Essay – Lego Group History

Table of Content

Itallbegan in1932 In 1932 Ole Kirk Kristiansen, a Danish joiner and carpenter, began making wooden toys . The business he established later passed from father to son, and today the founder’s grandson, Kjeld Kirk Kristiansen, and his children own the LeGO Group . In 1958 Godtfred Kirk Christiansen, son of Ole Kirk Kristiansen, made what would prove to be an extremely wise decision . On January 28, 1958, at precisely 13:58 he submitted a patent application for the LeGO® brick that was – literally – to prove to be the cornerstone of a toy fairy tale .

At the start of the new millennium the LeGO brick was acclaimed “Toy of the Century” – first by Fortune Magazine and later by the British Association of Toy retailers . It was Founder Ole Kirk Kristiansen himself who hit upon the LeGO name in 1934 . he took the first two letters of the Danish words LeG GODT, meaning “play well”, and combined them – quite unaware that one meaning of the word in Latin is . . . “I put together” . To this very day “LeGO” is both the name and the concept behind the company . lay is a key element in children’s growth and development, and play stimulates the imagination, the emergence of ideas, and creative expression . The aim of the company’s products is to “inspire and develop the builders of tomorrow”, and all products are based on the underlying philosophy of learning and development – through play . It is the LeGO philosophy that “good quality play” enriches a child’s life – and lays the foundations for later adult life .

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True to its motto “Only the best is good enough”, the LeGO Group has been emphasizing the importance of high quality since 1932 . This approach has brought consumers back to LeGO products time and again . At the same time the LeGO system means that many thousands of building elements can be easily combined in innumerable ways – and just as readily dismantled again . The more LeGO bricks you have, the more fertile your creativity can become, and there are hours of play in the LeGO brick that you don’t find elsewhere .

Child’s play is an everchanging world, and the company’s product development departments therefore work systematically with the evolution of play themes and product lines based on research among children and parents into things like play habits, family patterns and housing conditions . In addition, the combination of a structured system, logic and unlimited creativity encourages the child to learn through play in a wholly unique LeGO fashion . At a time of growing demand upon children’s capacity for learning and their ability to solve complex problems, LeGO toys are perfectly created for the child of tomorrow .

It is for this reason that the LeGO system is frequently cited by many leading organisations and individuals as a specially creative play material used in learning contexts by institutions and schools throughout the world . The child of the future will have plenty of things to play with . Consumer electronics is a tough competitor to traditional toys . But the LeGO Group is in no doubt that the LeGO brick will continue in future to be relevant to children of all ages . A world of imagination and total absorption . utting two LeGO bricks together is intuitive and delivers the spontaneous joy of creation which can be supplemented – but never replaced – by virtual experiences . 4 The LeGO GrOup 2011 TheLEGOGroup inkeyfigures The strong growth achieved by the LEGO Group in recent years continued at the same pace in 2010. The result before tax – a surplus of DKK 4,889 million – exceeded all expectations for the year, and the LEGO Group’s net sales rose by 37. 3% from DKK 11,661 million in 2009 to DKK 16,014 million in 2010.

Particularly the markets defined by the LEGO Group as special growth areas, the USA, Great Britain, Russia and Eastern Europe, have contributed to the extensive growth, but all the LEGO Group’s markets gained market shares in a slightly increasing global toy market. The classic product lines such as LEGO® City, LEGO® DUPLO® and LEGO® Star WarsTM created the highest sales in 2010. However, nearly all product lines showed higher increases in 2010 than expected. Today the LEGO Group is the third largest toy manufacturer in terms of sales: 1. 2. 3. 4. 5. Mattel Hasbro the lEgO group Bandai-Namco TOMY-Takara

FInancIal HIgHlIgHtS tHE lEgO grOup (DKK million) Income Statement: Revenue Expenses Operating profit before special items Special items Financial income and expenses Profit before income tax Net profit for the year Employees: Average number (full-time) 2010 16,014 (10,899) 5,115 (142) (84) 4,889 3,718 2009 11,661 (8,659) 3,002 (100) (15) 2,887 2,204 2008 9,526 (7,522) 2,004 96 (248) 1,852 1,352 2007 8,027 (6,556) 1,471 (22) (35) 1,414 1,028 2006 7,798 (6,393) 1,405 (80) (44) 1,281 1,290 8,365 7,286 5,388 4,199 4,908 The LeGO GrOup 2011 5 Focusongrowth

