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PRODUCT INNOVATION SECURES STRONG 2013 RESULT FOR THE LEGO GROUP

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A Successful Launch Of LEGO

A successful launch of LEGO® Legends of ChimaTM, continued success for LEGO Friends and strong performance from classic lines, such as LEGO City, contributed to a very satisfactory annual result for the LEGO Group.

Product Innovation Secures Strong 2013 Result For The LEGO GROUP

Product Innovation Secures Strong 2013 Result For The LEGO GROUP

“In 2013 we increased our sales by 11%, outperforming the general toy market, which is a very satisfactory result. In less than 10 years, we have now more than quadrupled our revenue,” says Jørgen Vig Knudstorp, President and CEO of the LEGO Group, adding:

“Continually developing and innovating our consumer offering is a key to our success, and in 2013 we successfully developed and launched products that children put high on their wish list all over the world”.

In 2013 evergreen product lines, such as LEGO® City, LEGO DUPLO®, LEGO Technic and LEGO Creator, all grew double digit. LEGO Friends, launched in 2012, showed its long term potential by also growing double digit in 2013, while LEGO Legends of Chima was successfully established as a major theme globally.

Key figures from the LEGO Group Annual Report 2013 published today:

  • In local currency (i.e. excluding the impact of foreign exchange rate changes), revenue increased 11% year over year.
  • Revenue increased by 10% in DKK to DKK 25,382 million [USD 4,519 million, EUR 3,403 million] against DKK 23,095 million [USD 3,987 million, EUR 3,103 million] the year before.
  • The year’s operating profit increased to DKK 8,336 million [USD 1,484 million, EUR 1,118 million] against DKK 7,606 million [USD 1,313 million, EUR 1,022 million] – an increase of 10%.
  • Net profit was DKK 6,119 million [USD 1,089 million, EUR 820 million] compared to DKK 5,613 m [USD 969 million, EUR 754 million] in 2012 – an increase of 9%.
  • Cash flow from operating activities was DKK 6,744 million [USD 1,247 million, EUR 904 million] compared to DKK 6,220 million [USD 1,100 million, EUR 834 million] in 2012, an increase of 8%.
  • The number of average Full Time Employees increased by 13% – an increase of 1,355 to 11,755 employees for the full year.
  • Investments in property, plant and equipment amounted to DKK 2,644 million in 2013 against DKK 1,729 million in 2012.

The LEGO Group reporting currency is DKK. The conversion from DKK to USD/EUR is a non-official unaudited, calendar-based calculation using an annual average currency rate (however conversion of net cash generated from operating activities is based on year-end currency rate) in 2013 and 2012 respectively.

LEGO sales increased in all major markets

A Successful Launch Of LEGO

A Successful Launch Of LEGO

The revenue growth was achieved in a global toy market that declined slightly in value in 2013.  North America saw a decrease in 2013, whereas European markets were flat but with very varying developments. In Asia, the Japanese market continued its decline, while the emerging Chinese market saw growth.

However, the LEGO Group achieved sales growth in all major markets. While the large US, UK and Central and Northern European markets had healthy single digit growth rates, most other markets saw double digit sales growth.  Especially in Asia, which is still a relatively small market for the LEGO Group, the sales growth was very strong.

While the LEGO Group expects the global toy market to grow low single digit annually in the future, Jørgen Vig Knudstorp believes the company can outgrow the global market and thereby gain market share:

“We remain ambitious and expect to continue to grow our market share. We will do so by expanding our global presence – but also through a continued focus on developing and innovating our product offering so that we remain relevant to children all over the world”, he says.

Successful product launches

Among the top selling lines in 2013 were core themes like LEGO® City, LEGO® Star Wars™ and LEGO DUPLO.

LEGO Friends, launched in 2012, and LEGO Legends of Chima, the big theme entering the market at the beginning of 2013, were also among the top selling lines.

“We are very satisfied with the growth of LEGO Friends in its second year on the market and we look forward to expanding the theme in the coming years. In addition, we have successfully established the theme LEGO Legends of Chima as a major line, and we will further develop this story and the products in 2014,” says Mads Nipper, Executive Vice president and CMO of the LEGO Group, adding:

LEGO Legends of Chima is a rich and engaging universe that children can explore in many ways. Not only by building and playing with LEGO sets, but also in the digital world using apps, exploring content on LEGO.com, via videos and online games. The theme is a great example of how we bridge physical and digital play.”

