Lego builds profits despite inflation

Agence France-Presse

Posted at Mar 07 2023 06:29 PM

A diorama made of Lego bricks and figures. EPA-EFE/LUKAS COCH

COPENHAGEN - Lego, the world's number one toymaker, said Tuesday that its revenue and profits rose last year as demand for its plastic bricks remained strong despite inflationary headwinds.

For 2022, net profit at the Danish firm rose four percent to 13.8 billion kroner ($1.98 billion) while sales jumped 17 percent to 64.6 billion kroner. 

"These results were delivered despite extraordinary inflationary pressures on materials, freight and energy costs," the company said in a statement.

Excluding currency effects, the sales gain was 11 percent. The privately-held company did not provide unit sales.

The firm, in which the holding company of Denmark's Kirkbi family owns 75 percent with the rest being held by the Lego Foundation, said sales improved in all markets and its market share grew globally.

"The company expects single-digit revenue growth in 2023, ahead of the global toy market and will continue to accelerate investments in strategic initiatives," it said.

The company has seen continued success in the last two years even after no longer enjoying a boost from lockdowns keeping people at home, so far withstanding pressure from inflation and slowing economies.

It has been buoyed both by sets based on franchises such as Star Wars and Harry Potter as well as home-grown hits like Lego Friends and Lego Technic.

Lego, which has completely withdrawn from Russia following Moscow's invasion of Ukraine, has continued its strategy of opening more stores, with 155 new shops opened during the year, bringing the number of shops worldwide to 904. 

Lego, which employs some 27,000 people, has also been making major investments to reduce the climate impact of its products and operations, including by manufacturing closer to consumers.

The group has just opened a carbon-neutral factory in Vietnam, joining already established ones in Hungary, the Czech Republic, Mexico, China and Denmark. A new factory is also being constructed in the United States.