Lego Profit Soars 35% as Toy Bricks for Girls Drive Sales Growth

Lego A/S, Europe’s biggest toymaker, boosted profit and market share last year as demand for its new building block sets for girls propelled sales growth.

Net income rose 35 percent to a record 5.61 billion kroner ($993 million) in 2012, the closely held Billund, Denmark-based company said today in a statement. Revenue increased 25 percent to 23.4 billion kroner, outpacing sales growth at Mattel Inc. (MAT), the world’s biggest toymaker. Hasbro Inc. (HAS), the second biggest, said this month its revenue declined.

Lego said it couldn’t keep pace with demand for its “Lego Friends” sets even after the company more than doubled production versus initial targets. The series is Lego’s sixth attempt to target girls and the company’s “most significant” new product in a decade, Chief Executive Officer Joergen Vig Knudstorp said at the product line’s introduction a year ago.

“We were able to develop and launch products that children all over the world have put at the top of their wish lists in 2012,” Knudstorp said in today’s statement. “It’s a highly satisfactory result and better than we expected at the beginning of the year.”

“Lego Friends” was the company’s fourth-best selling product line in 2012. The best was its classic “Lego City” sets, followed by “Lego Star Wars” and “Lego Ninjago.”

The Danish company said it boosted its global market share to 8.6 percent from 7.1 percent in 2011.

‘Economic Challenges’

El Segundo, California-based Mattel reported Feb. 1 that 2012 sales rose 2 percent to $6.42 billion. Hasbro, based in Pawtucket of Rhode Island, on Feb. 7 reported a 4.7 percent decline in 2012 sales to $4.09 billion.

“Continued sales growth is expected in 2013,” Lego said. “However, the economic challenges in many European and North American markets are expected to result in lower growth rates for the company than achieved in recent years.”

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net

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