The LEGO Group 2016 annual report

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LEGO released their financial results for 2016 yesterday and they give the impression of another very successful year on the whole, as anticipated. Revenue and profits show a marked increase over the totals from 2015, although not with the same growth rate experienced earlier in this decade.

You can read the full report here and will find some of the highlights after the break...

  • 335 new products were released last year.
  • City, Star Wars, NINJAGO, Friends, Creator and DUPLO accounted for the greatest revenue in 2016.
  • The LEGO Group's revenue increased by 6.0% in 2016 to DKK 37.9 billion against DKK 35.8 billion in 2015.
  • The LEGO Group’s profit for the year amounted to DKK 9.4 billion in 2016 against DKK 9.2 billion in 2015.
  • Net financials created a total expense of DKK 57 million in 2016 against an expense of DKK 96 million in 2015.
  • Tax on profit for the year amounts to DKK 3.0 billion, unchanged from 2015.
  • The lower growth in profits in 2016 is driven by the LEGO Group’s considerable planned investments in land, buildings and machinery as well as organisational capability building. These investments are made with a view to preparing the company for future growth.
  • Sales were driven by strong growth in Europe and Asia, while American markets experienced mixed performance.

42 comments on this article

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By in United Kingdom,

I wonder what lego classifies as a product given we have over 800 items released in 2016 in the database...

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By in China,

I just feel that LEGO has been too rushed about those big-bang themes like ninjago,CHIMA and NEXOknights.Both CHIMA and NEXO knight haven't been quite successful coz none of them offered much innovation while ninjago still has a long way to go.LEGO really need to create a theme that breaks away from the formulated method like ninjago since many new themes nowadays have been proved weaker than the old ones.

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By in United States,

That's a really good question Huw, how can over 800 items equate to 335 products? I wonder if we could get further explanation on this? Also curious how the American markets experienced only mixed performance. I try to do my part and spend way too much on Lego, but then my wife gets upset, something about not being able to pay bills. I can't please both the Lego Group and my wife, it's quite a conundrum.

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By in United States,

@Huw: I feel like their product count probably only consists of their typical retail products, and would exclude things with more idiosyncratic availability like extended-line products, gear, magazine gifts, product collections, and polybags. Also, they count each minifigures series as a single product, whereas Brickset has separate listings for each individual figure. Once you deduct those products, the number of sets for 2016 in the Brickset database drops by over 400!

@bty8: What gives you the sense that Ninjago has a long way to go? It's been wildly successful since its launch, and remains one of their top five themes. Chances are the movie will generate even more interest in the Ninjago brand. And I think Chima and Nexo Knights have both been fairly successful in their own right, even if neither has been a mega-hit on the level of City or Ninjago or Friends. Even though a lot of these "big bang" themes are largely dismissed by AFOLs, I don't think that is an indication that they're substantially weaker than older themes.

Just copying what I commented in the other thread about the annual results, there's a nice highlights page LEGO created with some additional details like what specific sets (in order) were their top sellers: https://www.lego.com/en-us/aboutus/events/annual-result-2016

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By in United Kingdom,

@bty8 What makes you say they haven't been successful? The report lists Ninjago and Nexo Knights as being among the top selling lines.

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By in United States,

Huw, I'm assuming it only means sets and not key chains polybags and other misc stuff

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By in United States,

@Huw I agree, I feel like there were way more 335 new products last year. Maybe they mean just building products? But even then I'd guess there's a lot more than 335.

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By in Canada,

I concur with Aanchir and think Lego only counts regular sets. I looked at Bricksets 2016 list (100 per page) and only looked at typical sets but still came up with 381:
Page 1 (exclude 34)
Page 2 (exclude 31)
Page 3 (exclude 26)
Page 4 (exclude 53)
Page 5 (exclude 33)
Page 6 (exclude 42)
Page 7 (exclude 100)
Page 8 (exclude 100)
Page 9 (exclude 28)

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By in Netherlands,

Interesting to see Duplo in the list of themes with greatest revenue.

