LEGO 2017 Financial Results – Simplified and made easy! [Feature]

Last week LEGO released its annual financial results for 2017, and to some of us, it may have seemed like it was written in a foreign language. You know what it means to have a profit and loss, but to help cut through all the accounting jargon, we’ve simplified things a bit further for you. Note that we’re taking a huge amount of liberty with the complex details to keep it simple, but it should give you the right general idea.

LEGO 2017 Financial Results Simplified Breakdown

First of all, we converted Danish krone to US Dollars using Google exchange rates, just to keep the number more digestible for most of you reading this. So if you see a three-digit number below, it runs into the millions (396 = 396 Million USD). A four-digit number in the chart means it runs into the billions (6273 = 6.273 Billion USD).

LEGO 2017 Financial Results Simplified Chart

Here’s a quick explanation of all the financial terminology used in the chart above.

A. Revenue – The annual salary your employer pays you
B. Your Expenses – All your purchases, including LEGO, diapers for your kid, flowers for your spouse
C. Operating Profit – A minus B. How much you have left after enjoying your spending
D. Financial Income and Expenses – Your side income from selling your LEGO sets that increased in value (positive) and other expenses such as postage (negative) to send the shipment to the buyer.
E. Profit Before Income Tax – C plus D
F. Tax on Profit – How much government taxes you paid after your remaining money from E
G. Net Profit – The final amount you have – (E minus F) in your bank after working for the full 12 months of the year


Now that we understand how much money came in, and how much remains at the end of the year, we can make some extremely broad and brave, and far-reaching assumptions. Unlike Apple — which has many product lines, like iPhones, MacBooks, and iPads — if we look at The LEGO Group as a “one-trick-pony” – all it ever does is sell LEGO sets made from bricks, or at least a large proportion of it. So we simplify LEGO to “selling sets” to us, and that’s it. (Granted there may be other sources of income, such as Legoland royalties from Merlin Entertainments, movie rights from WB, and so on but let’s set that aside for the sake of simplicity). One can safely assume that for a $100 set that you buy, only around $22.30 is profit to the LEGO Group as the very big picture from these results.

Just remember that this magic number is just an indication that this is really an oversimplification of things, but looking at it this way probably gives you a better understanding of the effort that goes into making a set a reality (of course, there are tons of other things not represented).

As LEGO builders and collectors, it might be easy to quickly judge actions LEGO takes like layoffs, or evaluate their business strategies, competition, or complain about pricing. But the reality is that we can’t see what really happens inside closed doors. So take a pause and ask yourself, if you were to run a company… would that level of profitability be acceptable to you? What would you do differently?

  • Currency conversion was based on today’s Google DKK to USD. It’s easier for most of us to digest currency in US dollars.
  • Rate Used: 1,000,000 DKK = 165370 USD. (Google)
  • Financial numbers obtained from LEGO 2017 Annual Report

7 comments on “LEGO 2017 Financial Results – Simplified and made easy! [Feature]

  1. Jelle

    Thanks for the explanation. The profitability is certainly high, and in most places one would also pay VAT, which leaves a relatively less fraction of the price for the Lego company.
    At least it shows they would not be able to sell at Lepin prices.

  2. Johnny Johnson

    Holy smokes. 22% of pure profit out of every dollar is… immense. Uh, good to know that they won’t be going out of business anytime soon, I guess?

  3. lylebot

    Yes, if I were running a multi-billion dollar company and making 22% profit, I’d be ecstatic. I’d sleep in a bed of bills. I’d bathe in coins. I’d hire an army of lobbyists to get my taxes cut. I’d even buy that 8000-piece Millennium Falcon set.

  4. aaaaa

    “for a $100 set that you buy, only around $22.30 is profit to the LEGO Group”
    “only”? Are you out of your mind?

  5. Roy Gal

    Wait a minute. A $100 retail set is probably only $50 or so wholesale to, say, Walmart. So Lego would make “only” $11 on the $100 you pay…

  6. Avery Horowitz

    You are way off.
    $100 set– the retailer gets $40 or 40 percent for his costs and profits.

    Why would you think expenses are so low?
    A 5-8 per cent return is great in most fields. Do we know the Lego Company return?

Comments are closed.