The LEGO Group 2017 Annual Report

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LEGO reported that its profits had fallen during the first half of 2017 and the full annual report has been published today. Unfortunately, this confirms a continuing decline in both revenue and operating profit when compared with the same period last year.

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

  • 2017's best selling themes include City, NINJAGO, Creator and DUPLO.
  • The LEGO Group's revenue decreased by 7.0% in 2017 to DKK 35.0 billion against DKK 37.9 billion in 2016.
  • The LEGO Group's net profit for the year amounted to DKK 7.8 billion in 2017 against DKK 9.4 billion in 2016.
  • Revenue in most established markets such as Europe and North America declined.
  • Revenue in China, on the other hand, saw double-digit growth in 2017.
  • Decline in revenue was driven in part by the clean-up of inventories across the value chain.
  • Global consumer sales were flat but trended upwards towards the end of 2017.
  • The number of full-time employees working for the LEGO Group at the end of 2017 was 17,534 compared with 19,061 at the end of 2016. Approximately 1400 staff members were made redundant, in accordance with LEGO's report for the first half of 2017.

Niels B. Christiansen, the LEGO Group CEO said: “2017 was a challenging year and overall we are not satisfied with the financial results. However, we ended the year in a better position. In December, consumer sales grew in seven of our 12 largest markets and we entered 2018 with healthier inventories. In 2018, we will stabilise the business and invest to build sustainable growth in the longer-term.

“During 2017, revenue in our established markets declined, primarily due to actions we took to clean up inventories. This decline impacted our operating profits. We also simplified and reduced the size of the organisation to meet current business requirements and these difficult actions are now complete. Our balance sheet, cash flow and profitability, remain sound.

“We started 2018 in better shape and during the coming year we will stabilise the business by continuing to invest in great products, effective global marketing and improved execution. There is no quick-fix and it will take some time to achieve longer-term growth.”


This report does not make for pleasant reading but it would seem that appropriate steps are being taken to alleviate the issues which LEGO has been facing in recent months. Reducing the volume of products being sold to retailers certainly seems like a wise decision and I think simplifying the organisation as a whole will pay dividends, although it is regrettable that this came at the cost of jobs.

It is also worth considering the extent to which the disappointing performances of The LEGO Batman Movie and The LEGO NINJAGO Movie had an impact upon LEGO last year. Neither is mentioned in the annual report but I think it is interesting that LEGO has posted its first drop in revenue and profits since 2004 in the same year that two feature films were released.

What is your opinion of these results? Let us known in the comments.

 

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89 comments on this article

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By in United Kingdom,

Well it doesn’t sound particularly good or reassuring that Lego’s profits were down so much last year, especially with at least a ten year chain of success and two major feature films too.

Fingers crossed they can recover (at least partly) in 2018, otherwise I can see the resume of another retracting era. I hope they don’t resort to closing brand stores.

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By in United Kingdom,

I agree that both the Ninjago and the Batman movies are a major thing to take into consideration. Only a select group would have an interest in seeing the films and buying the products, and marketing and actually making the films cost a very large amount. I'm sure that Lego is going to reevaluate making films dedicated to product lines, as I think it's a risky thing to do, as the films' success shows.

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By in United Kingdom,

They only made 7.8bn profit. That's awful ;-)

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By in United Kingdom,

> 2017's best selling themes include City, NINJAGO, Creator and DUPLO.

It is interesting that the report mentions those four themes. Yet the summary says "LEGO® City, LEGO DUPLO®, LEGO Creator and LEGO Friends continued to perform well, demonstrating the timeless appeal of LEGO play. LEGO NINJAGO also benefited from the release of the movie in September."

I wonder why they chose to leave Friends out of the report, but include it in the summary. And used that wording for Ninjago, which makes it appear not to be in the list of performing well themes.

I think 2017's results are possibly a reflection of how good 2015 and 2016's were. That growth was clearly not sustainable, and many of the extra staff taken on are now being laid off.

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By in Ireland,

I do feel that they’re starting to make the same mistakes as they did in the 90s. They’re diversifying away from the core product and ignoring the value proposition of their sets. The sets are no where near as bad as back then (most are brilliant), but when you look at some of the turkeys that have been released you have to question where their decision making is going. Hopefully it isn’t the start of a downward trend. Speaking personally, I’ve also started to feel fatigued at the number of high value sets they’ve released.

