Svenska Spel's Q1 net profits dip amid casino closures

23 Apr 2024

(PRESS RELEASE) -- The first quarter of the year was marked by a period of adjustment for Svenska Spel in order to lay the foundation for continued successful operations. On the one hand, the work of future-proofing the Group to create room for growth. Firstly, the closure of Casino Cosmopol in Malmö and Gothenburg in order to reduce losses in the business area. This had a major impact on the Group's earnings during the quarter, while the underlying business remained stable with strong earnings from the Tur business area. This is stated in Svenska Spel's interim report for the first quarter of 2024, which is presented today.

Svenska Spel has a stable business with strong brands, the gaming industry's highest image and a high level of commitment among its employees. But also challenges in the world around us, such as slowing growth in the gaming market and recession in the Swedish economy. To meet this, the Group has been working since the autumn to future-proof Svenska Spel by reviewing the Group's organisation, working methods and costs.

"We have reorganised, reduced the number of staff, and from 1 April we have a new organisation in place. In this way, we have freed up resources that we can invest in transformation, strengthened responsible gaming and growth. These are important investments for long-term sustainable value creation," says Erik Strand, President and CEO of Svenska Spel.

During the quarter, a decision was also made to close Casino Cosmopol in Malmö and Gothenburg in order to reduce losses in the business area.

The Group's net gaming revenue for the quarter is SEK 1,956 million (1,976). This is a decrease of 1%, which is mainly due to the restructuring of the Casino Cosmopol & Vegas business area. Operating profit of SEK 310 million (612) is a decrease of 49% and the operating margin was 16% (31). Operating profit and operating margin were negatively impacted by non-recurring costs of SEK 375 million during the quarter. These include the closure of the casinos in Malmö and Gothenburg, restructuring costs linked to the review of the Group, and a provision for the administrative fine imposed by the Swedish Gambling Authority on Svenska Spel Sport & Casino.

Excluding non-recurring costs, operating profit was SEK 683 million (612) and the operating margin was 35% (31).

For the Group as a whole, online business increased by 6% compared to the same quarter last year, and accounted for 56% (52) of the Group's revenue during the quarter.

Net gaming revenue for the Sports & Casino business area decreased by 3% during the quarter compared with the same quarter last year. This is mainly due to a poorer outcome for the pool games.

Business area Luck increased net gaming revenue by 6% compared with the corresponding quarter last year. This is the highest quarterly growth for the business area ever. The increase is driven by Eurojackpot and continued growth for Triss. This is due to both efforts to increase sales of Triss, and the effect of Triss being popular as a gift at, for example, Valentine's Day and Easter.

Revenues and earnings for the Casino Cosmopol & Vegas business area continue to be negatively impacted by the major restructuring of Casino Cosmopol. Net gaming revenue decreased by 32 per cent compared to the same quarter last year. This is mainly due to the closure of the casinos in Malmö and Gothenburg, but also reduced opening hours at the remaining casino in Stockholm. The Group's operating profit was affected by SEK -238 million from the Casino Cosmopol & Vegas business area, which is a decrease in operating profit of SEK 183 million compared with the same quarter last year.

During the quarter, Svenska Spel distributed 71 million prizes in number games and lottery tickets with a total value of SEK 395 million. The quarter's highest win was more than SEK 173 million on Eurojackpot, the eighth highest win ever at Svenska Spel and the highest Swedish Eurojackpot win since 2019. The sports games have delivered 18 million wins during the quarter, of which 15 on Stryktipset.

Stryktipset has completed the 27th edition of the championship Tips-SM with approximately 53,000 people and 3,500 teams registered. The three best tipsters, individually and in teams, got to donate the prize money of a total of half a million SEK to sports associations through the sponsorship initiative Gräsroten.

Svenska Spel has approximately 5,100 agents across the country and is continuously investing in improving the customer experience in the stores and simplifying the situation for the agents. During the quarter, the delegates were honored at a Winners' Gala when the year's best agents in nine categories were appointed.

In sports sponsorship, Svenska Spel started the year as the main sponsor of the Sports Gala and has since carried out a large number of activations around the Swedish Ski Association and its eleven sports, the Swedish Championships week in Luleå and Boden, and ice hockey's top leagues SDHL, SHL and HockeyAllsvenskan.

First quarter summary
Net gaming revenue for the Group amounted to SEK 1,956m (1,976), a decrease of SEK 19m or 1% impacted by the transformation of our casinos.

Business area Tur has had a strong quarter and increased net gaming revenue by 6% driven by Eurojackpot and good sales of Triss.

Operating profit for the Group amounted to SEK 310 million (612), a decrease of SEK 302 million or 49% where non-recurring costs* accounted for approximately SEK 375 million. The non-recurring costs are linked to the closure of two casinos, the provision for an administrative fine and the reorganization of Svenska Spel.

The operating margin was 16% (31).

Excluding non-recurring costs, operating profit amounted to SEK 683m (612) and the operating margin was 35% (31).

Svenska Spel has carried out a reorganization and reduced its workforce to make room for future investments. The new organization will take effect from 1 April.

The casinos in Gothenburg and Malmö have been closed and February 24 was the last night guests could visit us there.

Sport & Casino has completed the 27th round of Stryktipset's championship Tips-SM, where the prize money goes to sports associations via our sponsorship initiative Gräsroten.

We have paid tribute to our agents at this year's Winners' Gala and awarded prizes to the best agents in nine categories.

The Swedish Gambling Authority has issued Sport & Casino with a warning and an administrative fine for deficiencies in the duty of care in 2021.

