Lego unveils global expansion on the back of record £1.1billion profits amid the pandemic

Lego has unveiled a plan for global expansion on the back of record profits in the last year as people stocked up on building blocks to burn time spend under Covid lockdowns.

The Danish toy giant, which saw net profits rise by 19 per cent to 9.9 billion kroner (£1.1 billion), plans to recruit hundreds of computer whizzes in Britain, Denmark and China to expand its digital games and online sales operation.

Revenue spiked by 13 per cent in 2020 to 43.7 billion kroner (£5 billion) and the family-owned company has seen its fastest sales growth in the last five years.

But a new Super Mario set, which blends traditional play with online gaming, has been one of the biggest launches in the company’s 89-year history. 

Boss Niels Christiansen said Lego was going to speed up its digital expansion after the new success. 

He told the BBC that every 2.77 seconds ‘someone uploads a Lego creation to our digital platforms that they have created and want to share. The Lego community is based on the brick, but this shows there is no limit to where we can take this.’

While the colourful building blocks have always been at the heart of the business, Christiansen said: ‘Today’s children are growing up in a digital world and they effortlessly blend online and physical play.’

He added: ‘For the past two years we’ve made large-scale investments in initiatives designed to support long-term growth … we are accelerating our digital transformation. This is a big investment area for customers and suppliers.’  

The company announced record profits today despite being forced to temporarily close its plants in China and Mexico due to the pandemic, which led to higher supply costs.

Sales rose across the board, thanks to growing online shopping and a doubling of visits to its websites, as well as the opening of 134 stores, including 91 in China where the group intends to expand further.

Despite the rise in online sales, Lego, based in Billund in western Denmark, plans to open 120 new stores in 2021, including 80 in China.

In addition to its classic bricks, which remain among its most sold products, the company has in recent years moved strongly into areas such as video games, movies, cartoons and Legoland amusement parks.

Lego – a contraction of the Danish ‘Leg godt’ or ‘Play well’ – found particular success in its collaboration with Nintendo to launch its Super Mario game in August.

It allowed players to build real life versions of 2D Super Mario levels, including Bowser’s Castle, Toad’s Treasure Hunt and Adventure’s with Mario.  

Christiansen said that one of his recent favourite products – and a bestseller in 2020 – was a complex model of a Lamborghini sports car.

But he said that his absolute favourite set remains the traditional build-what-you-want box of bricks which remains in the top 10 bestsellers every year.

After a vast restructuring in 2017, Lego turned its focus to multimedia games and sustainability.

While Lego’s iconic bricks are virtually unbreakable and reusable for generations, plastic is increasingly shunned due to the lasting harms its chemical components do to the planet. Lego has therefore vowed that its bricks will be 100 percent sustainable by 2030.

The company also aims for its manufacturing plants to be carbon neutral by 2022, and is gradually phasing out its plastic bags separating pieces and replacing them with recycled paper.