The LEGO Group’s sales and revenue grew at a slower and steadier pace in 2023, while operating profit dropped year-on-year amid increased spending on ‘strategic initiatives’.
The company today published its full financial results for 2023, reporting 4% growth in sales and a 2% jump in revenue compared to the same period in 2022. Those numbers are significantly down on the year prior, however, when the LEGO Group reported a 12% boost in sales and a 17% increase in revenue on 2021. The new figures are in line with the company’s first-half performance in 2023, when sales grew by 3% and revenue by just 1%.
The LEGO Group has once again qualified those numbers with the context of the wider toy market, noting that its performance ‘significantly outpaces’ the wider industry. Revenue for 2023 rose to DKK 65.9bn (£7.5bn), while operating profit dropped 5% on 2022 to DKK 17.1bn (£1.9bn) – 3% of which the company attributes to ‘changes in foreign currency exchange rates’.
It’s chalked the rest up to ‘accelerated spending on strategic initiatives’, noting that operating profit for the second half of 2023 was actually up 7% year-on-year. But net profits were down from DKK 13.8bn to DKK 13.1bn, a drop of around £80m, as the company invested in expanding its global supply chain network, building new factories, opening new LEGO Stores and growing its digital team. It also increased spending on environmental initiatives by 60% in 2023 compared to 2022, and aims to double this year’s annual spend by 2025.
“We are pleased with our performance given that 2023 was the most negative toy market in more than 15 years,” said LEGO Group CEO Niels B. Christiansen. “We continued to grow on top of three years of extraordinary growth and saw strong momentum in the final quarter of 2023. We significantly outpaced the market, growing share and proving the appeal of our strong, diverse portfolio and the LEGO System in Play.
“Despite the external market conditions, we continued to invest for the future and made good progress on digital, sustainability and retail initiatives that will support long-term growth. We are grateful for our dedicated colleagues who remain committed to our mission to inspire and develop the builders of tomorrow.”
While overall growth may be modest compared to recent years, and profits have decreased slightly, these are not unhealthy numbers for the LEGO Group. (We certainly shouldn’t see any lay-offs to the degree of those in 2017.) And the company reports that while sales in China dipped due to the ‘challenging economic environment’, growth in established markets like the US and Central and Eastern Europe was ‘strong’.
“We know that play provides children with skills that help them achieve their potential,” added Christiansen. “We are fortunate to be in a strong financial position to invest in activities that bring learning through play to children around the world and invest for the future, so we can continue to have a positive impact on children for many generations to come.”
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