By Stine Jacobsen COPENHAGEN, March 10 (Reuters) - Lego is bracing for higher energy and raw material costs as oil and gas prices rise amid conflict in the Middle East, its chief executive said, as
Lego Prepares for Rising Costs, Focuses on Pokemon Collaboration and Innovation
Lego's Strategy Amid Rising Costs and Market Changes
By Stine Jacobsen
Impact of Global Events on Lego's Costs
COPENHAGEN, March 10 (Reuters) - Lego is bracing for higher energy and raw material costs as oil and gas prices rise amid conflict in the Middle East, its chief executive said, as the Danish toymaker looks to spur growth with interactive "smart bricks" and Pokemon tie-ups.
Rising oil prices could feed through to the cost of plastics and other inputs over time, CEO Niels Christiansen said, although existing deals the firm has mean the effect is likely to be gradual and cushioned.
CEO's Perspective on Oil Price Volatility
"If oil prices are going up, that could potentially also impact our raw material prices over time – maybe not in the short term because we have contracts," Christiansen told Reuters in a phone interview. "The real impact is if it stays for a long time."
The price of Brent crude oil has surged by as much as 65%since the United States and Israel bombed Iran on February 28, to above $100 a barrel.
Lego's Experience Managing Volatility
Lego had managed similar volatility during the COVID-19 pandemic and Russia's 2022 invasion of Ukraine, he said.
"It's not very different from what we've dealt with over the last five years in that sense. So we're comfortable that we can manage, but it is just volatility again," he said.
His comments come as manufacturers globally face renewed cost pressures from higher energy prices and persistent supply-chain uncertainty, especially with the widening war in Iran, while navigating slower growth in some consumer markets.
Lego's Global Expansion and Tariff Strategy
Managing Tariffs and Supply Chain Disruptions
TIE-UPS WITH BLUEY, POKEMON, FORMULA 1
As well as energy costs, Lego is navigating tariff volatility after the Supreme Court knocked down some of U.S. President Donald Trump's key levies last month. Trump then imposed a new blanket 10% rate that could rise to 15%.
Lego's strategy of having production plants close to key markets has helped rein in costs and shield it to a degree from tariffs and supply chain disruptions. It will open its first manufacturing plant in the United States in 2027, in Virginia.
"Right now, we are more interested in managing the new tariffs," he said. "Then we'll see over time what happens."
Lego's Growth, Collaborations, and Innovation
Sales Performance and Market Growth
Despite the pressures, family-owned Lego reported growth across all regions and product categories in 2025, with sales rising in the United States, Europe and Asia Pacific. China returned to growth in 2025 after two years of flat or declining sales.
Volume Growth Versus Price Increases
Volume growth, rather than price increases, drove performance, Christiansen said. Lego has no immediate plans to raise prices, focusing on reaching more consumers. The company expects high single-digit revenue growth this year.
Brand Collaborations and Product Innovation
The toymaker has boosted collaborations with brands such as Formula One and Nike, as well as shows like 'Bluey' and Pokemon. It is rolling out a new "SMART Brick", featuring lights, scanners, speakers and sensors.
(Reporting by Stine Jacobsen; Editing by Adam Jourdan and Susan Fenton)
