The chief government of Denmark’s Lego on Tuesday reflected on a rough calendar year for the world’s biggest toymaker, and outlined the firm’s extensive-phrase options to remain pertinent and “interesting with kids.”
Lego stated its 2023 revenue was 2% larger compared to the earlier yr, expanding to 65.9 billion Danish krone (around $9.65 billion). This was in line with anticipations, Lego explained in a assertion.
“It was a complicated year,” Lego CEO Niels Christiansen informed CNBC. Having said that, he stated the business had “managed to get quite a little bit of marketplace share.”
The Danish toymaker mentioned operating income declined a little from 17.9 billion Danish krone to 17.1 billion, noting that it experienced boosted paying on strategic initiatives designed to generate expansion.
Web gain arrived in at 13.1 billion Danish krone in 2023, when compared to 13.8 billion the prior year.
Shopper gross sales were up 4% in spite of slumping in China, Lego explained, attributing the advancement to escalating desire in the U.S. and central and eastern Europe.
It comes as the wider toy field has been having difficulties to keep expansion following booming all through the coronavirus pandemic, when moms and dads appeared for new strategies to entertain their children and older people re-found childhood pastimes.
Toy corporation Hasbro earlier this thirty day period mentioned its 2023 profits fell by 15% in contrast to 2022 and that it expected to see a more decline this yr.
Lego sees expansion likely in China
“On the U.S. side I feel we have observed pretty, quite solid development,” Christiansen mentioned. “Even while the industry in the U.S. was also damaging we basically managed to expand really comfortably.”
Even so, Lego struggled in China past calendar year. Christiansen explained this was owing to the far more tricky total financial disorders in the region. Shoppers nonetheless acquired Lego sets, but often selected a person with smaller price details, he explained.
Customers at a Lego retail outlet in Shanghai, China, on Feb. 3, 2024.
Costfoto | Nurphoto | Getty Pictures
Inspite of this, Christiansen believes there is considerable very long-term possible for Lego in China.
“We are on the expansion journey in China and hoping and expecting to get back to development,” he reported. This features opening new suppliers throughout the place, with all over 40 additional outlets envisioned in 2024, he mentioned.
“We know every time we get out to a new city we open up a retail outlet, we start off the model making routines all around, we do the job with companions, then it receives off the floor,” Christiansen explained.
Lego on Tuesday explained it had opened 147 merchants in 2023, ensuing in more than 1,000 outlets around the world. Christiansen explained around 100 extra are envisioned to open in 2024.
The toymaker said it had its major ever product offering in 2023 with 780 obtainable goods, all around 50 % of which have been new releases.
‘Staying relevant’
The most well-known ranges provided Lego Icons, which was specific at a a little bit more mature audience and contains sets like the Titanic and Eiffel Tower, Lego’s City line and Lego Technic, which addresses builds these kinds of as race automobiles. Its Star Wars and Harry Potter products and solutions were also among the the most well-liked lines.
Lego solutions which include flower bouquets and vegetation have also turn out to be common on social media, garnering tens of millions of likes in TikTok videos, and the business released a collaboration with preferred video clip sport Fortnite showcasing Lego’s brick figures and backdrops.
Licenses and collaborations like this are critical to Lego’s very long-expression ideas and to “staying pertinent and amazing with kids,” Christiansen advised CNBC.
“We want to be there the place they are and we want to be providing them with the type of activities they genuinely like,” he explained. “We are competing for kid’s time and attention.”
