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Today, The LEGO Group released their annual report for 2012 and it was another successful year for the toy company. With the launch of the 2013 Toy of the Year Friends theme combined with the continued successful themes such as City, Star Wars, and Ninjago, LEGO increased their revenue by a staggering 25% to GBP 2,549 million. This amount almost triples the sales from 5 years ago in 2007 and is the fifth year in a row that the LEGO Group had a revenue growth over 15%.

Key facts from the LEGO Group’s annual report for 2012, which was published today:

• The year’s operating profit increased to GBP 866 million against GBP 660 million in 2011, an increase of 40%.
• The operating margin increased to 34% from 30% in 2011.
• The year’s net profit increased to GBP 611 million against GBP 484 million in 2011.
• The revenue increased by 25% to GBP 2,549 million against GBP 2,181 million in 2011. In local currency (i.e. excluding the impact of foreign exchange changes) revenue increased 20% year over year.
• The net cash generated from operating activities was GBP 680 million against GBP 430 million in 2011.
• In 2012 the Group paid GBP 208 million in corporate income taxes.
The LEGO Group reporting currency is DKK. Conversion from DKK to GBP is based on an annual average currency rate (however conversion of net cash generated from operating activities is based on year-end currency rate) in 2012 and 2011 respectively.

Looking forward to 2013, … Continue

As a leader in the industry, LEGO is taking a stand to help the environment by releasing smaller boxes to cut back on their carbon footprint. These new boxes will have a FSC (Forest Stewardship Council) certification “which lowers the CO2 impact of its packaging by about 10%.” You will be able to start seeing the smaller boxes this year and by 2015, all of the products will be in smaller boxes. With this change, LEGO will save about 4000 tons of cardboard which is about 18% of their current consumption. These new boxes will come from sustainable forest so less trees will have to be taken down.

How will this benefit consumers and The LEGO Group? For us consumers, we’ll have smaller boxes to carry around and stores will have more space to stock their shelves. For LEGO, the smaller boxes also affect logistics such as transportation from the factories to the stores. LEGO is also involved in other plans to lower their carbon footprint. About 25% of the emissions are from manufacturing of the bricks themselves so they’ve made plans to mold the bricks more efficiently. The company also has invested in wind energy to improve their energy consumption. By using wind, LEGO can use clean energy that is plentiful and produces no emissions.

Read more about LEGO’s stance to help the environment here.

If you’re wondering what a retired LEGO mold looks like after producing 120,000,000 bricks, the above image shows it. A recent picture that was posted on Reddit shows a mold that was producing red 2×3 plates in it’s last cycle of it’s life. A commenter did calculations on how long the mold lasted and suggests it’s been at work for around 7 years nonstop, minus maintenance and color changes.

120,000,000 bricks / 8 bricks per cycle = 15,000,000 cycles
15,000,000 cycles / 4 cycles per minute = 3,750,000 minutes
3,750,000 minutes / 60 minutes per hour = 62,500 hours
62,500 hours / 24 hours per day = ~2604 days
2604 days = 7.135 years

According to the Pick-A-Brick page on Shop@Home, these 2×3 plates cost $0.15 each so if prices haven’t changed since the mold started production, it would’ve made LEGO around $18,000,000. As someone who has worked in the plastics industry before, the molds are the centerpiece to getting the bricks produced. Needing to be very intricate and precise, they can cost upwards of tens of thousands of dollars to make. They take a few hours to change out of the plastic injection machines and can weigh between 150-1500 kilos. If you have time, I suggest watching National Geographic’s Ultimate Factories/Megafactories of the LEGO factory in Denmark on how the bricks are created. The video talks more about the molds starting at 13:15.