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LEGO Group annual result just published

http://aboutus.lego.com/en-gb/news-room/2013/february/annual-result-2012?CMP=TWC-CO2012Annualresult2012

Brief summary:
* Revenue up by 25% to GBP 2,549 million (nearly triple the sales of 2007).
* More than 60% of sales are new launches every year.
* Ninjago and Friends did well.

Comments

  • paul_mertonpaul_merton UKMember Posts: 2,952
    brb, just working out how much of that revenue was down to me...
    jasorMatthewLegoFanTexas
  • BrikingBriking Dorset, UKMember Posts: 748
    I'm sure me coming out of my dark ages had a significan impact... lol
  • CCCCCC UKMember Posts: 17,806
    “Consumers will find it easier to handle the packaging, retailers will have space for more boxes on their shelves, and we’ll use less energy in transporting the goods to the shops. So it’s a win‑win situation for everybody,” says John Goodwin, CFO of the LEGO Group.

    Not to mention resellers having to fill up less of the loft / under-bed storage / underwear drawers / wherever else they stash stuff for the future.
    bellybutton290
  • jockosjunglejockosjungle Member Posts: 701
    Considering most sets get discontinued pretty soon, obviously new sets are going to be 60% of the sales.
  • tamamahmtamamahm Member Posts: 1,950
    "The best-selling product lines in 2012 were LEGO City and LEGO Star Wars™, followed by LEGO Ninjago (launched in 2011). The new product line, LEGO Friends, delivered a strategic milestone in 2012, selling much better than expected and becoming the fourth best-selling product line. Even though the LEGO Group more than doubled its production of LEGO Friends versus expectations, it was not possible to deliver all of the products demanded. "

    This part seems fairly key as well.
    Lego Friends did not exist the year before.
    Most of the what is being sold in this line is to a brand new market that was very much untapped before. This is really new revenue/growth for the company. This isn't kids in their established market that would have bought super heroes decided instead to by Friends. (in general) An entire line/market that was non-existant previously was their 4th largest product line. Now, obviously, there are still girls that would have bought either products, and their are still AFOLs and resellers, etc., so it is not all new growth, but overall this is still fairly significant.

    What always surprises me is that Lego City still remains a top selling line. I have always found this line pretty "blah" in terms of what my kids want. Of course, I can also see this really as a classic entry line for kids, but still. I am always a bit surprised.
  • SirKevbagsSirKevbags Fairy Land Member Posts: 4,030
    ^ I see owning a Lego Police Station as a right of passage for 5yo boys.
    rocaobellybutton290y2joshSi_UKNZ
  • PoochyPoochy USAMember Posts: 479
    ^ Or 35yo men coming out of their dark ages ... (or maybe it was just me).
    tamamahmkylejohnson11thenosjasor
  • thorniethornie Member Posts: 245
    This is the best time ever to be into LEGO. I am really happy to see box sizes start to shrink by 25%. I am also impressed by their sustainability and green initiatives. They've also tripled sales from 2007! Wow.
  • AanchirAanchir United StatesMember Posts: 2,807

    Considering most sets get discontinued pretty soon, obviously new sets are going to be 60% of the sales.

    Other way around, actually. Products are discontinued pretty quickly BECAUSE their sales slump off when they're no longer new, and older products have to be discontinued to make room for producing brand-new products. Which makes sense-- the audience for a set becomes smaller once it's something a lot of people already have, and also older products can't be afforded the same level of marketing and promotion by either TLG or individual retailers.

    Anyway, glad to see that some of the consistently reliable product lines are remaining successful and new ones like Friends are simultaneously joining the pack. It's a shame LEGO Hero Factory isn't mentioned... it'd be nice to have some insight into how that's performing. Obviously it's not making as big an impact on the company as BIONICLE did in its early years, but then again BIONICLE's early years were in the early naughts when TLG was still suffering financially.
  • rocaorocao Administrator Posts: 4,288
    CCC said:

    Not to mention resellers having to fill up less of the loft / under-bed storage / underwear drawers / wherever else they stash stuff for the future.

