Svenska Spel Report Stable Result in Troubled Times
Interim report January – March 2020
VISBY, Sweden (April 28, 2020) — The first quarter of the year began with two months of good growth for all business areas within Svenska Spel. However, from the middle of March, the corona virus’s effects have had a significant impact on parts of the group. In particular, it applies to sports games, physical casinos and vending machines, while number games and lotteries as well as other online games have not been affected to the same extent. This shows Svenska Spel’s interim report for January – March 2020, which is presented today.
The Group’s net gaming revenue for the first quarter was SEK 2,055 million, which is on a par with the same quarter last year (2,056). The operating profit of SEK 701 M (519) represents an increase of 35 percent compared to the same period last year, which is mainly due to lower operating costs and a lower cost for gaming tax. This, in turn, has had a positive impact on the operating margin, which is 34 percent (25). Net gaming revenue for the Sport & Casino business area decreases by one percent, while the Tur business area increases by four percent. The Casino Cosmopol & Vegas business area is down 11 percent.
“Svenska Spel, like many other companies and organizations, has quickly been forced to adapt to a new reality with the effects of the corona virus. We have therefore implemented measures to ensure a sustainable business, and we have done so with the utmost care about our customers and employees. Our hope is to be able to quickly switch to full operations when the situation turns around,” says Patrik Hofbauer, President and CEO of Svenska Spel.
Although the Tur business area is aware of a changed situation, it is not to the same extent as the other business areas. Noticeably, decreased sales of physical lotteries by agents, as a result of fewer customers in shops and stores.
Within the Sport & Casino business area, cancelled games and sporting events have had a major impact on the range of sports betting. Short-term work has been introduced for about 45 of the business area’s total of about 135 employees.
The most affected area is the Casino Cosmopol & Vegas business area, where in March there was a dramatic reduction in the number of guests at physical casinos. On March 29, all four casinos were temporarily closed as a result of the ban on gatherings with more than 50 people, and then notice was given and short-term work was introduced for just over 800 of a total of nearly 900 employees. Vegas vending machines have also been affected by the closure of a large number of business partners.
“The future is more uncertain now than we are used to, but we are dealing with it with an aggressive focus and with continued concern for our customers,” says Patrik Hofbauer.
On the product side, the Tur business area during the quarter started with Triss at a new type of retailer, the grocery store, with a premiere at Elon.
In the middle of February, the Dream profit fell on Lotto with SEK 138 million. It also meant another 16 new millionaires in the subsequent Million rain. Three weeks later, the Dream Profit fell again, this time with SEK 78 million and eleven new millionaires in the Million rain.
The Sport & Casino business area’s range of sports games was severely limited during the latter part of the quarter, but the business has continued with full force in other online games.
In poker, the finals were played in the 2019 Player Of the Year (POY) at the end of January and in March the Poker Tip was launched. Within bingo, the new game launched Kronbingo. Sport & Casino can now offer about 900 casino games and has supplemented with new suppliers.
Summary of the first quarter:
- Net gaming revenues for the Group amounted to SEK 2,055 million (2,056), which is in line with the previous year.
- Online continues to grow by 13 percent.
- Operating profit for the Group amounted to SEK 701 M (519), an increase of SEK 182 M.
- Profit for the Group amounted to SEK 545 M (408), an increase of SEK 137 M.
- The operating margin was 34 percent (25).
- Two Dream profits at Lotto fell by SEK 138 million and SEK 78 million respectively. A further 16 and 11 new winners respectively became millionaires in the subsequent Million rain.
- Short-term work within Svenska Spel Sport & Casino AB has been introduced for approximately 45 of a total of 135 employees.
- Casino Cosmopol has temporarily closed all four casinos due to the government’s decision to ban gatherings with more than 50 people.
- Notice of termination and short-term work affects more than 800 of Casino Cosmopol AB’s and CC Casino Restaurang AB’s total of nearly 900 employees.
- Svenska Spel’s Board of Directors has decided to withdraw its proposal for a dividend as the effects of the corona virus are difficult to overlook.
- The Competition Authority’s investigation into the complaint that Svenska Spel abuses its dominant position has been completed and the case is written off.
Here you can read the Interim Report January – March 2020 (pdf).
SOURCE: Svenska Spel.Tags: Svenska Spel