Revenues at LEGO Group for the six months to July grew 46% to DKK23bn (£2.7bn) compared with the same period in 2020, as consumer sales grew 36%, outpacing the toy industry and driving market share growth globally and in all major markets.
Operating profit was DKK8bn (£0.9bn), an increase of 104% compared with 1H 2020, helped along by a growing investment in ecommerce and digital experiences that take users beyond just purchase.
This continuing investments in its physical and digital retail channels paid off in the first half. Ecommerce sales across our own and partners’ platforms grew 50% compared with the same period last year.
The company also launched a new retail store format which will be introduced to around 60 stores during the second half of 2021. The format was unveiled at the opening of a new flagship store in New York City in June and is designed to create immersive, playful and memorable brand moments.
The LEGO Group continues to expand its global retail footprint opening more than 60 new LEGO branded stores in the first half of 2021, more than 40 in China. This brings the total number of LEGO retail stores as of June 30, to 737, with 291 of those located in China.
During the second half of 2021, the company will accelerate investments in a multi-year, enterprise-wide digital transformation. New digital platforms, products and ways of working will support a long-term ambition to digitally-enable the LEGO brand to create fantastic experiences for children, shoppers, partners and employees. Digital talent hubs were opened in Shanghai and Copenhagen in addition to the company’s headquarters in Billund and hub in London to support this effort.
The LEGO Group CEO, Niels B. Christiansen says: “We are very pleased with the progress we made across all areas of the business during the first half. Our performance was driven by strong demand for our portfolio, which has attracted new builders to the LEGO brand. Our year-on-year growth benefited from fewer COVID-related restrictions compared with 2020 as our factories operated uninterrupted and the majority of retail stores re-opened.”
He adds: “We also saw the benefits of multi-year investments in e-commerce, product innovation and a global supply chain network. Our strong financial performance now allows us to accelerate strategic investments in sustainability and digitalisation.”
Christiansen continues: “We are especially grateful for our amazing team. Despite all the challenges and uncertainties of the past six months, they worked extraordinarily hard to bring play to more families around the world.”
The company made progress against its ambition to create more sustainable products. In June it unveiled a prototype brick made from recycled single-use PET bottles, an important step in reducing its reliance on non-renewable raw materials.
It also completed a successful trial of paper bags designed to replace single-use plastic in boxes and will begin phasing in the new paper packaging from early 2022. This development ensures the Group remains on track to make all packaging 100% sustainable by 2025.
Looking ahead, Christiansen says: “As we look ahead to the second half of 2021, we continue to see strong demand for our products. Longer-term, we expect top-line growth to stabilise to more sustainable levels as people return to pre-pandemic spending patterns. This trend, combined with our plans to accelerate re-investments into the future of the business, is expected to result in more normalised profit levels moving forward.”
He adds: “Our investments are designed to create a sustainable future for the business and advance our mission to have a positive impact on children and the world they will inherit. Digitalisation and sustainability will have an especially critical play in this, and we are extremely pleased with the progress our teams are making in these areas. We will also continue to develop our play experiences and brand expression so that LEGO play is diverse and welcoming for all.”