NEW YORK, Feb. 19 /PRNewswire / -- AMERICAN INTERNATIONAL TOY FAIR --
The LEGO Group today announced it achieved growth in 2007 across all of its
key markets, attributable to a renewed strategic focus on balancing its
core business and products with some of the strongest global licenses among
The company's year-end result is considerably better than anticipated
at the beginning of 2007, when both decreasing sales and decreasing revenue
were predicted, as increasing investment activities and extensive supply
chain outsourcing were expected to put heavy pressure on the Group's
performance. However, the Group succeeded in producing at a level that
matched much of the strong year-long demand in its markets.
-- Profit for the year before tax reached $279 million USD against $253
million USD in 2006.
-- Net profit for the year amounted to $203 USD million against $255 USD
million in 2006, which gives a return on equity of 71.6%.
-- The Group's equity increased from $235 million USD at the end of 2006
to $331 million USD at the end of 2007.
-- Revenue amounted to $1.584 billion USD against $1.539 billion USD in
2006, an increase of +2.9%. Adjusted for exchange rate movements in
2007, the increase would have been approximately +6%.
-- Profit before special items, financial income and expenses and tax
amounted to $290 million USD in 2007 against $277 million USD in 2006.
-- The operating margin (ROS) was 18.1% against 17.0% in 2006.
Note: conversion from DKK to USD uses the year-end exchange rate.
"In the light of our expectations for 2007, I consider the results very
satisfactory," said Jorgen Vig Knudstorp, CEO, LEGO Group. "It has
particularly been very satisfactory for us that we have been able to meet
most of the demand for LEGO products despite our extensive supply chain
relocation activities. This has only been possible through the impressive
effort made by our employees."
In the U.S., the company achieved its third consecutive year of
consumer sales growth, again outpacing the U.S. toy industry. An +11.5%
gain in consumer sales(1) over 2006 further bolstered the brand's #1 rank
in construction toys, with category share increasing +6 points from 60% to
66%, the highest level in five years, according to The NPD Group.
A strong product portfolio balanced between homegrown classics and
licensed lines drove U.S. sales of LEGO(R) products in 2007 to be four
times larger than the next construction toy brand(2). The company
successfully renewed its position of strength in non-licensed play theme
products, evidenced by the simultaneous successful launches of three new
themes in 2007 -- LEGO Aqua Raiders, LEGO Castle and LEGO Mars Mission --
each individually delivering results on par with some of the strongest
classic play themes in LEGO history.
In a year of heightened competition from video games and consumer
electronics, classic LEGO building sets fared extremely well, with the LEGO
Brand ranking as #1 "most fun" among boys 6-8(3).
Among product line highlights:
-- LEGO CITY, the classic "downtown" theme and recruitment platform for
builders ages 5 and older received the prestigious Toy of the Year
Award for Best Activity Toy; meanwhile sales for the line have tripled
since 2004, with 2007 U.S. line sales growing +45% over 2006.
-- Sales of LEGO Creator, a line of classic build and re-build models were
also up double-digit versus 2006.
-- Collectible, authentic models, supported by another blockbuster video
game release, drove LEGO Star Wars(TM) sales to the top of the
company's U.S. chart in a non-movie year.
-- Constructible BIONICLE(R) action figures maintained strength in their
seventh year as the company's second strongest U.S. line.
-- LEGO Racers took pole position as the third strongest line in the U.S.
"We have successfully realigned our business strategy to balance our
portfolio between core, classic LEGO play, homegrown stories and themes,
and the best licenses in the industry to drive the strongest LEGO momentum
we have seen in the U.S. in years," said Soren Torp Laursen, president,
LEGO Systems, Inc., the company's North American division. "This
accomplishment is perfectly timed to coincide with the 50th anniversary of
the original LEGO brick in 2008. Our legacy of innovation to inspire and
develop the builders of tomorrow through the highest quality, safest play
experiences, combined with our continuing strength among American
consumers, will lead us to growth in 2008."
Expectations for 2008
The global toy market is subject to great uncertainty in 2008. The
trends of stagnation and recession seen in the U.S. during the last six
months of 2007 and into 2008 may create pressure on the Group's
performance. Historically, the LEGO Brand has weathered U.S. economic
recessions very well, and leveraging the Brand's 2007 momentum, which
continues year-to-date 2008, the company expects to achieve global sales
growth of 3-5%, the first time it has planned for growth in the last three
"In spite of the uncertainty of the U.S. economy and the increased
competition facing the toy industry, we feel we are in a prime position to
leverage the tremendous momentum we built in 2007, which is continuing year
to date 2008, to achieve aggressive U.S. consumer sales growth to support
our global growth plan," continued Laursen. "Our history of premium quality
and commitment to safety, and our supply chain operations based in Eastern
Europe and Mexico, are helping to ensure that many of the issues currently
facing toy manufacturers are not as much of an impact for us."
About LEGO Systems
LEGO Systems, Inc. is the North American division of The LEGO Group, a
privately-held, family-owned company based in Billund, Denmark, one of the
world's leading manufacturers of creatively educational play materials for
children. The company is committed to the development of children's
creative and imaginative abilities, and its employees are guided by the
motto adopted in the 1930s by founder Ole Kirk Christiansen: "Only the best
is good enough." Visit the virtual LEGO world at http://www.LEGO.com
LEGO and BIONICLE are trademarks of the LEGO Group. (C) 2008 The LEGO
(C) 2008 Lucasfilm Ltd. & TM. All rights reserved. Used under
1 Source: The NPD Group / Consumer Tracking Service
2 Source: The NPD Group / Consumer Data
3 KidQ 2007
LEGO Systems, Inc.
860-830-5885 / email@example.com
SOURCE The LEGO Group