In the first half of the year, Lego recorded double-digit growth in both revenue and profit, significantly outpacing the rest of the toy industry and gaining market share.
The Danish group’s revenue increased to DKK 31 billion (EUR 4.2 billion), marking an increase of 13% compared to the same period of 2023. Operating profits increased by 26% to DKK 8.1 billion (EUR 1.1 billion), while earnings increased by 16% to DKK 6 billion (EUR 0.8 billion). Cash flows totaled DKK 3 billion (EUR 0.4 billion), thanks to the solid performance of revenues, despite investments in the construction of new factories and the expansion of offices.
“We are very pleased with our strong first half results,” said CEO Niels B. Christiansen. “We saw double-digit growth in both profits and revenues and made significant progress in increasing the use of sustainable materials in our products.”
And this is the real news: the leading toy company has just announced that it is on the right track to replace fossil fuels used in the production of its iconic bricks with recycled and renewable plastic by 2032. The move follows the signing of agreements with manufacturers to secure a long-term supply of sustainable materials. Lego, which sells billions of plastic bricks each year, has tested more than 600 different materials to develop a new material that would completely replace petroleum-based bricks by 2030, but with limited success. The company is now aiming to gradually reduce the fossil fuel content in its bricks by agreeing to pay up to 70 percent more for certified renewable resin. The pledge is intended to spur manufacturers to increase production of sustainable plastic. “This also means a significant increase in the production cost per Lego brick,” CEO Niels Christiansen told Reuters.
Christiansen added that Lego plans to ensure that more than half of the resin it needs by 2026 is certified according to the mass balance method, that allows sustainable materials to be traced throughout the supply chain, up from 30% in the first half of 2024. But the CEO was quick to reassure consumers: “With a family owner who is committed to sustainability, it’s a privilege to be able to pay extra for raw materials without having to pass on additional costs to customers.” The announcement comes amid a global surplus of cheap virgin plastic, fueled by major oil companies’ investments in petrochemicals. Plastic is expected to continue to drive oil demand for decades to come. Lego suppliers are already using organic waste, such as cooking oil and waste fat from the food industry, as well as recycled materials, to reduce the use of virgin fossil fuels in plastic production. However, the market for recycled and renewable plastics is still developing, in part because many of the available raw materials are being used to produce subsidized biodiesel for transportation.
According to Neste, the world’s largest producer of renewable raw materials, fossil-based plastics cost about half to a third as much as sustainable options. “We see an increase in activity and willingness to invest in this area compared to last year,” Christiansen said, declining to provide details on suppliers, prices or volumes. Other toy makers are also adopting more sustainable practices: Hasbro has started incorporating plant-based or recycled materials into some products, while Mattel has set a goal of using only recycled, recyclable or bio-based plastic by 2030. Despite these efforts, 90% of global plastic is still made from virgin fossil fuels, according to PlasticsEurope.