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By in United Kingdom,

Star Wars was a rubbish film as well - LEGO would have had a wager on that bringing in a boost to sales £$€ - Which probably never happened. It's not even in its top themes anymore.

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By in United Kingdom,

Goodness me, did someone not like Star Wars? What a novel topic for discussion, please tell me more!

One wonders to what extent year-on-year growth in profits is a realistic prospect for any company. Surely there's an upper limit to how much Lego people can buy?

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By in United Kingdom,

"Star Wars was a rubbish film as well"
That's a matter of opinion, surely; many people loved it. The trouble is that a most of the sets so far are either 'meh' or really expensive, especially compared to The Force Awakens range (TWO X-Wings!)
It is odd that Star Wars isn't a bigger part of LEGO's sales. I really feel it COULD be. Again.

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By in United States,

@brickingit - Star Wars merch has fallen off across the board since shortly after The Force Awakens. I doubt that's solely responsible for the profit drop here, but The Last Jedi being the worst SW movie ever probably didn't help things any, and as Disney continues to dilute the brand, they're mainly going to hurt their licensees.

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By in United Kingdom,

It's probably because I'm not buying as much these days. :). Too expensive.

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By in United Kingdom,

This may just be me, but its interesting their profits have fallen the year that the LEGO House was built and opened, I'm gonna assume that sapped up a good chunk of that money...(Although it will undoubtedly make it all back)

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By in Netherlands,

How about the new factory they built? And those new plant-based parts and the research that had to go into that. It isn't that strange that turnover en profit are lower. If there are more expenses.

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By in United Kingdom,

In the meantime, Playmobil's sales increased by 11%. Our family has slowly shifted its interest to that brand and price is certainly a reason. As an example and for the sake of comparison, Playmobil's Ghostbuster Firehouse is £60 compared to £289 with Lego. I realize the product is not identical, but when you have children, will you always buy premium products?

Also, Playmobil's product range remained comparable to 20 years ago by still providing historic themes that have disappeared in Lego products range (Pirates, Romans, Castle, etc...). Nostalgia is an important factor for a parent to chose a product.

I really hope Lego will find the right direction again...

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By in Portugal,

@stephan3321 They didn't just start research into alternative materials in 2017 y'know. That will have been an ongoing project over many years.

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By in Ireland,

Lego Houses or new factories don't explain a drop in revenue.

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By in Norway,

It not like they are going bankrupt, like in the early 2000s.. Part of the problem was that they sold so many sets that they could not make enough, not the worst problem to fix.. I think the new HP sets will sell extremely well, hopefully also the FB sets ;)

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By in Slovakia,

@FreewheelBricks LEGO House is financed by LEGO Foundation, it was founded by Christiansen’s family and it's income is from The LEGO Group shares given to it by them. Therefore it gets the share from the net financial result of TLG and is not in the costs of the company.
I guess there will be some personal and project overlap, but the biggest investment, the building itself does not come from TLG coffers.

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By in United States,

I would love to see fewer Technic sets released annually. Hard to keep up. I'm still building my way through 2016.

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By in Ireland,

A downward trend is not good news but they still made just over 1 BILLION EURO profit. They're not quite in trouble yet. And with profits like that I find the ever increasing price of sets harder to stomach. Some of the Star Wars set have just been taking the mick in terms of price per part.
After getting it right with Ninjago they've got it wrong twice now with Chima and Nexo, neither of which was anywhere near as popular. That's got to hurt.
For a few years now they've been releasing more and bigger sets aimed at AFOLs and they may have reached the limit of what AFOLs can and are willing to spend.

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By in Germany,

Three words: Too freakin' expensive. By far. Okay, five words.

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By in Netherlands,

@kinggregus That comparison make little to no sense, The playmobil ghostbusters firehouse is missing two walls, a roof and lacks most of the details the Lego set offers. If Lego where to do that same set in a similair scale and with the same level of detail as the playmobil set, it would likey be around the same price point.
And that's not to mention that the Playmobil version is a set designed for play, a set made for kids age six and up. While the Lego set is a collecters item design for display, the recommended age for that set is 16 and up.
The comparison doesn't hold up.

People also seem to forget that inflation is a thing that exists. Lego set prices are up but the reason for that is not in control of Lego.

It's dissapointing to see Lego is doing worse but it seems they are more organized this year, so let's hope lego will be doing better from now on.

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By in United Kingdom,

That's what happens when all the AFOL's are saving their yearly LEGO budget for a Millennium Falcon they can't buy anywhere.

