LEGO group delivered strong results in 2012

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Olivia's House

The LEGO Group has just released their annual report for 2012, and as we would expect, they had a very strong year. Here are highlights of the report as directly reported by them:

"In 2012 the LEGO Group increased its revenue by 25% to GBP 2,549 million – nearly triple the sales of 2007. This represents the fifth consecutive year in which the LEGO Group delivered year over year revenue growth in excess of 15%.

Key facts from the LEGO Group’s annual report for 2012, which was published today:

  • The year's operating profit increased to GBP 866 million against GBP 660 million in 2011, an increase of 40%.
  • The operating margin increased to 34% from 30% in 2011.
  • The year's net profit increased to GBP 611 million against GBP 484 million in 2011.
  • The revenue increased by 25% to GBP 2,549 million against GBP 2,181 million in 2011. In local currency (i.e. excluding the impact of foreign exchange changes) revenue increased 20% year over year.
  • The net cash generated from operating activities was GBP 680 million against GBP 430 million in 2011.
  • In 2012 the Group paid GBP 208 million in corporate income taxes.

More than 60% of the LEGO Group’s sales are new launches every year.

“As a consequence we have huge demands on our development & supply processes. Year after year, we must be able to predict what will capture the interest of children and deliver this in relevant LEGO products – and in 2012 we succeeded,” said Jørgen Vig Knudstorp."

The best-selling product lines, in order, were 1) City, 2) Star Wars, 3) Ninjago, and 4) Friends.

Sales of Friends was much better than expected and even with doubling their original planned production, they state that they were unable to fully meet demand. Since Friends was targeted at a new demographic, it's logical to infer that it played a large part in sales growth, and the image of Olivia's House adorns the LEGO news release, just like I've done here.

Though Ninjago was ranked third, the statement that over 60% of sales are from new launches sheds some light on why they seemed to have scaled back and invested heavily in Chima for 2013.

The investments in facilities closer to their core markets in North America and Europe were considered to have already contributed to execution success and TLG is continuing that trend in the future by closing packing operations in Billund and focusing on moulding and engineering at that site.

Asia is called out as being a prospective engine of growth. It will be interesting to see if LEGO is able to succeed in that potentially huge market, and whether or not they'll need to change some of their approaches to product and marketing.

You can view the highlights here and the full annual report here.

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By in United Kingdom,

Great news, albeit expected. I am glad to hear that Friends has been received as well as it has, and pleased to see Star Wars close to the top of the list of best sellers.

Speaking of the huge investment in new releases, I have noticed enormous advertising campaigns for both Lego TMNT in Argos and other toy shops over the last few days, and Legends of Chima since Christmas. In the Brighton Lego store almost the entire shop seems to be devoted to Chima and the sets are selling like hotcakes by the looks of the crowds around them this half term!

A couple of years ago I recall seeing a statistic telling us what percentage of Lego was bought by adults for adults, is there any news on that this year? Perhaps that information is released in a different report altogether.

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By in United Kingdom,

Disappointed to see no mention of the amount of lucrativeness of the Lord of the Rings/Hobbit license, I was very interested to see how well this line was selling.

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By in United States,

That is fantastic news! Its good to see a hands on toy company continue to make a profit in todays digitalized world.

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By in United Kingdom,

Glad to see that LEGO are paying their taxes, unlike some *cough*Amazon*cough*Starbucks*cough*...

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By in Canada,

Yeah, I have to say I'm pretty surprised Friends was up there.

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By in Canada,

This was a very insightful article. As an AFOL I'm glad to see the City theme doing really well since those are the sets I go after (plus Creator). I imagine most of the City sales probably come from the police and fire sub-themes.

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By in United States,

Certain groups must be in an uproar now. LEGO sales of Friends is a good indication their research was fairly accurate.

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By in United States,

Is there a list of how much money was made on each theme?

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By in United States,

@CapnRex101: no mention, and I personally think there's not much point in calculating it nor would much value be gleaned for us to see a figure. LEGO knows by now how valuable the AFOL community is that they don't need those numbers to justify dedicating a segment of their set design to us. Keeping us interested ensures ever-growing mindshare to their entire customer base. And we can see how valuable we are by them continuing to release adult-oriented sets, their continued and increasing engagement with our community, etc.

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By in United Kingdom,

^ True, I would still have been interested to find out whether the percentage has risen, I remember it was 5% in 2010. The number of sets being released aimed predominantly at AFOLs seems to have risen recently, so I suppose this suggests that the market has grown or the already present market just wants more!

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By in Canada,

Revenue at 2,549 million, profit at 611 million... That's a decent margin, considering most of their sales must be wholesale! In a perfect world, this would be reflected in lower prices (which, according to previous research, it is... ever so slightly!).

I've travelled a lot to Japan in the past 12 years, and I have to say I was surprised during my last trip a few months ago: Lego products were everywhere, in large and small stores. There was that huge "Build Japan" event, several click-a-brick stores... I have to say it looks very good for them there!

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By in United Kingdom,

At this rate give it a few years and they could be the 3rd biggest toy company. Clearly a good time to be at lego and a good time for the fans kids and afols alike as we must like what they produce!

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By in United Kingdom,

How would they even know how much is bought by AFOLs for AFOLs. Larger stuff such as Tower Bridge, it is clear it is not for a five year old. But I know of a 14 year old that built it jointly with his dad. And then there are AFOLs that buy a lot of "kids" ranges such as CMF and Star Wars. Unless they ask who it is for each time you purchase, they have no way of knowing whether it is for a kid or an adult. There might be kid ranges and adult ranges, but the boundary is so blurred, it is almost non-existent. So long as they keep making both, I don't care!

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By in United States,

City being number one seems to explain why Lego charges through the roof for the sets. They are more expensive than license sets now.

