Successful launch of LEGO Friends

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LEGO has published a press release on its finances so far this year, attributing its success partly to strong sales of Friends:

The LEGO Group concludes the first half of 2012 with another very strong set of interim accounts. Net sales for the period were DKK 9,134m compared with DKK 7,355m for the same period last year – an increase of more than 24%.

Operating profit (profit before financial items and tax) for first half 2012 was DKK 2,877m compared with DKK 2,030m for first half 2011, an increase of 41.7%. At the same time the company’s equity rose from DKK 4,565m at the close of the first half 2011 to DKK 6,031m. Cash flow from operations was DKK 2,230m compared with DKK 1,703m during the first half of 2011.

Commenting on the financial result, LEGO Group CEO Jørgen Vig Knudstorp says:

“Once again the first half of the financial year exceeds our expectations, and the financial result is exceptional - especially in view of general developments in the world toy market. However, it is still too early to provide estimates on the expected result for the full year because the closing months of the year are crucial for our business.”

The LEGO Group’s strong result was achieved at a time when the global toy market is declining – it softened by a further 4% during first half 2012.

Astonishing sales on new products
The year’s big launch – LEGO® Friends, a product line targeted for girls – has done amazingly well since its launch in January. The Group sold twice as many LEGO Friends sets as expected during the first six months of the year. It has therefore increased production to meet the demand for LEGO Friends in the important Christmas period.

Reflecting on the launch of LEGO Friends, Jørgen Vig Knudstorp says:

“LEGO Friends is a result of four years’ development, and it has been amazing to experience the enthusiastic welcome that consumers have given the new range. Sales have been quite astonishing. With LEGO Friends we’ve managed to make creative construction toys more relevant for girls – and we look forward to developing the product line further in the years ahead.”

LEGO Ninjago, launched in 2011, maintained its success in all markets in 2012, with the ninja theme selling significantly better than expected. Classic lines such as LEGO City and LEGO Star Wars™ are still the LEGO Group’s biggest-selling product lines.

Broad global strength achieved
So far the weakening toy market has not had an effect on the LEGO Group, which enjoyed double-digit growth rates in consumer sales in virtually all LEGO markets.

The sales increase varies from region to region but is broad based. Sales in European markets rose by an average of just over 10%, while sales in the US increased by 23%. In Asia, sales rose at an even steeper rate, which is a continuation of the picture from 2011. The sharp rise in Asian sales supports the LEGO Group’s long-term ambition for making the region one of its core markets in line with Europe and the US.

Boosted by this growth, the LEGO Group increased its share of the global toy market to more than 8% – one percentage point higher than in first half 2011.

Increased capacity and bigger workforce
The LEGO Group has been expanding capacity in all areas of its business in order to be able to meet growing demand. This has taken place in several countries and the development continues in 2012, with the LEGO Group likely to hire approx. 1,000 new employees.

The LEGO Group’s factory in Monterrey, Mexico, has expanded its facilities markedly in recent years and has significantly increased its production capacity. In March 2011 work began on a major expansion of the LEGO factory in Kladno, Czech Republic, and will be officially inaugurated in autumn 2012. A brand-new factory is also planned in Nyíregyháza, Hungary, to replace the existing, rented facility in the same town. And finally, moulding capacity in Billund, Denmark will be increased in autumn 2012.

Activities designed to increase production capacity are expected to continue into 2013, and in addition the LEGO Group will remain focused on making the organisation even more adaptable.

19 comments on this article

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By in Germany,

Good news that is. :)
Let's beat up MATTEL and HASBRO!

I'm espicially happy that LEGO Friends is a success. My daughter loves it and finally there'll be no more Belle Vue!
The US market is probably stronger due to the new licenses (Super Heroes, Lord of the Rings).

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By in Denmark,

Well done, TLG. I'm sure the couple of hundred quid from my pocket helped.

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By in Australia,

Congratulations TLG and many, many happy fiscal returns!

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By in Germany,

It's amazing that in 2003 they were nearly broke... 9 years later, it's always up and up. :P

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By in United States,

Maybe set prices can be lowered seeing as they are moulding money in their Billund factory?

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By in United States,

@bmwlego - Unfortunately that's not how economics works. High demand means higher prices...they might continue to raise prices until demand tapers off.

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By in United States,

I am happy for them, but wish they would make fewer Technic sets per year. I can't keep up. There was a time when they released one or two per year and some years none! Now it's ten per year and I have about six sitting in boxes waiting for my time. Even when I do build one I feel like I don't get enough "quality time" with it like in the old days before it's time to build the next. What's a Technic-complete collector to do? Woe is me! ;)

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By in United States,

Am I the only one who thought it was odd that they didn't mention Superhero sets in that press release at all?

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By in Canada,

I was instantly charmed by the unique buildings in the Friends sets, and was hoping to pick them up for 30-50% off somwhere. My opinion on the sales of Friends was all over the map until I read this article. I don't think I'll be expecting a sale on Friends for a long time... if at all :(

I just assumed since Friends was new, and reaching out to a new market, retailers might try and throw it on sale to create some interest. I was wrong. I also thought the chances of summer time sales were high because retailers (like TRU) would have to clear space for the summer line of Friends. I was wrong again.

It shouldn't be a blessing in Canada to only get 20% off Lego. If Lego is doing so well financially, they could at least make the price cuts in countries which are having horrible markups. I see why Australia and Hawaii get marked up, but shoving a 20-25% price increase on Canada is just mean. Maybe just lower general set prices in Canada by 10% or something... humor me a little.

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By in Ireland,

I wonder if there's any data on who's been buying the Friends sets; the target audience or AFOLs who like the new colours?

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By in Belgium,

@lippidp - You lucky guy, only six boxes waiting for you. I have more then 50 sets to build. Some are even from the '80 or '90. Only 22 years till I retire and will have loads of time.

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By in France,

So, we can expect prices going down for the 2nd half of this year.

(but my little finger telling me I am dreaming.....)

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By in United States,

@ Duq: No doubt loads of AFOLs enjoy the new colors, yet there is much movement of the target audience snatching them up, based on Friends events, parent reports, and such -- here are some examples: http://friendsinspiregirlsglobally.blogspot.com/

:-)

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By in United States,

I would have preferred if they mentioned all the free press exposure from the anti-prink brigade contributing to the success of Friends, just to rub salt in the wounds... I'm glad it is doing well though and wish them much success. I'm excited about 2013!

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By in United States,

My 6 year old daughter loves the Friends collection. Just bought the Adventure Camper set for her yesterday. Took her less than two hours to put it together today and only needed my help once for a misplaced brick, and as always to put the stickers on for her. I must say it is a really well thought out design with lots of play value. The two bicycles are cool.

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By in {Unknown country},

I wish they did less licensed sets, I really miss the Castle series (LOtR doesn't count for me) and the pirates.

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By in Canada,

Well done, TLG. I wonder where all that money is going. Probably new licensed themes. They are the most profitable, which is why we are seeing a slight decline in classic themes.

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By in United States,

Well, I doubt the Forest Police or the mining sets helped City much... Hopefully Friends sticks around though for a long time.

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