    Or collectors who keep boxes, whom unlike resellers, will never be able to reclaim that space. I still have my long-standing wish that LEGO would use fewer box sizes and that smaller boxes be able to fit neatly into larger boxes.

    While I personally love the smaller boxes, I bought a $30 TMNT set as a birthday gift recently. It's size was underwhelming compared most the other presents that were a fraction of the cost. I'm an indoctrinated AFOL so I still took solace in knowing the value of what I was giving, but for every one of me there are probably a dozen parents and grandparents who don't know the difference and will instead eschew the small LEGO box for countless other toys in huge packaging.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    In USD, that works out to just over $4 billion in sales. It is 8% of the toy market in the US and key is that it appears that Friends passed Barbie in sales dollars last year. That is amazing...

    As others have said, this is a whole new market segment for LEGO. For whatever criticisms Friends may have, clearly the consumer has spoken.

    For what it is worth, my daughter and all her friends love the line and can't seem to get enough of them. I gave small Friends sets to several people for Christmas, including my postman who has a 6 and 10 year old daughters, he has told me he has already bought more as they love them.

    Ninjago also clearly took LEGO by surprise, or they wouldn't have had it ending. Clearly at some point they figured that out and put plans in place to revive that. Hope it doesn't take too long, kids are fickle. :)

    My son has now asked for Chima, so word has gotten out. I have said no, too many themes to keep up with already and he hasn't built the golden dragon or temple of light yet. As a parent, I only want to keep up with so much, something LEGO needs to keep in mind.
  • rocaorocao Administrator Posts: 4,288
    edited February 2013
    Aanchir said:

    Other way around, actually. Products are discontinued pretty quickly BECAUSE their sales slump off when they're no longer new, and older products have to be discontinued to make room for producing brand-new products. Which makes sense-- the audience for a set becomes smaller once it's something a lot of people already have, and also older products can't be afforded the same level of marketing and promotion by either TLG or individual retailers.

    Right, saying 60% of total sales is new releases because products are discontinued quickly sounds like @jockosjungle is implying that customers had no choice but to buy new product which isn't correct. What we see on the shelves has reached as close to an equilibrium as LEGO can achieve with their current fulfillment processes. As long as they aren't discontinued, old sets and new sets will be restocked as quickly as the sales justify. There are of course shortages of sets (although even those tend to be of newer releases) and some inefficiencies (i.e. they ship by the palette so some things get overstocked) but that doesn't change the overall picture that much.

    With that said, LEGO does seem to be testing just how short a lifecycle can be to minimize opportunity cost. CMFs, Ninjago spinners, Friends foilpacks, and Chima Speedorz are high demand, low cost items so they're expected to sell briskly and apparently don't need to languish on the shelves for even a year, as most of the demand is filled within months.
  • binaryeyebinaryeye USMember Posts: 1,734

    As a parent, I only want to keep up with so much, something LEGO needs to keep in mind.

    I would think catering to the many casual consumers with a large variety of products is more important than catering to those relative few who feel they need to "keep up" with all of LEGOs product lines.
  • bellybutton290bellybutton290 Member Posts: 453
    Some amazing numbers there! too bad they don't float their stock. I wonder what the latest estimates are for AFOL purchases, it was about 5-7 percent of sales previously or something like that.
  • rocaorocao Administrator Posts: 4,288
    ^ Right. Kids are fickle. To account for their fickleness, develop a large variety of themes and products. Kids are unpredictable, but they can be persuaded. That's why successful companies invest so much money in marketing, and it's how TLG can confidently declare that Legends of Chima will be a success even before a single set was sold.

    In all instances, being able to adapt and execute quickly is crucial, and TLG continues to make strides there as well.
  • tamamahmtamamahm Member Posts: 1,950
    edited February 2013
    I see both points from LegoFanTexas and rocao.
    I am a fan of having a large variety of themes and products. As an example, even with the many themes out this year, there is next to nothing for my son's interests. With my girls, it is even more bleak. Lego will lose money from me this year simply because of lack of product lines.

    On the other hand, LegoFanTexas has a point.

    My son just got Ninjago for Christmas. He used his Christmas money for some of the new Ninjago sets. I really do not want him hoping to the next fad.

