LEGO’s gift to staff as profits and revenue soar amid the pandemic

Lego

Source: Unsplash/Ravi Palwe.

The world’s largest toymaker LEGO has recorded a bumper year, with burgeoning sales, revenue and profit from the colourful bricks increasing by nearly a quarter during the pandemic.

Consumer sales surged 22% in 2021, compared to 2020, while revenue was up 27% as homebound parents and kids turned to the much-loved toy during COVID-19-induced downtime.

Operating profit was up a mammoth 32% for the year, “despite ambitious strategic investments and increased freight and raw materials costs” associated with strangled supply chains worldwide, the company said.

As the Danish company reached its 90th year in 2022, LEGO sales topped DKR55.3 billion ($11.1 billion) and profits hit DKR17bn ($3.4 billion), while all market groups delivered double-digit consumer sales growth.

In November, LEGO Group rewarded its 24,000-strong staff with three extra paid days off a year as thanks for the surging profits, plus an unspecified “special bonus” for each staff member in April.

The Lego Group has before doled out bonuses based on earnings — a previous bonus was a full month’s salary, according to Bloomberg, but it’s not clear if that is the case here.

“The owner family wishes to … thank all colleagues with an extra three days off at the end of 2021,” LEGO Group said in a statement.

“Our passionate and committed team of more than 24,000 colleagues showed tremendous dedication and resilience to keep the world playing.”

STEM toys hit the spot

So what drove the success? Two things: the LEGO group opened more than 60 stores in the first half of 2021, with two-thirds located in China, bringing the total number of stores globally to 832 as of December 31.

“In 2021 we saw the benefits of strategic investments made over the past three years to innovate our portfolio, expand and evolve our retail experiences and increase capacity within our global supply chain network,” LEGO Group CEO Niels B. Christiansen said in a statement.

The second driving force is thought to be a growing movement towards STEM toys to prepare children with practical skills, though a 9,090-piece model of the Titanic showed the pastime is not just for children. Other top-performing themes in the year were LEGO City (where consumers can make train stations or helicopters), LEGO Star Wars and LEGO Harry Potter.

So what next? The LEGO Group says it expects growth rates will “normalise” to single-digit growth, likely driven by kids heading back into the classroom this year amid the easing of pandemic restrictions.

But it’s still a busy year ahead. Last year the toy giant announced it will open a $1.3 billion factory in Vietnam — the company’s first carbon-neutral factory — to “support long term growth in the Asia-Pacific region”.

Staying on the green theme, the LEGO Group will phase in sustainable packaging to replace plastic bags this year, with an aim to replace all packaging with sustainable alternatives by 2025.

In October, LEGO also pledged to remove gender labelling on their sets after a global survey showed it influenced kids to think about their play and future careers differently.

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