The Lego Group has reported its earnings for the full year 2023, achieving growth in revenue despite challenging market conditions.
The company grew revenue +2% to £7.5b despite a difficult external operating environment and significantly outpaced the toy market, growing market share. Operating profit was a solid £1.96b as the company accelerated spending on short- and long-term strategic initiatives.
CEO Niels B. Christiansen said: “We are pleased with our performance given that 2023 was the most negative toy market in more than 15 years. We continued to grow on top of three years of extraordinary growth and saw strong momentum in the final quarter of 2023. We significantly outpaced the market, growing share and proving the appeal of our strong, diverse portfolio and the Lego System in Play. Despite the external market conditions, we continued to invest for the future and made good progress on digital, sustainability and retail initiatives that will support long-term growth. We are grateful for our dedicated colleagues who remain committed to our mission to inspire and develop the builders of tomorrow.”
Excluding the impact of foreign currency exchange rates, revenue grew 3% compared with 2022. Consumer sales grew 4% in 2023 vs 2022, driven by strong growth in the US and Central and Eastern Europe. This was offset by a decline in China due to the challenging economic environment.
Operating profit was down 5% compared with 2022 due to accelerated spending on strategic initiatives and changes in foreign currency exchange rates. Excluding the effects of currency, profit was down 2%. Operating profit in the second half of 2023 grew 7% against the same period in 2022 due to revenue growth and increased productivity. Net profit was £1.5b in 2023 compared to £1.58b in the previous year.
The company invested £970m, mainly in offices and new and existing factories to expand capacity to support growth.
The Lego portfolio was the largest ever last year, with 780 products designed for fans of all ages and interests. As in previous years, new products accounted for about 50% of this.
The Lego Group also launched innovative new play experiences including Lego Fortnite, and Lego Dreamzzz.
The top performing themes were a mix of homegrown and entertainment IPs and included Lego Icons, a range for older builders, Lego City and Lego Technic alongside Lego Star Wars and Lego Harry Potter.
In 2023, the Lego Group opened 147 new Lego branded stores taking the global total to 1,031. It also launched Lego Insiders, a new membership programme to connect, reward and inspire fans.
The Lego Group also continued to invest in expanding and upgrading its manufacturing capacity and capabilities in its factories in Hungary, Mexico and China and is building two new factories in the US and Vietnam.
With the aim of becoming a more environmentally friendly company, The Lego Group increased spending on environmental initiatives by 60% in 2023 vs 2022, and by 2025 plans to have doubled its annual spend compared to 2023.
The company made further progress on efforts to make Lego products more sustainable including introducing paper-based bags and increasing the use of more sustainable raw materials.
Through social responsibility programmes, the Lego Group impacted 9.8m children in 2023, above its target of 8.8m. These included its flagship Build the Change programme which engaged more than 2m children around the world on environmental issues.
Niels added: “We are fortunate to be in a strong financial position to invest in activities that bring learning through play to children around the world and invest for the future, so we can continue to have a positive impact on children for many generations to come.”
