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7 Management’s Reviewwe have seen strong success with LEGOSuper Mario which embeds technology intothe brick characters. In 2021, we expandedthis successful theme, adding LEGO Luigi tothe universe which for the first time enabledbrand new 2-player adventures.We also expanded our digital LEGO BuildingInstructions that provide a range of buildingsuggestions based on elements available ina given box. More than 7 million people alsodownloaded the play app LEGO Life, whichencourages young builders to share theircreations in a safe digital environment.Making play more inclusiveWe are investing to make our building andbrand experiences more inclusive for all. Wewant children to be able to see themselvesrepresented in what we do and help themlearn about the diverse world around themthrough play.One step towards this is a more inclusivemarketing approach. In 2021, we beganworking with the Geena Davis Institute onGender in Media and UNICEF to ensurethat LEGO products and marketing areaccessible to all and free of gender bias andharmful stereotypes.This approach also includes our adult fansand in 2021, we launched the LEGO Everyone is Awesome set designed to celebratethe diversity of our global LEGO community.Creating memorable retail experiencesFor the past three years, we have investedto expand, innovate, and transform theexperiences we offer our shoppers and ourretail partners.Investments in our e-commerce capabilities helped drive our performance in 2021.Over proportional e-commerce sales inour own and our partner sites comparedto con sumer sales growth, indicates thatthe shift to online sales is set to continue.Our technology platforms seamlesslysupported over a quarter of a billion visitsto LEGO.com during the year. We willaccelerate investments in e-commerceand digital marketing to reach evenmore shoppers & fans and ensure peopleeverywhere have a great digital brandexperience.The LEGO System in Play isby its very nature innovative.It allows you to build, unbuildand rebuild anything youcan imagine.We will also accelerate investments in ourbrick and mortar stores. In 2021, togetherwith our partners, we opened 165 LEGObranded stores around the world, takingour global total to 832. This global networkallows us to reach new builders and toinspire them with great instore brand andbuilding experiences. This is especiallyimportant in China, where we now have340 branded stores and are able to directlyconnect with the first generation of children to enjoy the benefits of LEGO play.Part of this investment is our new retailplatform. The new concept is designedto make visitors feel they have walkedinto a magical world of bricks filled withawe-inspiring builds. Launched in a newflagship store in New York City, the conceptwas introduced to more than 70 brandedstores in 2021. In 2022, we expect to openover 150 new branded stores.Global supply chain networkOur global network of five factories in threecontinents proved its value in 2021. Whenmuch of the world’s supply was disrupted due to the pressures of the COVID-19pandemic and a capacity shortage, wecontinued to meet demand due to ourfactories being in close proximity to ourmajor markets. This offers the flexibilityto respond to local demand, shortens thesupply chain, and reduces the time andenvironmental impact of shipping productslong distances.In 2021, we announced a further expansion of this network with a new factoryin Vietnam. Located near Ho Chi MinhCity, the site will be our first operationallycarbon neutral factory, constructed tosupport long-term growth in the region.Construction will commence in 2022 withproduction due to start in 2024.We are also investing to expand capacityat existing sites to meet immediate andlong-term demand in line with growthexpectations.A new retail store formatwas introduced to createan immersive brandexperience for shoppersof all ages.