    This is the difference with Ninjago/Chima compared to a line like Friends or Super Heroes. The later are JUST lines. One really wants to have a large variety of themes for lines like that.

    For Ninjago, we are talking about a top to bottom, left/right, every which direction marketing strategy.
    Building kits
    toy
    TV show
    merchandise
    clothing

    Chima will be similar.
    The idea is to take something and make it a huge sensation.

    This is why there are not new Ninjago shows out right now. There are not spinners out. All of that truly conflicts with Chima, especially when they are trying to build it to be as crazy big as Ninjago.

    I very much understand LegoFanTexas's point.

    I really have no interest in my son suddenly dropping Ninjago, when he just received sets, and moving on to the next best thing because it is the next best thing and kids are slowly starting to talk about it.
    My son is enjoying Ninjago. There are still Ninjago sets out there.
    It's a nice lesson of not jumping onto something simply because other kids are.

    Because of that, nope, I'm not buying Chima at this time.
    That may change down the road, but I suspect if it happens, it will not be until Christmas or until next year.
  • rocaorocao Administrator Posts: 4,288
    It'll come down to the eternal struggle between what our children want and what we want as parents. You may win this battle, but you won't win the war ;)
  • binaryeyebinaryeye USMember Posts: 1,734
    tamamahm said:

    I really have no interest in my son suddenly dropping Ninjago, when he just received sets, and moving on to the next best thing because it is the next best thing and kids are slowly starting to talk about it.

    I can fully understand not buying something new to reinforce appreciating what you've already got. But if your son wants a Chima set would you instead buy him a Ninjago set? That type of behavior among parents that buy LEGO for their children is likely quite rare.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    binaryeye said:

    As a parent, I only want to keep up with so much, something LEGO needs to keep in mind.

    I would think catering to the many casual consumers with a large variety of products is more important than catering to those relative few who feel they need to "keep up" with all of LEGOs product lines.
    That may be true, but depth of product line is important, just as having multiple product lines is.

    It is a balance.

    I'm simply not going to introduce Chima into my house. Nothing from that line will be sold to me.

    I already have Ninjago, so if LEGO releases some ultimate playset for Ninjago, I may well buy it, because I already own many such Ninjago sets.

    Other people already have "enough" Ninjago and won't be movidated to buy another set. They might buy Chima sets. Or they might buy something else. Or nothing at all.

    So there are two sides to that coin. :)

    What I would have liked would be a third season of the pirates that were in just that one episode. They could rerelease the ship in pirate trim, they could create the entire line of pirate enemies, etc. My son would have liked all of it.

    As it stands, he has:
    City
    Technic
    Star Wars
    Ninjago
    Super Heros

    That's it, if he wants something else, then one of those has to go. It is already 1 too many in my taste, but I allowed Technic in there because I feel it is different and teaches him something.

    When I suggested that he could have Chima if all the Ninjago sets were sold, he put his head down and looked quite sad. I took the chance to sit down with him and have a conversation about having "enough" in life and not trying to collect "everything". The goal of life is not to end up with more "stuff", it is to enjoy what you do have.
    pharmjodSi_UKNZ
  • RTORTO Member Posts: 65
    I posted this on the home page, but I think it can be repeated here, in a slightly different format:

    Here are the 2011 stats for the top 5 toy makers in the world: http://www.statista.com/statistics/241241/revenue-of-major-toy-companies-worldwide/

    Lego was 4rth ($3.163 billion).

    In 2012 they jumped to 2nd:

    Mattel: $6.42 billion
    Lego: $4.17 billion
    Hasbro: $4.09 billion

    That's extraordinary growth.
    pharmjod
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    rocao said:

    It'll come down to the eternal struggle between what our children want and what we want as parents. You may win this battle, but you won't win the war ;)

    In my view, that is part of what is wrong with how we as a socity are raising children.

    I am my child's parent, it isn't a battle or a war. I know better than he does what he needs, it is not a debate or a democracy. He is welcome to tell me what he wants, but ultimatly I'll tell him what he can have. Once he goes up and earns his own money, he can do whatever he wants with it.

