The LEGO Group Delivers Top Line Growth In H1 2024

Highlights vs. H1 2023

• Revenue grew 13 percent to DKK 31.0 billion.

• Consumer sales grew 14 percent driven by demand for a strong and diverse portfolio.

• Market share grew as the LEGO Group continued to significantly outperform the toy market.

• Operating profit grew 26 percent to DKK 8.1 billion driven by strong top-line while spending on strategic initiatives increased as planned in H1. Net profit grew 16 percent to DKK 6.0 billion.

• Free cash flow was DKK 3.0 billion due to strong top-line performance while investments continued in building new factories and expanding facilities and offices.

• 30 percent of all resin purchased in H1 was certified mass balance, which translates to an estimated average of 22 percent material from renewable and recycled sources in the raw materials the company uses to make LEGO® bricks.

  
  

The LEGO Group released earnings for the first half of 2024. The company delivered double-digit growth on the top- and bottom-line and significantly outpaced the toy industry, gaining market share. Top-line growth was driven by strong demand for its large and diverse portfolio, especially in Americas and Europe, and excellent execution in all markets. At the same time, the LEGO Group continued to increase spending on strategic initiatives to drive short- and long-term growth.

Niels B Christiansen, CEO said:

“We are very pleased with our strong performance in the first half. We delivered double-digit growth on the top- and bottom-line and made significant progress on increasing the amount of sustainable materials used in our products."

“Our portfolio continues to be relevant for all ages and interests, and this is driving significant demand across markets. We used our solid financial foundation to further increase spending on strategic initiatives which will support growth now and in the future to enable us to bring learning through play to even more children.”

In the first six months, the LEGO Group’s revenue increased by 13 percent to DKK 31.0 billion compared with DKK 27.4 billion in H1 2023. Consumer sales grew 14 percent, significantly outperforming the toy industry.

Operating profit grew 26 percent versus H1 2023 to a record DKK 8.1 billion, while the company significantly increased spending on strategic initiatives such as sustainability, retail and digitalisation to support short- and long-term growth. The LEGO Group plans to further accelerate spending on these initiatives in the second half of the year. Net profit grew 16 percent to DKK 6.0 billion compared with DKK 5.1 billion in the first half of 2023.

Cash flow from operating activities increased 60 percent to DKK 7.5 billion from DKK 4.7 billion in H1 2023. The company invested DKK 4.5 billion mainly in building new factories and expanding facilities and offices, up from DKK 3.6 billion in H1 2023. This resulted in free cash flow of DKK 3.0 billion against DKK 1.1 billion in H1 2023.

Large and diverse portfolio for all ages and interests

In the first six months, the LEGO Group launched around 300 new sets, which ensures the portfolio remains diverse and offers build experiences for fans of all ages and interests.

Some of the top performing themes were a mix of homegrown and licensed themes such as LEGO® Icons, LEGO City and LEGO Technic™ as well as LEGO Star Wars™ and LEGO Harry Potter™.

In the first half of the year, the company celebrated the anniversaries of some of its longest-standing and most popular themes including the 25th anniversary of LEGO Star Wars and 15 years of the fan-designed theme LEGO Ideas and gaming icon LEGO Minecraft®.

The LEGO Group continued to expand LEGO play offerings on Fortnite with the launch of LEGO Islands, a series of kid and family-friendly experiences. It will bridge digital and physical play with the release of the first LEGO Fortnite® sets in October.

Strategic initiatives to drive sustainable long-term growth

• Memorable brand experiences in retail: The LEGO Group continued to invest in its retail experiences in both its own and partner channels. In the first six months, the company opened 41 new stores including a store in Jakarta which is the largest in Southeast Asia. The company saw increased footfall in stores and exceptional shopper satisfaction scores in-store and online.

• Digital: The LEGO Group continues to make progress using technology and data to provide great brand experiences for kids, shoppers, retail partners, and colleagues. In the first half of the year, the company relaunched the LEGO Play app which replaces its ground-breaking LEGO Life app, the first social network for kids.

• Global supply chain network: The LEGO Group continued to expand its global supply chain and operations network to ensure production and distribution are close to its major markets. It opened a new European Regional Distribution Centre in Belgium and continued construction of two new factories in Vietnam and Virginia, USA, which will open in 2025 and 2027 respectively. It also continued to expand capacity at its existing factories in Mexico, Hungary and China.

  
  

Building a sustainable future

The LEGO Group continued to increase the amount of resin purchased from sustainable sources certified under the mass balance principle. By doing this, the company aims to help accelerate the industry’s transition to more sustainable, high-quality materials.

In H1, 30 percent of all resin purchased was certified mass balance, which translates to an estimated average of 22 percent material from renewable and recycled sources. This is a significant increase from 2023, when for the full year, 18 percent was certified mass balance which equated to 12 percent sustainable sources. Over the coming years, the company aims to purchase more than half of its raw materials from sustainable sources via the mass balance principle and, by doing so, reducing its use of virgin fossil materials.

The company increased focus on activity to reduce greenhouse gas emissions. These included launching a new Supplier Sustainability Programme which requires suppliers to set targets to reduce emissions by 2026, and further by 2028, and an annual carbon emissions reduction KPI linked to employee bonuses.

Additionally, the company expanded its LEGO brick takeback programme, LEGO Replay, to the UK and continued to pilot models in the USA and Europe.

Celebrated first International Day of Play

The LEGO Group welcomed the UN General Assembly’s decision to adopt an International Day of Play, which was celebrated for the first time on June 11, 2024.

Niels B Christiansen said:

“We are proud to have played a role in this important development to put play on the agenda for kids everywhere. More than ever, children need play. Play is universal and taps into their natural enthusiasm and curiosity to learn, helping them to develop essential life skills.”