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By in China,

@ Aanchir JonMarten :I'm not saying that ninjago isn't successful on the contrary it has even deeper potential to be discovered which made NEXO knights and CHIMA somewhat unnecessary.You know back in days everyone was upset about CHIMA for it almost ended ninjago.If CHIMA proved to be successful why now discontined?I think LEGO just need a big bang theme every 10 year maybe since BIONICLE already had a great 10 year until ninjago took its place.

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By in Denmark,

^...LEGO "just" need a big bang theme every 10 year...

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By in United States,

Honestly, I'm not a fan of the "big bang" format, regardless of quality. It just feels like Ninjago is really being dragged out now, even though there's no loss of interest to be found in the theme. I can't fault them for something that works, but it seems tiring and overwhelming the longer it goes on.

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By in United States,

Yeah I can believe that America has mixed results when it comes to Lego sales. In my area, I haven't been seeing them sell as well since a few major retailers jack the prices up. Sometimes it's only by five dollars, other times it's twenty. Though I suspect the real reason that sales are mixed is because kids can only afford the tiny sets and parents are unwilling to pay the $130 or even $50 for the larger sets (even for birthdays). Everyone's in a "save money or else" kind of mood. Though it also could just be too much product shipped over.

Mainly for me, I think the reason I stopped buying as many Legos is because they just don't feel as interesting as they did before. Look back at the Johnny Thunder sets. They had tons of play value and even if they didn't, they brought some new things to the table. I'm not denying that new things aren't being brought nowadays (swamp police was pretty interesting) but the problem is that the designers seem to be stuck in a loop. In some of my favorite sets, the areas were the highlight while in the newer ones, the vehicles are the highlight. And when you look at Chima, Nexoknights, and Ninjago, almost every set is a couple of dudes with one big vehicle. Eh. I think more variety is needed. But, that's just an opinion.

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By in United States,

EU firms, especially those of Germany and Scandinavia are managed for longer term organizational health rather than the quarter-to-quarter tactics of many of American F500 firms. A positive 6% gain in base demand without gaming the numbers through stock buybacks—these are respectable numbers within that paradigm. Notwithstanding I would like to see SKU reports for those directly released vs SKUs represented through licensing, which is how some of the products that make it into the database, like Dimensions for example, are accounted. Others, like assortments such as the CMFs and seasonal and polybags, are only counted in a report like this by their master line SKUs.

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By in Ireland,

Take out unreleased items (13), individual collectable minifigs (74), books (33), collections (19), gear (117), 'other'/magazine gifts (67) and that's already 323 out of your 800.

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By in United States,

I am just surprised that the Marvel and DC Super-Hero lines weren't successful enough to mention. Reading this report, you would think those themes were doing the same as Elves and Speed Champions.

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By in Netherlands,

I'm reading news and comments on Brickset and similar sites a Thousand times a day, but a lot of AFOLS always seem to forget one thing: THE KIDS (AND THEIR PARENTS) BRING IN THE MOST MONEY!!! That's why themes like City and Duplo score big. I spend every spare penny (Euro) on LEGO sets, but I'm probably the only one on this street(s). But all the children in the city I live in, including my own, get several sets a year. And it may seem that NINJAGO is not as fresh anymore, but with my 7-year old and his friends it's as hot as ever!

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By in United States,

"Also curious how the American markets experienced only mixed performance. "

The American markets saw huge surges the past couple of years. To the extent there was even a collectors bubble forming. The more mixed growth in those markets is more a sign that a peak or plateau is being reached there. Part of it is Lego may be oversaturating those markets a bit.

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By in United States,

@bty8: A theme ending is not the same as a theme failing. Most themes are not expected to last more than three years. Not even Ninjago — it only became an evergreen theme after massively surpassing expectations with regard to sales and fan engagement. The reason for the brief hiatus in summer 2013 was that the 2013 wave was originally meant to be the final one, and the decision to extend the theme beyond that point wasn't made in time to have a new wave out right away.

