Svenska Spel Reports Stable Q2 Results with Increased Profitability
Svenska Spel Group has announced its interim report for the period of January to June 2023, highlighting a stable second quarter characterized by improved profitability. Despite facing challenges in the Casino Cosmopol and Vegas slot machines sectors, the group has demonstrated increased profitability and a stronger operating margin.
According to Patrik Hofbauer, President and CEO of Svenska Spel, the focus on simplifying and enhancing the gaming experience, as well as promoting sustainable gambling practices, has yielded positive results. The group has witnessed an increase in healthy revenues and sustainable customers, while risky gambling has decreased.
During the second quarter, the net gaming revenue for the group amounted to SEK 1,967 million, representing a small increase compared to the same period last year. The operating profit reached SEK 550 million, marking a 3% increase of SEK 18 million. Despite a negative impact on the result for the Casino Cosmopol & Vegas business area, which experienced a decrease of SEK 29 million, the operating margin strengthened to 28%. Online business accounted for 52% of the group’s revenue during the quarter, marking a 9% increase compared to the same period last year.
Within the Sport & Casino business area, net gaming revenue increased by 6% compared to the same quarter in the previous year. This growth can be attributed to pool games such as Stryktipset, favorable margins in sports betting, the expansion of online casinos, and a rise in the number of customers within the business area.
The Tur business area witnessed a 1% increase in net gaming revenue compared to the corresponding quarter of the previous year. Eurojackpot played a significant role in driving revenue, breaking sales records during midsummer week with a maximum jackpot of SEK 1.4 billion.
However, the Casino Cosmopol & Vegas business area experienced a 13% decrease in net gaming revenue. The operating profit declined by SEK 29 million to -52 million compared to the same period last year. Factors contributing to this decline include increased competition from online games, resulting in fewer guests and lower revenues. Additionally, strengthened measures to ensure responsible gambling and combat money laundering negatively impacted revenue but positively influenced healthy revenue. To address these challenges, the Casino Cosmopol & Vegas business area is implementing a restructuring plan that includes cost reduction measures.
Svenska Spel achieved several milestones during the quarter, such as the launch of a new poker platform offering customers a broader selection of games and an enhanced mobile experience. Collaborating with one of the largest poker networks globally, the platform also provides customers with access to more tournaments and larger prize pools. Other notable developments include the introduction of the PIX Mix packaged game based on four pool games, the launch of three new digital lotteries, and the successful holding of the Poker Championship at Casino Cosmopol.
Improvements to the customer experience have been implemented, such as the ability to correct lottery tickets at manned cash registers at gambling agents. Additionally, the new digital service, Ombudsportalen, facilitates communication between Svenska Spel and its approximately 5,000 agents.
During the quarter, Svenska Spel distributed winnings totaling over SEK 268 million in number games and lotteries. The highest win amounted to over SEK 63 million in Eurojackpot. Sports and casino games accounted for SEK 25 million in winnings, with SEK 19 million won in Stryktipset and Europatipset.
Efforts to promote responsible gambling have yielded positive outcomes, as risky gambling by Svenska Spel’s customers decreased compared to the same period last year. Contacts made with customers showing signs of risky gambling resulted in a reduction of gambling activity for 7 out of 10 customers. Svenska Spel’s commitment to research on problem gambling was recognized at the Swedish Gambling Award, where the group was honored for contributing over SEK 60 million since 2010.
In summary, Svenska Spel’s second quarter showcased stability with increased profitability. The group continues to prioritize sustainable gambling practices, enhance the customer experience, and invest in research and responsible gambling initiatives to create long-term value for customers, owners, and employees.