The Lego Group reports that the company outperformed the toy market in H1 as long-term strategic initiatives were accelerated.

The Lego Group has announced earnings for the first six months of 2023. Revenue was up +1% compared with the same period in 2022. Consumer sales grew +3%, outperforming a declining toy market and contributing to strong market share growth.

Operating profit was in line with expectations compared with an exceptionally strong H1 2022. The company continued to accelerate spending in long-term strategic initiatives including manufacturing, digital and sustainability.

“We are satisfied with our performance, especially as it has been a challenging six months for the toy industry. Demand for our products saw us outpace the industry and significantly grow market share,” commented CEO, Niels B Christiansen.

“Our strong financial position allows us to invest for the long term, particularly in areas such as digital, sustainability and manufacturing. Overall, our performance is in line with expectations, after three consecutive years of extraordinary growth and we are grateful for our great colleagues who work each day to inspire children through play.”

Consumer sales in major, established markets such as the Americas grew, while consumer sales in China were impacted by a slower than predicted return to pre-pandemic shopping habits. The company will continue to expand its retail footprint and online presence in China in 2023 and beyond.

The top performing themes in the first half were a mix of homegrown IPs and external IPs and included Lego Icons, Lego Star Wars, Lego Technic and Lego City.

The Lego Group and Epic Games continue to make good progress on their partnership to create fun, safe digital experiences for children and expect to be able to share more information in the coming months.

The company stepped up strategic initiatives to deliver sustainable long-term growth and relevance.

Ground was broken on a new factory in Virginia, US, in April and construction of a new factory in Vietnam continued. Both sites aim to be carbon-neutral run, once completed in 2025 and 2024 respectively. Capacity was also added to Lego factories in Mexico, Czech Republic, Hungary and China. These investments further strengthen the company’s global manufacturing network, which locates production closer to major markets to ensure a short, efficient supply chain able to respond to shifting consumer demands and reduce carbon footprint.

The Lego Group continued to make progress on initiatives to reduce its environmental impact. In the first half, the company continued its transition to paper-based pre-packs and announced a partnership with European Energy to produce e-methanol which has the potential to be used in future products.

The Group aims to triple spending over three years on activity to reduce its carbon footprint, including using more sustainable materials, expanding usage of renewable energy and working towards its target to reduce carbon emissions by 37% by 2032. It also pledged to achieve net-zero greenhouse gas emissions across its full supply chain by at least 2050.

The company opened 89 new stores during the first half of 2023, taking the total number globally at the end of the period to 988. The company has also continued to strengthen e-commerce capabilities and performance across its own and partner platforms.

Niels added: “We remain fully focused on our ambition to inspire and develop more children around the world. We are proud to be in a strong financial position to deliver on this mission today and invest to ensure we continue to deliver for many generations in the future.”