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	Svenska Spel's Q1 net profits dip amid casino closures 23 Apr 2024 <a href='https://ad.casinocity.com/adclick.php?n=a21efcd1'><img src='https://ad.casinocity.com/adview.php?what=-site:vendors/width:250/RON&n=a21efcd1' border='0' alt='' /></a> (PRESS RELEASE) -- The first quarter of the year was marked by a period of adjustment for Svenska Spel in order to lay the foundation for continued successful operations. On the one hand, the work of future-proofing the Group to create room for growth. Firstly, the closure of Casino Cosmopol in Malmö and Gothenburg in order to reduce losses in the business area. This had a major impact on the Group's earnings during the quarter, while the underlying business remained stable with strong earnings from the Tur business area. This is stated in Svenska Spel's interim report for the first quarter of 2024, which is presented today. Svenska Spel has a stable business with strong brands, the gaming industry's highest image and a high level of commitment among its employees. But also challenges in the world around us, such as slowing growth in the gaming market and recession in the Swedish economy. To meet this, the Group has been working since the autumn to future-proof Svenska Spel by reviewing the Group's organisation, working methods and costs. "We have reorganised, reduced the number of staff, and from 1 April we have a new organisation in place. In this way, we have freed up resources that we can invest in transformation, strengthened responsible gaming and growth. These are important investments for long-term sustainable value creation," says Erik Strand, President and CEO of Svenska Spel. During the quarter, a decision was also made to close Casino Cosmopol in Malmö and Gothenburg in order to reduce losses in the business area. The Group's net gaming revenue for the quarter is SEK 1,956 million (1,976). This is a decrease of 1%, which is mainly due to the restructuring of the Casino Cosmopol & Vegas business area. Operating profit of SEK 310 million (612) is a decrease of 49% and the operating margin was 16% (31). Operating profit and operating margin were negatively impacted by non-recurring costs of SEK 375 million during the quarter. These include the closure of the casinos in Malmö and Gothenburg, restructuring costs linked to the review of the Group, and a provision for the administrative fine imposed by the Swedish Gambling Authority on Svenska Spel Sport & Casino. Excluding non-recurring costs, operating profit was SEK 683 million (612) and the operating margin was 35% (31). For the Group as a whole, online business increased by 6% compared to the same quarter last year, and accounted for 56% (52) of the Group's revenue during the quarter. Net gaming revenue for the Sports & Casino business area decreased by 3% during the quarter compared with the same quarter last year. This is mainly due to a poorer outcome for the pool games. Business area Luck increased net gaming revenue by 6% compared with the corresponding quarter last year. This is the highest quarterly growth for the business area ever. The increase is driven by Eurojackpot and continued growth for Triss. This is due to both efforts to increase sales of Triss, and the effect of Triss being popular as a gift at, for example, Valentine's Day and Easter. Revenues and earnings for the Casino Cosmopol & Vegas business area continue to be negatively impacted by the major restructuring of Casino Cosmopol. Net gaming revenue decreased by 32 per cent compared to the same quarter last year. This is mainly due to the closure of the casinos in Malmö and Gothenburg, but also reduced opening hours at the remaining casino in Stockholm. The Group's operating profit was affected by SEK -238 million from the Casino Cosmopol & Vegas business area, which is a decrease in operating profit of SEK 183 million compared with the same quarter last year. During the quarter, Svenska Spel distributed 71 million prizes in number games and lottery tickets with a total value of SEK 395 million. The quarter's highest win was more than SEK 173 million on Eurojackpot, the eighth highest win ever at Svenska Spel and the highest Swedish Eurojackpot win since 2019. The sports games have delivered 18 million wins during the quarter, of which 15 on Stryktipset. Stryktipset has completed the 27th edition of the championship Tips-SM with approximately 53,000 people and 3,500 teams registered. The three best tipsters, individually and in teams, got to donate the prize money of a total of half a million SEK to sports associations through the sponsorship initiative Gräsroten. Svenska Spel has approximately 5,100 agents across the country and is continuously investing in improving the customer experience in the stores and simplifying the situation for the agents. During the quarter, the delegates were honored at a Winners' Gala when the year's best agents in nine categories were appointed. In sports sponsorship, Svenska Spel started the year as the main sponsor of the Sports Gala and has since carried out a large number of activations around the Swedish Ski Association and its eleven sports, the Swedish Championships week in Luleå and Boden, and ice hockey's top leagues SDHL, SHL and HockeyAllsvenskan. First quarter summary Net gaming revenue for the Group amounted to SEK 1,956m (1,976), a decrease of SEK 19m or 1% impacted by the transformation of our casinos. Business area Tur has had a strong quarter and increased net gaming revenue by 6% driven by Eurojackpot and good sales of Triss. Operating profit for the Group amounted to SEK 310 million (612), a decrease of SEK 302 million or 49% where non-recurring costs* accounted for approximately SEK 375 million. The non-recurring costs are linked to the closure of two casinos, the provision for an administrative fine and the reorganization of Svenska Spel. The operating margin was 16% (31). Excluding non-recurring costs, operating profit amounted to SEK 683m (612) and the operating margin was 35% (31). Svenska Spel has carried out a reorganization and reduced its workforce to make room for future investments. The new organization will take effect from 1 April. The casinos in Gothenburg and Malmö have been closed and February 24 was the last night guests could visit us there. Sport & Casino has completed the 27th round of Stryktipset's championship Tips-SM, where the prize money goes to sports associations via our sponsorship initiative Gräsroten. We have paid tribute to our agents at this year's Winners' Gala and awarded prizes to the best agents in nine categories. The Swedish Gambling Authority has issued Sport & Casino with a warning and an administrative fine for deficiencies in the duty of care in 2021.