Lego net profit up 32% in H1, stronger than expected: CEO

Lego, the world's biggest toy maker by revenue, reported stronger-than-expected earnings for the first half of the year, with net profit rising 32 percent, according to its CEO, Niels Christiansen. In a statement to AFP, Christiansen said the family-owned Danish company anticipates double-digit growth for the full year, with the increase not limited to a specific market, product, or theme.

For the first half of the year, Lego recorded a net profit of 8.6 billion Danish kroner, a 32 percent increase from the previous year, while revenue jumped by 26 percent at constant exchange rates to 41.9 billion kroner. Christiansen noted that the company has been pleasantly surprised by the profits and growth figures.

However, Christiansen acknowledged that Lego has faced challenges in gaining traction among Chinese consumers, stating that the market is difficult and consumers are somewhat reluctant to spend. He explained that the company is making a concerted effort to incorporate more renewable and recycled materials into the production of their iconic plastic bricks, though he did not provide specific figures on the share of such materials used.

Despite the higher costs associated with these sustainable materials, Christiansen revealed that Lego is absorbing these expenses itself rather than passing them on to consumers. He added that the company has managed to maintain profitability despite rising oil prices, which have had an impact on the cost of plastic production. Christiansen concluded that the growth in sales and profits is benefiting Lego, as it allows the company to optimize its factories and improve overall productivity.