The LeGO Group has seen continued growth for several years, and sales have increased by double-digit rates . This has happened in a global toy market characterized by stagnation for years . The LeGO Group expects continued growth in sales . The foundation for this growth is a constant focus on the company’s core products and markets . In addition, the LeGO Group constantly endeavours to develop the way the collaborative work of all the departments within the LeGO Group comes together in a unique operational system to ultimately design, manufacture, plan, sell and distribute products to customers and consumers .

The LeGO Group calls this the “Operating Model” . On the basis of these core activities, seven growth initiatives have been defined: • grow market share in uSa uSA is the world’s largest market for toys, and the LeGO Group has dramatically increased its market share in recent years, to approximately five per cent at the end of 2010 . The LeGO Group believes this share can be further increased in the coming years . • grow market share in Eastern Europe The toy market in eastern europe is experiencing rapid growth, and the LeGO Group aims to continue to expand its strong position on these markets . Seed “emerging markets” Markets such as China, Mexico, Brazil and India are expected to see strong growth in the future, and the LeGO Group plans to invest in developing them . • Seed new concepts In addition to ongoing product development based on the existing core portfolio, the LeGO Group will develop innovative new products which are “obviously LeGO® products, but never seen before” . An example of such new products is the LeGO Games board-game series launched in 2009 . • Expand “direct to consumer” activities The LeGO Group currently has direct contact to consumers through its own sales channels, clubs, collaboration programs, etc .

The aim is to get even closer to consumers through greater contact and by expanding offers available direct to consumers . • Expand lEgO Education The aim is to create growth in the area of educational materials for preschools, schools and educational institutions all over the world . • Develop digital business The LeGO Group currently operates on digital platforms through the LeGO . com website and video games . Digital business has been further expanded, in particular through LeGO universe – the first MMOG (massively multiplayer online game) from the LeGO Group, launched in 2010 . The LeGO GrOup 2011 Organization The LeGO Group today is owned by the third and fourth generations of the Kirk Kristiansen founding family: Kjeld Kirk Kristiansen and his three children . Ownership of the LeGO Group is handled through the investment company KIrKBI and the LeGO Foundation . KIrKBI owns 75% of the LeGO Group . KIrKBI also owns a 36% shareholding in Merlin entertainments Group whose activities include running the LeGOLAND® parks .

The remaining 25% of the LeGO Group is held by the LeGO Foundation . read more at: www. KIrKBI. dk www. lEgO-fonden. k chief Executive Officer Jørgen Vig Knudstorp gSc Executive Vice President Bali Padda global Supply chain (gSc) GSC is responsible for the Group’s supply chain, from procurement and production – including moulding, decoration and packing – to shipping and distribution to the retail trade . M&p Executive Vice President Mads Nipper Markets & products (M&p) M&p has global responsibility for development of new products, development of marketing materials, global marketing and sales to retail customers worldwide . cED Executive Vice President Lisbeth V. Pallesen ommunity, Education & Direct (cED) CeD is responsible for direct contact with consumers as well as sales via LeGO brand retail stores, online sales and mail order . In addition, this business area is responsible for digital business . And CeD is also responsible for the Group’s development, marketing and sale of educational materials .

cc Executive Vice President Christian Iversen corporate center (cc) CC covers the strategic and supportive functions: Corporate IT, Corporate hr, Corporate Communications, Corporate Governance & Sustainability, Continuous Improvement, LeGO Service Center and Governmental Affairs . F Chief Financial Officer Sten Daugaard corporate Finance (cF) CF is responsible for financial management and controlling as well as follow up on business planning and strategic initiatives . The LeGO GrOup 2011 7 Ideaand production Concept and product development takes place primarily at the company’s Billund headquarters (Denmark) – but the LeGO Group also has listening posts in Munich, Los Angeles and Tokyo in order to monitor the latest trends . The creative core is made up of 120 designers representing about 19 different nationalities .