Management’s ReviewA prototype brick madefrom recycled PETbottles is an importantstep towards using moresustainable materials forour products.Investing in a digital futureDuring the past year, we have stepped upsignificant long-term investments in digitalinfrastructure, engineering capabilities,and digital product experiences whileexpand ing our digital teams in London(UK), Shanghai (China), and Billund & Copenhagen (Denmark).We will accelerate this effort across ourentire business in 2022 so that children,shoppers, partners, and colleagues havea fantastic digital experience when theyengage with the LEGO brand.Positive impact on the planet & societyOur sustainability efforts are driven by ourPlanet Promise which is to have a positiveimpact on the planet and society ourchildren will inherit.In 2021, we revealed a prototype brickmade from recycled plastic bottles, the culmination of three years’ work by more than150 experts who tested over 250 vari ationsof PET materials. We have also workedto expand the range of bio-based LEGOelements made from bio-polyethylene(bio-PE), a soft, durable, and flexible plasticderived from sugarcane. There are currently around 150 elements made from bio-PEand nearly half of our sets are designed tocontain at least one of these elements.During the past year, we completed asuccessful trial to replace plastic withpaper -based bags in our boxes. We willbegin phasing in the new packaging in2022, keeping us on track to make all packaging more sustainable by 2025.By encouraging the donation and reuseof LEGO bricks through the LEGO Replayprogrammes in the US and Canada, weextended the creative life of approximately62 million bricks through 138,411 kg(305,145 lbs) of LEGO bricks donated tomore than 67,000 children in North Americain 2021. Since its launch in 2019 in the US,and in 2020 in Canada, this brings thetotal number of bricks donated to theprogramme to 296,072 kg (652,727 lbs),a milestone exceeding 100,000 childrenreached in North America.Reaching childrenDespite the continued COVID-19 pandemic,we reached more than 3.5 million childrenvia learning through play initiatives. Wealso supported children spending moretime online and at home, through an expanded suite of activities to help familiestalk about digital child safety.Through our Build the Change programme,we challenged children to voice their hopesand dreams for the future which resulted inten Building Instructions for a Better Worldhanded to leaders at COP26 in Glasgow.You can read more about our sustainabilityefforts in our 2021 Sustainability ProgressReport or visit: LEGO.com/AboutUs/Sustainability.8Motivated and engaged colleaguesWe have a team of more than 24,000employees working across 39 countries.Each year we track levels of engagement toensure we are providing a great workplaceexperience. We are pleased to report thatdespite the continued disruption, levelsof motivation and satisfaction were outstanding as our colleagues feel valued andbelieve they have opportunities to develop.We continued to introduce Parental Leaveglobally, which guarantees at least 26 weeksof fully paid leave to the primary caregiverand 8 weeks’ paid leave to the secondarycaregiver. Our commitment to developingfuture generations begins with our employees’ children, which is why we believe theopportunity to be present during the earliest stages of development is so important.Finally, in recognition of colleagues’ outstanding efforts to bring play to morechildren around the world, meet the strongdemand characterising 2021 and thecompany’s extraordinary strong financialperformance, the owner family providedadditional days off during the holiday period for colleagues to spend with family andfriends at the end of a busy and extraordinary year. In addition, an extra performancebonus will be paid out in April 2022 via theexisting Performance Management Plan.We are extremely grateful for our colleagueswho continue to work so incredibly hard toinspire millions of children around the world.

Environment9 Management’s ReviewOUR AMBITIONS & PROGRESS2021 SustainabilityHighlightsWe have set ourselves ambitious environmental and socialtargets to create a better world for future generations.We are proud of the progress we made in 2021.Visit LEGO.com/Sustainability/Reporting,to find out more about our sustainability journey.Sciencebased targetSustainablematerialsSustainablepackagingKeep LEGObricks in playReduce absolute carbonemissions by 37% by 2032compared to 2019 baseline.Make products from moresustainable sources by 2030.Make packaging more sustainableby 2025.1st prototype LEGO brick madefrom recycled material.Single-use plastic removed fromLEGO.com orders in Europe.Give consumers an easy andsafe way to pass along LEGObricks they are not using.Almost 50% of products designed to contain elements ofbio-PE.Introduced paper-based Pick-a-Brickcups in LEGO Brand Retail stores.100% balanced by renewableenergy.98% increase in solar panelcapacity at LEGO factories compared to 2020.Paper-based bags in LEGO boxes willbe phased in from mid-2022.70% reduction of landfilled wastecompared to 2020.Achieved an ‘A’ leadership status in2021 CDP climate change rating.Building sustainablebusinesses togetherLearningthrough playPartnerfor playDigital safetyand wellbeingPlayfor allAmplifychildren’s voicesReach 8 million children ayear with learning throughplay programmes & activitiesby 2022.Give children in ruralChina an opportunityto learn through play.Help families build onlinechild safety & wellbeing skillsand empower children tobecome good digital citizens.Make products and marketing accessible to all and free of genderbias and harmful stereotypes.Help children learn about ourplanet through play and providea platform so they can participate in the climate debate.1.5 million LEGO setsdonated through Buildto Give programme.67,000 children in the US andCanada benefited from donations.PeopleChildren3.5 million children reachedin 2021 despite COVID-19pandemic-related limitations.138,411 kg (305,145 lbs) ofLEGO bricks donated via theLEGO Replay programme.Partnerships with the LEGOFoundation and UNICEFannounced in 2021 expectedto directly benefit 20,000children aged 0 to 6 yearsand around 40,000 care giversthrough access to familysupport services and playmaterials.77.5 million parents reachedwith LEGO digital citizenshipprogramme.Expanded our range of toolsand activities for families,such as Build & Talk, to helpaddress online safety andcyberbullying issues.Partnered with the Geena DaviesInstitute on Gender in Media whoaudits and consults on select LEGOproduct and marketing assets.Worked with UNICEF to launch aninternal LEGO D&I Playbook to inform communication and productdevelopment going forward.At COP26, launched ten BuildingInstructions for a Better World,which reflected input from 6,000children around the world.Almost 170,000 children reachedthrough Build the Change activities designed to inspire andeducate children on sustainability.Working with our suppliers to reducethe carbon footprint in our supply chain.80 suppliers committed to the CDPcarbon disclosure system.Caring for colleaguesProtect the rights and wellbeing of everyone involved in making LEGO products.’Top in class’ motivation and satisfactionamong employees in the LEGO GroupPeople Pulse against external benchmark.1All suppliers must sign our ResponsibleBusiness Principles which legally requiresthem to provide a safe, fair, and healthyworkplace for all employees.1 Ennova Employee Engagement Survey 2021