Billions invested in capacity

During 2013 the LEGO Group increased its extensive investments in production capacity across the globe to more than DKK 2.6 billion [USD 489 million, EUR 354 million].

“We have made a strategic decision to build our capabilities globally, both when it comes to employees and production facilities. We need to invest globally in order to deliver on our ambition of making LEGO play relevant to even more children around the world,” says John Goodwin, Executive Vice President and CFO of the LEGO Group.

As a result of the ambitious expansion strategy, major capacity investments took place in 2013. In Mexico and the Czech Republic current factories were expanded, while the construction of a brand new LEGO factory in Hungary is nearly completed. The construction of a LEGO factory in Jiaxing, China has just begun. When the factory opens in 2016, it will supply the growing Asian market with LEGO products.    

“It is our strategy to fully control the production process in order to secure that we deliver products that are safe for consumers and of consistent high quality, and we are proud to report that in 2013 the LEGO Group once again reached our target of zero product recalls. Our constant focus on quality and safety wherever we operate also means that our new factories in China and Hungary will run with the same technology, automation and standards for employee safety and product quality as any other LEGO factory,” says Bali Padda, LEGO Group Executive Vice President and COO.

Adding more than 1300 employees

In addition to the physical capacity building mentioned above, 2013 was a year of employee capacity and capability building in areas such as Production, Engineering, Sales and R&D, to equip the LEGO Group for future growth. This resulted in welcoming a significant number of new employees during the year, increasing the average number of full-time employees by 1,355 to 11,755, one of the largest annual employee increases in the company’s history.

In 2013 the LEGO Group also reinforced its commitment to globalising the company by announcing its intention to grow a number of major regional sites. Headquarters will remain in Denmark, and in order to attract a more diverse global work force focus will be put on building presence in London, Singapore and Shanghai as well as at the present LEGO premises in Connecticut,USA.

Investing

What is the procedure for proving a missing or lost Will?

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Intermediaries will be key to Investment Houses navigating the Covid19 crisis

By Alexa Payet, Partner at Bolt Burdon and listed specialist in the Certainty

Contentious Probate Hub & Area

Initial steps

When an individual dies it is necessary to search their paperwork to establish whether they made a Will and gather information regarding their estate. This is important because the personal representatives of the estate have a legal duty to distribute the estate correctly and could be held financially responsible for any mistakes made through any breach of duty.

Where a Will cannot be found but is believed to exist there are a number of steps that can be taken to help confirm its existence, including (but not limited to) the following:

  • making enquiries of the deceased’s family and friends;
  • making enquiries with the deceased’s professional advisors;
  • instructing The National Will Register to undertake a Certainty Will Search.

Presumption of revocation

Where the original Will is known to have been in the testator’s possession before their death and cannot be located afterwards, there is a rebuttable presumption that the Will was destroyed by the testator with the intention of revoking it. If an order for the proof of a copy is to be obtained then this presumption must be rebutted.

Procedure for proving a copy Will

The procedure for proving a copy Will is set out in Rule 54 of the Non-Contentious Probate Rules 1987 (‘NCPR’).

The application is made to the Probate Registry at which the application for the grant will be made and the order can be made by a district judge or registrar.

The application must be supported by evidence in the form of an affidavit (although during the global pandemic the rules have been amended by the Non-Contentious Probate (Amendment) Rules 2020, SI 2020/1059, to provide for the use of witness statements as an alternative to affidavits).

The evidence must set out the grounds of the application and any available evidence that the applicant can adduce as to the Will’s existence after the death of the testator or, where there is no such evidence, the facts on which the applicant relies to rebut the presumption that the Will was destroyed by the testator during his/her life.

The applicant must ensure that the Court has the best available evidence of what happened to the testator’s Will in order that effect may be given to his/her testamentary wishes.

It is important to understand that the applicant does not need to demonstrate that the Will has been lost (it is the fact of its loss which gives rise to the presumption of revocation). Instead, the applicant must establish, by evidence, that the Will was not in fact revoked.

What is a Certainty Will Search and why is it necessary?

A Certainty Will Search searches for Wills that have been registered on The National Will Register (circa 8.7 million Will registrations in the system) and for Wills that have not yet been registered in geographically targeted areas where the deceased used to live and/or work. A Certainty Will Search is extremely important as it will be necessary to notify the probate registry of any persons who would be prejudiced by the grant if the copy Will is proved. If no such person exists then the registrar is more likely to grant the application. Alternatively, if such a person does exist then you should seek to obtain their written consent to the application. The written consents can then be lodged with (or following) your application.