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By in United Kingdom,

@Duq, it is not actually a downward trend, at least not yet. It is one year, that came on the back of many successful years, especially the last three.

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By in Australia,

Given how poor they were with the supply of Saturn V and the UCS MF, this should surprise no one.

The UCS MF in particular has been an operational disaster.
A set that they knew was incredibly popular given the after market price of the original UCS set, they then hyped the set over several weeks, had a pre-launch and were so ill-prepared that they didn't have enough sets for the official launch.

For AFOLs like ourselves most of us will wait to buy it but for the bigger market, given it is an expensive set, selling when the hype occurs is critical. Lego will not just miss out on those opportunity sales, as rich parents spent their money on something else but it will have an impact on how they are viewed re dependable going forward.

As a huge Lego fan you can only hope they learn from this experience.

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By in United States,

I think it may have to do with the lackluster themes to some extent. I bet they were relying heavily on Star Wars to do well, and although some people obviously like it, it is just not the blockbuster that it was in the past, largely due to the newer films not being of remotely comparable quality. I'm hoping that some awesome new Harry Potter sets will see renewed interest!

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By in Ireland,

I think they should adjust their RRP, 90% of the sets i got nowadays are between 20-40% reduced, so whats the point of selling them at high RRP? People simply are not paying the bills nowadays.

Meanwhile, the price in $ is getting cheaper and cheaper compared to us £€, they also get big discounts as well in Target/Walmart! (price in DKK is the worst but thats always been the case).

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By in Australia,

`@X-Strike "...the worst Star Wars film ever...." in your opinion. Others would agree with you. Many wouldn't. Even people I know who didn't love TLJ would certainly never describe it as the worst ever.

For me my favourite since ESB.

Re Star Wars toys like with Episode 1 , TFA saw a lot of money spent on merchandise with it being the first Star Wars movie in a while. Unsurprisingly that money is not being spent on Rogue One or TLJ toys.

Speaking to parents buying for their kids the pricing of Star Wars related Lego continues to be a big issue. It's horrible here in Australia (as compared to US, UK etc)

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By in Poland,

More and more parents I meet just buys Lepin - it's TRIPLE cheaper so I can't defend Lego on this battle.

Also - PROMOTE REBUILDING AND CUSTOMIZING. Make small cheap partpacks that will be available everywere and allow to get rid of old bricks. Also more smaller sets overwall.

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By in Netherlands,

lol @ worse.
DKK 7.8 billion is just really good profit. I think most companies would love to see such numbers.

Declines happen, growth is not infinite.

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By in United States,

I don't think any of us can say really why their profits are down. They have good themes out there, but perhaps the movies didn't bring in enough across the board? The sets based on the movies were great, but overall maybe they didn't profit as much as they would have liked.

When it comes to all of the big sets, we're partially to blame. We keep saying we like big and detail oriented sets, but then we complain when they come out and they're expensive.

Also, @Xstrike, every word in that sentence is wrong ;)

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By in Czech Republic,

No tree grows to heaven, period. If this means less D2C exclusives per year and all of them of high quality, perfect. Too many exclusives released per year and the effort to keep up with all the releases making it a very expensive hobby for an AFOL.

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By in United States,

My purchases are down because of all the remakes or poor sets in the themes that I collect.

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By in United Kingdom,

Well just read this BBC news article : http://www.bbc.co.uk/news/business-43298897

Basically, they're blaming making too many bricks and having to sell of excess stock and diversifying too far by making the movies for the profit slump.

Seriously though, companys still made like £1Billion in profit, so they're hardly going bankrupt here...

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By in Canada,

Have to agree with others; normally diversification should be good but in Lego's case it seems to dilute the brand. I'm sure Lego will learn from the early 2000s and research the issue extensively and hopefully turn it around.

For me personally I find that they are focusing way too much on IPs and the Minifigures; does this really equate to better sales? You only need to look back at 2012 with the Hobbit sets, the first wave was good but then it was nothing but great Minifigures with crappy builds. This trend has continued with all the Super Hero movies. With what appears to be so many movie tie in sets again I ask does this equate to better sales?

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By in United Kingdom,

LEGO's profits have grown off the back of the effects of global recession; people tend to concentrate their purchasing on fewer, quality items. LEGO were happy to take the credit and praise their own marketing genius when this was on the up. Now the effect is waning they don't know which way to turn, falling back on the desperate tactic of staff reduction.

