Stockholm Danish toy company Lego, known worldwide for its plastic building blocks, has appointed a new chief executive.
Bali Padda takes over as chief executive of the family-owned Lego Group from Jorgen Vig Knudstorp as of January 1.
Padda, who has worked 14 years at Lego, is currently chief operations officer and said the appointment was “a huge and exciting task.”
Knudstorp who has been Lego boss since 2004, was to head a new entity, Lego Brand Group, aimed at focusing on protecting and developing the toymaker’s brand.
He was to work closely with Thomas Kirk Kristiansen of the owner family and was nominated to be new president of the company board as of May, a statement read.
Founded 1932, Lego is one of the world’s leading toymakers. It reported a 10-per-cent rise in turnover for the first half of 2016.
Net profit for the six-month period was 3.48 billion kroner ($US524 million dollars), slightly down on the corresponding 2015 period.
The group has about 15,000 employees. Production is based in Denmark, the Czech Republic, Hungary, Mexico, and China.
“2015 was a big year for Lego Group,” said Mykola Golovko, project manager – toys and games, Euromonitor International.
“Revenues increased by 25 per cent to DKK35.8 billion, whilst net profit reached DKK9.2 billion, constituting a 31 per cent increase on 2014.
“A strong US dollar contributed to these results by increasing US revenues in terms of Danish kroner, but the majority of growth was organic, with licensed Star Wars products and new product lines like Lego Dimensions driving growth.”
In 2015, Lego Group reported strong growth across most of its product lines and subbrands, including Ninjago and Lego Elves.
However, Star Wars and LEGO Dimensions were the biggest growth drivers, according to Euromonitor analysis.
The release of Star Wars Episode VII in December 2015 provided a significant revenue boost to most of the world’s biggest toy makers, as Star Wars-licensed products took over store shelves the world over. Lego Star Wars products comprised a significant part of the company’s product portfolio and included hits like the Millennium Falcon that were among the most sought after in the run up to the film release.
The launch of Lego Dimensions in September 2015 provided another significant source of revenue over the holiday season. Toys-to-life have grown in popularity since the launch of Skylanders in 2011, and Lego Dimensions has brought a unique product offer to the fast-growing category. The key differentiating factor for Lego Dimensions is the real world playability of its toys-to-life as they are compatible with regular Lego pieces, whereas all other contemporary toys-to-life products are simple figurines.
“Lego Group has built successful product lines based on popular entertainment franchises, and this is key to success in an environment permeated with technology and near universal access to media,” said Golovko. “This has made licensed products like Lego Star Wars increasingly important.
“At the same time, it has pushed more toy makers to develop proprietary entertainment media properties and the success of The Lego movie and cartoon series like Spin Master’s Paw Patrol served as a catalyst for this trend.
“For Lego Group, this means that long-term success is based on developing entertainment ecosystems that span films, cartoons, and video games, as well as toys, around its product lines. So, the company’s prospects beyond 2016 rest largely on the success of Ninjago and NEXO Knights and The Lego Movie sequel (scheduled for release in 2018),” said Golovko.