Most of the designers have trained at design or art schools in various parts of the world . The LeGO Group, however, does not formally stipulate that its designers must have such a training; selection is based on hands-on work and face-to-face interviews . LeGO® bricks are manufactured at the Group’s own factories in Denmark, hungary, Czech republic and Mexico . The locations have been selected in order to be close to the Group’s most important markets in europe and the uSA . In addition, elements and finished products are procured from external suppliers .

In 2010 more than 36 billion elements were made, equivalent to approx . 68,000 elements a minute – or 1,140 elements every second . There are approx . 4,000 different elements in the LeGO range – plus 58 different LeGO colours . each element may be sold in a wide variety of different colours and decorations, bringing the total number of active combinations to approx . 8,000 . HowLEGO®bricks aremade During the moulding process, the plastic is heated to 230310°C until its consistency is about that of dough .

It is then injected into the moulds at a pressure of 25-150 tons, depending on which element is being produced . On an average, it takes five to ten seconds to cool and eject new elements . The moulds used in production are accurate to within five my (= 0 . 005 mm), and the accuracy of the moulding process means that only 18 elements in every million produced fail to meet the company’s high quality standard . All LeGO® elements are fully compatible, no matter when they were made during the period from 1958 until now or by which factory . 8 The LeGO GrOup 2011

LEGO®products forallchildren The range embraces products for all children . The entire product portfolio is graduated in its challenge to reflect the fact that children grow older and develop . LeGO® products can be grouped into a number of categories: play themes play themes are all those products that are built up around a story . For example, there are themes such as fire station, police, airport, knights’ castle, racers – and many more . As well as enjoying building, the child can spend many hours playing with the finished models . pre-school products re-school products are the category for children who haven’t yet started school . The products are specially developed to cater for the capabilities of the youngest children – encouraging them through creative play to use their hands and develop their motor skills . Today LeGO® DupLO® comprises both loose bricks – encouraging the child to build entirely what comes into its mind – and play themes – for example, airport, train and hospital . The series is graded in difficulty for children aged 18 months to six years . Safety is a key feature of the pre-school range .

The elements are large enough for children under three years to play with without swallowing them – and thanks to the way they have been moulded no bits can become loose . licensed products Licensed products are play themes based, for example, on movies or books for which the LeGO Group has acquired the rights . LeGO designers recreate the universe and characters in LeGO bricks so that play can continue on the floor at home . examples of series produced by the LeGO Group under licence are the LeGO® Star Wars™ and LeGO® Toy Story™ product lines . lEgO® MInDStOrMS® nXt

With LeGO MINDSTOrMS NXT you can design your own robot . By means of the software included in the set, robots can be programmed to perform loads of different operations . The robot can be fitted, for example, with sensors which can control motors and react to light, sound, touch, etc . Bricks & More Bricks & More is the name given to sets or buckets with traditional LeGO bricks and special parts such as windows, wheels and roof tiles . No building instructions are needed here – just a bit of imagination . With Bricks & More you can build what you want . un out of ideas? There are booklets enclosed – with illustrations to feed the active mind . Bricks & More is available in DupLO bricks and standard LeGO bricks . lEgO® Education LeGO education products have been developed specially for the educational sector and contain material for both teachers and pupils . pupils get the opportunity to do their own research, for example, into how cause and effect are related . When you learn by doing, you remember it better than if someone simply tells you . This is the philosophy behind LeGO education’s teaching concepts .

The LeGO GrOup 2011 9 • Offline lEgO® games LeGO online games are played on consoles and personal computers . They enable players to immerse themselves in beloved environments such as LeGO® Star Wars™, LeGO® indiana Jones™ and LeGO® harry potter™, discovering new adventures, battling enemies and using creativity to progress in-game . user-friendly gameplay, multiplayer capabilities, well-known franchises and a uniquely LeGO sense of humor combine to make LeGO video games a popular way of engaging with the brand in today’s digital age . ombining board games and lEgO play LeGO® Games provides the opportunity for a unique combination of building with LeGO bricks and social play with family and friends . players build the game from bricks, play it – and can then build a new version of the game or change its rules . The many games in the series have been developed on the basis of LeGO core values: fun, creativity and quality, and with an appeal to children aged five years and older . • Online – lEgO® universe LeGO universe is the first massively-multiplayer online game from the LeGO

