Lego builds up 9 per cent rise in profits

Lego said that net profits rose to 6.12 billion Danish kroner in 2013 from 5.6bn kroner in 2012 while revenues rose to 25.38bn kroner from 23.1bn kroner, outpacing competitors such as the Barbie manufacturer Mattel.

Warner Bros’ The Lego Movie was released in cinemas earlier this month and topped the box office for three straight weeks, grossing so far more than US$185 million. AP Photo / Warner Bros Pictures

Riding high on the popularity of "block" buster The Lego Movie, the Danish toy giant Lego reported a 9 per cent increase in net profits for 2013 yesterday and a 10 per cent increase in revenues.

The Billund-based, family owned company said that net profits rose from5.6 billion Danish kroner (Dh3.76bn) in 2012 to 6.12bn kroner, while revenues rose from 23.1bn kroner to 25.38bn kroner, outpacing competitors such as the Barbie manufacturer Mattel.

The company, which has enjoyed a decade of growth since posting a loss in 2003 following a period of diversification in the 1990s, said that it expected the global market for traditional toys to experience flat to low-digit growth this year, but that the group would continue to outperform.

Over the past few years traditional toy makers such as Lego, Hasbro and Mattel have faced serious competition from technology companies as children play with more high-tech toys and the popularity of fashion fads spreads.

By comparison Mattel recently reported revenue growth of 1 per cent, while Hasbro said that its 2013 sales were little changed at $4.08bn.

Lego predicted that the global toy market would grow by “low single digits” over the coming years, but added that it plans to outgrow the market and gain market share – especially in its Asian growth markets.

“In less than 10 years we have now more than quadrupled our revenue,” said the chief executive Joergen Vig Knudstorp. “In 2013 we successfully developed and launched products that children put high on their wish list all over the world.”

He added that Lego Friends, the brand designed to appeal to girls aged from five and nine, and Lego Duplo, which is aimed at toddlers and very young children, sold especially well last year, recording double-digit sales growth. Other top sellers included Lego City, Lego Star Wars, Lego Friends, Lego Legends of Chima and Lego Ninjago.

Warner Bros' The Lego Movie was released in cinemas earlier this month and topped the box office for three straight weeks, grossing so far more than US$185 million. Its effect on sales will not be recorded by the company until its 2014 results.

However, Lego said that it was selling 17 specially designed Lego sets and a series of Lego Mini figures “inspired” by the film.

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