The chief govt of Denmark’s Lego on Tuesday reflected on a difficult yr for the world’s premier toymaker, and outlined the firm’s prolonged-expression options to continue to be suitable and “neat with children.”
Lego explained its 2023 profits was 2% better compared to the past 12 months, expanding to 65.9 billion Danish krone (all-around $9.65 billion). This was in line with expectations, Lego claimed in a statement.
“It was a complicated yr,” Lego CEO Niels Christiansen advised CNBC. On the other hand, he explained the organization experienced “managed to just take rather a little bit of industry share.”
The Danish toymaker stated working income declined somewhat from 17.9 billion Danish krone to 17.1 billion, noting that it had boosted paying out on strategic initiatives made to generate development.
Net income came in at 13.1 billion Danish krone in 2023, when compared to 13.8 billion the previous yr.
Purchaser sales had been up 4% irrespective of slumping in China, Lego mentioned, attributing the growth to increasing need in the U.S. and central and japanese Europe.
It arrives as the wider toy business has been having difficulties to sustain advancement just after booming for the duration of the coronavirus pandemic, when mother and father looked for new means to entertain their children and older people re-found childhood pastimes.
Toy firm Hasbro before this month stated its 2023 income fell by 15% as opposed to 2022 and that it expected to see a even more decrease this calendar year.
Lego sees expansion prospective in China
“On the U.S. side I believe we have seen very, quite strong progress,” Christiansen explained. “Even although the industry in the U.S. was also detrimental we actually managed to expand pretty easily.”
However, Lego struggled in China last calendar year. Christiansen mentioned this was thanks to the far more challenging over-all economic problems in the country. People however acquired Lego sets, but typically selected 1 with lesser price details, he explained.
Prospects at a Lego store in Shanghai, China, on Feb. 3, 2024.
Costfoto | Nurphoto | Getty Pictures
Despite this, Christiansen thinks there is sizeable very long-phrase opportunity for Lego in China.
“We are on the advancement journey in China and hoping and anticipating to get again to advancement,” he mentioned. This includes opening new stores across the state, with all-around 40 more suppliers predicted in 2024, he said.
“We know every time we get out to a new city we open up a keep, we start the model building pursuits all around, we operate with companions, then it gets off the ground,” Christiansen said.
Lego on Tuesday reported it experienced opened 147 suppliers in 2023, resulting in more than 1,000 shops throughout the world. Christiansen stated all over 100 more are expected to open up in 2024.
The toymaker reported it experienced its most significant ever product giving in 2023 with 780 accessible products, all-around fifty percent of which were being new releases.
‘Staying relevant’
The most popular ranges incorporated Lego Icons, which was qualified at a marginally older audience and includes sets like the Titanic and Eiffel Tower, Lego’s Town line and Lego Technic, which covers builds these types of as race vehicles. Its Star Wars and Harry Potter products and solutions were also among the most preferred strains.
Lego goods like flower bouquets and vegetation have also turn into well-liked on social media, garnering tens of millions of likes in TikTok films, and the company introduced a collaboration with well-known video clip recreation Fortnite that includes Lego’s brick figures and backdrops.
Licenses and collaborations like this are critical to Lego’s lengthy-expression ideas and to “being applicable and great with young ones,” Christiansen advised CNBC.
“We want to be there where by they are and we want to be giving them with the type of experiences they actually really like,” he stated. “We are competing for children’s time and notice.”