LEGO posts strong H1 performance

Global toy giant LEGO Group has posted robust financial results for the first half of 2024, achieving double-digit revenue growth that outpaced the overall toy industry and reaffirmed its continued efforts to invest in the Chinese market for long-term growths.

During the company's earnings call on Wednesday, CEO Niels B Christiansen highlighted LEGO's rapid growth in China over the past four to five years.

"Our brand position and market share are much stronger today than they were a few years ago," Christiansen said.

"Although the market is affected by macroeconomic situations, we remain committed to building our brand, optimizing stores, and investing in our portfolio in China. The long-term potential in China is fantastic, and we will continue to invest in this market."

The company's first-half financial report underscores its strong global performance. LEGO Group's revenue surged by 13 percent to 31.0 billion Danish krone ($4.62 billion), compared to 27.4 billion Danish krone in the same period last year.

Consumer sales surged by 14 percent, outpacing the broader toy industry, which saw a 1 percent decline. Operating profit also grew by 26 percent year-on-year, reaching a record 8.1 billion Danish krone, while net profit rose 16 percent to 6.0 billion Danish krone.

The LEGO Group increased investments in sustainability, retail and digitization to support short- and long-term growth.

Capital expenditures for the first half amounted to 4.5 billion Danish krone, up from 3.6 billion Danish krone in the previous year, primarily focused on new factory constructions and facility expansions. This increased investment resulted in a free cash flow of 3.0 billion Danish krone, up significantly from 1.1 billion Danish krone in H1 2023.

The first six months of 2024 saw the company launching around 300 new sets, maintaining a diverse portfolio that caters to fans of all ages. Top-performing themes included both homegrown and licensed lines such as LEGO Icons, LEGO City, LEGO Technic, as well as LEGO Star Wars and LEGO Harry Potter.

The group also expanded its retail footprint, opening 41 new stores globally, including a flagship store in Jakarta, the largest in Southeast Asia. The company relaunched its LEGO Play app, an evolution of the groundbreaking LEGO Life app, which was the first social network designed for children.

As part of its ongoing supply chain enhancements, the company continued to expand capacity at its factories in Mexico, Hungary, and China.