Yes, they've upset AFOLs by failing to supply their most popular set in years, and going on about a company ethos of 'only the best is good enough' whilst completely ignoring their own shocking drops in product consistency, and now they're about to really **** everybody off with the new 'event support' arrangements. But they don't really believe anything the AFOLs do or say really affect their profits, which is why they ignore their opinions on the products they aim at children.

But mainly they've just spoiled their market as they always do, by pushing out higher and higher priced sets, this time expecting the hype of a series of movies to drive their sales, which hasn't happened. Look at all the stupid sizes of the Batman movie vehicles compared to Batman sets from before the movie. It's like they've set out to punish the fans.

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By in United States,

I think the underperformance of TLBM, TLNM, DC and the Disney licenses (Marvel AND Star Wars AND regular Disney sets) have all contributed.

Disney licensed merchandise is down across the entire toy industry, dragging LEGO down with it. Regardless what you think of the movies, revenue for them continues to decline since The Force Awakens. Disney has set itself an unrealistic time table to recoup their $4 billion investment, and now it’s hurting licensees for their products. They’re diluting the brand and the controversy over the quality of the films is having a real impact on merch sales.

As weird as it sounds, LEGO may have to wean itself off Disney at some point.

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By in Gibraltar,

Prices need to come down...simple!

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By in United States,

LEGO is in no danger, but there definitely need to be some changes. Star Wars has really fallen for me as a product line, primarily because of the obscenely high costs compared to other ranges. There is no need for the licensing fees from Disney/Lucasfilm to be so high, and it's hurting the sales rather than bringing the licensee revenue.

In other themes, the lack of a new engaging story theme and the proliferation of D2C models at very high prices shows a change in focus that isn't helping the company. Ninjago is working for them, so they should feel no reason to replace it, and nobody has enough money to buy many of their D2C sets, let alone one now. The huge huge sets used to be few and far between, with Modular-sized and priced sets being the majority of the AFOL-oriented pieces, but now things are getting bigger and bolder and most people aren't keeping up.

While inflation may be the cause for some of the lower-price sets being more expensive, there are no longer any very small impulse sets below $10, and the CMF line has kept a price increase demanded by the Simpsons wave even when there are no licenses involved.

Fewer products and lower prices would probably help for more consistency.

(Also, The Last Jedi sets failed because the movie was bad? While I politely disagree, the sets were out for a fair time before the film came out, where there was generally more hype than dissent! Prices and unexciting models dragged down the sets, not the film's reputation.)

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By in United Kingdom,

Pricing of sets has got to play a huge factor in this, I remember the days when a the first wave of starwars sets came out the x-wing was around £30/£40 were as now it's doubled in price but not really in size.

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By in United States,

I mean, as sad as this is, LEGO is still a multi-billion DKK company...

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By in Canada,

I know nothing about the market and pricing etc. however as a consumer I think the price of Lego has seemed to get quite expensive. Don't get me wrong I can still buy it if I like to but for many they can't afford it and there are so many other alternatives around. Not to mention other distractions. Even some of the City sets I find somewhat over priced.

Supply seems to be another issue Lego is struggling with. Several sets recently have been in short supply. Sure your die hard fans will wait till you resupply but I am sure they likely lost sales to some consumers due the fact that a product wasn't readily available when they went looking for it either online or in a store.

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By in United States,

I can only speak for myself, but I've personally cut way back on LEGO spending of late. I am finding myself tired of so many sets that just seem uninspired. I need more sets like Bilbo's house, and less "here's a part of a wall with a stud shooter on it"
And any sets that grab my attention are super expensive. I plan on getting as many as I can, but LEGO is just no longer a priority for me as far as budgeting.
Just my two cents.

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By in Netherlands,

"Revenue in most established markets such as Europe and North America declined."

Maybe they shouldn't wear their blatant greed on their sleeves, then.

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By in United States,

From what I know, SW is the line they have most invested in and apparently none of the new movie sets sell as well the original trilogy ones. With the UCS falcon still selling like mad I would guess that more sets are going to lean towards the collector market in the future. Something I don't agree with.

