Lego is preparing for a potential uptick in energy and raw material costs as oil and gas prices climb in the wake of conflict in the Middle East, the company's chief executive said, even as the Danish toymaker pushes to grow through interactive product features and franchise collaborations.
CEO Niels Christiansen told Reuters in a phone interview that rising oil prices have the potential to feed through to the price of plastics and other inputs over time, though he said the firm’s existing contracts mean any impact would likely be gradual and cushioned.
"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 said. "The real impact is if it stays for a long time."
The CEO noted that Brent crude oil has surged by as much as 65% since the United States and Israel bombed Iran on February 28, moving above $100 a barrel. He said Lego had navigated comparable swings during the COVID-19 pandemic and following Russia’s 2022 invasion of Ukraine.
"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 added.
Those remarks come as manufacturers across the globe confront renewed cost pressures from elevated energy bills and ongoing supply-chain uncertainty amid concerns about a widening regional conflict, while also adjusting to slower consumer growth in some markets.
Tariffs, production footprint and the US plant
Alongside energy-driven input risks, Lego is monitoring tariff volatility after a recent US Supreme Court decision altering previous levies. Following that decision, the US administration imposed a new blanket 10% tariff rate that could increase to 15%.
Christiansen said Lego’s strategy of situating production close to key markets has helped limit costs and offered some protection from both tariffs and supply-chain disruptions. The company plans to open its first manufacturing plant in the United States in Virginia in 2027.
"Right now, we are more interested in managing the new tariffs," he said. "Then we’ll see over time what happens."
Sales drivers and product strategy
Despite external pressures, Lego reported growth across all regions and product categories in 2025, with sales rising in the United States, Europe and Asia Pacific. The company said China returned to growth in 2025 after two years of flat or declining sales.
Christiansen attributed the company's recent performance to volume growth rather than price increases. He said Lego has no immediate plans to raise prices and is concentrating on reaching more consumers. The company expects high single-digit revenue growth in the current year.
On the product and partnership front, Lego has increased collaborations with global brands and entertainment franchises. Examples cited include Formula One, Nike and television shows such as Bluey, as well as Pokemon. The company is also rolling out a new "SMART Brick" that incorporates lights, scanners, speakers and sensors, signaling a push toward more interactive, technology-enabled sets.
Operational context and outlook
Christiansen’s comments framed Lego as a business balancing near-term volatility with active strategies to sustain growth: localised manufacturing to mitigate tariff and supply risks, product innovation and expanded brand tie-ups to drive volume, and contractual protections that delay the pass-through of raw material cost shocks.
He emphasized that while current contractual arrangements help dampen immediate input-cost exposure, sustained increases in oil and gas prices over a longer period could yet translate into higher material costs for the company.
For now, the toymaker is prioritising volume-led expansion and go-to-market reach rather than immediate price adjustments, while preparing operationally for tariff shifts and potential longer-term input-cost inflation.