In the first half of 2016, Danish toy manufacturer Lego has had its profit drop because of major investments in China and Mexico. The company’s turnover however, grew more than 10 %.
Invest in expansion
Lego’s total turnover grew 11 % in the past 6 months, up to 15.7 billion krona (2.1 billion euro), but its profit dropped 1.8 % to 3.49 billion krona (470 million euro). The profit drop is due to some major investments: its workforce increased by 24 % to 18,500 people, on top of its huge investments in a Chinese factory, which just opened its doors. It is even looking to expand further, in Mexico and Hungary.
“These investments in people and infrastructure will obviously have an impact on our short-term profit growth. But they are part of our long-term plan to sustain the development and delivery of fun, high quality, and creative play experiences for more children in more parts of the world in the future”, CFO John Goodwin said. The company has doubled its turnover compared to four years ago, but it clearly still has an appetite for more growth.