Group, enabling imaginative digital building and play with friends and other players in a safe online environment . Launched in fall 2010, the game lets players adventure, explore, battle, build and bring their creations to life in ever-expanding LeGO worlds past, present and future . Going beyond the typical and often passive gaming experience in which players consume content created by others, LeGO universe gives players the opportunity to create and share their own worlds and stories in a new, virtual play space . Digital offerings

The LeGO Group aims to deliver digital play experiences that embody core LeGO values in new ways with interactive technology, both in offline games such as licensed video game products and LeGO apps and online via LeGO universe and LeGO . com . The mission of the LeGO Group is to provide the digital content, play spaces and tools that inspire and motivate children to live and share stories of their own creation . The digital offerings live up to the same strict safety and quality standards that consumers expect from physical LeGO sets . 10 The LeGO GrOup 2011 TheLEGOHistory InShort

The LeGO Group is a family owned company with a long history . here is a short summary of the most important historic events: The 1960s 1962 The company re-invents the wheel and starts experimenting with motors . 1932 Master carpenter, Ole Kirk Kristiansen, started making wooden toys . The 1930s The 1940s 1955 ”The LeGO® System of play” is introduced together with the first “play and Learn” Concept, emphasizing the importance of learning through play . 1958 The LeGO brick is launched with a new coupling system and thereby lays the foundation for the toy of the century .

A patent application for the building unit is filed at the Danish patent and Trademark Office in Copenhagen The LeGO GrOup 2011 1950 Godtfred Kirk Christiansen takes over as Managing Director of the LeGO Group after his father, Ole Kirk Kristiansen . The 1950s 11 The 1980s 1966 The first LeGO® train is introduced complete with rails and a 4 . 5 volt motor . 1984 The LeGO Group initiates a visionary partnership with Media Laboratory at the Massachusetts Institute of Technology, uSA . 1968 LeGOLAND® park opens in Billund . 1980 The educational Department is formed and changes its name to LeGO Dacta .

LeGO Dacta, now called LeGO education, develops and launches educational teaching materials . 1969 LeGO® DupLO® is launched for the youngest children . The bricks are twice the size of regular LeGO bricks on all dimensions, so they are easy to build with . 1974 The LeGO figure is born . The figures represent a brand new LeGO concept where role-play and characters become an integral part of the LeGO play experience . The 1970s 1977 LeGO Technic is introduced . The product challenges older children to construct vehicles and other machines . 1978 Godtfred Kirk Christiansen’s on, Kjeld Kirk Kristiansen, introduces the “System in a System” concept . The various product programs must to a higher extent take into consideration the needs and skills of children at various ages . 1979 Kjeld Kirk Kristiansen becomes president and CeO of the LeGO Group . LeGO themes are introduced and attention is drawn to story-telling and role play . 12 The LeGO GrOup 2011 The 1980s 1986 LeGO® Technic Computer Control is launched as one of the first outcomes of this partnership .

LeGO products for use in schools highly benefit from this invention . 998 LeGO MINDSTOrMS is launched based on the collaboration between the LeGO Group and Medialab at Massachusetts Institute of Technology, uSA . ® ® 1989 professor Seymour papert from MIT is appointed “LeGO professor” . 1993 LeGO Kids’ Wear from Kabooki A/S is launched based on a license agreement . The 1990s The LeGO Group enters into a license agreement with Lucasfilm Ltd . obtaining the right to develop, manufacture and market LeGO sets based on the Star Wars™ films . Later, the LeGO Group enters similar agreements with, among other companies, Disney, hit entertainment and Warner Bros . 1996 www . LeGO . om is introduced . LeGOLAND® park opens in Windsor, england . 1997 The first computer game is released . 1995 LeGO prIMO™ is launched for babies and toddlers up to 24 months . The LeGO GrOup 2011 13 The 1990s 1999 LeGOLAND® park opens in California, uSA . The LeGO® product is elected “Toy of the Century” . 2001 The BIONICLe® universe is launched . A combination of physical products and an extensive on-line universe invites children to tell and explore the story line . The 2000s 2009 LeGO Games board games with the slogan “Build – play – Build again” are introduced . 2002 LeGOLAND park opens in Günzburg, Germany .