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By in United States,

I’m not saying things are rosy...I’m not business savvy enough to have any real clue. It does seem to me that having endless growth in profits is not realistic, nor should it be expected. They were still VERY profitable. If that number has a notable, persistent decline then I’ll be worried

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By in France,

if a year where they make 8 billion is challenging, I wonder how they would call a year like at the beginning of the century?
and if they made some serious reorganization, it probably cost some money, but now companies apparently expect that investments will not cost anything (except maybe public money)

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By in United Kingdom,

They say they spread themselves a bit thin with diversifying into the films.
Lego Movie works as it's a general film, Batman & Ninjago are more niche so aren't going to get the sales
The Batman CMFs also are limited. Again, niche interest but also no real Army Builder figures. They're all characters you want one of. The sets have a similar problem- does anyone really need yet another Batman figure with minimal changes to the last one? A bit more variety in the set characters would help.
Irrespective of people's thoughts on the last SW film, I'm not sure that can be blamed for Lego having to clear it's warehouse of sets before the film even came out.

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By in United States,

I know there are several people who haven't commented yet and who will say something about how Lego hasn't gotten more expensive when you look at inflation, so that's certainly not part of the reason the numbers are "down." I think this is incorrect. I'm not sure what it's like elsewhere, but in the USA, at least, wages have risen at a much slower rate than inflation (especially after the Great Recession). The price of a set from 1990, for example, has about doubled if you just look at inflation alone, but average household income hasn't even come close to doubling since 1990. This means that Lego may not be more expensive when you look at inflation alone--but it IS more expensive than it used to be when you look at how much it is as a percentage of what people make.

Anyway, as mentioned before, Lego is still massively profitable, and pricing is probably only one minor issue. Still, I know that any mention of their finances usually brings out the this kind of talk.

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By in France,

Maybe TLG needs to look at the way it goes about hedging and how this reflects on RRP?

75204 Sandspeeder... rrp is £34.99, US$29.99, €EU39.99.

21309 Saturn V... rrp is £109.99, US$119.99, €119.99

Inconsistency with exchange rates is wild.... and to top that off the 75-192 Millenium Falcon is still not being supplied in sufficient quantity to meet demand for several months.

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By in United States,

60$ for an overpriced set or a video game. My 4 kids are more and more asking for video games and leas Lego due to the costs vs use.

Release more smaller 15-30$ sets, with useable pieces. Cost and reuse is an issue. Way too many large useless one time pieces have returned.

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By in United States,

Blaming any of this on Star Wars: The Last Jedi is stupid, it only came out two weeks before the END of 2017... the sets being undesirable (aside from BB-8) maybe I can understand, but the movie itself had nothing to do with it.

I don't think LEGO is going full 90s anytime soon. I don't think they even have any other movies planned aside from The LEGO Movie 2. Quality of sets is as good as it has ever been and weird themes generally don't get very large releases (except for Nexo Knights and Legends of Chima). LEGO video games have been a thing for upwards of 20 years now. LEGO robotics kits have been around even longer, Boost is only the fourth or fifth base robotics set they've made ever.

Also, yes, I'm pretty sure people saving their money to buy the practically-unavailable 75192 Millennium Falcon is a factor as well, considering it is sold out within minutes of being available at RRP anywhere.

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By in France,

about lego becoming more expensive... sets have actually hardly ever been cheaper than in 2017 for me thanks to all the discounts. though star wars is still overpriced, even sometimes at deep discount, and the value of all D2C sets released keeps increasing pretty fast year after year.

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By in Norway,

Well, any company delivering 22% after trashing inventory and having a major distributor (TRU) more or less bankrupt isn’t doing all that poorly...

Higher RRP for most sets means more room for discounts for sites like AMZ, which draws sales, so as much as despise it, those are probably here to stay.

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By in United States,

Lego is blaming the weak performance on having to sell off excess stock cheaply. They need a magic 8 ball and tell them which set is going to sell and which set is not. Although it is pathetic that Lego had inventory problems with Saturn V and MF when everyone else knew those two would sell....

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By in United States,

I can only speak for myself but my LEGO purchases have declined in the last year. Rising health care costs and no raise in 3 years now, plus always high child care costs really put a damper on my LEGO budget. To make matters worse I find that where as I soley collected SW sets, and was a completionist for several years, I haven't bought a new SW set in quite awhile (save for the little DJ polybag). I can't justify the trend of price hikes and fork my hard earned money over just to to satiate Disney's greed. I did think TLJ was a good SW movie, loads better than TFA, and I would like to have the sets, but not at those prices.

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By in Germany,

I think the problem is, that the sets and themes are getting more and more special or extravagant, because slowely they are running out of ideas, because they released so many sets since foundation.

They are bringing out tons of sets each year the set number increases from year to year. So who can buy all those sets? I thinks there is to much offer on the market. I personally seldom buy a lego set, because I have no space anymore :)

I would like, if they would bring out more sets of the basic strong topics like pirates, knights, egypts etc. People like retro.

