Record results in 2020 / Sales and earnings show double-digit growth / Focus remains on sustainability
In its own nearly identical plants, toy production is flexible (Photo: Lego)
Despite more difficult production and delivery conditions during the pandemic, along with the favorable conditions for playing at home during the lockdown, Danish toy manufacturer Lego (Billund; closed 2020 with record results. In addition, the group said it outperformed the global toy market, which grew by some 10%.

Lego’s 2020 turnover grew 13% to DKK 43.7 bn (EUR 5.9 bn) versus the year prior. Operating profit increased 19% to DKK 12.9 bn, and net profit jumped 19% to DKK 9.9 bn, highest in the company’s history. In the EMEA region, the company said sales hit DKK 19.1 bn, DKK 16.3 bn in the US and DKK 7.9 bn in the Asia-Pacific region. The new “Super Mario” Lego playset brought the group the strongest growth spurt in five years, it noted.

Lego boss Niels Christiansen said he was very satisfied with the results. The family company’s investments, for example in e-commerce and product innovations, came just in time for the pandemic and paid off in 2020. At DKK 1.8 bn, the same amount was spent on plant and equipment as in 2019. Part of this went into expanding capacity at plants in Nyíregyháza / Hungary and Monterrey / Mexico.
Focus on sustainability
After Lego announced in September 2020 that it would invest up to USD 400m (EUR 335m) in sustainability and social responsibility over the next three years (see of 29.09.2020), this “green future” is expected to start earlier than planned. Before the original self-imposed deadline of 2025, Europe’s largest toy manufacturer wants to completely abolish the use of plastic bags in game boxes. In what it calls a more climate-friendly alternative, paper bags have been used on a trial basis for individual bricks since the beginning of 2021. In addition, according to a report from Bloomberg news agency, the Danish company is planning much more far-reaching changes, including making Lego blocks from sustainable materials, instead of conventional fossil-based plastics. That would affect around 100,000 t of plastic bricks per year.

The company said its goal of building carbon-neutral production is to be achieved by 2022. The toymaker also supports a pilot initiative by the European Commission on climate protection. Together with other consumer goods giants such as L’Oréal, Colruyt Group, Decathlon and Renewd, Lego signed the Green Consumption Pledge agreement on 25 January 2021 in Brussels and published its own consumption pledge.

In addition to strengthening its e-commerce platform, Lego opened more than 130 additional stores last year despite the pandemic, with over 90 of them in China. This increased the number of its outlets to nearly 689. To keep the supply chain as flexible as possible, Christiansen said Lego is also planning to expand the digitisation of the company and its products with “hundreds of new employees.”

Lego faces a number of challenges, but all revolve around trademark rights. On the one hand are ongoing conflicts with YouTubers and influencers, who have obviously received warnings from the company. On the other are legal disputes with German importers and dealers who want to offer Chinese alternatives to the original toy bricks.
19.03.2021 [247216-0]
Published on 19.03.2021
Lego: Wachstumsschub für dänischen SpielzeugkonzernGerman version of this article...

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