The LeGO Learning Institute is established . The institute comprises international experts researching into children’s imagination, creativity and learning skills . 2006 A new, updated version of the LeGO® MINDSTOrMS® robot hits the shelves . MINDSTOrMS NXT is far more advanced than its eight years older brother and is capable of seeing, hearing, speaking, feeling and moving . The 2000s 2003 The LeGO Group presents a major deficit and faces a serious crisis . During the 2004-2005 period, the company focuses on survival and a turnaround based on a clearly defined action plan . 004 Jørgen Vig Knudstorp succeeds Kjeld Kirk Kristiansen as president and CeO . 2005 The LeGOLAND parks are sold to Merlin entertainments Group, as the LeGO Group because of its financial crisis must focus more on the core business . At the same time the LeGO Group’s owner takes over a share of Merlin entertainments Group .

The LeGO GrOup 2011 The 2010s 2010 A multiplayer on-line game, LeGO® universe, is launched . In a virtual environment players can experience the same fun, creativity and quality as when playing with a physical LeGO product . Did you know… . . . grown-ups also build with LeGO bricks? Just below five percent of the LeGO sales goes to a large and loyal group, called ”AFOLs” – ”Adult Fans of LeGO” . Many of these fans meet in clubs, where they plan large exhibitions in order for the fans to show their creations . The LeGO GrOup 2011 15 Theminifigure The first LeGO® minifigure appeared on the market in 1978 . Since then the little yellow figure has gone from strength to strength . Over the years approx . 4 billion minifigures have been produced – making it the world’s biggest population group!

The minifigure has appeared in many guises, including knight, astronaut, policeman, racing driver, Star Wars™ warrior, harry potter, Santa Claus, Steven Spielberg, crane operator, footballer, explorer, nurse, basketball player, Spider-Man, scuba diver, skier, firefighter, skeleton, pirate, skater, American Indian and queen . When the minifigure first appeared, it was decided that its face should have only one colour: yellow . And that its facial features should be happy and neutral . The figure would have no sex, race or role – these would be determined by the child’s imagination and play .

It was not until the launch of LeGO pirates in the 1980s that the need seemed to arise for having a figure who could be evil or good, happy or grumpy . With licensed products such as LeGO® Star Wars™ and LeGO® harry potter™ the figure began appearing in specific roles, and with LeGO Basketball in 2003 it took on authentic skin colours . In 2004 the LeGO minifigure assumed an even wider range of skin colours when it was decided that the figures in licensed products should resemble the original characters as closely as possible . One result was that the figures in LeGO harry potter™ changed from yellow to a more authentic skin colour .

Over the years approx. 4 billion minifigures have been produced – making it the world’s biggest population group! 16 The LeGO GrOup 2011 Minorandmajorsteps inthehistoryoftheminifigure 1978: The first minifigures are launched for the themes Town, Space and Castle . There are seven different figures to start with . 1978: Two months after the appearance of the first minifigures the first female minifigure arrives on the scene: a hospital nurse . 1989: Minifigures change their facial expressions . Now they can be either good or bad – and can even have a patch over one eye! Some of the figures are equipped with a wooden leg and hook . 997: The minifigure comes to life . In the computer game “panic on LeGO® Island” the minifigure makes its first-ever appearance as an animated character . The launch of this new game is preceded by extensive experiment in developing the figure’s movements and language . 1998: With the new Star Wars™ characters the minifigure makes its first appearance in a specific role . This personification of the minifigure is later extended to LeGO® harry potter™, LeGO Studios, LeGO Basketball and other series . 2000: In LeGO Football the minifigure is mounted on a spring – becoming a functional element .

