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LEGO's building mission to revive U.S. growth

Tuesday, September 06, 2016 - 01:37

Sales at LEGO grew 10 percent in the first half of 2016 but net profit slipped as it ramps up investment in Asia. As Hayley Platt reports, the Danish toymaker's CFO says the North America market has been difficult

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It's the world's most profitable toymaker enjoying double-digit growth for more than a decade. But profits at LEGO stalled slightly in the first half of the year. The Danish firm blamed supply challenges in North America where demand outstripped supply keeping growth flat. (SOUNDBITE) (English) LEGO, CHIEF FINANCIAL OFFICER, JOHN GOODWIN, SAYING: "We've had to dial back a little bit in 2015 on some of our demand stimulating activities and we still ended up having a very strong 2015 in that region. We believe though that the dialling back on activities has meant we've had a slow entry into 2016 from a growth point of view." Still sales of its brightly coloured bricks in Europe and Asia helped revenues grow 11 percent to 2.35 billion dollars. Operating profit rose just 1 percent. The group's also investing heavily in its future. It's already expanded production in Mexico and plans to double its plant in Hungary. A factory in China is also a new addition. (SOUNDBITE) (English) LEGO, CHIEF FINANCIAL OFFICER, JOHN GOODWIN, SAYING: "About 80 percent of the LEGO sales currently come from countries that contain 20 percent of the world's child population. So we see lots of opportunities out there (China) for us to reach more children and that's why we're investing for the future." But expansion doesn't come cheap. This year alone the group has upped its staff numbers by 24 percent - taking the total to 18,000. Last year it estimated it sold more than 72 billion plastic bricks. No surprise perhaps that they didn't count them all.

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LEGO's building mission to revive U.S. growth

Tuesday, September 06, 2016 - 01:37