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Oil prices rise as investors look to higher demand seen in second half

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Oil prices rise as investors look to higher demand seen in second half 1

By Shadia Nasralla

LONDON (Reuters) – Oil prices climbed on Tuesday as optimism that government stimulus will eventually lift global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally are cooling fuel consumption.

Brent crude futures for March rose 72 cents to $55.47 a barrel by 1152 GMT after slipping 35 cents in the previous session.

“The perception that any retracement will be quick as confidence in economic and oil demand recovery is unlikely to fade away,” said PVM analysts in a note.

U.S. West Texas Intermediate crude was at $52.65 a barrel, up 29 cents. There was no settlement on Monday as U.S. markets were closed for a public holiday. Front-month February WTI futures expire on Wednesday.

Investors are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020.

China also avoided an economic contraction last year.

Investors are watching out for U.S. oil inventory data from the industry association API, due on Wednesday, the same day U.S. President-elect Biden’s inauguration speech will likely give details on the country’s $1.9 trillion aid package.

The International Energy Agency cut its outlook for oil demand in 2021, but pointed to a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.

“Border closures, social distancing measures and shutdowns…will continue to constrain fuel demand until vaccines are more widely distributed, most likely only by the second half of the year,” it said in its monthly report.

(Additional reporting by Florence Tan, editing by Louise Heavens)

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Can Thematic Investing provide investors with growth opportunities in uncertain times?

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The impact of COVID-19 on the investment market

New whitepaper from CAMRADATA explores

CAMRADATA’s latest whitepaper on Thematic Investing, considers the role this type of investing can play in asset management and explores trends that can permeate society and traverse sectors. The whitepaper includes insights from guests who attended a virtual roundtable on Thematic Investing hosted by CAMRADATA in November, including representatives from CPR Asset Management, Sarasin & Partners, Impact Investing Institute, PwC, Quilter Cheviot, Scottish Widows and Stonehage Fleming.

Sean Thompson, Managing Director, CAMRADATA said, “In these seminal times, thematic investing has the potential to shape how the future unfolds. Yet running a successful thematic fund is no easy feat – it is a bit like navigating unchartered waters trying to identify the trends and the long-term opportunities.

“Trends such as AI and biotechnology are still in their relative early days, for example, and global economies are undergoing dramatic changes. But mapping out certain trends, identifying potential sustainable returns through a unifying thread that spans multiple sectors, could help future-proof investments. “Our roundtable guests considered current key themes, which themes worked well, and which have not and how thematic investors could identify trends with the potential to offer future growth.”

The guests named themes they currently like which included artificial intelligence, China, climate change, clean energy, automation, evolving consumption, ageing, digitalisation, water, waste management, biodiversity, and board diversity.

After discussing themes that have worked or not, the guests looked at total allocation to themed funds, and whether clients might be blinded by themes to the overall risk exposure in their portfolios.

Key takeaway points were:

  • Themes have a habit of coming and going. One guest recognised that automation and robotics, for example, were cyclical, which means that investors will have to think carefully about entry-points.
  • It was agreed that the commodities ‘super cycle’ of the 2000s came about with the economic development of China. Many commodities-based products found their way into mainstream investing, but this is unlikely to happen again.
  • One guest was surprised by some of the themes that interested their customers; with their research showing that Board Diversity was almost the lowest-ranking concern among the ESG choices they listed.
  • There was correlation between environmental impact and social benefits to investing. The theme that concerns the Impact Investing Institute, which is less than two years old, is improved measurement of such relationships.
  • In terms of successful themes, one clear winner due to COVID had been digitalisation.
  • One theme that has not done so well is the Ageing theme focused on older people travelling and enjoying experiences abroad later in life.
  • One guest said their firm used themes for ideas generation, not as a shortcut for portfolio construction. They said themes lead to good ideas, but they then spend at least three months researching a stock, so that the best themes are represented by the best investments.
  • The final point was that there are sensitivities for any global investor in allocating to themes, even the biggest one of all, Climate Change.
  • But on a positive note, one guest added if all stakeholders can resolve their differences on definitions such as impact and ethical investing, then more capital will be readily transferred into opportunities.

The whitepaper also features two articles from the sponsors offering valuable additional insight. These are:

  • CPR Asset Management: ‘Central Banks: leading the path towards Impact Investing’
  • Sarasin & Partners: ‘Theme or fad? How to invest for the long term’

To download the Thematic Investing whitepaper, click here

For more information on CAMRADATA visit www.camradata.com

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