There is further development with LeGO Basketball – when the spring is used to activate the figure’s hip movement . 2003: For the first time in the history of the minifigure its yellow facial colouring is replaced by a more authentic skin colour . In LeGO Basketball there are both dark and light players, with hairstyling printed on the character’s head . 2004: LeGO licensed products no longer have yellow faces – harry potter, for example, assumes a more natural skin tone . 2010: Minifigures are launched as collector’s items . each minifigure comes in a sealed “mystery” bag, so you never know which minifigure you might get .

And you could exchange minifigures with other collectors to obtain a full collection . The LeGO GrOup 2011 17 LEGOLAND®parks LeGOLAND® parks are family parks in which children enter an exciting world of adventure built of LeGO® bricks . The LeGO Group sold its LeGOLAND parks in summer 2005 . The purchaser was Merlin entertainments . A new company was set up under the deal – Merlin entertainments Group . Today the company owns a number of family attractions all over the world, including LeGOLAND parks, Madame Tussauds®, SeA LIFe®, London eye®, Gardaland® (Italy) and heide park® (Germany) .

KIrKBI A/S (owning 75% of the LeGO Group) owns approx . 36% of Merlin entertainments Group . lEgOlanD® Windsor A second park was opened in 1996 – in Windsor in the south of england . Nearly 55 million LeGO bricks were used in the building of the park . LeGOLAND Windsor is located approx . 22 miles west of London, with Windsor Castle as its nearest neighbour . In 1997 the park was hailed as the most popular new attraction in Britain . lEgOlanD® california The third LeGOLAND park opened in 1999 in Carlsbad, uSA, 30 miles north of San Diego and an hour’s drive south of Anaheim, California .

Like the other LeGOLAND parks, LeGOLAND California combines interactive attractions, family activities, shows, restaurants, shops and LeGO models . More than 35 million LeGO bricks were used in the construction of the park’s 15,000 LeGO models . The park is open all year round . lEgOlanD® Billund LeGOLAND Billund opened in 1968 and quickly became Denmark’s most popular tourist attraction outside the capital, Copenhagen . LeGOLAND Billund has seven theme areas – and more than 58 million LeGO bricks have been used to create the unique environment with knights, pirates, cowboys and other mpressive LeGO models . lEgOlanD® Deutschland The fourth LeGOLAND park opened in 2002 in Günzburg in southern Germany . A total of 50 million LeGO bricks were used to build life-size giraffes and hippopotami and to create interactive games and learning . Attractions and shows also help to give the visitor a fun and exciting experience . new lEgOlanD® parks to be established The owner of the LeGOLAND parks – Merlin entertainments Group – has announced the opening of two new LeGOLAND parks . LeGOLAND Florida is expected to open in Winterhaven, Florida towards the end of 2011 .

Furthermore, it is planned to open a LeGOLAND park in Iskandar, Malaysia in 2012 . 18 The LeGO GrOup 2011 LEGO®Community It is important to the LEGO Group to have close contact with its fans and consumers throughout the world. And to this end, the Group engages in many initiatives to strengthen ties between LEGO enthusiasts and the Group. wards . The new offer is an option for the most enthusiastic members, who can access an even broader range of LeGO activities . Among other things, they receive special information and behind-the-scenes LeGO stories plus the opportunity to take part in special competitions . EgO® Design byME lEgO. com LeGO . com is the official website of the LeGO Group . The aim of LeGO . com is to create a virtual LeGO® universe in which users can enjoy one of the most intense LeGO experiences . LeGO . com is more than just an online shop . It is a place where children, parents and LeGO fans of all ages can play and learn about LeGO Group values and ideas through games, stories, activities and experiences . More and more people are clicking their way to LeGO . com, and the website now tops the list of family and children’s sites on the

Internet . The LeGO Group also gives children and adults the opportunity to build their own virtual models on the computer– and then have the bricks for the physical LeGO® model sent by post . At the website www . DesignbyMe . com children and other building enthusiasts can build virtual LeGO models using the professional software application, LeGO Digital Designer . Consumers can design and build precisely the model they think is lacking from the official LeGO range . The aim of the website is to introduce a whole new dimension to the fun of building .

