ENFIELD, Conn., Aug. 29, 2007 -- The LEGO Group, world's leading construction toy manufacturer, sold 5% more during the first half of the year than it did in the same period of 2006. Profit before tax for the first half-year was DKK 173m compared with DKK 168m for the same period the previous year, making the result is better than expected at the beginning of the year.

Strong sales in most markets, especially the U.S.

Generally speaking, all markets recorded higher sales. Sales to the American market rose especially well during the first half of the year, where the company's share of the U.S. construction toy market is up +8 points from 64% to 72%, according to the NPD Group. The LEGO Group's direct sales to consumers through its Brand Retail stores, mail order, and Web Shop continue to develop positively. The total global toy market increased by about 1% during the first half of 2007.

Boost for classic product lines

Sales during the first six months of this year were DKK 2,966m compared with DKK 2,821m in the corresponding months of 2006. The increase was due in particular to higher sales of such classic lines as LEGO® CITY and LEGO TECHNIC® and a range that has become a classic: the LEGO Star Wars™ line. The Group's new product line, LEGO AQUA RAIDERS, also proved itself a success in the first half-year.

Result better than expected

The prospect at the beginning of the year was of a substantial decline in profits on account of heavy investment in the Group's business platform, including IT, production and innovation, but the result of DKK 173m is better than had been forecasted and can be attributed primarily to a combination of higher sales and a postponement of certain cost items.

At the end of the first half-year the Group's equity was DKK 765m compared with DKK 274m at the end of the corresponding period in 2006. Cash flows from operations are, at DKK 208m, unchanged in relation to the same period of 2006.

Increased activity extends the transition period

The LEGO Group is already well advanced with the planned outsourcing of its production. But in view of the need for increased capacity to meet higher demand, it has now been decided that further relocation of moulding activities scheduled to commence in late 2007 will be postponed 12-15 months. As a result, there will be no transition-related workforce reductions this year.

Full-year expectations

In the light of results for the first half-year, the LEGO Group is raising its forecast of the result for the full year to DKK 900m compared with DKK 550m at the beginning of the year. The expected improvement is due largely to the higher level of revenue; the high level of investment in the Group's business platform will be maintained as unchanged. Traditionally, however, the bulk of sales occur during the second half-year, which means that success during the peak Christmas season is essential in order to meet the expected new target for 2007.

Total sales for the year are now expected to equal the 2006 level, i.e. approx. DKK 7.8 billion.

CEO Jorgen Vig Knudstorp said of the half-year result:

"The result demonstrates that our core products and values are the right ones, and at the same time we have enjoyed the benefit of a positive note on most of our markets. This is extremely useful in a situation in which we continue to invest many resources in preparing the Group for the future."

He continued:

"We are only halfway through the implementation of our seven-year strategy plan, and although we have come a long way in many areas there is still a lot to do. During the present phase the focus is on creating a long-term, sustainable business platform -- and we haven't achieved that yet. We still need to focus on improving the efficiency of our operations and reducing our fixed costs so that we can derive full benefit from investment in our improved business platform."

Note: The corporate structure of the LEGO Group has altered substantially since 2006, and the comparative figures shown are therefore also correspondingly altered.

About LEGO Systems, Inc.

LEGO Systems Inc. is the Americas (North America and Latin America) division of the LEGO Group, a privately-held firm based in Billund, Denmark. The LEGO Group is committed to the development of children's creative and imaginative abilities through high-quality, creatively educational play materials, 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 http://www.LEGO.com.