If LEGO kept all successful themes running until they became unsuccessful, then they wouldn't have nearly as many resources to commit to new themes. Also, many themes have their peak success when they're still fairly new (Bionicle, for example, had its peak sales in 2002). Ending a theme before it becomes unsuccessful frees up resources LEGO can use for other themes that might be able to achieve even greater success, as opposed to years of diminishing returns.

Another thing: creating a mega-hit isn't just a factor of how long it's been since the last one. It often takes numerous attempts to really strike gold. Ninjago wasn't the first successor to Bionicle's design and marketing strategy. Other "Big Bang" themes or forerunners to that concept included Knights' Kingdom II, Exo-Force, Power Miners, and Atlantis. And all of these were reasonably successful in their own right, just not nearly as successful as Bionicle or Ninjago. If LEGO only launched a new "Big Bang" theme after retiring the previous one, that could mean years of untapped potential in between the ones that hit it big.

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By in United States,

Honestly, I think that the reason sales are down in the United States may be because of the prices not being too good of a value, and not enough option of cheaper things.

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By in Australia,

Huw: Must be a typo, City alone has 450 this year (2017). Its probably 3335 products.

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By in United Kingdom,

They use the following notation ...
LEGO® City, LEGO® Star Wars™, LEGO® NINJAGO®, LEGO Friends, LEGO Creator and LEGO® DUPLO®

Does anyone know why they don't use the ® after the name LEGO when talking about Friends and Creator, but do after City (and the licensed themes).

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By in Australia,

Aanchir: Does this mean that Lego has ended the entire Historical Theme (3 themes; Castle, Pirates, Wild West) just to give Nexo Knights a chance?

Why would they end all 3 themes?

(I know Nexo Knights could count as a Castle theme, but its far too Steam-punk; or Medieval-punk to be counted as a Historical theme)

As an example, (I'll continue to use Historical themes) why cannot Lego keep their good themes but try new things with it?

In the case of Historical, perhaps they could try Ancient History, like Ancient Greece, but add in some mythological monsters to keep children interested?

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By in United States,

@Brickchap: No, I mean that Chima and possibly also Ultra Agents ended to give Nexo Knights a chance. Castle 2013 and Pirates 2015 seem to have been designed as one-wave themes in the first place much like Pharaoh's Quest and Monster Fighters, and there WAS no non-licensed Western theme for Nexo Knights to take the place of.

Nexo Knights is probably the reason there wasn't an ADDITIONAL new Castle theme designed for 2016 (Castle seems to be re-imagined every three years, with Nexo Knights as the current re-imagining), but it's not like LEGO decided to end the previous Castle theme to make room for a theme that was still two years off at that time.

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By in Netherlands,

I don't think we have proof they've definitely ended the historical themes, or for that matter that TLG even lump those three themes together to that degree in their thinking. And it's been a long while since Western ended; yes, there was the Lone Ranger theme, but it was an unsuccessful film license whose shelf life would always be limited by the success of the movie and whether or not it became an ongoing franchise.

There was a thread in the forums not long ago where someone pointed out that a lot of the appeal of Pirates is echoed in Ninjago, but that Ninjago has fuller storytelling and character creation compared with Pirates, which may be why it's done better compared with the last time Pirates came back...

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By in United States,

Castle is on a break to give Nexo Knights (Action) and Elves (Minidoll) a chance. Pirates is on a break at least until the new Pirates of the Caribbean sets run their course. When Castle comes back, I would love to see it incorporate more fantasy elements which should be possible now that the Tolkien licenses are over.

I don't believe Wild West was ever an evergreen theme. I think the best we can hope for regarding "Historical" themes are Adventurers spin-offs like Pharaoh's Quest... as well as the occasional CMF.

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By in New Zealand,

LEGO always gives US great prices and other countries the short end of the stick. With the mixed results from US hopefully LEGO will start lowering prices elsewhere to match US... UK, Asian and Oceania prices are very high compared to US pricing!

