LONDON: The Danish toy company Lego is planning to ramp up growth in the Middle East with the opening of an office in Dubai toward the end of this year, according to the company’s CEO Niels Christiansen.
“The market there is already big, it is already growing … We believe we can accelerate that by now putting people on the ground in Dubai who can develop the region further,” he said at a press conference on March 6.
His comments come as the toy brick-maker announced that its 2017 profits were down compared to the previous year, with full-year net profit dropping to 7.8 billion Danish kroner ($1.3 billion) compared to 9.4 billion kroner in 2016.
Revenues decreased by 8 percent to 35 billion kroner in 2017 compared to 37.9 billion kroner last year.
The reduced revenues were partly blamed on too much inventory already sitting in shops and warehouses that needed to be sold off. Global consumer sales were flat in 2017, moving upward in the final months of the year benefiting from the Christmas season.
“2017 was a challenging year and overall we are not satisfied with the financial results,” Christiansen said.
“However, we ended the year in a better position. In December, consumer sales grew in seven of our 12 largest markets and we entered 2018 with healthier inventories. In 2018, we will stabilize the business and invest to build sustainable growth in the longer term,” he said.
He said there was “no quick-fix” to the company’s fortunes. “It will take some time to achieve longer-term growth,” he said.
While revenues declined in the company’s established markets of North America and Europe, Lego saw “significant” revenue growth in China.
The company is planning to further expand in the country, and last year signed a partnership deal with one of the country’s largest Internet companies, Tencent, to work together to develop online games for Chinese children.
Lego to build up presence in Mideast with Dubai office
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