Lego builds solid sales despite coronavirus
Danish toy company Lego saw its half-year sales rise solidly despite the coronavirus pandemic, as it benefited from long-term investments in e-commerce and product innovations.
The firm said on Wednesday that overall sales rose 7% to 15.7 billion kroner (£1.86 billion) from the same period last year while operating profit grew 11% to 3.9 billion kroner (£467 million).
Net profit, which includes all potential financial items including tax payments, fell by only 1% to 2.6 billion kroner (£311 million).
Lego’s CEO Niels B Christiansen said: “I am super happy for the good result, despite the coronavirus outbreak.”
Privately-owned Lego saw double-digit consumer sales growth in its major market groups including the Americas, western Europe, and Asia.
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The operating profit boost was driven by the strong sales, offset by investments in long-term growth initiatives and higher freight costs associated with shipping products following temporary, government-mandated factory closures in Mexico and China.
Headquartered in Billund, western Denmark, Lego produces in Mexico for its American markets and in China for its Asian market, while the production for Europe comes from factories in the Czech Republic and in Denmark.
The factory in Mexico was closed for almost two months by local authorities so Lego produced its colourful bricks elsewhere and shipped them to the North American continent, Mr Christiansen said.
“During the first half, we saw the benefits of our investments in long-term growth initiatives such as e-commerce and product innovation,” Mr Christiansen added.
“We also collaborated closely with our retail partners to ensure they could continue to supply their shoppers online.”
On top of that, families spent more time together during the lockdown.
“There we have a seen a tendency where families have built more together,” Mr Christiansen noted.
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