Svenska Spel’s Q1 2024 Report: Transition Amidst Operational Adjustments

Svenska Spel navigated through a transformative first quarter of 2024, marked by strategic adjustments aimed at fortifying its operational framework for sustained growth. The period saw significant restructuring efforts, including the cessation of operations at Casino Cosmopol in Malmö and Gothenburg, aligning with the company’s objective to mitigate losses within this sector.

Despite the pronounced impact of these changes on the quarter’s financials, Svenska Spel maintains a robust underlying business structure, characterized by stable operations, renowned brand recognition, and a dedicated workforce. However, external factors such as sluggish market growth and economic downturns pose ongoing challenges necessitating proactive adaptation strategies.

The company’s net gaming revenue for the quarter totaled SEK 1,956 million, representing a marginal decline of 1%, primarily attributable to the restructuring initiatives within the Casino Cosmopol & Vegas business segment. Operating profit decreased by 49%, amounting to SEK 310 million, reflecting the influence of non-recurring costs totaling SEK 375 million (£ 27.78 million/US$34.54 million /€32.31 million). These expenses encompass the closure of Malmö and Gothenburg casinos, organizational restructuring, and penalties levied by the Gambling Inspectorate.

Excluding one-time expenditures, operating profit stands at SEK 683 million, with an operating margin of 35%. Notably, online operations witnessed a 6% revenue uptick compared to the previous year, constituting 56% of the group’s total revenue.

While the Sport & Casino business segment experienced a 3% decline in net gaming revenue, the Tur segment witnessed a record-breaking 6% growth, driven by Eurojackpot and Triss sales. Conversely, the Casino Cosmopol & Vegas segment recorded a substantial 32% revenue decrease due to the closure of Malmö and Gothenburg casinos.

In addition to financial performance, Svenska Spel maintained its commitment to corporate responsibility, distributing SEK 395 million in winnings across various games and initiatives. Notably, Eurojackpot awarded the quarter’s highest win, exceeding SEK 173 million.

The company also engaged in community-building endeavors, such as hosting the Tips-SM championship and recognizing outstanding agents through the Vinnargala event. Moreover, Svenska Spel’s sports sponsorships, including partnerships with the Swedish Skiing Association and ice hockey leagues, underscore its dedication to fostering sporting excellence.

In summary, Svenska Spel’s Q1 2024 report reflects a period of strategic transition amidst operational adjustments, positioning the company for sustainable growth amidst evolving industry dynamics.

“We have reorganized, reduced the workforce, and from April 1 have a new organization in place. In this way, we have freed up resources that we can invest in transformation, a strengthened gambling responsibility work and growth. These are important investments for long-term sustainable value creation,” says Erik Strand, president and CEO of Svenska Spel.