    Example: My son has a Nintendo 3DS. The house rules are that he can play with it downstairs on the couch, but that it does not go into his room. Recently I caught him with it after bedtime in his bed. He lost it for a month for that infraction. He knows that if he does it again, I'll sell it and he'll never get another one.

    I see his friends, and largely I see spoiled, whiny children who badger their parents for everything. I refuse to allow my children to grow up like that.
    CrownieBumblepantspharmjod
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    binaryeye said:

    I can fully understand not buying something new to reinforce appreciating what you've already got. But if your son wants a Chima set would you instead buy him a Ninjago set? That type of behavior among parents that buy LEGO for their children is likely quite rare.

    The other option is to not buy either. :)

    I've learned that my children point to almost anything new and shiny and say "I want that", I've also learned to say no most of the time.

    Much of the time, it is just "oh, new shiny thing" and they quickly forget about it. When it comes up over and over, I pay it more attention.

    That is how we ended up with a 3DS, my son played with one at his friends house and talked about it enough that I looked into it and decided it was something that fit into the family well enough, that his sister could use, and the price of it and the games made sense.

    But I sure didn't get one the first time he said "oh, this is cool, I want one". :)
    kylejohnson11
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    RTO said:


    Lego was 4rth ($3.163 billion).

    In 2012 they jumped to 2nd:

    Mattel: $6.42 billion
    Lego: $4.17 billion
    Hasbro: $4.09 billion

    That's extraordinary growth.

    It is, and hopefully they take a breath and enjoy their new status. It becomes very hard to keep growing at that rate once you're so big, it takes larger and larger jumps to make an impact.

    Hopefully, being a privately held company, they won't feel the pressure to keep growing 25% a year.

    Take those profits, put 1/3 into a rainy day fund, put 1/3 into improving manfacturing so that you can make the same products for less money, put the last 1/3 into R&D to make sure your products don't become stale.

    Another idea, one I'm sure LEGO is working on... Consider what else besides LEGO System, LEGO Duplo, LEGO Technic, & LEGO Mindstorms can be done with the idea. Is there another product line that could work?

    Anyone here remember Quatro? I actually bought some of those from Walmart back in 2005-2006 for my newborn son, not knowing at the time that it was new and wouldn't last long. Shame it died off, cool concept.
  • binaryeyebinaryeye USMember Posts: 1,734

    As it stands, he has:
    City
    Technic
    Star Wars
    Ninjago
    Super Heros

    That's it, if he wants something else, then one of those has to go. It is already 1 too many in my taste, but I allowed Technic in there because I feel it is different and teaches him something.

    This goes back to my original point: I expect most parents see their child's LEGO collection in terms of total quantity, not the number of different product lines.

    Anyone here remember Quatro? I actually bought some of those from Walmart back in 2005-2006 for my newborn son, not knowing at the time that it was new and wouldn't last long. Shame it died off, cool concept.

    While I wish my toddler had been able to get Quatro instead of MegaBloks (as gifts from relatives), it doesn't surprise me that LEGO no longer produces them. I think the "active window" for that size of blocks is relatively small. My son, for example, started playing with Duplo at about 1.5 years. Combine that with the lower price of the competition, and it probably wasn't worth it for LEGO to pursue that market.

    What I would like to see from LEGO is a micro line, similar to nanoblock. I think this would better cover some potential markets (for example, the Architecture line). I'm a fan of microscale, so I know amazing things are possible with System pieces. But in general, the scale is too large for recognizable detail at small sizes.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    binaryeye said:

    As it stands, he has:
    City
    Technic
    Star Wars
    Ninjago
    Super Heros

    That's it, if he wants something else, then one of those has to go. It is already 1 too many in my taste, but I allowed Technic in there because I feel it is different and teaches him something.

    This goes back to my original point: I expect most parents see their child's LEGO collection in terms of total quantity, not the number of different product lines.
    Do they? I do it the other way around... (maybe I'm just different)

    He can have almost anything he wants from those 5 lines, but nothing from outside them.

