Technological watch
Sales decline continues at German toymaker / Costs hit results / Transformation process launched
Sales decline continues at German toymaker / Costs hit results / Transformation process launchedThe moose might be happy, but management is likely less joyful in light of the latest results (Photo: Playmobil)For German toymaker Playmobil (Zirndorf; www.playmobil.de), the financial year that ended on 31 March 2022 proved to be another disappointment. The firmâ??s parent, holding company Horst Brandstà¤tter Group, reported an annual sales decline of 2.8% to EUR 736 mn, with managing director Steffen Hà¶pfner not commenting on the earnings situation, which was usual.
Income at Playmobil, the largest business group with its licensing business and leisure parks, dropped 4.3%. A spokesperson told Plasteurope.com that the company could not put a figure on the impact of long-term closures at the companyâ??s leisure parks due to the pandemic, a reason for the difficulty in making comparisons with previous years.
In the previous financial year, sales of the main brand fell 2.5% to EUR 659 mn, which meant that, for 2021/22, sales should have amounted to around EUR 630 mn. The plant pot division Lechuza, on the other hand, reported considerable growth of 16.3% versus the previous year as products for the spring business had already been ordered in the autumn.
As in the prior year, the toymakerâ??s performance tended to be weaker than the industry average. The income growth at its competitors in 2021 was in many cases well into double-digits: Lego headed the list at 27%, closely followed by Schleich with 20%. For Bruder, the year ended with growth of 8%, while Simba Dickie also put its growth in sales without Mà¤rklin at 1.8%.
The decline at Playmobil was presumably not even attributable to customersâ?? purchasing behaviour because, according to the German trade association for toys Handelsverband Spielwaren, buyers generally spent 4% more on such products last year.Russian business haltedThe reasons for Playmobilâ??s poor performance are many and varied. Hà¶pfner says it is the usual mix of delivery chain bottlenecks with packaging materials, electronic components and tools, as well as heavy cost increases for polymers and freight. In fact, the group started the last financial year well, but, said Hà¶pfner, the numbers deteriorated as time progressed.
At the same time, it was virtually impossible to push through price increases, with management at Simba Dickie also indicating a similar plight. It is likely that the resulting margin pressure pushed Playmobil figures into the red, but the parent company rejected a Plasteurope.com suggestion this was the case. Hà¶pfner nevertheless said static pricing put a â??considerable strain on the result.â?
In the current financial year, a further fall in turnover is likely. For the first quarter, the group reported negative effects on sales by volume and by value because of the war in Ukraine. The halt to deliveries to Russia alone will cost the Playmobil business around EUR 10 mn. Apart from that, the company wants to invest EUR 50 mn in climate protection in the coming years.
How exactly management will react to the crumbling of income is not entirely clear. A transformation process has begun, says the company, meaning among other things the â??rapid adjustment or realignment of processes.â? Whether this might also include abandoning production in Germany and Europe remains to be seen.First-time use of post-consumer recyclateFresh areas of business are also to be engaged, and long-term cooperation agreements signed, which includes a deal with the publishers of the Asterix the Adventurer series of comics. The tactile properties of games appear to be at the forefront again and criticism is being expressed about digital media. Nevertheless, the company does not see any contradiction in the combination of digital media with traditional toy figures. â??We want to be present in the reality of life, both digitally and physically,â? is one of the firmâ??s guiding principles.
Playmobil is using post-consumer recyclate (PCR) for the first time in figures from its latest new creation â??Wiltopiaâ? â?? a made-up word combining â??wildlifeâ? and â??utopiaâ? â?? after gaining many years of experience in the internal recycling of production scrap. The ABS recyclate is obtained from refrigerators and is being used in addition to biobased materials that are, however, not described in more detail.
The company is planning to introduce return systems, both for the toys and for the Lechuza polypropylene plant pots. Playmobil did not, however, give any details about the collection or about the recycling partner28.06.2022 Plasteurope.com [250505-0]
Income at Playmobil, the largest business group with its licensing business and leisure parks, dropped 4.3%. A spokesperson told Plasteurope.com that the company could not put a figure on the impact of long-term closures at the companyâ??s leisure parks due to the pandemic, a reason for the difficulty in making comparisons with previous years.
In the previous financial year, sales of the main brand fell 2.5% to EUR 659 mn, which meant that, for 2021/22, sales should have amounted to around EUR 630 mn. The plant pot division Lechuza, on the other hand, reported considerable growth of 16.3% versus the previous year as products for the spring business had already been ordered in the autumn.
As in the prior year, the toymakerâ??s performance tended to be weaker than the industry average. The income growth at its competitors in 2021 was in many cases well into double-digits: Lego headed the list at 27%, closely followed by Schleich with 20%. For Bruder, the year ended with growth of 8%, while Simba Dickie also put its growth in sales without Mà¤rklin at 1.8%.
The decline at Playmobil was presumably not even attributable to customersâ?? purchasing behaviour because, according to the German trade association for toys Handelsverband Spielwaren, buyers generally spent 4% more on such products last year.Russian business haltedThe reasons for Playmobilâ??s poor performance are many and varied. Hà¶pfner says it is the usual mix of delivery chain bottlenecks with packaging materials, electronic components and tools, as well as heavy cost increases for polymers and freight. In fact, the group started the last financial year well, but, said Hà¶pfner, the numbers deteriorated as time progressed.
At the same time, it was virtually impossible to push through price increases, with management at Simba Dickie also indicating a similar plight. It is likely that the resulting margin pressure pushed Playmobil figures into the red, but the parent company rejected a Plasteurope.com suggestion this was the case. Hà¶pfner nevertheless said static pricing put a â??considerable strain on the result.â?
In the current financial year, a further fall in turnover is likely. For the first quarter, the group reported negative effects on sales by volume and by value because of the war in Ukraine. The halt to deliveries to Russia alone will cost the Playmobil business around EUR 10 mn. Apart from that, the company wants to invest EUR 50 mn in climate protection in the coming years.
How exactly management will react to the crumbling of income is not entirely clear. A transformation process has begun, says the company, meaning among other things the â??rapid adjustment or realignment of processes.â? Whether this might also include abandoning production in Germany and Europe remains to be seen.First-time use of post-consumer recyclateFresh areas of business are also to be engaged, and long-term cooperation agreements signed, which includes a deal with the publishers of the Asterix the Adventurer series of comics. The tactile properties of games appear to be at the forefront again and criticism is being expressed about digital media. Nevertheless, the company does not see any contradiction in the combination of digital media with traditional toy figures. â??We want to be present in the reality of life, both digitally and physically,â? is one of the firmâ??s guiding principles.
Playmobil is using post-consumer recyclate (PCR) for the first time in figures from its latest new creation â??Wiltopiaâ? â?? a made-up word combining â??wildlifeâ? and â??utopiaâ? â?? after gaining many years of experience in the internal recycling of production scrap. The ABS recyclate is obtained from refrigerators and is being used in addition to biobased materials that are, however, not described in more detail.
The company is planning to introduce return systems, both for the toys and for the Lechuza polypropylene plant pots. Playmobil did not, however, give any details about the collection or about the recycling partner28.06.2022 Plasteurope.com [250505-0]
This project has received funding from the Bio Based Industries Joint Undertaking under the European Union’s Horizon 2020 research and innovation programme under grant agreement No 837761.