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By in Switzerland,

Only one solution possible- Lego should additionally increase prices! One billion EUR is not enough, fans should pay same sets two times more so Lego can earn two billions instead.

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By in Netherlands,

I imagine TLG Board members reading these posts and chuckling in their fists: Lego too expensive? Wait till they see our plans for next year’s prices. Too many products? There cannot be enough. Bad operations? AFOLs will swallow it, they always do.

Ah, I have just read my first sentence again. How unrealistic of me, as if TLG Board members would ever sink so low as to read these posts. I would love to be proven wrong.

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By in United States,

Here's a reminder article from 2016 about some supply fulfillment concerns.
http://iveybusinessreview.ca/cms/5757/lego-restructuring-brick-brick/

There were several times in 2017 when I didn't make impulse buys on pricier sets, because they were out of stock multiple times at the local LEGO stores and eventually just I lost interest in the sets. When I wanted to buy and when it was in stock just weren't in sync.

On the other hand, in 2017, I frequently speculated that much of LEGO's top talent was assigned to movie tie ins, a theme that doesn't interest me much.

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By in United Kingdom,

I expect that most of the losses were due to the failure of Dimensions to reach the projected market volume.
The overproduction of Friends and Disney stuff probably accounts for some of the rest?
I would not think there was any failure of the two Movies, but possibly TLG overproduced stock of the TLBM sets.
In my opinion there were three or four major sets that were badly designed and of no real interest to the core market and the AFOL market, until the prices were dropped.

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By in United States,

I bought very few sets last year since they produce fewer things I'm interested in nowadays. I am excited for the Incredibles sets, Brickheadz, and Star Wars action figures though.

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By in United Kingdom,

TOO. MUCH. STAR. WARS.

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By in Denmark,

10 years intensive growth and constant hirering, some clean up will be needed at one point - this is what to expect!

And this is nothing like 2004. They got the brains to adjust and continue.

No worries!

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By in Germany,

"made redundant" - what a wonderful euphemism. Ugh.

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By in United Kingdom,

I'm wondering if LEGO having a really poor website had anything to do with it?

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By in United Kingdom,

Prior to taking on livences Lego made sets just for the builder since Starwars etc, they have to understand they are appealing to builders & collectors. Many builders bought more than one set sometimes to add to there build or to collect with the prospect of selling on & paying towards their muched loved hobby. There not dealing with the collectables side properly and as such after sales prices have dropped so builders are no longer buying more than one for collecting purposes s much. Ciollectos see sets out for years, far to long for a reasonable return any time soon so between builders and collectors sales are dropping put into the mix sets from a film which did not engage builders & collectors and again sales drop. Lego needs to learn to treat collectors with respect or continue to lose those who are willing to buy lego to help fund there hobby or collectors getting a reasonable return. Learn , evolve or get left behind.

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By in Canada,

How much of that loss can be placed squarely in the blame of TRU and their debt loaded idiocy? I mean most retailers need to pay for their products in advance and let's not forget TRU declared bankruptcy and seems to be hanging on a razor's edge that could soon spell the end of big box toy based retail. I have to imagine that LEGO losing money or at least part of the % of loss can be placed on the feet of negligent invoice payment and breach of sale from TRU.

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By in United Kingdom,

It's pretty obvious why profits are down.
Building' the lego house' must have cost a fair bit. It's an investment though which should bring in money for the foreseeable future.

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By in China,

Revenue in China, on the other hand, saw double-digit growth in 2017.
As a China LEGO fan, I'm so happy to know this.
LEGO is NOT popular in China. The high price may be the reason in part. The PPP of most sets in China is about RMB ?1 (16 cent).
I believe if LEGO reduce the price in China, the revenue will increase.

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By in Singapore,

I feel some of their own themes like Ninjago (not the movie ones), Nexo Knights get kind of repetitive in concept after a while. I started the Nexo Knights for a bit but decided to stop as there's really nothing new. I even stopped my Star Wars collection cos there's really nothing very fresh or new. So now I only focus on Super Heroes (with constant new minifigure designs) and City (to build my LEGO city, and I like those new location themes like mining and jungle). So I guess they spread out their lines a bit too much.

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By in United States,

@Venunder: Where on earth are you getting overproduction of Friends? Is it just because it's a theme you don't like? Because it's specifically called out as one of the top-selling themes.

