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In lugnet.general, Allan Bedford wrote:
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LEGO has released their annual report for 2004 and it looks like there is some
good news!
http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=14426&countrycode=2057&yearcode=&archive=false
It came into my Inbox via Google alerts, with this link:
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=newsview&newsId=20050406005253&newsLang=en
Keep up the great work!
Best regards,
Allan B.
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That’s some heroic spin from our man Jorgen. See this:
The result after tax for the year was DKK -1,931m compared with DKK -935m
in 2003.
Obviously, all the cost-cutting is good news, and once they unload the parks
they’ll be in much better shape. But it ain’t happened yet.
Marc Nelson Jr.
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In lugnet.lego, Marc Nelson, Jr. wrote:
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In lugnet.general, Allan Bedford wrote:
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LEGO has released their annual report for 2004 and it looks like there is
some good news!
http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=14426&countrycode=2057&yearcode=&archive=false
It came into my Inbox via Google alerts, with this link:
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=newsview&newsId=20050406005253&newsLang=en
Keep up the great work!
Best regards,
Allan B.
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That’s some heroic spin from our man Jorgen. See this:
The result after tax for the year was DKK -1,931m compared with DKK -935m
in 2003.
Obviously, all the cost-cutting is good news, and once they unload the parks
they’ll be in much better shape. But it ain’t happened yet.
Marc Nelson Jr.
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Forbes has a less positive spin than the TLC press release:
Struggling Danish toy maker Lego Systems A/S Wednesday said its full-year
net loss more than doubled as sales fell.
The net loss for 2004 was 1.93 billion kroner, or about $333 million, a
widening from last year’s loss of 935 million kroner.
Marc Nelson Jr.
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In lugnet.general, Allan Bedford wrote:
> LEGO has released their annual report for 2004 and it looks like there is some
> good news!
I'm glad to see that gross margin is improving and that "Make and Create" has
been successful. I think these two factors are linked. Its good to see Lego get
back to basics and make more money out of it too.
I just wish I could see profitability by product line - especially Make and
Create vs Star Wars vs Bionicle.
For those too lazy to click through, this is what they say about explicitly
about AFOLs:
A growing number of adult LEGO
enthusiasts have begun setting up
groups to discuss their LEGO hobby.
They call themselves “AFOLs” – “Adult
Fans of LEGO”. Over a period of years,
the LEGO Group has actively developed
relations with many “AFOL”
groups, who have their own websites,
organise public events, and take part in
LEGO development projects. In January
2005 the LEGO Group announced
its “LEGO Ambassador” programme for
AFOLs worldwide. The purpose of this
programme is to expand mutually useful
relations between the LEGO Group
and its loyal, talented and committed
consumers.
I dunno, but the first two sentences sounds like the reaction of someone kind of
mystified and bemused by an unexpected phenomenon.
"A growing number of adult LEGO enthusiasts have begun setting up groups to
discuss their LEGO hobby. They call themselves “AFOLs” – “Adult Fans of LEGO”."
"There are a growing number of carnivorous plants growing sprouting up in our
back garden. They call themselves "Triffids""
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In lugnet.lego, Arne Lykke Nielsen wrote:
> In lugnet.general, Allan Bedford wrote:
> > LEGO has released their annual report for 2004 and it looks like there is some
> > good news!
> >
> > http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=14426&countrycode=2057&yearcode=&archive=false
> >
> > It came into my Inbox via Google alerts, with this link:
> >
> > http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20050406005253&newsLang=en
> >
> > Keep up the great work!
> >
> > Best regards,
> > Allan B.
> It was in all the Danish news yesterday - but not as a positive story, but as a
> very negative story with the headlights: LEGO struggling for survival, LEGO will
> close down factories in Denmark, Switzerland and USA and move production to
> China, and in Billund eventually (by 2007) 1500 people will have lost their jobs
> - and in a town with 7000 inhabitants, this would be very noticeable.
> Quote Knudstorp in TV-interview: "No areas are protected from downsizing"
It was interesting to note that other Google alerts that I got yesterday gave
links to stories that were more like what you describe above. I guess it might
be all in how you interpret the numbers. Although things may still not be
fantastic, it seems that at least 2004 wasn't quite as bad as the year before.
And that leaves me hopeful that 2005 will be even better. :)
Best regards,
Allan B.
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In lugnet.lego, Arne Lykke Nielsen wrote:
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In lugnet.general, Allan Bedford wrote:
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LEGO has released their annual report for 2004 and it looks like there is
some good news!
http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=14426&countrycode=2057&yearcode=&archive=false
It came into my Inbox via Google alerts, with this link:
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=newsview&newsId=20050406005253&newsLang=en
Keep up the great work!
Best regards,
Allan B.
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It was in all the Danish news yesterday - but not as a positive story, but as
a very negative story with the headlights: LEGO struggling for survival, LEGO
will close down factories in Denmark, Switzerland and USA and move production
to China, and in Billund eventually (by 2007) 1500 people will have lost their
jobs - and in a town with 7000 inhabitants, this would be very noticeable.
Quote Knudstorp in TV-interview: “No areas are protected from downsizing”
Arne, Copenhagen
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The BBC is not exactly positive either.
http://news.bbc.co.uk/1/hi/business/4417585.stm
I guess it depends on what the percieved improvement is rather than the current
status. I guess one thing LEGO really suffer for is that they can’t shift their
manufacture around much like other companies. They really are tied to the
machines and skills.
Tim
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In lugnet.general, Allan Bedford wrote:
> LEGO has released their annual report for 2004 and it looks like there is some
> good news!
>
> http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=14426&countrycode=2057&yearcode=&archive=false
I just finished wading through the annual report - it's an interesting read.
Boiled down, I think it comes to: "Last year wasn't quite as bad a stinkburger
as we thought. Kinda."
