The Lego Group's First Half of 2017 Financial Results and layoffs

Val-E · 2017-09-05T07:43:53.000Z

Ok, so it seems clear now the CFO and CEOx2 have left at the right time as both profit and revenue have declined for the first time in the last 5 years (if not more). It´s not been a good year and the lack of solid new themes to replace solid sellers like JW has hit hard. Overproduction also seems to have been an issue - I guess all those SH Girls, Nexo, SW Buildables and TLBM on clearance have an explanation. https://www.lego.com/en-us/aboutus/news-room/2017/september/interim-results/ Interesting statements from the report. Revenue for the period totalled DKK 14.9 billion, a decline of 5 percent compared with the first half of 2016 . Performance across the market regions was mixed. In established markets such as the United States and in parts of Europe (this is new) revenue declined, while in a growing market, such as China, revenue grew by double digit . Operating profit was DKK 4.4 billion, down 6 percent compared with the same period in 2016 . This was due to lower revenue and increased costs associated with investments in production capacity and organisational capabilities made to support higher expectations of revenue which failed to materialise . (So they made too much Nexo and Super Heroes.) During the first half of the year some of the best-performing themes were homegrown classics such as LEGO® City, LEGO Friends, LEGO DUPLO and LEGO Technic, while the LEGO Batman movie products also saw a great response from consumers. (They saw the sets and said no way unless 70% off!) As a consequence of the plans, the LEGO Group believes it would need to reduce its total global workforce by around eight per cent . This would impact approximately 1,400 positions, the majority before the end of 2017. Currently the LEGO Group employs approximately 18,200 people. Pressing the reset button is one of two elements of a plan launched by the Group. The second element is how to return to growth. The Group is doing this by exploring adjustments to its successful formula for product development and marketing in order to achieve its ambition to reach more children around the world with LEGO play experiences that stimulate playful learning.(Less helicopters and more farm maybe?)