The LEGO Group witnessed a 5% decline in revenue for the first half of fiscal 2018, to the tune of USD2.21 billion. Similarly, operating profit was down 4% to USD651 million, and net profit dropped 10% to USD465 million.
The LEGO Group CEO, Niels B Christiansen said, “Our plan for 2018 is to stabilize the business and invest to create growth in the longer-term. These results show we’re on track and we are encouraged by the early progress. They are due to strong execution by our market teams and compelling innovation, including the successful launches of new products such as the LEGO Creator Roller Coaster, the Jurassic World range and the LEGO Technic Bugatti Chiron.”
Performance in established markets was stable compared with the same period in 2017. In constant currency, revenue in western Europe grew low single digits, while revenue in North America declined slightly, in part due to the changes in the retail landscape. China continues to perform strongly, with revenue growing double-digits in the first six months of the year.
Global consumer sales stayed relatively steady, growing 1% in the first six months of fiscal 2018. Top performing themes for this period included LEGO Technic, LEGO Ninjago, LEGO Creator, and LEGO Classic. 2018 marks the 60th anniversary of the LEGO brick, as well as the 40th anniversary of LEGO’s mini-figures.
Operating profit in DKK terms was 4.2 billion compared with 4.4 billion in 2017, a decline of 4 percent, driven by the impact of the weaker US Dollar.
The LEGO Group continues to build a strong foundation for long-term growth, reinvesting savings from organization adjustments to product and experience innovation and channel development.
The company also continues to expand in strategic markets and will open two flagship stores in China in the coming year, one in Shanghai in September 2018 and a second in Beijing in early 2019. It will also continue to develop its partnership with Tencent, one of China’s largest internet service companies, and follow the successful launch of its video channel in May, with a games product in the second half of 2018.
Christiansen said, “LEGO play is about the endless possibilities of the brick, and that will always be our focus. But we also see an exciting potential to bring the brick to life in new ways through blending digital and physical play. For example, we recently launched LEGO DUPLO trains and a LEGO Batmobile which use an app to create new, fun ways to build and play.”
The LEGO Group remains committed to its ambition of reaching more children around the world.