The LEGO Group yesterday reported earnings for the full year 2023. The company grew revenue two percent to DKK 65.9 billion (£7.55 billion) despite a difficult external operating environment and significantly outpaced the toy market, growing market share. Operating profit was a solid DKK 17.1 billion as the company accelerated spending on short- and long-term strategic initiatives.
CEO Niels B. Christiansen said: “We are pleased with our performance given that 2023 was the most negative toy market in more than 15 years. We continued to grow on top of three years of extraordinary growth and saw strong momentum in the final quarter of 2023. We significantly outpaced the market, growing share and proving the appeal of our strong, diverse portfolio and the LEGO® System in Play.”
“Despite the external market conditions, we continued to invest for the future and made good progress on digital, sustainability and retail initiatives that will support long-term growth. We are grateful for our dedicated colleagues who remain committed to our mission to inspire and develop the builders of tomorrow.”
Performance overview
Revenue grew two percent to DKK 65.9 billion vs. DKK 64.6 billion in 2022, in line with expectations. Excluding the impact of foreign currency exchange rates, revenue grew three percent compared with 2022.
Consumer sales grew four percent in 2023 vs. 2022, driven by strong growth in the U.S. and Central and Eastern Europe. This was offset by a decline in China due to the challenging economic environment.
Operating profit was DKK 17.1 billion down five percent vs. 2022 due to accelerated spending on strategic initiatives and changes in foreign currency exchange rates. Excluding the effects of currency, profit was down two percent. Operating profit in the second half of 2023 grew seven percent versus the same period in 2022 due to revenue growth and increased productivity. Net profit was DKK 13.1 billion in 2023 compared to DKK 13.8 billion in prior year.
Cash flow from operating activities increased one percent to DKK 15.4 billion from DKK 15.3 billion. The company invested DKK 8.5 billion mainly in offices and new and existing factories to expand capacity to support growth, up from DKK 6.0 billion in 2022. This resulted in free cash flow of DKK 6.9 billion in 2023 against DKK 9.3 billion in 2022.
