ALBAWABA — The Lego Group on Tuesday reported record revenue and profits last year despite strong global inflationary pressures, raising expectations for even higher market share growth this year at the Danish firm.
For 2022, net profit rose 4 percent to 13.8 billion kroner while sales jumped 17 percent to 64.6 billion kroner.
"I am very satisfied with our performance. We achieved double digit top line growth and landed the year beyond expectations on the back of exceptional growth last year and despite challenging market conditions. This was due to our relevant brand, a fantastic, diverse portfolio, inspiring shopping experiences and outstanding execution from our teams," said Niels B. Christiansen, LEGO chief executive officer, in the company’s annual earnings report.
The CEO said that the company’s momentum from past years had continued into 2022, driven by prior investments which are now paying off and establishing a foundation for long-term, sustainable growth.
"We plan to accelerate investments in strategic initiatives in the coming years to build long-term relevance and growth of our brand," he added.
Operating profit increased 5 percent to 17.9 billion kroner, up from 17 billion kroner in 2021. Net profit was 13.8 billion kroner, a 4 percent rise from 13.3 billion kroner compared to last year.
Free cash flow was 9.3 billion kroner against 12.9 billion kroner in 2021, driven by increased capital investments in areas such as production capacity.
The world's number one toymaker noted in its annual report that "these results were delivered despite extraordinary inflationary pressures on materials, freight and energy costs".
According to Christiansen, strategic investments in diversification of their game offerings, sales, digitalization and sustainability have allowed the company "to continue to take market share and that's why we can grow in a market that's not growing".
As the worldwide toy industry sales spiraled down 1 percent last year, the company says it made progress, and will continue to make progress although at a reduced pace.
"We believe it's more like single digit or high single digit," the CEO said.
Lego has continued its strategy of opening stores, with 155 new shops opened during last year, raising the number of worldwide shops to 904.
In a show of confidence, Lego, a privately held company, reported annual results even though it is not obligated to do so.
