Lego executive claims Trump's tariffs aren't his primary source of nightly concern.
*LEGO Rides the Wave of Success, despite Geopolitical Turbulence***
AFP saves the day with an exclusive interview with LEGO's CEO, Niels Christiansen. Despite the looming threats of Donald Trump's tariffs, the world's largest toymaker is celebrating record earnings for 2024.
Sales and Profits Soar
The Danish company's sales skyrocketed by 13%, reaching 74.3 billion kroner ($10.8 billion) last year, while net profit grew by 5% to 13.8 billion kroner.
"We're not just playing with toys anymore—we're relevant and passionate about captivating various consumer groups," Christiansen told AFP.
Staying Afloat in Rough Waters
The head of the unlisted family-owned company aims to keep cool during geopolitical uncertainties and Trump's trade policies. LEGO has a factory in Mexico supplying the US market and is building another in the United States, set to open in 2027.
Tariffs on Mexican products have been paused until next month, and Trump has threatened duties on European Union products. Christiansen remains unfazed: "We've seen fluctuations before, and every time, we’ve managed to not overreact."
Market Share is the Game Changer
For Christiansen, market share is more valuable than avoiding tariffs. LEGO's success, even in a sluggish toy market, has been impressive—consumer sales increased by 12% in 2024 while the market contracted by 1%.
A Crowd Favorite: Lego's Strategies
Lego's secret sauce lies in its extensive portfolio of 840 products, of which 46% are new. Franchises like Star Wars and Harry Potter, as well as partnerships (such as Fortnite), have cemented the Danish toymaker's brand.
LEGO aims to remain relevant to both kids and adults by tapping into popular culture, like sports or video games. It's a winning strategy that has garnered attention worldwide.
However, the group has seen stronger demand in the Americas, Europe, and the Middle East than in Asia, where it has invested heavily in recent years.
Going Green: LEGO and Sustainability
For several years, the company has been making strides in sustainability, with 50% of the materials now sourced sustainably. Although the exact investment figures were not disclosed, the company reported a 68% increase in sustainability projects compared to the previous year.
Digging Deeper: LEGO's Strategies Unveiled
Locked and loaded with strategies for navigating trade policies, LEGO focuses on three key areas:
1. Geographic Diversification & Localized Production
LEGO has been establishing state-of-the-art factories in Vietnam [5] to reduce dependency on any single region. Using Vietnam's trade agreements with various countries, LEGO mitigates the risks from U.S.-specific tariffs by distributing production more worldwide.
2. Licensing & IP Protection
By partnering with major franchises (e.g., Star Wars, Harry Potter), LEGO ensures strong IP enforcement. This strategy limits dependencies on tariff-vulnerable markets as it maintains premium pricing power globally.
3. Digital & Community Expansion
Investing heavily in digital experiences and a global collector community through online marketplaces and workshops, LEGO creates revenue diversification that lessens reliance on physical exports.
All in all, LEGO's strategies collectively address the risks posed by trade policy volatility, creating a flexible and resilient business model.
- The CEO of LEGO, Niels Christiansen, shared with AFP that the company's success extends beyond toys, stating, "We're not just playing with toys anymore—we're relevant and passionate about captivating various consumer groups."
- In an effort to remain afloat during geopolitical uncertainties and trade policy changes, LEGO plans to further diversify its geographic production, establishing factories in Vietnam and the United States, in addition to its existing factory in Mexico.
- In 2024, despite tariff threats and a sluggish toy market, LEGO outperformed the competition, with consumer sales increasing by 12% while the market contracted by 1%.
- LEGO's diversified product portfolio, which includes new offerings like Lego Star Wars and Harry Potter sets, has been a significant factor in the company's growth, as well as partnerships with entities such as Fortnite.
- Investments in sustainability initiatives, with 50% of materials now sourced sustainably, have been a focus for LEGO in recent years, increasing the number of sustainability projects by 68% compared to the previous year.
- To further insulate itself from trade policy risks, LEGO is also investing in digital experiences and a global collector community through online marketplaces and workshops, offering a revenue stream less dependent on physical exports.