It's the type of document that can be taken both ways. Improvements are
definitely happening, which is good news; but they still lost more. The bar
charts are particularly telling. Hard to spin the numbers.
It's funny to note what the media gloms on to... a lot of headlines read,
"Ailing LEGO to shed parks" or something along those lines. That was announced a
while ago. Whatever is the sexiest headline, I guess.
It would be very nice to hear a balanced, honest analysis of what this REALLY
means for LEGO in the long run. No doom-n-gloom chicken little, no corporate
happyspeak spin.
Anybody here volunteer? ;)
- Kelly
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In lugnet.lego, Kelly McKiernan wrote:
> It would be very nice to hear a balanced, honest analysis of what this REALLY
> means for LEGO in the long run. No doom-n-gloom chicken little, no corporate
> happyspeak spin.
>
> Anybody here volunteer? ;)
Very tricky. I have gone through the annual report - but its not clear whether
what's happened is the start of a long contraction down to a niche player or
more of a once-off adjustment that's a foundation for modest growth.
A couple of interesting points from the annual report.
- gross margin is much healthier. This implies that Lego is selling less at
clearance prices and more at full price and that costs are being reduced
- cash flow looks much better
- investment has been reduced dramatically
- the % value of licensing fees to revenue didn't fall as I was expecting it
to. (and currency issues cloud that number)
Increased gross margins on slightly lower revenue in a flat market is a good
start. The current strategy of focusing on core lines rather than the old
strategy of broadening the brand seems to be improving the numbers.
But an annual report for a privately held company is never as informative as one
would wish.
The annual report doesn't answer the following questions:
1. Can they thrive in a smaller form - like Brio or Playmobil? Will there be
enough revenue to cover Lego-size R&D costs?
2. How representative are the anecdotal stories of shrinking retail shelf space
for Lego? Are the competitors increasing the shelf space share?
3. Has the toy market changed too much for Lego to adjust? Do kids want mobile
phones more than construction toys? Has the growing faddishness of the toy
market invalidated Lego's R&D model? Will Bionicle suddenly become "yesterday's
toy" and if so does Lego have another winner waiting in the wings?
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In lugnet.lego, Kelly McKiernan wrote:
> It would be very nice to hear a balanced, honest analysis of what this REALLY
> means for LEGO in the long run. No doom-n-gloom chicken little, no corporate
> happyspeak spin.
>
> Anybody here volunteer? ;)
Very tricky. I have gone through the annual report - but its not clear whether
what's happened is the start of a long contraction down to a niche player or
more of a once-off adjustment that's a foundation for modest growth.
A couple of interesting points from the annual report.
- gross margin is much healthier. This implies that Lego is selling less at
clearance prices and more at full price and that costs are being reduced
- cash flow looks much better
- investment has been reduced dramatically
- the % value of licensing fees to revenue didn't fall as I was expecting it
to. (and currency issues cloud that number)
Increased gross margins on slightly lower revenue in a flat market is a good
start. The current strategy of focusing on core lines rather than the old
strategy of broadening the brand seems to be improving the numbers.
But an annual report for a privately held company is never as informative as one
would wish.
The annual report doesn't answer the following questions:
1. Can they thrive in a smaller form - like Brio or Playmobil? Will there be
enough revenue to cover Lego-size R&D costs?
2. How representative are the anecdotal stories of shrinking retail shelf space
for Lego? Are the competitors increasing the shelf space share?
3. Has the toy market changed too much for Lego to adjust? Do kids want mobile
phones more than construction toys? Has the growing faddishness of the toy
market invalidated Lego's R&D model? Will Bionicle suddenly become "yesterday's
toy" and if so does Lego have another winner waiting in the wings?
Want more detail Kelly?
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In lugnet.lego, Mark Jordan wrote:
> In lugnet.lego, Kelly McKiernan wrote:
> > It would be very nice to hear a balanced, honest analysis of what this REALLY
> > means for LEGO in the long run. No doom-n-gloom chicken little, no corporate
> > happyspeak spin.
> >
> > Anybody here volunteer? ;)
>
> Very tricky. I have gone through the annual report - but its not clear whether
> what's happened is the start of a long contraction down to a niche player or
> more of a once-off adjustment that's a foundation for modest growth.
- much good stuff snipped -
That's a good analysis, thanks for taking the time to write it up.
> The annual report doesn't answer the following questions:
> 2. How representative are the anecdotal stories of shrinking retail shelf space
> for Lego? Are the competitors increasing the shelf space share?
This would be an interesting one for them to address publicly. You're right,
it's all been anecdotal, although I know that I've seen it as well, especially
at Wal*Mart and K-Mart. Toys 'R Us seems to be retaining the shelf space and at
least trying to differentiate the brands by separating them, but I don't know if
that's just my local stores or if it's more widespread.
> ...Will Bionicle suddenly become "yesterday's
> toy" and if so does Lego have another winner waiting in the wings?
That's the DKK 64,000 question, and one that has me worried. What happens when
Bionicle tanks? Let's hope that line has a few more years left, so LEGO can find
their Next Big Thing, their iPod. They've done a good job with expanding that
success into the Knights' Kingdom, but that's evolutionary rather than the
revolutionary change that Bionicle was in 2001. They need another leap, I'm
guessing within the next couple of years.
> Want more detail Kelly?
Always :) But this has been very helpful, thank you.
- Kelly
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> Well even though TLG is downsizing, it looks like they are headed in the right direction. This is good news for all AFOLs (except of course for those few who publicly stated that they wish ill will on TLG).
>
> Gary Istok
Well, can't say it's exactly good news for those of us who bought Ambassador
passes a few weeks before the divestiture announcement! (We certainly don't go
to the parks for the rides.)
-Ted
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