group also continued to invest in its brand through its global brand campaign Rebuild the World and in 2020 was named the world’s most loved brand.
On top of this, the company’s omnichannel retail system has supported growth in its partners’ and its own channels as physical stores were forced to temporarily close to prevent the spread of COVID-19.
The number of visits to LEGO.com doubled compared with the prior year, while the company continued its global store expansion programme. During 2020, it opened 134 new retail stores, including 91 stores in China, bringing the total number of LEGO branded stores globally at the end of 2020 to 678.
The company plans to open a further 120 stores in 2021, 80 of those in China.
“People are looking for unique and memorable physical brand experiences, so we will continue to invest to expand our global retail footprint, as well as elevate our instore shopping experiences,” continued Christiansen.
“This approach strengthens our brand, creating a positive impact across all channels. We will also further build our e-commerce capabilities to support online shopping on our own and our partners’ platforms.”
The LEGO Group concluded its financial report with an update on its initiative to positively impact on the future of play. Last year, the firm detailed that up to $400 million will be invested over three years in sustainability initiatives, focusing on learning through play, reducing its environmental impact, and ensuring inclusive workplaces.
The company has begun trials of paper bags to replace single-use plastic packaging in its products and announced a commitment to reducing its absolute carbon emissions by 37 per cent by 2032.
During the year, it also partnered with a range of organisations to support its efforts and will work with UN Women to empower women in all of its workplaces, as well as the Ellen MacArthur Foundation to explore circular business models.
Christiansen concluded: “The challenges facing this generation of children are urgent and complex and must be addressed through a collective effort by companies, governments and experts.
“We look forward to joining forces with children, parents, colleagues and partners to help shape a bright future for generations to come.”