Strong performance of product lines, such as LEGO® City, LEGO Creator as well as THE LEGO® MOVIE products contributed to sales growth in all regions of the world and led to a highly satisfactory annual result for the LEGO Group with sales increasing to 28.6 billion DKK.
In 2014 we increased our sales by 15 percent. I am proud that we delivered high quality creative play experiences to millions of children all over the world. This resulted in a highly satisfactory result for us, and it remains our aspiration to be the best at what we do, says Jørgen Vig Knudstorp, President and CEO of the LEGO Group.
Key 2014 results
- Revenue growth excluding foreign exchange impacts was 15% year over year on a local currency basis
- Revenue increased by 13% in DKK to DKK 28.6 billion against DKK 25.3 billion the year before
- The year's operating profit increased to DKK 9.7billion against DKK 8.3 billion in 2013 an increase of 16%
- Net profit was DKK 7.0 billion compared to DKK 6.1 billion in 2013 an increase of 15%
- Investments in property, plant and equipment amounted to DKK 3.1 billion in 2014 - an increase of 18% versus the previous years investment level
- Zero product recalls - for the 5th year running
- Injury rate 1.7 compared to 1.7 in 2013
- More than 90% of waste from production sites recycled
- The number of employees in the LEGO Group increased from 13,869 at the end of 2013 to 14,762 at the end of 2014
Double digit sales growth in all regions
In 2014 the LEGO Group continued recent years strong growth in sales, outperforming the global toy market development. All LEGO Group market regions experienced double digit sales growth while the traditional toy market in most countries grew by low single digit rates.
In the LEGO Groups largest market, the US, sales grew double digit as did sales in the UK, France, Russia and China, while Central and Northern European markets achieved healthy single digit growth rates.
Among the top selling lines in 2014 were core themes like LEGO® City, LEGO® Star Wars and LEGO Friends. LEGO Creator and LEGO Technic experienced high growth rates during the year, and a significant contributor to the strong sales growth in 2014 was THE LEGO® MOVIETM product line which launched in conjunction with the release of THE LEGO MOVIE feature film in early 2014. The product line performed strongly across the full year.
Our ability to innovate and reinvent the LEGO play experience every year is vital for our success. We are dedicated to create new products that are fun and appealing to children all over the world. Through our products we provide children with a tool to express their imagination. At the same time we continuously want to deliver play experiences that are safe and of the highest quality, and we have impeccable safety and quality standards. 2014 was our 5th consecutive year without a product recall which remains our ambition level for 2015, says Jørgen Vig Knudstorp, adding:
Looking at the products we have developed for 2015 I feel confident that we will bring joy to even more children in the coming year.
In the coming years the global toy market is expected to continue to grow low single digit.
Due to our continued focus on innovation and commitment to global expansion we expect to grow moderately ahead of the market in the future, while remaining committed to our continued aspiration to deliver the greatest play experiences possible to children all over the world, says John Goodwin, Executive Vice President and Chief Financial Officer.
85 million children reached in 2014
The LEGO Group strategy of globalising operations further has enabled the company to reach more children in markets where the LEGO Group already have a strong presence as well as new parts of the world where LEGO play is relatively new to the consumers.
We estimate that more than 85 million children across the world had a LEGO play experience during 2014. This has only been possible through an ongoing focus on building our capabilities globally during 2014 from manufacturing to sales, as well as developing great products that appeal to children across cultures and geographies, says John Goodwin.
Building the organisation of the future
As a consequence of the LEGO Groups ambition to globalise its activities, an increased focus has been placed on attracting a more diverse, global workforce. During 2014 two main offices have been opened in Shanghai and London to supplement the main offices in Singapore and Enfield, US, and the headquarters in Billund, Denmark. All of these five locations are to have significant top management presence.
In addition to setting up main offices, the LEGO Group significantly increased already extensive investments globally to re-enforce the companys commitment to expand its market presence, and consumer experiences in the future.
In March, a new factory was inaugurated in Nyíregyháza, Hungary, to replace the existing plant in the same town.
In April the foundation stone of a manufacturing facility in Jiaxing, China, to solely supply the Asian market was revealed. Construction is ongoing and the plant is expected to commence operation in 2015 and be fully operational by 2017.
At the LEGO factory in Monterrey, Mexico, an expansion to the packing facilities was inaugurated in June.
In August the foundation stone of the LEGO House a 12,000 m2 experience centre in Billund, Denmark was laid by the owner family of the LEGO Group. When the LEGO House opens, fans of all ages will be able to experience the LEGO story and the endless possibilities of the LEGO brick.
In September, the construction of a new production hall at the LEGO factory in Kladno, the Czech Republic, was completed. The new hall is part of a significant expansion of the plant that is expected to be finalised in 2016.
During 2014 considerable investments have been made in an upgrade of equipment in the moulding factory in Billund, Denmark, which remains the largest moulding location globally when measured by output.
Finally, sales offices in Brazil, Turkey and Malaysia have been added to the long list of local presence for the LEGO Group.
As a result of the LEGO Groups commitment to build an organisation to support the further globalisation of the LEGO play experience, the number of employees in the company grew by 893 to 14,762 employees by the end 2014 compared to 13,869 at the end 2013.
Our dedicated and highly engaged employees around the world can proudly take credit for our strong performance in 2014. In addition, welcoming even more new employees adds to our current diversity, brings new inspiration and new ways of working to our company, so I am pleased that so many employees joined us in 2014, amongst them the two new members of the LEGO Groups Management Board, says Jørgen Vig Knudstorp.
