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LEGO Expects 50% Profit Growth in 2009: LEGO CEO
Published: Thursday, 29 Oct 2009
By: Reuters
Danish toy company LEGO expects to post a 50% profit growth in 2009, CEO Jorgen
Vig Knudstorp told CNBC, and he expects the growth momentum to continue in the
near term.
“I think we can continue this low double-digit growth for the foreseeable
future,” he said, which is a commendable feat considering the company was deep
in the red when Knudstorp came on board five years ago.
Then, LEGO was losing nearly $350 million a year. Knudstorp has since embarked
on a massive restructuring, closing down plants and whittling down packaging.
LEGO still makes 7000 different pieces, but only half of what it used to.
While many multi-national firms are outsourcing production to more
cost-effective countries like China, LEGO prefers to ‘in-source’ its operations.
“The real economic profits are much less (when you outcome) because you lose
sales, you have too much inventory, you’ve got too much working capital,”
Knudstorp said, adding that the protection of intellectual property rights is
also a major concern for us.
“So we found that for a number of reasons (it’s) economically unattractive to
manufacture in China to serve our major markets. China to us today is 40 times
smaller than the U.S. market. I think it’s going to be another 15 to 20 years
before China is a major market in the context of LEGO.”
Knudstorp said he may be manufacturing in Asia in 10 years. For now, LEGO says
it plans to increase capacity in Mexico - its hub for U.S. sales.
LEGO is also warming up to Hollywood. Knudstorp said the Star Wars series has
been a blockbuster in the U.S., but licensing costs and keeping up with trends
could be a gamble.
On CNBC site there is a short Interview with
LEGO Group CEO Jorgen Vig Knudstorp video over 5 minutes (5:34) long.
-end of report-
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In lugnet.mediawatch, Abner Finley wrote:
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LEGO Expects 50% Profit Growth in 2009: LEGO CEO
Published: Thursday, 29 Oct 2009
By: Reuters
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-Correction-
LEGO Group CEO corrects erroneous forecast story
By Katie Roberts
Nov. 4, 2009, 9:53am
CEO Jorgen Vig Knudstorp is keen to correct recent reports on his sales
predictions for 2009.
The story claimed that the CEO was hoping to post a 50
per cent global profit growth this year. The story was written by Reuters and
picked up by various online news sites including CNBC and ToyNews.
A statement from LEGO explained: “Jorgen Vig Knudstorp has confirmed that he was
misquoted in an interview published on Reuters.
“What he commented on was LEGO Group growth in sales for 2009. He did say that
he expected a two-digit growth in sales for 2009 - approx. 15 per cent, not 50
per cent as quoted.”
http://www.toynewsmag.com/news/31823/Lego-CEO-corrects-eroneous-forecast-story
-end of report-
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In lugnet.mediawatch, Abner Finley wrote:
| |
In lugnet.mediawatch, Abner Finley wrote:
| |
LEGO Expects 50% Profit Growth in 2009: LEGO CEO
Published: Thursday, 29 Oct 2009
By: Reuters
|
-Correction-
LEGO Group CEO corrects erroneous forecast story
By Katie Roberts
Nov. 4, 2009, 9:53am
CEO Jorgen Vig Knudstorp is keen to correct recent reports on his sales
predictions for 2009.
The story claimed that the CEO was hoping to post a 50
per cent global profit growth this year. The story was written by Reuters and
picked up by various online news sites including CNBC and ToyNews.
A statement from LEGO explained: “Jorgen Vig Knudstorp has confirmed that he
was misquoted in an interview published on Reuters.
“What he commented on was LEGO Group growth in sales for 2009. He did say
that he expected a two-digit growth in sales for 2009 - approx. 15 per cent,
not 50 per cent as quoted.”
http://www.toynewsmag.com/news/31823/Lego-CEO-corrects-eroneous-forecast-story
-end of report-
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Ever hear the one about the guy who walks into his boss’ office and asks for a
15% raise? The boss wrings his hands and says, “Gosh, that’s an awful lot. Let
me think about it.” The next day the boss comes back and says, “I’m sorry, but
I can only do 25% for you,” because, of course, he misheard 15% as 50%.
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In lugnet.mediawatch, Edward Welsh wrote:
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Ever hear the one about the guy who walks into his boss’ office and asks for
a 15% raise? The boss wrings his hands and says, “Gosh, that’s an awful lot.
Let me think about it.” The next day the boss comes back and says, “I’m
sorry, but I can only do 25% for you,” because, of course, he misheard 15% as
50%.
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No, but I’m interested in working for this boss you speak of...
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