LEGO Group

February 24, 2005 08:37 ET

LEGO Group Positioned to Maintain Category Leadership in 2005 as Play Pattern and Business Strategy Both Produce Honors at Annual Toy Fair



FEBRUARY 24, 2005 - 08:37 ET

LEGO Group Positioned to Maintain Category Leadership
in 2005 as Play Pattern and Business Strategy Both
Produce Honors at Annual Toy Fair

NEW YORK--(CCNMatthews - Feb 24, 2005) -

-Global construction market leader celebrates two industry honors and 50
years of its System of Play, stays committed to constructive play
pattern it pioneered amidst tech toy rush-

As manufacturers unveiled new product lines at this week's annual Toy
Fair, LEGO Group bucked the technology trend to celebrate its timeless,
classic toys and play pattern in an ever-increasingly electronic toy
marketplace, and walks away with two industry honors - Best Boy Toy of
the Year and Vendor of the Year.

The Toy Industry Association kicked off Toy Fair by celebrating the best
and most innovative toys of 2004, honoring LEGO® KINGHTS' KINGDOM™
with the prestigious Toy of the Year Award for Best Boy Toy.

KNIGHTS' KINGDOM unites the constructible action figure platform the
company pioneered with BIONICLE® in 2001 with the best of traditional
play theme construction and role play to engage a broader base of boys
under one compelling storyline. Unlike other category finalists,
KNIGHTS' KINGDOM utilizes no technology to capture boys' imaginations,
rather, represents a classic play pattern reinvented to appeal to
today's youth.

"This T.O.T.Y. honor underscores that classic play patterns like LEGO
construction, independent of technology, can be just as innovative and
compelling to today's children, and we thank the industry for
recognizing that," says Soren Torp Laursen, president, LEGO

"As many manufacturers jump on the technology bandwagon as a means of
staying relevant with today's children, we look deep into our compatible
system of play to reinvent ourselves year on year," says Laursen.
"Themes like castle are timeless, it's simply a matter of retooling the
look, the building experience and model functionality to stay fresh and
relevant. We offer a technical toy, just not in the way the market
defines technology."

This year, consumers will see stronger focus on classic and new LEGO
themes, including fire, police, construction, dinosaurs and castle. With
first-ever BIONICLE theme sets, children can build story environments
and movie events for Star Wars™ and Harry Potter™ support LEGO

As LEGO Group celebrates 50 years of its compatible System of Play for
all ages in 2005, the company reflects on changes in the marketplace and
among the children to whom it caters with the highest quality building

"Certainly things have changed since we launched our first themed
building sets in 1955," says Laursen. "However, times have not changed
so much that children and parents alike don't recognize and appreciate
the heritage, quality and inherent fun of the classic LEGO play

In its 50th year, LEGO Group is leveraging technology to draw people
back into the core building experience with LEGO Factory, an online tool
where children can design models in the virtual world, then buy their
custom creation to build in the real world.

"We incorporate technology where meaningful and relevant to enhance role
play value or building experience," Laursen continues. "Our evergreen
LEGO MINDSTORMS™ product leverages technology to compliment the play
experience by bringing robots to life, while LEGO Factory delivers the
best of the virtual play world, but then sends children back to the
physical play environment."

Not only has the company refined its strategy to recapture the
traditional play theme construction business (boys ages 6-12) for which
it is best known, significant back-office improvements have been
achieved to make the company faster, leaner and more competitive.

As testament to the company's operational improvements, LEGO Systems was
named "Construction Toy Vendor of the Year" by Toys 'R Us, recognizing
considerable increases made in fill rates, productivity and
profitability, in-store displays and consumer education programs, and
development of differentiated products to drive store traffic in 2004.

In the U.S., LEGO Group ended flat in 2004, outpacing the U.S. toy
industry and most major toy brands and maintaining position as
construction toy category leader. Supply chain efficiencies increased
fill rates 10% for the year, driving a 45% increase in fourth quarter
fill rates to core accounts. Globally, total operational costs were
reduced by 20%, product development lead time has decreased more than
50%, and the company balance sheet has been sanitized, reducing fixed
assets by two-thirds.

LEGO Group, a privately-held, family-owned company based in Billund,
Denmark, is one of the world's leading manufacturers of play materials
for children, employing approximately 8,000 people globally. The Company
is committed to the development of children's creative and imaginative
abilities, and its employees are guided by the motto adopted in the
1930s by founder Ole Kirk Christiansen: "Only the best is good enough."


Contact Information

    LEGO Americas
    Michael McNally, 860-763-7825