Svenska Spel President and CEO Anna Johnson has highlighted the operator’s recent restructuring, stating that it has led to “lower costs, improved earnings and a strengthened operating margin” in the second quarter of 2024.
In addition, Johnson noted that opportunities have now been created for the Swedish operator to “invest in transformation, strengthened responsible gaming work and investments that create growth”.
Casino Cosmopol closures impact overall revenue
Publishing its interim report, Svenska Spel declared an overall Q2 net gaming revenue of SEK 1.87bn (€161.8m), down by five per cent year-over-year (Q2 2023: SEK 1.97bn).
The operator noted that the decrease was partly due to its Casino Cosmopol business only having one casino open in comparison to three the previous year following the closure of casinos in Malmö and Gothenburg, resulting in a SEK 90m reduction.
Its online unit improved by eight per cent in comparison to the same period last year, accounting for 59 per cent of the total revenue earned during the quarter (2023: 52 per cent).
In addition, the operator stated that the strengthening of responsible gaming measures had “a negative impact on revenues for all business areas”, but a positive impact on healthy revenue.
Svenska Spel will start reporting on its share of healthy revenues at the end of August, after which the figure will be included in interim reports to show its sustainability and transparency.
The group’s operating profit for the quarter was SEK 640m, up 17 per cent YoY (2023: SEK 550m) following restructuring between October 1, 2023 and March 31, 2024, which resulted in lower costs. Operating margin rose to 34 per cent (2023: 28 per cent) due to the lower costs, while group profit grew by five per cent YoY to SEK 499m (2023: SEK 474m).
For the first half of the year, the operator’s net gaming revenue has fallen by three per cent YoY to SEK 3.83bn (2023: SEK 3.94bn), due to it being “heavily impacted by changes in the casino business”.
H1 operating profit stood at SEK 950m, down 18 per cent YoY (2023: SEK 1.16bn), impacted by “non-recurring costs of approximately SEK 375m for the closure of two casinos, the provision for an administrative fine and the reorganisation of Svenska Spel”.
Profit for the group in H1 was SEK 794m, down 19 per cent in comparison to the same period the previous year (2023: SEK 981m).
Johnson: Starting to see restructuring results
Johnson, who took over as President and CEO in June, commented: “We are now starting to see the results of the restructuring we have implemented at Svenska Spel. We have conducted a review of the organisation, working methods and costs. We have subsequently carried out a reorganisation of Svenska Spel with a new organisation in place from 1 April.
“We have also closed down our casinos in Malmö and Gothenburg. This has led to lower costs, improved earnings and a strengthened operating margin in the second quarter. It gives us an opportunity to invest in transformation, strengthened responsible gaming work and investments that create growth.”
Svenska Spel reported that Sport & Casino net gaming revenue in Q2 fell by two per cent YoY, but the European football championship had a positive impact on revenues in June. A new sports betting platform Oddset was launched in May as well.
Tur net gaming revenue increased by three per cent YoY with Eurojackpot being a growth driver, but the operator did note that efforts to increase Triss sales have produced a “positive effect on revenues”.
Net gaming revenues from Casino Cosmopol operations in Q2 fell by 72 per cent YoY as the Stockholm casino was the only one operational. However, Svenska Spel did state as well that responsible gambling measures did impact revenue.
“We are now starting to see the results of the restructuring we have implemented at Svenska Spel.”
Svenska Spel President and CEO Anna Johnson
For its Vegas business, net gaming revenue dropped by 24 per cent YoY due to a “tough economic situation for business partners and strengthened gaming responsibility”.
Svenska Spel highlighted that it simplified and digitised the interaction between customers and agents during the quarter through “channel-independent gaming accounts in stores” which has resulted in smoother payouts and reduced cash handling.
For lottery operations, the operator distributed 97 million winnings in number games and lotteries in Q2 with a total value of more than SEK 307m. A new campaign lottery – Triss Semestervinsten – was launched ahead of the summer too.