The LEGO Group released its financial results for the first half of 2019. It also states to step up its investments to expand its global reach both physical and digital.
During the first half of 2019, revenue grew 4% to DKK 14.8 billion compared to the same period last year. Consumer sales grew 5% while the brand was able to grow market share in its largest markets. Due to the decision to step up investments in initiatives designed to create growth in the long term, the operating profit of DKK 3.5 billion was a decline of 16% compared with the first half of 2018.
According to the Niels B Christiansen, The LEGO Group CEO, the Danish company is satisfied with the results. “Especially given the transformative shifts which continue to reshape the global toy industry.” The company managed to continue to grow consumer sales and market share in its largest markets. At the same time, it has been investing to create a strong foundation to inspire future generations. “This includes opening new markets, expanding in China, create new retail experiences and developing new products and play experiences.”
Expanding in new markets
The LEGO Group is stepping up investments to expand its global physical and digital footprint. This way, it hopes to reach more children and people around the world. The Group will continue to invest in China and is on track to have more than 140 stores in 35 cities by the end of 2019. It will also open an office in Mumbai in early 2020. From there, the company will expand its presence in India.
“We see an opportunity to reach more Indian children and families who value the benefits of learning through play. The growing middle class, the importance of education and growing economy make India a logical next step in our efforts to reach many more children around the world,” said Christiansen.
Upgrading e-commerce and physical retail experiences
The LEGO Group is investing in upgrading its e-commerce platforms to improve the user experience for consumers and its service to retail partners. In addition, more than 70 stores carrying the brand’s name will open outside of China during 2019. This includes a new flagship store in Amsterdam, the Netherlands, in December 2019. It will be the brand’s fifth flagship store.
Christiansen said: “We are making these investments from a sound financial base. This way, we can capture the opportunities being created by mega-trends such as digitalisation and global demographic and economic shifts which are reshaping the industry.”