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By in United States,

^Or they will raise prices elsewhere to subsidize the US market.

I only buy on sales now. LEGO is too expensive otherwise, especially for the number of sets released (that I want). And it is perceived as such from other people I talk with that aren't AFOLs. But like was stated, large growth will never continue. There will always be a regression or plateau. For some reason the higher ups in my company don't seem to understand that. They just want to make money now, no matter who it overworks (myself included).

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By in United States,

As soon as I saw that 335 number my brow furled up. Sure enough, My Sets -> Sets you own -> 2016 -> 343 matches :D Physical brick-based products only, counting each whole CMF series as one item, and including only 5 out of around 30 Duplo sets they released.

Looking at the year drop-down on the Brickset Browse page shows what has to be an unsustainable trend of practically doubling the release of new products every 10 years! It's stunning that they've been able to maintain strong profits while expanding at such an incredible rate.

Great to see Friends in the top 5 grossing sets and themes overall yet again.

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By in Australia,

Good Lord, it's Jangbricks!

This is very irrelevant to Brickset, but I cannot comment on Youtube.

I just have to say how much I love your videos and to keep up all the great work you do. You are an inspiration for all Lego fans.

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By in Australia,

I am very happy to see that my comment on historical themes has sparked a discussion.

Thanks for reminding me about Adventures/Pharaohs Quest. I wish Lego would bring back Adventures, after all, its action and history combined. Pharaohs Quest was a good idea but but was too fantastical for me and none of the vehicles (except the biplane) were realistic at all. All the cars were hot rods.. :(

Pirates Of Caribbean 2017 movie sets wont help for pirates theme cause there is only 3 sets (2 are brik heads so they don't count, Silent Mary not helpful at all)

It looks as if Nexo knights might be like Ninjago (continue for a long time) which means they'll never be another castle theme.

I understand what you are all saying about Wild West. Lone Ranger movie was bad in my opinion but the sets were pretty good and make up the majority of my western collection.

But I guess that 19th century America is not appropriate for Lego. What I mean is, the main reasons the west was wild are exactly what Lego would not put in sets, which I understand and agree with.

I don't see how a Castle theme would stop Elves. Kumasawa;What did you mean by evergreen?

Why could Lego not have tried another historic era so that Historic Themes and Nexo Knights would not clash? (like my previously suggested idea of Ancient Greece).

Some other ideas I thought of for new history themes were;

a 1950s American City-style theme (with a diner, drive in cinema, garage, dance hall sets and lots of cool 50's cars)

16th century England or Spain (like the imperial Armada or Shakespeare's era perhaps a Globe Theater set,which would definitely be educational)

Victorian London (I think that would be popular with children, with Sherlock Holmes and that Assassins Creed Syndicate game)

What do you chaps think of those ideas?

Youtuber Just2good made a video about cancelled Lego themes, on of which was a Gangster theme which was 1920s/30s America theme. It had a barber shop, gangster yacht and lots of old cars. (this was planned in the 80s and 90s)
I can understand why the didn't make the theme, the same reasons they probably ended Wild West.

However, what do you chaps think of a new historic theme set in Prohibition with a character like Chase McCain, only he is a private detective like Ace Brickman. It would certainly complement detectives office. They could continue the Candy Prohibition or just have money and jewellery stolen like in City.

Any thoughts?

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By in Canada,

As many have pointed out, it's just too bad they allowed their Castle/Pirates/Adventurers/Wild West stuff to disappear. I'm especially bothered by Castle,
a theme which I have long considered a staple in the Lego product lineup and overall history of the company. Someone above made an excellent, astute point that perhaps it's on a break to give Nexo Knights a chance, and I'll agree with that. Furthermore, someone else mentioned that it's kids and parents, not AFOLs, that bring in the real money for the company. Truer words were never spoken. Therefore, as an AFOL, I'm super sour about what's transpired the last few years (incomplete LOTR line, a brief juniorized castle line, now Nexo Knights). Unfortunately, my demographic/position (as an AFOL) leaves me wanting. I'm left to wander the secondary markets for classic sets, as I'm sure many others here are. Lego can't cater to everyone.

