Lego's H1 profits grow as toymaker invests more in greener materials

28th Aug 2024 09:41

(Sharecast News) - Toymaker Lego announced an impressive set of first-half results on Wednesday, with both top and bottom lines expanding by double digits, as it continued to outpace industry growth and increase its market share.

Revenues were 13% higher than last year in the first six months of the year at DKK31bn (£3.5bn), with operating profit up 26% at DKK8.1bn, as it "significantly outperforms" the wider toy industry.

Results were helped by the launch of around 300 new Lego sets during the period, with top performers including a mix of both "homegrown" and licensed themes like branded Star Wars and Harry Potter toys.

"Top-line growth was driven by strong demand for its large and diverse portfolio, especially in Americas and Europe, and excellent execution in all markets. At the same time, the LEGO Group continued to increase spending on strategic initiatives to drive short- and long-term growth," the Danish company said in a statement.

Increased profits are enabling the company to invest heavily into more expensive renewable materials, as it continues to raise the amount of resin purchased from sustainable sources certified under the so-called mass balance principle.

The toymaker is aiming to purchase more than half of its raw materials from sustainable sources via the mass balance principle to cut its reliance on virgin fossil materials.

In the first half, 30% of all resin purchased was certified mass balance, which translates to an average of 22% material from renewable and recycled sources, up from 12% last year.

According to an interview with the Financial Times on Wednesday, chief executive Niels Christiansen said it was 40-60% more expensive to use sustainable sources, but costs are not being passed on to consumers. "It comes out of our EBIT line," he said.