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Jurassic World, Elves and Mario Draghi keep the Lego bandwagon going

LEGO isn't seeing any saturation of the Chinese market yet. LEGO isn't seeing any saturation of the Chinese market yet.
LEGO isn't seeing any saturation of the Chinese market yet. Courtesy of LEGO

Lego Group just goes from strength to strength.

The privately-held Danish company consolidated its position as the world’s largest toymaker with a 23% rise in sales in the first half of the year, with dinosaurs, elves and ninjas all putting in strong shifts.

Around 5 percentage points of that increase was due to a bump from foreign exchange factors: Denmark’s central bank makes sure the krone tracks the euro tightly, and the European Central Bank’s quantitative easing program has kept the euro weak this year.

But the other 18 percentage points is just bona fide organic growth, an eye-catching performance from a company that’s already the biggest in its field in a pretty mature business. Operating profit rose 27%, while net profit was up 31% at 3.55 billion kroner ($536 million).

Merchandise related to the movie Jurassic World in particular helped keep up the momentum built up last year by the LEGO movie.

 

One line that stood out from the company’s release was that “Asia saw the highest growth rates”–something that stands in stark contrast to the negativity around Asia in financial markets these days. As with Apple Inc. CEO Tim Cook’s assertion about strong sales in China last week, the figures are an intriguing counterpoint to widespread fears that the world’s second-largest economy is running out of steam (all the more so since cheap plastic toys are probably a broader indicator of consumer spending than high-end gadgets).

 

LEGO noted that it still expects to make its new manufacturing plant in Jiaxing, China, fully operational in 2017. It will more than double staff levels to 600 by the end of this year from 230 now.