    My goal is to create themes, he has a shelf for each one, but if he ends up with a few sets from everything, it all just becomes clutter at some point.
  • CCCCCC UKMember Posts: 17,806
    edited February 2013
    ^ Maybe clutter in your eyes, but do they mix sets? My kids think nothing of having Batman flying though a city hospital to rescue Frodo, while avoiding the evil S6 intergalactic girl.
  • BanditBandit Member Posts: 890
    My kids get presents for Xmas and their birthdays. If the #1 thing on their list is set X, they get set X. Doesn't matter what theme it is. What do I care? :) I suppose if I'm buying something for them for some other reason the rest of the year, I can impose my own restrictions on what I want it to be, but I'm not going to tell them what they can and can't have otherwise. They're kids, gosh darn it! :)

    And of course, there's a money limit threshold on sets for birthdays/xmas. No 10188's or the like for them. But why would they want that anyway, when they just play with mine? ;)
    sidersdd
  • mathewmathew Member Posts: 2,096
    edited February 2013


    He can have almost anything he wants from those 5 lines, but nothing from outside them.

    My goal is to create themes, he has a shelf for each one, but if he ends up with a few sets from everything, it all just becomes clutter at some point.

    It sounds like you are projecting yourself onto your son's Lego collection. Lego are toys. Kids don't "collect" like adults do. They play. My son who is probably younger than yours will dissasemble a set as soon as I hand it over to him. He makes creations that rival Syd's from Toy Story. That's the fun of it for him. Not displaying it on a shelf where it will collect dust.
  • BanditBandit Member Posts: 890
    I can tell you, as an anal, lego obsessive AFOL parent, it's been incredibly difficult to just 'let go' and try not to worry about what my kids are doing with their sets. But I've come to the conclusion and realization that this is their stuff, not mine, and if they want to tear sets apart, make franken-sets, lose pieces, mix up all the minifig heads and bodies, mix 15 different themes together, and whatever else, I just have to let them do it.

    It drives me nuts, but I've just decided I'm not going to stifle their creativity, and tell them what they can and can't do, and get mad when they do stuff 'I wouldn't do'. Hell, all I do is build stuff and put it on a shelf and look at it. My kids must think I'm insane. They're just little kids, that's what they do, and I have to understand that and be ok with it.

    Every so often we'll sit down and put stuff back together, and everything will be right again with the world, and I am happy and contented, and then the next day the chaos is back. But at least I had those few hours. ;)
  • jockosjunglejockosjungle Member Posts: 701
    That's the point of lego after all! Build it, break it and then mix it all up in one giant box!
  • RedbullgivesuwindRedbullgivesuwind Brickset's Secret HeadquatersMember Posts: 1,767
    I think when it comes down to how AFOL's and kids see the world is always best summed up in this lego advert. On one side the AFOL who builds a nice structured house. The other a child who adds a laser turret because its cool.

    sidersddfitzyfitzPoochydougts
  • RedbullgivesuwindRedbullgivesuwind Brickset's Secret HeadquatersMember Posts: 1,767
    On topic I think this growth has really been helped, I think in the UK at least, by the amount of press that Lego has been receiving. Numerous newspaper articles, MOC's in the press, models featured on websites. It seems to have really driven the brand forward. What's more is it's seen as good wholesome fun. Which has raised it's profile even more.
  • PicopiratePicopirate Member Posts: 312
    With LEGOs success, can anyone explain why they recently had layoffs and moved packaging? It sounds like they are tinkering with a system that was already working well. I can understand that this could help the company become even more profitable but such decisions in times of success just make the company look bad. It also seems to contradict Ole's supposed grief when he was forced to lay off employees in the early years of the company. I understand it is a business and dont mean to get down on them, I just fear that they might may cut corners in other areas and the product quality may begin to suffer.
  • BumblepantsBumblepants DFWMember Posts: 5,832
    ^the full article indicated that they are moving the packing jobs closer to the markets to save $$ on transport and the like. It also mentioned that jobs were being added elsewhere. Of course Lego wrote the report so I am sure they made it sound as cheerful as possible. Basically it boiled down to trimming costs and streamlining production.
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