LEGO has just released their financial details for the first half of 2017 and it’s not looking too good for the best toy brand in the world. Compared to the same time as last year:
– Revenue down 5 percent to DKK 14.9 billion compared with DKK 15.7 billion
– Operating profit down 6 percent to DKK 4.4 billion compared with DKK 4.7 billion
– Net profit down 3 percent at DKK 3.4 billion compared with DKK 3.5 billion
– Cash flow from operating activities was DKK 4.6 billion compared with DKK 3.9 billion
LEGO Group Chairman, Jørgen Vig Knudstorp stated,
We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this.
We are working closely with our partners and we are confident that we have the long-term potential of reaching more children in our well-established markets in Europe and the United States. We also see strong growth opportunities in growing markets such as China.
Some of the best performing themes for 2017 include LEGO City, LEGO Friends, LEGO DUPLO, and LEGO Technic, all in-house IPs. The LEGO Batman Movie also did very well.
As a result of the profit decline, the company will have to trim its total global workforce by about eight percent which is about 1,400 jobs by the end of the year.
The LEGO Group will now have to restructure the company as well as having to clean up their inventory to simplify the business model.
What are your thoughts on this surprising piece of news? Let us know in the comments below.
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