If children are looking for advice or ideas, they can see inspirational material at the site posted by LeGO designers and adult LeGO fans . lEgO® club The LeGO Club is for children six to 12 years old and has a membership of more than 4 million . Through the LeGO Club, members can show each other pictures of their favourite building work and draw inspiration for future play . every two or three months members receive a members-only magazine in english, German, French or Dutch . They also have access to a special LeGO Club website . In 2004 a new club offer was launched in the uSA: LeGO BrickMaster, aimed at children aged seven years and up- EgO® Inside tour Twice a year it is possible to join a very exclusive visit to the LeGO Group and be shown round the company . enthusiasts from all over the world take part in these Inside Tours . During the tour, visitors have close-quarter encounters with product developers, designers and modelmakers, who introduce the fans to a themed building competition with LeGO bricks . These special visitors also learn about the company’s history, culture and values – and get to see behind the scenes at LeGOLAND® Billund . It is a special opportunity to see parts of the company which are otherwise closed to the public .

The LeGO GrOup 2011 19 adult lEgO fans A growing number of adult LeGO enthusiasts have been setting up groups (LeGO user Groups – LuGs) in which to share their LeGO hobby . They call themselves “AFOLs” (“Adult Fans of LeGO”) . Over a period of years, the LeGO Group has actively developed relations with more than 70 “AFOL” groups with a total of 70,000 registered members . The groups have their own websites, blogs and discussion foras . The most popular LeGO fan blogs have more than 150,000 unique visitors each month . LeGO fans are also very active at YouTube where more than 550,000 LeGO tagged videos are to be found .

At Flickr more than one million LeGO tagged images are to be found . In 2010 more than 170 public events were organized by LeGO fans, and more than 2 . 6 million people (typically families with children) visited these events . During 2010, the LeGO Group and LeGO user Groups collaborated on 80 projects – from events to development projects . programmes for adult lEgO fans In 2005 the LeGO Group announced its “LeGO Ambassador” programme for AFOLs worldwide . The purpose of this programme is to expand mutually useful relations between the LeGO Group and its loyal, talented and committed consumers .

All LeGO user Groups are entitled to be represented by one person in the LeGO Ambassador programme . The current LeGO Ambassador programme has 70 members from more than 30 countries all over the world . Some LeGO fans have turned their passion for building and creating with LeGO bricks into a full-time or part-time profession . 13 of those have been appointed LeGO Certified professionals and have been officially recognized by the LeGO Group as trusted business partners . Today there are six LeGO Certified professionals in North America, four in europe, two in Asia and one in Australia . Social media

The use of social media is expanding at an explosive rate, and consumers across the world expect more and more to be able to dialogue with companies and organisations in which they are interested . For businesses, social media are a new and unique channel through which to conduct a dialogue with consumers . The LeGO Group has therefore decided to make use of these opportunities because staying close to its consumers is one of the key factors behind the company’s success . But the LeGO Group is very aware of the need to protect the safety of children on the Net . In May 2011, the LeGO Group presented its official LeGO page on Facebook .

The company was permitted to take over the page from a LeGO fan who had set up the page in 2008 . 20 The LeGO GrOup 2011 Learning throughplay research into the fields of play and learning has always been an important LeGO Group activity – combined with creativity, it is referred to as “playful learning” . To advance this research, the Group works closely with several research institutes throughout the world . The development of LeGO® MINDSTOrMS® NXT, which was launched in autumn 2006, is an excellent example of how collaboration with the Massachusetts Institute of Technology has resulted in a new, innovative product . ollaboration with educationists and teachers, and LeGO education is involved in many projects throughout the world – often in conjunction with local education authorities . FIRST® lEgO® league FIRST LeGO League is a robotic tournament for children and youngsters aged nine to 16 years . The robotic tournament has been established in collaboration between the American non-profit organization “FIRST” (For Inspiration and recognition of Science and Technology) and the LeGO Group to inspire children and youngsters and encourage their interest in science and mathematical/ technical subjects .

Teams are made up of five to ten players competing against other teams in various disciplines . The teams build their own robots on the basis of LeGO MINDSTOrMS products . In addition, the teams prepare a theoretical solution to the year’s challenge . In the 2011/2012 season, more than 175,000 children in 56 countries will be involved in FIRST LeGO League . The tournaments in each individual country are organized by a number of non-profit organizations . lEgO® Education In LeGO education playful learning is the focus of its products .