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By in Sweden,

25% increase in revenue, and yet 380 people in Billund are losing their jobs over the next few years.

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By in United Kingdom,

What no one has said so far is how interesting it is that the number ONE seller was 'City' - in the UK prices seem to be either priced under licensed sets like LOTR or Star Wars and even Chima but its still been their best seller – if anything, Lego should look to the past, i.e. Legoland Town theme and expand on the 'City' brand - more smaller 'impulse buy / pocket money' sets for children, more small to medium sized sets and in general a cohesive branding that leads to 'City' becoming what it really should be - more choice, more items emulating the old 'Town' theme. What they really need to do is stop adding loads of small sets together to make large sets i.e. 'City Corner, 7641, instead concepts like this could be broken down and sold separately...

Fingers crossed someone influential at LEGO reading my musing does something about it... :)

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By in United Kingdom,

10 minutes ago I would have said the Friends theme was a flash in the pan attempt to get girls interested in Lego. Shows what I know I guess.

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By in United Kingdom,

I get the impression, although it could just be my imagination, that the Friends line is opening up people that would otherwise dismiss Lego as a "Boys Toy", and that's why it's selling so well. The purchase impulse coming from the Grannies and Aunties that would ordinarily think of Lego as being all about trucks and jets when looking for something to buy for nieces and granddaughters. Once the boxes are opened, and the bricks are in the hands of the children, the gender stereotype dimisnishes, as the girls themselves do with the pastel bricks the sort of things they've always wanted to do with the traditional bricks, if only the could get a look in.

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By in United States,

why would KIRKBI Invest take out and repay USD 4.7 billion in loans last year to LEGO?

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By in United States,

But how did lord of the rings do?

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By in United Kingdom,

^^ KIRKBI a/s is the holding company that owns 75% of TLG on behalf of the Kristiansen family.

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By in Sweden,

I think that if Lego had been able to deliver Friends to demand it would have reached higer than fourth place. In the area were I live Friends were pretty much sold out, besides a few of the smaller sets, pretty much from launch. By fall 2012 they had even removed it from the ordering systems used by stores to restock so they couldn't even try to restock.

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By in United Kingdom,

I'm trying to decide whether this is good news or not... it's not like their success is going to make them less greedy and give something back to us customers i.e. charging less and giving more freebies. It will probably just make them greedier now that they know that we are desperate enough to pay their extortionate prices and they'll probably just keep going up and up...

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By in United Kingdom,

@graysmith - I guess these job losses might be due to the packaging operations being moved elsewhere?

I found it humourous to read chima described as 'collectible social competition kits'. Do they mean toys? :P

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By in United Kingdom,

@brixton - I'm also chuffed to see City at the top. The police theme had become very dull but last years "forest" sub-theme was excellent. I'm not too thrilled with this years City sets though!

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By in United Kingdom,

Quelle surprise! It was a brilliant year in terms of attractive sets, new themes and ideas. It certainly hit my wallet on a budget. I'm sure like many people I am going to continue playing 2012 catch-up way past 2013. No world recession can deter even the most hard up adult collector. Its a sickness. That said, well done TLG.

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By in Malaysia,

I think I am one of the contributors for the huge success of the Friends theme; I personally bought Olivia's House and the Heartlake Vet. The accessories are too difficult to resist.

Good to hear that TLG has seen that Asia is a good area for growth, since we recently got a Legoland opened in Johor.

However TLG really really need to put in more effort here in Malaysia as the retail Lego situation here is getting hopeless. I give a few examples:-
1) Prices here are RIDICULOUS
2) Long wait for sets to arrive
3) No sign of some exclusives - No haunted house, No maersk train has been seen, even in Legoland. The haunted house has yet to reach out shores.
4) Stocks of Lego is so bad that the Lego shelves in many many major retailers and even TRU is now barren. Some are even filled with competitors bricks.
5) No discount, No VIP, No free polybags, No Shop at home. I envy all the promotions those in the US and EU get to enjor.
6) Series 9? Where art thou? No sign of it in retail. (although some of our AFOLS have already brought in boxes and boxes of it already through independent means)
7) Clone bricks retailers are taking advantage of the high price of Lego and lack of availability.

That is why we AFOLS have GIVEN UP getting from retail and decided it will be much cheaper and faster to bring in from overseas on our own. It does not help some retailers have been selling some competitors bricks more than Lego since Lego cannot be relied upon to keep their shelves filled.

The Big Shop in Legoland is not different since it comes from the same source and has high prices & lousy selection.

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By in United Kingdom,

I am surprised that the Superheroes or LOTR themes are not mentioned anywhere. Perhaps they haven't been selling as well as the other themes have or maybe Lego is trying to branch out with their own non-licensed themes, probably to save money I'd imagine. But I do hope that these themes do not get cancelled any time soon because these are 2 of my main 3 themes which I am currently obsessed about.8-)

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By in United States,

Being involved in the education world, it's no surprise the Friends theme is doing so well. Course offerings are full of 'STEM for girls'. Lego is associated with STEM. (Science, Technology, Engineering, Mathematics) Teachers and parents alike continually increase their push on girls in this direction. If you combine that push with the fact that Friends is brilliantly designed and attractive to girls, we have the making of a long-term success.
I believe that success could be leveraged into social networking tools.

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By in Belgium,

@TheCaheySlash, I guess LOTR is safe until 2014 at least when the third Hobbit movie comes out. Beyond that, who knows.

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By in United States,

I'm glad to hear that Lego in general is doing great, but I'll echo Cahley's post about Superheroes not being mentioned. Given the poor designs for 2013, I'm starting to think they're trying to dump the licenses (too expensive?) to focus on other lines. The 2013 sets were so well designed, the Iron Man 3 and Man of Steel sets don't look like they'll be popular.

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