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By in Canada,

@Champion Bricks, pretty obvious, except for the fact the Lego company didn't pay for it.

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By in United States,

NA and EU markets have shown weakness since at least 2013 for many reasons and I assume it has something to do with the current global economic situation. China , on the other hand, has a stable economy growth for decades and LEGO have indeed put more focus recent years in China. The decline is expected in some ways you know both EU and NA are still LEGO's main markets. LEGO is still not a big deal in China and some third world countries despite high growth.

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By in United States,

A lot of sets don't have the "charm" they used to- that must sound super snobby. There used to be whole waves of sets I would fall in love with at first sight. For the last couple years, though, it's been pretty much just the D2C's and a few of the smaller sets for an entire year that I really see myself buying. Too many product lines I have zero interest in. If they can find a few themes that really work and stick with those for a while, that would be perfect.

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By in Serbia,

LEGO House was not financed from the LEGO Group, but directly by the owners from their own assets.

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By in Australia,

Great to see City and Creator up the top. Although I hate Ninjago, I am very happy to see non licensed themes as the best sellers instead of Star Wars and Superheros as usual.

A decline in revenue in Europe and America. I knew this would happen.

I don't know why Lego has been focusing so much on expanding their market in China. Lego has tried new markets before but never put as work into getting into the Chinese market.

China already has an impregnable market dominated by fake Chinese Lego products such as Lepin. And I don't think its a coincidence that at the same time Lego pushes into China and sets up lots of factories in China, Lepin starts gaining power and 'magically' getting official Lego designs before images are officially released.

Its definitely an inside job, Lepin couldn't make an exact copy of an entire set with box images alone, they'd need instructions.

Meanwhile, sets/themes which appeal to all markets have been neglected (ie City). Apart from a few stores, the so called 'established markets' seem to have almost been forgotten about these last 2 years.

Of course Lego continues to completely ignore the Southern Hemisphere. One never hears of any Lego news for South America and the only Lego involvement in my country and 'across the ditch' is the ANZAC tax. (Australia and New Zealand Auxiliary Cost). You Yanks and Poms complain about high prices for certain themes, well Down Under its ridiculous prices for EVERY theme.

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By in Canada,

I think they should take the overstocked parts and pieces and re-re-release the Taj Mahal and re-re-re-re-re-release the Millennium Falcon in different color schemes...

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By in Australia,

"In December, consumer sales grew in seven of our 12 largest markets" - so they had to get to the 12th largest market to be able to claim 50% of markets had sales growth.

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By in United Kingdom,

So has this turned into the "Too much Star Wars and the recent films are the worst ever released" thread?

Star Wars sets are astronomically expensive, particularly if you're not in the USA but 1.) If you don't like Star Wars you're probably not the target market and 2.) The theme probably doesn't have as much financial impact as a whole in 2017 as, say the Lego Batman Movie theme. I can't believe they've churned out 3 full waves and 2 sets of collectible minifigures off the back of that one film! The prices are also as bad or worse than Star Wars in many cases.

It's then crazy that in many respects the Ninjago Movie was the reverse - not very good, virtually no one seeing it in the cinema, but fantastic Lego sets and well-priced too. Just shows how hard it is to get it right!

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By in Canada,

Yah i'm with The Rancor here. The top selling lego themes were the ones with best Value (well and City, but that's because it's City which everyone likes). I love Star Wars, but holy smokes the sets have become so expensive now, and the value just isn't there. I know price per piece isn't really a fun metric, but i'm on a tighter budget and the value for money needs to be there for me to be in for the buy.

Not only that, but some of the SW sets recently have just been... bad. Pricey + bad set =/= sales lol

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By in United States,

I don’t think the movies played a role, because of the subject matter. Batman will always be a draw & a big seller, as will Ninjago. It was a top seller. I think the product range is cast too wide. Personally(without knowing sales figures) I think those Constraction sets, Brickheadz, and DC Super Hero Girls should all go. The Constarctions, all but a few, look terrible. Brickheadz was them jumping on the fad wagon that is Pops!, and Girls simply doesn’t need to be.