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By in United Kingdom,

You can tell that expense has deceased. The number of defected minifigs/prints that I recieved in 2016 has been unacceptable.

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By in China,

So ninjago is still the most successful bigbang theme of this decade after all.Can't see when the next hit theme will take place you know it's getting hard to make a long-lasting theme nowadays as most of the new themes cant survive more than 3 years.

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By in United States,

@Brickchap: I highly doubt that Nexo Knights will be anywhere near as long-lived as Ninjago. Ninjago from its very first year was praised for breaking sales records and hitting major milestones. All LEGO has really had to say about Nexo Knights' success this year is that it "contributed to growth", which is about what they had to say about Chima. I would expect Nexo Knights, like Chima, to have a three-year run, with its final wave in Summer 2018. And then in 2019 I think there's a strong chance of a more traditional Castle theme arising to take its place.

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By in United States,

Out of curiosity, is there anywhere we can look up the relative popularity of the various current LEGO themes (or individual sets)? In their report they mention City, Friends, Ninjago, Creator, and Duplo as being the best-selling themes, and also gave a top 5 of individual sets (in terms of sales). I'm just curious what the rest of the list looks like... is Elves not very popular, for example? (That's would be a bummer for me since we really like that theme in my house.) I think Ragana's Magic Shadow Castle was WAY more interesting than the Friends roller coaster, for example, but the latter got #2 in sales in 2016...

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By in United States,

The top 5 by sales - that has to be by $$ value, not by number of sets sold right?

Example
10 units of 75105 @ $150 = $1,500

vs.

50 units of 75165 @ $15 = $750

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By in United States,

@lentil: LEGO doesn't publicly release a lot of that sort of information, since I think they want to avoid giving their competitors too many hints about what works and what doesn't. They did mention in the 2015 annual report that Elves was off to a good start. It's worth noting that a theme doesn't necessarily have to do so well compared to other themes if it appeals to a considerably different audience than those themes. Elves is one of only four girl-targeted themes, and aimed at a somewhat older audience than Friends and Disney, so I feel as though LEGO is unlikely to retire it until they're prepared to launch a new theme directed at that same demographic. But when that might be is still a mystery. I'm hoping the Elves Netflix series this year is a sign that LEGO still sees a lot of potential in the theme.

@PJMcC: Yes, probably so. This is part of why the top-selling themes and sets alike tend to skew in favor of larger ones. That said, it still says something about popularity since most people wouldn't spend so much more on the larger sets and themes if they didn't want them that much more than the smaller ones. Plus, these sets and themes are often only as big as they are because they're themes that have proven popular enough for people to buy more and bigger sets from them.

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By in United States,

I am amazed the Porsche 911 GT3 was their third best seller bearing in mind the cost and that it was not available for all 12 months. Would indicate that theme of large Technic cars is popular.

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By in United States,

Wow. Disney minifigures as their fourth best?? I knew they were popular, but that had to have been a huge amount sold considering the low price.

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By in United States,

I only get the Speed Champions, Advanced Models, Pick a Brick, and some City sets. I've been working on building my own city for years now. Even have a Custom Taco Bell, Starbucks, Krispy Kreme's, and 7 Eleven built in mine so far. I do go after the Ideas but only ones I'm interested. The original Ghostbusters was my last buy in that one. If the Addams Family House had succeeded, I would had definitely gone after that one. Really expected that one too after the Haunted Mansion was a huge success. But unfortunately we're stuck with another minifigure collection like the Beatles one waw pretty much like. Had the tiny submarine but was still mostly Minifigures. But I say don't count the Family out. The Goonies, and even the Wayne Manor was not selected but still made an appearance.

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