About Lego Systems, Inc.
Doing business as LEGO Group, LEGO produces hundreds of millions of interlocking plastic bricks every year and vies with Mattel and Hasbro for the title of world's largest toy company. As well as producing its own lines, such as LEGO City and LEGO Friends, the company produces LEGO sets in partnership with many of the entertainment industry's major players, such as Disney (Star Wars, Marvel), Minecraft, and Angry Birds. LEGO's business model rests on a relentless pace of product development, with 60% of sales coming from new product launches. The group operates roughly 200 retail outlets in the US and Europe and sells its products in more than 130 countries. The founding Kristiansen family holds 75% of LEGO's shares.
Note: Growth rates may differ after conversion to US Dollars. LEGO reports its financials in Danish Krona.
LEGO's sales grew steadily for a decade until 2017 when the company overextended itself and sales sagged.
The company returned to growth in 2018, sales growing 4% to DKK 36.4 billion (roughly $5.5 billion). Growth was led by a double-digit increase in sales in China, where LEGO Group continues to expand its retail channels, branded stores, and e-commerce and digital platforms.
Net income grew 3% to DKK 8.1 billion ($1.2 billion) more or less in line with revenue growth; operating margins were unchanged at 29.6%.
LEGO's cash position strengthened during 2018, ending the year DKK 574 million higher at DKK 1.1 billion. Its operations generated DKK 9.8 billion, while its investing activities used DKK 1.5 billion and financing activities used DKK 7.8 billion. Its main cash uses in 2018 were dividend payments totaling DKK 7.0 billion and capex of DKK 1.4 billion.
A decade of growth came to a halt in 2017 when LEGO missed its half-year revenue goals by a large and unexpected margin. The company blamed the complex corporate structure that had been thrown up to support the rapid expansion of the last five years that saw it overtake Mattel and Hasbro as the world's biggest toy company. It responded by cutting 1,400 jobs, restructuring, and reducing the number of licenses it holds.
It reduced its capital expenditure program slightly in the following year, down from DKK 1.5 billion to DKK 1.4 billion ($210 million). LEGO expanded two manufacturing plants in geographically advantageous locations, Monterrey in Mexico and Nyíregyháza in Hungary, which are both expected to be completed in 2019.
LEGO is intent on accelerating its rapid growth in the Chinese market. The company is opening stores and developing its e-commerce platform in the country, and was rewarded in 2018 with double-digit sales growth in China.
555 Taylor Rd
Enfield, CT 06082-2372
Phone: 1 (860) 749-2291
Employer Type: Privately Owned
Chief Financial Officer: Marjorie Lao
Director: Heather Manchester
Senior Director, Demand and Customer Planning: Mark Moynihan
Employees (This Location): 1,350
Employees (All Locations): 1,450
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