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Lego 2011: Outgrows Hasbro, Mattel as ‘Star Wars’ Sets Boost Profit

Lego A/S, Europe’s biggest toymaker,
boosted profit and market share last year to outgrow its main competitors,
helped by sales of building-block sets based on “Star Wars” and “Harry Potter” themes.
Net income jumped 12 percent to a record 4.16 billion
kroner ($747 million) in 2011, the Billund, Denmark-based
company said today in a statement. Revenue rose 17 percent to
18.7 billion kroner.
Lego grew faster than Mattel Inc. and Hasbro Inc., the
world’s largest toymakers, which both reported 7 percent growth
in 2011 sales. The Danish company said today it boosted its
global market share to 7.1 percent from 5.9 percent in 2010 and
that it expects sales to increase this year.
“Growth in the North American market continued
undiminished, and also in most European and Asian markets we
were able to report double-digit increases in sales,” Chief
Executive Officer Joergen Vig Knudstorp said in the statement.
“Sales of license-based product lines in particular were well
above expectations in 2011.”
Lego has bought licenses from moviemakers including
Lucasfilm Ltd. and Walt Disney Co. to base building-block sets
on film characters. Sales of “Pirates of the Caribbean” sets
also exceeded the company’s forecasts.
Lego said the European toy market will be “flat or
slightly declining” in 2012 because of the debt crisis, and
that there will be “modest” growth in the rest of the world.

Comments

  • I helped. New AFOL here as of last year.

    Started w/ Star Wars but I'm seriously considering the Modular Sets that are currently still available in the shop.
  • I am fascinated that this article mentioned both Harry Potter and Pirates as contributors to that growth.
    I thought what we had been hearing is that HP was near end of life with sales and that Ninjago was the big seller? This doesn't mention Ninjago at all, and I would think if HP (and pirates for that matter) really contributed to the bottom line as the article states that they would have milked it for at least one more year. I Know a number of kids that would have wanted more HP sets, especially ones based on past books.

    Tammy


  • @tamamahm
    you will see next year an increased in their sale by 20% and it will be due once again to Star wars and then...batman, LOTR etc...so i am not too worried for TLG now....
  • I'm glad to hear TLG is making a profit...

    Also interesting is that they did a total of $3.35 Billion in sales... If they are indeed selling 220 Million Lego sets a year, then that works out to an average per set price of $15.23, much lower than I would have expected.

    So either the 7 sets per second count isn't right, or they sell tons and tons of $5 items.

    At $50 per set, $3.35 Billion works out to 67 million sets a year.

    Of course, those numbers are wholesale, other than S@H and the Lego stores... So perhaps it is really closer to $20 per set average sale price, but that is much lower than I thought it would be.
  • @tamamahm Just because product line X sold well in 2011 does not mean it will sell nearly as well in 2012. Without the movie tie-ins, there would be a natural expectation of decline in sales (probably a substantial decline) for both PoTC and HP, and additionally you have an already saturated market of buyers who already have products from both those lines. It makes sense to refresh the lineup of themes year to year to remain relevant with current trends in buyer desire, as well as offering new and fresh ideas that appeal.
  • I wonder if they consider a CMF as a set. If they do then that would pull the average price of a set down significantly.
  • edited March 2012
    Article in the sun newspaper today in the sun city section. Sales of £2bn for 2011 globally, uk sales up 21 percent.
  • I'd say the CMF are sets too, and they sell them by the bucket load. Don't think I know any kids (or even that many adults after my bad influence) that don't have a few.

    Also, interesting to hear that POTC did better than expected. I think we were all thinking it was a bit of a dud with all he heavy discounting.
  • edited March 2012
    Ninjago was their highest grossing product introduction line in history. That is pretty amazing, though not very surprising. Classic Asian stylings, ninjas, dragons, and a card/spinner game. What is there for a young boy not to like?

    Was the cartoon any good? Do you think it helped?
  • I wish they'd do a Lego Star Wars cartoon like Ninjago.. The one episode with little Han saving everyone was great.
  • Agreed! The Padawan Menace was funny as heck!!!!
  • I definitely believe the cartoon has helped. Several of the kids in my son's prek class play pretend Ninjago, and several have watched the cartoon.

    I also believe the switch from skeletons to snakes was a great idea. It extends the line by adding in a new 'bad guy'. My son had no interest until the snakes were added, and then he started watching the cartoon.
  • My son too, loves the 2 headed snake.
  • The Ninjago series has not even begun to air in the UK yet, sales of the line there are purely from marketing alone.
  • ^ the cartoon IS marketing! It's the Disney model: Put your previously premium pay channel on standard cable/satellite, populate it with a lineup of cheap to produce run of the mill original shows featuring a never-ending stable of "talented" new teen "stars", and churn out season after season of thinly veiled 30-minute commercials, all designed for the sole purpose of selling merchandise: music, DVDs, books, clothing lines, toys, branded merchandise of every category possible. And laugh all the way to the bank as customers line up in droves to buy the latest X for their preteens.
  • I just bought a set.. Destiny's Bounty I believe it's called. I bought it because 2 of the minifigs are going for $20 a peice on EBay. Also saw a custom Green Ninja at $110 with people still bidding!
  • I'm glad to hear TLG is making a profit...

    Also interesting is that they did a total of $3.35 Billion in sales... If they are indeed selling 220 Million Lego sets a year, then that works out to an average per set price of $15.23, much lower than I would have expected.

    So either the 7 sets per second count isn't right, or they sell tons and tons of $5 items.

    At $50 per set, $3.35 Billion works out to 67 million sets a year.

    Of course, those numbers are wholesale, other than S@H and the Lego stores... So perhaps it is really closer to $20 per set average sale price, but that is much lower than I thought it would be.
    If they consider each CMF a "set" then those alone would drag the average way down due to volume of them at 3$ each.
  • Yes, but if CMF is a "set", then the 7 sets per second figure is not very useful, because that would then include every polybag and other $5 item they sell.

    I thought that "set" meant one of the 4 digit items, or one of the 1xxxx sets... Not every little item.

    Does this mean the promo newspaper giveaways in the UK count in the set totals?
  • Yea, but thats how companies also pad their numbers.
  • ^^ I thought the figure was that there are 7 sets sold per second. That would mean that giveaways and freebies would not count into that statistic.
  • I wonder if the AFOL contribution has grown from the previous year? (previously estimated between 7 and 10 percent of sales). I am very pleased for TLG, what a great year for them and further cementing what a great product the little brick is. Was also pleased to hear that some factories are having increased investment or moving to newer and bigger premises and these are in Europe and Mexico and jobs are being created as a result. Hopefully all this means cost saving measures will now be kept to a minimum, though of course that will never stop.
  • ^^ and ^^^^ it depends on whether TLG sells the items to the newspaper publishers or not.
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