TLC builds higher profits as sales of new products soar

[Stinky]

Read all about it here.

The Friends series did the trick. Really a good result in these times of crisis.

Lego builds higher profits as sales of new products soar

Danish toy company defies downturn to boast revenues of $4bn in 2012, up from 25% in 2011 and nearly treble sales of 2007

guardian.co.uk,

Thursday 21 February 2013 11.52 GMT

Lego Friends sculpture "Stephanie" at the New York toy fair. The building bricks have become increasingly popular with girls. Photograph: Andrew Kelly/Reuters

Lego continues to defy the downturn, reporting profits and sales up 25% after the successful launch of new products including its Lego City, Star Wars sets and Lego Friends.

The Danish firm said revenues were $4bn in 2012, up from 25% in 2011 and nearly treble the sales of 2007.

The chief executive, Jorgen Vig Knudstorp, said: "It is a highly satisfactory results and better than we expected at the beginning of the year. This is due, first and foremost, to the fact that we were able to develop and launch products that children all over the world have put at the top of their wish lists in 2012." He added that 60% of sales were from new products.

The building brick toys, traditionally popular with boys, have also increased sales among girls, especially in the US with the launch of its Lego Friends brand.

According to the company, the number of girls in the US with Lego has trebled in the past year, and there has been double-digit growth across North America, Asia and central and eastern Europe. Southern Europe has struggled, although there were single-digit boosts, the company said.

Lego says it expects 2013 to be satisfactory. Photograph: Gorman & Gorman/Getty

Operating profit rose to $1.4m from $1.1m in 2011, with net profit up to $969m against $776m in 2011.

The company announced plans to shut one of its plants in Denmark during the year, with the loss of 380 jobs, as it streamlines production. It also expanded into the Czech Republic and built a factory in Hungary.

Lego bosses hope to continue increasing sales in Asia and opened a head office in Singapore.

The company said 2013 would be tough, but it had high hopes for the launch of Legends of Chima, based on a fantasy world populated by mythological animal tribes.

Lego said it expected a "satisfactory" result for 2013, but cautioned: "The challenging global economic situation will result in lower growth rates in 2013."

Edited February 27, 2013 by Fugazi
added original article

[Lyichir]

They recently released their annual report, and connected to their profits is a point I noticed; that they have such great profits and success, in the midst of a hurting industry in a poor economy, while paying taxes at an effective rate of around 25%. Here in the U.S., politicians and corporations balk at the idea of raising the comparatively low tax rate on corporations for fear that it'll cripple them or provoke them into finding new ways to avoid taxation. But Lego serves as a pretty effective example of how a corporation can prosper and pay their fair share at the same time.

[naf]

Glad to see the company doing better, but sad to hear about plans to shut down a plant in Denmark. I was always willing to pay higher prices for Lego because I knew that they're made in Denmark, with quality and responsible labor practices. I hope Lego isn't following the global trend of shipping manufacturing and jobs to third world countries where labor is exploited. TLC has always been a leader this way, so I hope they do the right thing in the end.

[antp]

Glad to see the company doing better, but sad to hear about plans to shut down a plant in Denmark. I was always willing to pay higher prices for Lego because I knew that they're made in Denmark, with quality and responsible labor practices.

It is a decoration & packaging plant that they shut down in Denmark. In a longer article they were saying that along with that shutdown, they were going to invest in the molding in the main Denmark plant to maintain a similar amount of jobs in Billund (and possibly increase in the next years).

edit: from http://cphpost.dk/business/lego-cutting-380-positions-billund

The company is planning to invest hundreds of millions of kroner in their factory in Billund in future years. Because of this, Lego believes that the number of employees in Billund will remain the same or even rise in the future, despite the closure of the packaging plant and production line.

Edited April 2, 2013 by antp

[naf]

That's good to hear, thanks for the info.