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By in Canada,

I contributed my share of $$$$ to LEGO in 2017, definitely not my fault. I still haven't been able to get the UCS Falcon yet either. :)

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By in United States,

The problem really isn’t sales. Well beyond sales numbers stayed flat. They didn’t decline. The problem was too much inventory in the merchant channel, and quite frankly far too much inventory selection on shelves. This was the point Lego hit in the 90’s and early 00’s. Too many product offerings that clogged shelf space and resulted in Lego competing with itself. With the result being the less desirable products stockpile on store shelves and merchants reduce ordering until they can clear it out. The Lego Batman Movie did not need 42 sets. All it does is force decision points on customers and tantrums on children that result in no sale. Lego needs to go back to a leaner, cleaner, tighter product line. Right now 20% Of the Lego shelf space at my local target is devoted to Star Wars build a figures that nobody is buying. Many of them Rey, Jon Urso and that cast of Rogue One Rebels that nobody, not even the most devoted fans, can name. “Stick dude, and that guy with the really big gun!”

As for The Last Jedi. That failure was on Lucasfilms. Nothing, absolutely nothing in that movie was “toyetic”. All of the new ships were trash heaps. Especially the Rebel...err Ressustance stuff. Nothing swooshable. No scenes anybody wanted to recreate. No characters anybody wanted to be. Especially among the core Star Wars toy buying target audience. (Here’s a hint. For Toy Buying purposes the Force is NOT and Never Has Been Female!)

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By in United States,

ummm I think everyone is forgetting they made 7.8bn in PROFIT. They will be just fine.

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By in Netherlands,

TOO. MUCH. STAR. WARS.
agreed. All LEGO blogs, LEGO sites, AFOL sites, nearly every third article is about this theme. I've been a fan since the first films, but never understood the appeal for the sets and the enormous hype for them (ok, honestly, I'm building the Falcon now, just for the size of it and being able to say "I've build it", but when done I'll get rid of it). Never understood how one can want every single minifig with only one different stripe or part of a partial scene from a 5 second movie scene, but hey, every one can have their taste and preference.

I sell second hand/used LEGO sets for a living (no, not on Bricklink) and have many themes available, so I see a lot of sets coming by from the past decade and more. Even though some themes were short-lived, I think the sets were more appealing than the sets I see now in store.

Their Blockbuster theme CITY has diluted to silly sub themes such as Volcanic Explorers, Mountain Police/Swamp Police/Forest Police/prison island, Jungle, Coast Guard. The main thing I sell like crazy is the "old" "normal" CITY sets. Regular police sets, regular firemen sets, regular trucks, service stations, cars...
Al the rest, mehh, not really interesting. All the special sub themes: that's where the creativity needs to kick in with a kid.

Where are the nice little sets like 657, 6362, 6364. Just small and affordable things to fill up your city, besides the cars? Why are these street plates so crazy expensive? A kid is not interested in how accurately detailled a racer car is (Speed Champions) to the real model, it's a racecar. And you only need so many in your city to play with, not every race car model available. They want to have lots of LEGO, have it build up and ready in their room or other, able to play with when they feel like it.

That is where they are loosing focus: LEGO makes toys for kids, bought by parents. My opinion is you want your kid to have something that stays interesting to them, so when you get them something that is highly priced, it needs to be "safe" and relatable. The amount of sets they collect over time should work together. And bringing new but similar sets out every year is not a great driver for parents to spend money on.

As they grow older, they might need more challenging sets, maybe a different theme (Technic, anyone?), but that also results in more expensive sets now.

Great to see all the sets from Super Heroes, but my kids, like many others here in the Netherlands have no clue who all these characters are, so why should a parent spent a load of money on a licensed set? Or on the movie sets? They see the movie and are enthusiastic, when the hype wears of, I bought crazy expensive sets to replay a movie that they have forgotten about. And Brickheadz, really?

In short: focus on your blockbuster themes, keep them affordable for parents for different gift occasions. Keep them interesting for kids over the years to expand their collection. Trigger more to stimulate creativity in rebuilding existing sets. Limit your special interest themes with high licensing costs and short-lived appeal. Keep the continuously whining AFOL's happy with large sets that they will buy anyway in the end.

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By in Germany,

I have stopped visiting brickset on a regular base. All I see is special stuff, brickheadz, comic book stuff, star wars stuff. What happened to castle, space, and pirates? My kids loved Chima, also gone.
And yes, I have not bought Lego in 2017. I would like to though.. but the last Lego knight was sold years ago.
Apparently, I am not alone.

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By in United States,

What does "Decline in revenue was driven in part by the clean-up of inventories across the value chain." actually mean? I just can't figure out exactly what they're trying to say? What's "Value Chain" and how did they "clean up inventories" and if that's a thing how did that decline revenue?

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