Building a toy empire brick by brick
The team here at FWD loves LEGO. We cannot stop playing, collecting, building, and designing things with the awesome interlocking bricks. They’re quite addicting. From Knights to Star Wars to City-themed sets and everything in between, there is a LEGO set for everyone. Simply put, we’re obsessed with LEGO and we’re not alone.
In 2022, the global toy sales reached USD $107 billion with the LEGO Group holding onto the poll position as the leading toy company in the world. LEGO’s popularity has translated into handsome revenues and steady profits. It turns out that making toys that appeal to both kids and adults is good for business. In 2022, the LEGO Group celebrated its 90th anniversary while bringing in 64.65 billion Danish Krone in revenue and generating 13.8 billion Danish Krone in net profits - the most ever in company history. That roughly translates to USD $9.56 billion in revenue and USD $2.04 billion in net profits based on the exchange rate at the time this was written; not bad for a business that mainly sells plastic bricks.
LEGO Group CEO Neils B. Christiansen called 2022 “a milestone year” for the company. “I am very satisfied with our performance,” said Christiansen in a news release on LEGO’s 2022 annual results. “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.”
It’s not difficult to see why LEGO had a banner year in 2022 when you look at some of the other numbers it put up. During the year, LEGO Group opened 155 new LEGO branded retail stores, bringing the total number of stores to 904 globally. Visit the LEGO website to find a LEGO store near you. The company also expanded three factories to increase production capacity, and two new factories in the U.S. and Vietnam are expected to begin production over the next two years. By 2025, LEGO will have a total of 7 manufacturing facilities globally.
How does LEGO’s 2022 performance compare to its peers? Using figures made available through 10-K filings and LEGO’s annual report, we compare the revenues and net profits of the LEGO Group against other toy giants Mattel, Bandai Namco, Jakks, and Hasbro. And as you can see from the graph below, the LEGO group outperformed its competitors by a significant margin in terms of revenue and net profits.
One of the most valuable brands in the world
LEGO is a behemoth in the toy industry and it is one of the most beloved and valuable brands in the world. According to Brand Finance, LEGO was the most valuable toy brand in 2022 with a brand value of over USD $6 billion. And in Brand Finance’s Global 500 Report, LEGO is the top-ranked toy company and sits 378 out of the top 500 brands globally. What goes into calculating brand value? Well, it’s complicated, but the folks over at Brand Finance do an excellent job explaining the methodology they used to calculate brand value on pages 93 through 105 of their Global 500 Report. It’s worth the read.
The history of the LEGO Group
The LEGO Group has come along way since master carpenter Ole Kirk Kristiansen founded the company in 1932 in Billund, Denmark. The company started out manufacturing wooden toys and made its first foray into plastic toys in 1946, when Kirk Kristiansen purchased the LEGO Group’s first plastic mold injection system from Great Britain. The company began producing a version of its now ubiquitous plastic bricks in 1949 under the name Automatic Binding Bricks. In 1958, the LEGO bricks that we know today were introduced to the world. Over the years, LEGO has expanded its global footprint and has established itself as a leader in the children’s toy market. We’ve put together this short timeline highlighting some notable LEGO milestones over its 90-year history. You can check out their full history on the LEGO Group website.
1930's
Humble beginnings in Denmark
In 1932, master carpenter Ole Kirk Kristiansen starts a wooden toy company in Billund, Denmark. A few years later, in 1936 he would name his company LEGO, a combination of two Danish words Leg Godt meaning Play Well. At the time he was unaware that it translated to I put together in Latin.
Plastic bricks are born
In 1946, Ole Kirk Kristiansen orders his first plastic injection molding machine from Great Britain. Fast forward a few years to 1949 and Kirk Kristiansen launches the first LEGO plastic bricks under the name Automatic Binding Bricks.
1940's
1950's
LEGO branded bricks hit the market
In 1953, the LEGO stamp begins to appear on every brick. Two years later, Ole Kirk Kristiansen's son Godtfred launches the first LEGO play system. Godtfred takes over the day-to-day management of the business in 1958 and in 1959 the company patents a new coupling principle, creating the bricks we know today.
Moveable parts are here
The sixties ushered in a series of firsts for LEGO. In 1962, the company introducd the first movable part in the LEGO play system - a wheel. The following year, they introduce building instructions. In 1968, the first LEGOLAND park opened in Billund, Denmark. And in 1969, LEGO launches the DUPLO brick, twice the size of a LEGO brick, geared towards young children.
1960's
1970's
Age-specific themes
LEGO Technic is launched in 1977. A year later, Kjeld Kirk Kristiansen launches systems for specific age groups and new themes including Castle, Space, and Town are introduced as part of this strategy. The now iconic minifigures were also launched in 1978. Kjeld Kirk Kristiansen takes the helm as CEO in 1979.
Here come the Pirates
LEGO and MIT form a partnership in 1984 with the goal of adding intelligence and behavior to LEGO play. In 1989, the company launched its Pirates theme that included the first minifigures to feature different facial characteristics.
1980's
1990's
LEGO goes online
On March 22, 1997, www.LEGO.com goes live and in 1999, the LEGO brick is named Toy of the Century
A series of firsts
In 2001, LEGO launched its Creator products, designed to encourage adults and children to build without rules. In 2002, the first LEGO retail store opens in Cologne, Germany, and in 2004, LEGO licensed minifigures start appearing with more natural skin tones rather than the traditional yellow faces.
2000's
2010's
Lots to celebrate
Throughout the 2010s, LEGO opens two new factories - one in China and the other in Mexico. In 2012, the company launched its Friends theme which introduced a new mini-doll figure. In 2014, the LEGO Movie premiered in cinemas all over the world. During this decade, LEGO celebrated the 60th anniversary of the LEGO brick, and the 40th anniversary of the LEGO minifigure. Quite the decade!
LEGO celebrates a milestone
In 2022, LEGO celebrated its 90th anniversary.
2020's
A bright future ahead
Over its 90-plus year history, LEGO has established itself as the leading toy company. Its iconic interlocking blocks can found around the world. While there are many competitors and imitations, LEGO has maintained its position as the go-to construction toy. LEGO continues to release fun, innovative sets that inspire the imagination of both children and adults. The future is bright for the LEGO Group. We can’t wait to see where they go from here.
