– 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 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 number 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, says Erik Strand.
In this year’s Gräsroten, customers chose to support 8,654 associations in 73 sports. They were given a share of SEK 35 million, which contributes to supporting youth sports and association life, as well as enabling more people to get moving. In sports sponsorship, Svenska Spel has also extended the long-term collaboration with Elitfotboll Dam, EFD, until 2026.
Svenska Spel is one of Sweden’s ten best employers according to Universum’s annual survey. It is proof that the overall group goal of having the best employee experience in Sweden has been achieved. During the autumn, work began on future-proofing Svenska Spel. It includes a review of the group’s organization, working methods and costs with the aim of freeing up resources to invest in transformation, a strengthened gambling responsibility work and growth.
Summary of the fourth quarter
- Net gaming revenue for the group amounted to SEK 2,121 million (2,185), a decrease of SEK 64 million or 3%, where the Casino Cosmopol & Vegas business area decreased by SEK 67 million.
- The share of healthy revenue* increases compared to the same quarter last year and the number of sustainable customers* is at an all-time high.
- Operating profit for the group amounted to SEK 485 million (580), a decrease of SEK 94 million or 16%. The operating margin amounted to 23% (27). Both profit and margin are affected by profitability challenges within the Casino Cosmopol & Vegas business area.
- The result for the group amounted to SEK 383 million (559), a decrease of SEK 176 million or 31%.
- Sales records for Triss Christmas calendars and the number of customers who played at Stryktipset were the highest ever in December.
- Casino Cosmopol adapted its operations to lower demand and is open four days a week from October 1, while the workforce has been reduced by the equivalent of 220 full-time positions.
- On January 24, Svenska Spel’s board made a strategic decision to close the casinos in Gothenburg and Malmö.
- SEK 35 million was paid to 8,654 associations in youth sports through our initiative Gräsroten, and the collaboration with Elitfotboll dam was extended by three years.
- The board proposes to the 2024 annual general meeting a dividend of SEK 1,900 million (2,000).
- Anna Johnson will be the new president and CEO of Svenska Spel and will take up the position in June 2024 at the latest.
* Definition see page 20 of Interim report January – December 2023.
Summary of the period January–December
- The net gaming revenue for the group amounted to SEK 8,029 million (8,036), at the level of the previous year, where the Casino Cosmopol & Vegas business area decreased by SEK 129 million.
- Operating profit for the group amounted to SEK 2,333 million (2,387), a decrease of SEK 54 million or 2%. The operating margin amounted to 29% (30). The reduction is due to the restructuring that has taken place within the Casino Cosmopol & Vegas business area.
- The result for the group amounted to SEK 1,941 million (1,995), a decrease of SEK 54 million or 3%.
- Sport & Casino launched a new poker platform with a larger selection of games and Momang – a new online casino.
- Tur launched Supportern, a digital lottery for associations in Swedish sports.
- We have also launched winning weeks for Keno and improved the customer experience through the possibility of correcting lottery tickets at the till with our agents.
- The agent portal became a new digital service that facilitates communication with our approximately 5,000 agents.
- We chose Kambi as a new sportsbook supplier and our customers can look forward to an expanded gaming experience under the Oddset brand.
- Svenska Spel is the industry best in the Sustainable Brand Index as the most sustainable gaming company.
Here you can read the Interim Report January – December 2023 in its entirety.
SOURCE: Svenska Spel.