10 Management’s Review2021 Financial ReviewSummaryOverall, 2021 was a very satisfactoryyear for the LEGO Group. The companyachieved double-digit revenue, consumersales, and profit growth while makinginvestments in strategic initiatives designedto drive long-term growth.The LEGO Group’s main activity is thedevelopment, production, marketing, andsale of play materials. It operates in thetraditional toy market, which grew 9% in2021.1 Consumer sales grew 22% which outpaced the industry’s growth and was drivenby a strong and diverse portfolio, resilientglobal supply chain network, strong retailerpartnerships both online and instore, and arobust e-commerce platform.RevenueRevenue for the full year increased by 27% toDKK 55.3 billion compared to DKK 43.7 billionin 2020. Excluding the impact of foreigncurrency exchange rates, revenue for the fullyear increased by 28% against 2020. Consumer sales grew double digits in all marketgroups, ahead of 2021 plans which anticipated single-digit growth. Revenue grew asa result of extraordinarily strong consumerdemand for the company’s portfolio whichappealed to builders of all ages and interests.Expenses, Tax & ProfitIn 2021, the LEGO Group made significantinvestments in initiatives designed todeliver long-term growth. This includedportfolio innovation, investing in brandawareness, expanding the number of LEGObranded stores globally, upgrading theLEGO.com e-commerce platform, increasing capacity in its global supply chainnetwork, and building presence in newermarkets such as China.Cash flow and equityThe LEGO Group’s assets increased to DKK48.0 billion in 2021 compared to DKK 37.2billion in 2020. Cash flow from operatingactivities was DKK 16.0 billion, against DKK13.4 billion in 2020. After recognition of theprofit and distribution of dividends, theLEGO Group’s equity was DKK 29.1 billionup from DKK 23.5 billion in 2020. Return onequity for the LEGO Group was 50.4% in2021 against 43.4% in 2020.Operating profit grew 32% to DKK 17.0 billionin 2021 compared to DKK 12.9 billion in 2020.The operating margin was 30.8% in 2021against 29.6% in 2020. Net financials createdan expense of DKK 39 million compared toDKK 412 million in 2020. This resulted in aprofit before income tax of DKK 17.0 billionagainst DKK 12.5 billion the prior year.InvestmentsIn 2021, the LEGO Group increased investments in property, plant, and equipment toDKK 3.1 billion up from DKK 1.8 billion prioryear. This included increasing processing capacity in factories in Nyíregyháza (Hungary),Monterrey (Mexico), and Jiaxing (China).Income tax expense amounted to DKK 3.7billion compared to DKK 2.6 billion in theprior year and the effective tax rate was21.9% against 20.7% in 2020 which is in linewith expectations.Net profit was DKK 13.3 billion in 2021against DKK 9.9 billion in 2020. This wasabove expectations and driven by the samereasons as mentioned under “Revenue”.1 The NPD Group / Retail Tracking Service / G13 – YTD Dec 2021

