| ||||
Boost for classic product lines
Result better than expected The prospect at the beginning of the year was of a substantial decline in profits on account of heavy investment in the Group’s business platform, including IT, production and innovation. The result of DKK 173m is better than had been forecast at the beginning of the year. The improvement can be attributed primarily to a combination of higher sales and a postponement of certain cost items. At the end of the first half year the Group’s equity was DKK 765m compared with DKK 274m at the end of the corresponding period in 2006. Cash flows from operations are, at DKK 208m, unchanged in relation to the same period of 2006. Increased activity extends the transition period
Full year expectations In the light of results for the first half year, the LEGO Group is raising its forecast of the result before tax for the full year to DKK 900m compared with DKK 550m at the beginning of the year. The expected improvement is due largely to the higher level of revenue; the high level of investment in the Group’s business platform will be maintained unchanged. Traditionally, however, the bulk of sales occur during the second half year, which means that success during the peak Christmas season is essential in order to meet the expected new target for 2007. Total sales for the year are now expected to equal the 2006 level, i.e. approx. DKK 7.8 billion. CEO Jørgen Vig Knudstorp says of the half year result: “The result demonstrates that our core products and values are the right ones, and at the same time we have enjoyed the benefit of a positive note on most of our markets. This is extremely useful in a situation in which we continue to invest many resources in preparing the Group for the future.” “We are only halfway through the implementation of our seven year strategy plan, and although we have come a long way in many areas there is still a lot to do. During the present phase the focus is on creating a long term, sustainable business platform – and we haven’t achieved that yet. We still need to focus on improving the efficiency of our operations and reducing our fixed costs so that we can derive full benefit from investment in our improved business platform,” says Jørgen Vig Knudstorp. |