But although the products of LeGO education are based on the LeGO brick, the product range should not be mistaken for toys for schools . They are in fact a wide range of options for teachers and pupils, providing a solid grounding in the learning of science concepts through practical exercises . In this way, the products are mainly used in subjects in which pupils learn, for example, about technical principles, the environment or IT technology . All the concepts behind the products of LeGO education have been developed in close The LeGO GrOup 2011 21 172 m 22

The LeGO GrOup 2011 381 mio. 75 LEGO bricks 560 billion FunLEGO®facts • LeGO® products are on sale in more than 130 countries . • The LeGO Club has over four million members worldwide . • On average, every person on earth owns 75 LeGO bricks . • With a production of over 381 million tyres in 2010, the LeGO Group is one of the world’s largest tyre manufacturers . • If all LeGO sets sold in 2010 were stacked on top of each other, they would fill a football field (5,000 m2) to a height of 172 m – equivalent to a 52 story building. • More than seven lEgO sets are sold each second .

During the Christmas season (weeks 49-51) almost 28 sets are sold each second . • Laid end to end, the number of LeGO bricks sold in 2010 would reach more than 12 times round the world . • If you built a column of about 40 billion LeGO bricks, it would reach the moon . • In the manufacture of LeGO bricks the tolerance of the knob is 2/100 mm. 22 billion 40,000,000,0 • Over the years, approx . 560 billion LeGO elements have been manufactured . • In 2010 the LeGO Group achieved a global production of more than 36 billion elements – equivalent to approx . 8,000 elements a minute or 1,140 elements every second . • In 2010 approx . 22 billion LeGO elements were made at the factory in Billund, Denmark – equivalent to approx . 2. 5 million elements an hour or 42,000 a minute . • In one week more than one million sets containing more than 230 million LeGO elements are packed at the LeGO factory in Monterrey, Mexico . • The high-bay warehouse at the LeGO factory in Kladno, Czech republic has 59 km of shelf space with room for 180. 000 storage boxes with LeGO elements .

The automated cranes in the high-bay warehouse can transport 600 boxes per hour . • 2,5 million LeGO® DupLO® elements are moulded daily at the LeGO factory in hungary – if you laid them in a line, it would stretch 42 km. • In 2010 the 1×2 brick was the LeGO element produced in the largest numbers . A total of 908,949,651 1×2 bricks in various colours were moulded . 915millionways tocombine sixLEGO®bricks When people used to visit the LeGO Group, one of the things they were told was that there are 102,981,500 possible ways to combine six eight-stud LeGO® bricks of the same colour .

But one day the Group was contacted by a professor of mathematics who had calculated that this figure was too low . With the aid of computer programming he had calculated that the exact figure was 915,103,765 . The discrepancy is explained by the fact that in the original method of calculation, the only possibilities counted were the ones that eventually produce a column six bricks high . But, of course, it is also possible to build the six bricks – for example – in a chunk three bricks high .

The difficulty in the early 1970s when the original calculation was made was that a computer was not available to perform that calculation . So the correct figure is 915 million possible combinations . The LeGO GrOup 2011 23 Usingthe LEGO®brand name please help us to protect our brand name: • The LeGO® brand name should always be written in capital letters . • The LeGO brand name must never be used as a generic term or in the plural or as a possessive pronoun, e . g . “LeGO’s” . • When the LeGO brand name is used as part of a noun, it must never appear on its own . It should always be accompanied by a noun .

For example, LeGO set, LeGO products, LeGO Group, LeGO play materials, LeGO bricks, LeGO universe, etc . • The first time the LeGO brand name appears it must be accompanied by the registered symbol ® . • Thank you for helping us! Produced for the LEGO Group by Corporate Communications. © 2011 The LEGO Group. LEGO, the LEGO logo, DUPLO, BIONICLE, MINDSTORMS, LEGOLAND, the Minifigure, the Brick and Knob configurations are trademarks of the LEGO Group. ©2011 Lucasfilm Ltd. & TM. All rights reserved. ™ & © Warner Bros. Entertainment Inc. Harry Potter Publishing Rights © JKR.

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