Management’s ReviewResearch and development (R&D)Innovation is critical to the company’ssuccess and in 2021, new products makeup around 50% of the portfolio. The LEGOGroup invests in innovating core playthemes as well as exploring new playpatterns. Digitalisation is influencing howchildren play and the LEGO Group hasstepped up investments to understand theintersection between digital and physicalplay and create new products to meetthese changing needs. R&D activitiesinclude developing new technologiesto enable learning through play; trendspotting; anthropological studies; andcollaborating with educational institutionsto deepen our understanding of children’sdevelopment.Intellectual capital resourcesThe number of employees at the end of2021 was 24,484 compared to 20,468 at theend of 2020. Employees participate in theLEGO Group’s Performance ManagementProgramme. The programme is designed toensure all colleagues work towards achieving the LEGO Group’s short and long-termambitions. Employees have targets thatare aligned to the Group’s overall targetsand are awarded a bonus based on performance versus target.Responsible business conductThe LEGO Group aims to have a positiveimpact on its stakeholders and its localcommunities. In 2003, the LEGO Groupsigned the United Nations Global Compactto demonstrate its support of human rights,labour standards, anti-corruption, andthe environment. The LEGO Group’s 2021Sustainability Progress Report (COP report)describes how it is working to adhere to theCompact. Pursuant to sections 99a and 99bof the Danish Financial Statements Act, the2021 Sustainability Progress Report constitutes the statutory statement of corporatesocial responsibility. This also includesinformation about the required quantitativetargets for the under-represented genderon the Board of Directors. The 2021 Sustainability Progress Report is available at: LEGO.com/AboutUs/Sustainability/Reporting.Risks and governanceThe LEGO Group has no significant tradereceivables risk concentrated in specificcountries but has some single significanttrade debtors in the Americas. The LEGOGroup has fixed procedures for determiningthe granting of credit. The LEGO Group’srisk relating to trade receivables is considered to be moderate. For more information,see note 3.4.Innovation is critical to thesuccess of the LEGO Groupand each year new productsmake up around 50% ofthe portfolio.The majority of the LEGO Group’s sales arein foreign currency, and the risks relating tocurrency are described in note 4.6.The LEGO Group is committed to complying with all applicable laws and regulationsin the countries in which it operates.11The LEGO Group’s global Tax Strategy is defined by the Board of Directors and reviewedon an annual basis to ensure it remainscompliant. More information about the taxstrategy and the total tax contribution canbe found in the 2021 Sustainability ProgressReport and at LEGO.com/AboutUs.The LEGO Group is committed to handlingdata responsibly. In 2021, the company haveworked with data ethics around four key principles which are that data must be used withinthe company in a positive, fair, clear, andresponsible way. This has resulted in a writtenset of data ethic principles. The next steps willbe to make these principles operational andapplicable to the organisation. A dedicatedteam will collaborate with relevant internalstakeholders to develop a simple and usefulframework that can be applied across projects.The LEGO Group’s principles regarding dataethics can be found at vents after the reporting dateNo events have occurred after the balancesheet date that would influence the evaluation of the Annual Report.OutlookThe LEGO Group expects single-digit growthin 2022, ahead of the global toy market. Thisis expected to be achieved through continued focus on product innovation and appealand growth in established and newer markets. The LEGO Group will continue to investin areas such as digitalisation, sustainability,retail channels, and innovation which willdrive long-term sustainable growth.

Management’s ReviewFinancialHighlights ofthe LEGO )(158)Profit before income tax17,00512,50010,75210,51010,201Net profit for the year13,2859,9168,3068,0767,806Total 39,7329,197Cash flow from operating activities16,04813,3829,5579,84710,691Purchase of property, plant, equipment and intangible assets(3,159)(1,891)(2,173)(1,502)(1,529)Free cash flow12,89211,4987,3958,3559,168Average number (full-time)20,19817,43116,11215,05016,480Headcount end of year24,48420,46818,80017,38517,534281647(7)Gross margin69.669.768.467.867.1Operating margin30.829.628.129.629.6Net profit margin24.022.721.522.222.3Return on equity (ROE)50.443.437.838.038.3Return on invested capital (ROIC)94.074.168.478.972.3Equity ratio60.763.363.569.169.3Income StatementRevenueExpensesOperating profitFinancial income and expensesBalance SheetThe Financial Highlights for 2021, 2020 and 2019 areaffected by the implementation of IFRS 16 Leasesas from 1 January 2019. Comparison figures for 2018and 2017 have not been restated due to the use ofthe modified retrospective approach.The comparison figures for the financial ratio, Return on invested capital (ROIC), have been restatedin 2020 and 2019 to reflect a classification changein the balance sheet, see note 1.1, as well as including goodwill in the calculation.Statement of Cash FlowEmployeesFinancial ratios are calculated in accor dance withthe guidelines from the Danish Society of FinancialAnalysts. Definitions are disclosed in note 1.1.Other financials (in %)Parentheses denote negative figures.Financial ratios (in %)Revenue growth in constant currency

13 Management’s ReviewBoard of Directorsand ManagementChairmanVice ChairmanThomas KirkKristiansenSøren ThorupSørensenExecutiveLeadership TeamEvaBernekeFionaDawsonNiels B. ChristiansenPresident and Chief Executive OfficerThomas Kirk Kristiansen representsthe fourth generation of the ownerfamily and became the Chairman ofthe Board in February 2020. He waspreviously Deputy Chairman from May2016 to February 2020 and joined theBoard in 2007. Thomas is also DeputyChairman of LEGO Brand Group, member of the Board of KIRKBI A/S and onefully owned subsidiary, Chairman ofthe Board of LEGO Foundation and amember of the Executive Managementteam of Kirk & Kirk Holding ApS withmanagement roles in four subsidiaries.Søren Thorup Sørensen has been amember of the Board since 2010 andcurrently serves as Deputy Chairmanand Chairman of the Audit Committee.He is the Chief Executive Officer ofK

Content 04etter from the CEO L 05 S 2021 Performance Snapshot 06 Strategic Overview 09 2021 Sustainability Highlights 10 S 2021 Financial Review 12 Financial Highlights of the LEGO Group 13 Board of Directors and Management Management's Review 71anagement's Statement 59 M 7260 Independent Auditor's Report Management's Statement and Auditor's Report .