strong growth in the Lego Group

[legomilk]

February 23 2009

Strong growth in the LEGO Group

For the LEGO Group, 2008 was a successful year with considerable increases in both sales and profit. This was announced when the LEGO Group presented its Annual Report 2008 at a press conference today in Billund, Denmark.

Profit for the year before tax reached DKK 1,852 million against DKK 1,414 million in 2007.

Net profit for the year amounted to DKK 1,352 million against DKK 1,028 million in 2007.

The Group’s equity increased from DKK 1,679 million at the end of 2007 to DKK 2,066 million at the end of 2008.

Revenue amounted to DKK 9,526 million against DKK 8,027 million in 2007, an increase of 18.7%.

Global sales increases

Nearly all the LEGO Group’s markets reached two-digit growth rates in 2008. Especially the English-speaking markets saw extraordinarily high sales increases, which resulted in considerable increases of the LEGO Group’s shares of these markets. In Central Europe, the LEGO products increased their market leadership through continued growth, and in Northern and Eastern Europe, the strong position of the LEGO products was further strengthened during 2008.

Classic play themes such as LEGO City are still among the largest product lines. LEGO Star Wars also achieved extensive growth in 2008, and moreover the launch of the licensed product LEGO Indiana Jones was very successful.

The global market for traditional toys saw a slight decrease in 2008. A moderate decrease was seen on the American toy market, whereas the world’s second largest toy market, Japan, saw extensive decreases. On the other Asian markets and on the Eastern European markets, toy sales were increasing, whereas markets stagnated in Western Europe in 2008. The LEGO Group has increased its market share on all its markets.

Expectations for 2009

The development in 2009 is subject to great uncertainty. Already under pressure, the toy market is expected to be increasingly affected in 2009 by the worldwide recession.

Nevertheless, the LEGO Group expects moderate sales increases in 2009. In order to support this growth, the LEGO Group is planning to continue its investments in the development of markets and products as well as production capacity.

On this basis, satisfactory results are expected for 2009.

Comments

”Our results for 2008 have been extraordinarily good”, says Mr Jørgen Vig Knudstorp, President and CEO.

”And this applies not only to the financial results. During 2008 we also took over two factories in the Czech Republic and Hungary, and we began the construction of a factory in Mexico. The successful change to increased own production, combined with strong sales increases, is attributable to the impressive performance by all our employees.”

”Despite gloomy economic prospects, we feel well prepared for growth in 2009 as well, and our optimism is supported by the results seen in the first months of the year,” says Mr Knudstorp.

http://www.lego.com/eng/info/default.asp?p...p;archive=false

[brickzone]

I think a significant amount of this success must simply be down to the top-class quality of their recent output. Fantastic themes, great set designs, and a great attention to making them attractive and fun for kids, as well as pretty appealing to most of us AFOLs too (plenty of whom buy for their kids/relatives too and affect purchases by those they know).

Long may it continue - I just hope I have cash for the great Lego coming out this year!

[Inigo Montoya]

This is great news, even more impressive with the current worldwide economic crisis affecting nearly every other company.

I guess instead of multiple hundreds of dollars in video game consoles and $50+ video games, kids and parents are flocking to Legos and other less expensive but more replay value added entertainment. This strong growth allows Lego to be even more leverage in rolling out new sets.

And, like the poster above, I agree that it's the top class sets that continue to impress year after year.

[Norro]

The improved sets quality has definitely helped them snag more of my money. Not that I'm spending more, just they are geting a higher percentage than my Bricklink exile of late...

Thanks for posting and God Bless,

Nathan

[pesgores]

This is great news!

[CP5670]

I think a significant amount of this success must simply be down to the top-class quality of their recent output.

Unfortunately, this can only be said about the set designs, not the pieces.

It's impressive that they are doing so well even in the current market situation though.

Edited February 23, 2009 by CP5670

[Dadster]

Good news!!

Hopefully the upcoming years will also see increased growth.

[Grrr]

This is good news. I'd rather our favourite company doesn't become a casualty of this recession.

I feel this is particularly impressive given the fact they have taken back the outsourced factories from flextronics. This is positive for us as I expect better quality parts from Lego than from an OEM.

[mania3]

Given what I spent last year, this better be true. 180 sets I bought between May and December might account for a bit of that growth.

[Nikola Bathory]

Yes, I read about that. Great news indeed!

[Millacol88]

Looks like another good year for them. It seems like they're expecting a fairly significant drop in profit for 2009 though.

[legotrainfan]

Looks like another good year for them. It seems like they're expecting a fairly significant drop in profit for 2009 though.

I also believe that they are not going to make so much profit in 2009 due to the economic crisis. However, it's good news that 2008 was such a good year for TLC. And I hope that they can still make a lot of profit with the sets being released this year.

[The Cobra]

The news is spreading around: I saw it on the tv (Tg2, yesterday at 18.30) and read it in the newspaper (Il Giornale, today's edition).

[KimT]

I think a significant amount of this success must simply be down to the top-class quality of their recent output. Fantastic themes, great set designs, and a great attention to making them attractive and fun for kids, as well as pretty appealing to most of us AFOLs too (plenty of whom buy for their kids/relatives too and affect purchases by those they know).

Long may it continue - I just hope I have cash for the great Lego coming out this year!

And hiring Jørgen Vig Knudstorp to lead the company.

He's worked wonders.

He even 'killed' some of the recent outsourcing and returned the production of special bricks to Billund, saving several hundreds of jobs.

He's also quit the cooperation with Flextronics, so that TLG now runs their own factories around the world.

(Hungary, Mexico* and the Czech Republic)

* Factory is still being built.

[CP5670]

And hiring Jørgen Vig Knudstorp to lead the company.

He's worked wonders.

He even 'killed' some of the recent outsourcing and returned the production of special bricks to Billund, saving several hundreds of jobs.

He's also quit the cooperation with Flextronics, so that TLG now runs their own factories around the world.

(Hungary, Mexico* and the Czech Republic)

* Factory is still being built.

Actually, I think the outsourcing was done under him in the first place, along with the other production-side changes in the last few years.

[Col. Brik]

the toy market is expected to be increasingly affected in 2009 by the worldwide recession.

Nevertheless, the LEGO Group expects moderate sales increases in 2009. In order to support this growth, the LEGO Group is planning to continue its investments in the development of markets and products as well as production capacity.

That is the sign of a great company. When others pull back, cut quality to keep profit, layoff or hire unskilled labor they fail to realize the product they make will suffer.

LEGO just decides to get better. No wonder I love this Hobby.

[Legoist]

Great news indeed!

But that's also thanks to the LEGO fans around the world, who in times of recession would rather cut their food budget than slowing down their LEGO purchasing habits