Svenska Spel Reports Positive 2023 Results and Dividend Proposal

Svenska Spel has emerged from 2023 showcasing the fruits of its labor in promoting sustainable gaming practices, achieving a notable upswing in healthy revenue streams and an expanded sustainable customer base. The year, however, presented its set of challenges, particularly within its Casino Cosmopol & Vegas division, which underwent a significant restructuring aimed at curtailing losses. This move, while necessary, had a temporary dampening effect on the group’s overall revenues and results for the quarter. Despite these hurdles, the resolve to maintain a forward trajectory remained undeterred, as evidenced by the board’s decision to propose a generous dividend of SEK 1.9 billion to its owner.

The year also highlighted Svenska Spel’s commitment to supporting the community through its Gräsroten initiative, which saw SEK 35 million allocated to 8,654 associations across 73 sports, bolstering youth sports and community engagement. Further solidifying its stance on sports sponsorship, the company extended its collaboration with Elitfotboll Dam (EFD) until 2026, underscoring its support for women’s football.

Earning a spot among Sweden’s top ten employers in Universum’s annual survey was a testament to Svenska Spel’s dedication to creating an exceptional work environment, aligning with its goal of offering the best employee experience in the country. This accolade was complemented by strategic efforts to future-proof the organization, focusing on reviewing and optimizing the group’s structure, operational efficiencies, and cost management to pave the way for transformation, enhanced responsibility in gaming, and sustainable growth.

The fourth quarter offered a mix of achievements and challenges. Net gaming revenue slightly dipped due to the operational adjustments within the Casino Cosmopol & Vegas division. Nonetheless, the quarter saw an increase in healthy revenue shares and a record number of sustainable customers, marking significant strides towards responsible gaming. The operating profit for the quarter faced a decline, primarily due to the profitability challenges within the Casino Cosmopol & Vegas business area. Despite these obstacles, the period was marked by sales records for Triss Christmas calendars and unprecedented customer engagement in Stryktipset.

The broader annual perspective showed a stable net gaming revenue, with the year mirroring the performance levels of the previous one, albeit with a slight decrease in operating profit attributed to the restructuring within the Casino Cosmopol & Vegas division. The year was also marked by innovative launches including a new poker platform, the introduction of Momang online casino, the launch of the Supportern digital lottery, and enhancements to the customer experience across various platforms.

In preparation for the future, Svenska Spel embarked on a series of strategic decisions, including the closure of casinos in Gothenburg and Malmö and the selection of Kambi as the new sportsbook supplier, promising an enriched gaming experience for customers. The company’s achievements in sustainable gaming practices were recognized in the Sustainable Brand Index, earning it the title of the most sustainable gaming company.

As Svenska Spel turns the page to a new chapter, the company stands on solid ground, ready to continue its journey of sustainable growth and innovation in the igaming industry. With Anna Johnson set to assume the role of president and CEO by June 2024 at the latest, Svenska Spel is poised for a future filled with continued leadership, innovation, and commitment to responsible gaming.

CEO Erik Stand highlighted: “Despite concerns in the outside world, zero growth in the gaming market and challenges for Casino Cosmopol & Vegas, the Svenska Spel Group has had a stable year in 2023. I am happy that the board intends to propose a dividend of SEK 1.9 billion to the owner. We are the entire Swedish gaming company and one of the reasons is that our entire surplus goes back to the treasury, says Erik Strand, president and CEO of Svenska Spel.

“For the full year 2023, net gaming revenue is SEK 8,029 million (8,036), which is on par with the previous year. For the Sport & Casino and Tur business areas, net gaming revenue increases compared to the previous year, which means that two out of three business areas show growth. The operating profit for the group is SEK 2,333 million (2,387), a decrease of 2 percent. The challenges for the Casino Cosmopol & Vegas business area have a negative impact on operating profit of SEK 309 million, while Svenska Spel’s other operations continue to deliver stable results. The operating margin amounts to 29 percent (30).

“For the fourth quarter, the group’s net gaming revenue is SEK 2,121 million (2,185), which is a decrease of 3 percent. The operating profit of SEK 485 million (580) is a decrease of 16 percent, and the operating margin amounts to 23 percent (27). This is mainly due to reduced income for Casino Cosmopol & Vegas as a result of lower customer demand and the restructuring measures being carried out. The group’s online business continues to increase. This quarter by 6 percent compared to the same quarter last year, and online accounts for 52 percent (48) of the group’s revenue.

“The net gaming revenue for the Sport & Casino business area increases by 7 percent compared to the same quarter last year. It is driven by a continued increase in the number of active customers, a good sales trend for pool games such as Stryktipset, as well as a continued growth of online casinos.

“Business area Tur reduces net gaming revenue by 2 percent compared to the corresponding quarter last year. It is still the Eurojackpot that drives the revenue, but it does not compensate for reduced revenue for other numbers games.

“Business area Casino Cosmopol & Vegas revenues and results are negatively affected during the quarter by the major restructuring of Casino Cosmopol. Net gaming revenue is down by 25 percent as both Casino Cosmopol and Vegas are challenged by competition from online gaming and strengthened measures regarding gambling responsibility and the work against money laundering. Casino Cosmopol has implemented a number of measures and has reduced the workforce by the equivalent of 220 full-time positions, of which around 100 via redundancies. The group’s operating profit is affected by -167 MSEK from the Casino Cosmopol & Vegas business area, which is a deterioration of the operating profit by 122 MSEK compared to the same quarter last year.

“The result is affected by a provision for conversions and write-downs of almost SEK 100 million. Despite extensive measures to reduce losses and lower costs, there are challenges with profitability going forward as well. Svenska Spel’s board therefore also intends to wind down the casinos in Malmö and Gothenburg. The casino in Stockholm will continue operations as before.

“The tip is now in its ninetieth year and in December had more gambling customers and higher revenues than ever. Among the game news of the quarter is the European Champion, a competition from Europatipset. In sports betting, customers will be able to look forward to a larger selection and an expanded gaming experience under the Oddset brand following the selection of Kambi as the new sportsbook supplier. The total sales of Triss Christmas calendars increased compared to the same quarter last year to the highest level ever.

“During the quarter, Svenska Spel distributed 79 million winnings in number of games and lotteries with a total value of more than SEK 375 million. For the full year 2023, this means 277 million profits with a value of more than one billion kroner. The quarter’s highest win in the number of games and lotteries was also the year’s highest, SEK 191 million on Lotto’s Dream Win. The sports games have delivered 13 million in winnings during the quarter. A total of 76 million in profits fell from the Sport & Casino business area in 2023, of which 38 at Stryktipset.

“Our continued focus on sustainable gaming is having an effect and the share of healthy revenue is increasing compared to the same quarter last year. The number of sustainable customers is also increasing to the highest level ever,” commented CEO Erik Strand.

Here you can read the Interim Report January – December 2023 in its entirety.

Published on:

Editorial Tags: