LEGO Company to Channel Strong 2001 Performance into Aggressive Growth Strategy for North America; World leader in construction toys aims to double its Canadian business by 2005.

Business Editors

ENFIELD, Conn.--(BUSINESS WIRE)--April 16, 2002

Following a year of strong growth in North America, the LEGO Company has set its sights on doubling business in North America by the year 2005, coupled with a plan to become the leading creative brand for families with children. Currently, the LEGO Company is ranked the seventh strongest consumer brand in the world among leaders like Coca Cola, Levi's and Disney, according to Young & Rubicam's Brand Asset Valuator. In Canada, LEGO ranks as the third largest overall toy company behind Hasbro and Mattel.

Last year, the LEGO Company reported a global pre-tax profit of approximately $103 million (CAD) across all aspects of the business, including retail toy sales, direct-to-consumer sales, LEGO(R) Brand Retail stores, LEGOLAND(R) Parks and the LEGO Educational Division.

In 2001, the overall Canadian toy market was relatively flat, but the LEGO Company posted a 17% increase in Canadian consumer sales. Canada continues to be a priority market for the LEGO Company, as the Richmond Hill, Ontario office has been a key growth driver over the past three years with revenue increases in excess of 50% to achieve a commanding 74% share of the Canadian construction toy market. LEGO has plans to extend its Canadian brand presence to become increasingly dominant not only in the toy marketplace, but also in the fabric of Canadian families.

Andrew Black, new president of LEGO Americas and a native Canadian, has implemented an aggressive strategy to realize business goals for North America over the next three years.

"Our 2001 performance indicates we are in a position to aggressively pursue our goal to double the LEGO business in Canada and the United States by 2005," says Black. "Innovative products and marketing helped us exceed our expectations - in fact, BIONICLE received a T.O.T.Y. Award for Most Innovative Toy of the year from the Toy Industry Association. We will continue to raise the category bar with our product offerings and marketing support, but at the same time, we will stay close to market demand and go outside of the construction toy category to establish LEGO presence in areas like action figures and preschool."

Privately-held and family-owned for the last 70 years, the LEGO Company has achieved overwhelming success in the construction toy category through its commitment to high quality products and brand experiences. As the premier construction toy brand, LEGO defines the category, with a current category share of nearly 70% in North America, and aided brand awareness of 98% among North American consumers.

In 2002, the LEGO Company continues to redefine construction with additions to the BIONICLE universe, combining construction with storytelling and collectibility, as well as with a line of new build-and-compete LEGO Soccer products. Hot licensed properties also will drive growth, including new products in the LEGO STAR WARS(TM) line to coincide with the May launch of Episode II and 11 new LEGO Harry Potter(TM) sets based on the Harry Potter(TM) and the Chamber of Secrets movie launching this fall.

Because the core LEGO values of creativity, imagination and fun lend themselves to virtually any toy, LEGO is planning to expand its innovative approach to play to new toy categories, starting with action figures and preschool in 2002.

Building on the proven success of constructible BIONICLE action heroes, LEGO leaps into the true action figure category with a new organic building system, called GALIDOR. This quick-build assortment allows children to build action figures based on the characters and creatures of the YTV television series, GALIDOR(TM): Defenders of the Outer Dimension, filmed and produced in Montreal by CineGroupe, and airing Wednesdays at 7:00 p.m. GALIDOR by LEGO will be featured in the action figure aisle at retail.

"With GALIDOR, we're translating LEGO values and play patterns in new ways to establish ourselves in a new category," says Black. "Construction accounts for three percent of the overall toy market, while action figures account for six percent. We seek to maintain leadership of the construction toy category while finding new paths for growth in strong toy categories where before we've never asked for consideration. We're growing our brand by expanding our scope."

In addition to GALIDOR, the company will launch LEGO EXPLORE: The Complete Discovery System for preschool children. LEGO EXPLORE takes a holistic approach to cognitive development through play, and is designed to appropriately inspire creativity, imagination and fun through individual and group play.

"Looking at our 2002 plans, we're certain that we have the momentum we need to significantly grow our business in North America and at the same time build one of the leading and most creative brands for families with children," says Black.

LEGO Systems, Inc. (LSI) is the Americas (North America and Latin America) division of the LEGO Company, a privately-held firm based in Billund, Denmark. The LEGO Company employs nearly 1,200 people in the Americas - approximately three-quarters of whom work at LSI's 203-acre headquarters in Enfield, Connecticut. The LEGO 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." For more information, visit www.LEGO.com.

LEGO and the LEGO logo are trademarks of The LEGO Group.

GALIDOR is a trademark.(c) 2002 CineGroupe and The LEGO Group.

HARRY POTTER, characters, names and related indicia are trademarks of and(c)Warner Bros. 2002.

(c)2002 Lucasfilm Ltd. & TM. All rights reserved. Used under authorization.