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Lego bricking it: toy manufacturer announces reduced profits for first time in 13 years

Douglas Whitbread
March 7th, 2018


This article is more than 6 years old.

Figures out this week show poor returns compared to the previous year

Are there tough times ahead for the firm? (photo: 00alexx)

In 2005, Lego dodged financial ruin to become a prominent symbol of corporate success in Denmark. However, there are signs this could soon be about to change.

Recent figures posted by the company showed it made a considerable loss in 2017 compared with the previous year.

Revenue fell 7 percent from 37.9 billion kroner in 2016 to 35 billion kroner in 2017. Total profits were also down, from 9.4 billion kroner to 7.8 billion kroner – a drop of around 17 percent.

A spokesperson for Lego attributed the loss to an over-production of bricks in the past year. This, she suggested, meant the manufacturer was forced to sell off large quantities of stock at reduced rates.

New order working?
In the autumn Lego appointed a new boss, Niels B Christiansen, the former chief executive of Danish heating and engineering firm Danfoss.

He spearheaded a major savings program late last year in which 1,500 employees were sacked – 600 of whom were based in Denmark.

Despite this decisive action, the financial data from 2017 will remain a concern for investors.

Looking forwards
Christiansen insisted that in spite of the reported losses, Lego had performed well in seven of its largest markets.

One of the countries where he predicted the company would have strong future growth was China.

In December 2017, Lego won a legal challenge against the Chinese firm Lepin. Courts in the country ruled the Danish corporation’s copyright had been severely infringed.

The legal decision paved the way for Lego to challenge others in the country that might try to steal the brand’s market share by replicating its iconic toy design.

READ MORE: Lego wins critical copyright case in China


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A survey carried out by Megafon for TV2 has found that 71 percent of parents have handed over children to daycare in spite of them being sick.

Moreover, 21 percent of those surveyed admitted to medicating their kids with paracetamol, such as Panodil, before sending them to school.

The FOLA parents’ organisation is shocked by the findings.

“I think it is absolutely crazy. It simply cannot be that a child goes to school sick and plays with lots of other children. Then we are faced with the fact that they will infect the whole institution,” said FOLA chair Signe Nielsen.

Pill pushers
At the Børnehuset daycare institution in Silkeborg a meeting was called where parents were implored not to bring their sick children to school.

At Børnehuset there are fears that parents prefer to pack their kids off with a pill without informing teachers.

“We occasionally have children who that they have had a pill for breakfast,” said headteacher Susanne Bødker. “You might think that it is a Panodil more than a vitamin pill, if it is a child who has just been sick, for example.”

Parents sick and tired
Parents, when confronted, often cite pressure at work as a reason for not being able to stay at home with their children.

Many declare that they simply cannot take another day off, as they are afraid of being fired.

Allan Randrup Thomsen, a professor of virology at KU, has heavily criticised the parents’ actions, describing the current situation as a “vicious circle”.

“It promotes the spread of viruses, and it adds momentum to a cycle where parents are pressured by high levels of sick-leave. If they then choose to send the children to daycare while they are still recovering, they keep the epidemic going in daycares, and this in turn puts a greater burden on the parents.”