Svenska Spel Reports Interim and Q2 Results for January – June 2024

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Svenska Spel, a leading gambling operator in Sweden, recently reported its interim results for the January to June 2024 period, along with its Q2 results. These results provide insights into the company’s performance, challenges, and future prospects.

H1 Results

Revenue Overview

In the first half of 2024, Svenska Spel reported revenue of SEK 3.83 billion ($360 million), marking a slight decline of 3% from the same period last year. This drop can be primarily attributed to changes in its casino operations.

Casino Business Impact

The most significant factor in the revenue decline was the cessation of operations at all Casino Cosmopol venues except the one in Stockholm. This strategic move aimed at restructuring and cost reduction has had a notable impact on overall revenue.

Operating Profit Decline

Operating profit for H1 2024 dropped 18% to SEK 950 million. The closure of the Casino Cosmopol venues in Gothenburg and Malmö, along with associated reorganisation costs and administrative fines, amounted to SEK 375 million, contributing significantly to this decline.

Net Profit Drop

Net profit faced a similar decline, down 19% year-on-year to SEK 794 million. Despite these setbacks, there were positive developments in other segments of the business.

Online and Tur Segment Growth

Svenska Spel’s online segment saw a 7% growth in sales, indicating a shift in consumer preference towards online gambling. Additionally, the Tur segment, which includes lottery and other games, experienced a 5% increase in net gaming revenue (NGR).

Q2 Results

Revenue and NGR Analysis

In the second quarter, Svenska Spel reported NGR of SEK 1.87 billion, down 5% year-on-year. The reduction in the Casino Cosmopol business, which saw a 72% drop in NGR, was the main contributor to this decline.

Impact on the Vegas Segment

The Vegas segment also faced challenges, with NGR down 24%. Svenska Spel attributed this to a tough economic situation for business partners and enhanced gaming responsibility measures.

Positive Segment Growth

Despite the overall decline, other segments showed positive growth. Online gaming revenue was up 8% in Q2, making up 59% of Svenska Spel’s group revenue. The Tur segment saw a 3% year-on-year increase in NGR, driven by the success of Eurojackpot.

Operating Profit Increase

Svenska Spel’s operating profit for Q2 rose 17% to SEK 640 million. This increase was due to the restructuring efforts carried out between October and March. The company’s profit also saw a 5% year-on-year increase to SEK 499 million, indicating a recovery trajectory.

Comments from the Leadership

During this period, Svenska Spel welcomed a new President and CEO, Anna Johnson. Commenting on the results, Johnson said, “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.”

Conclusion: The Interim and Q2 Results

Svenska Spel’s interim and Q2 results for January to June 2024 highlight a period of transition and restructuring. While the company faced declines in revenue and profit due to strategic closures and reorganisation, there are positive signs of recovery and growth in the online and Tur segments. The leadership’s commitment to restructuring and responsible gaming is poised to steer Svenska Spel towards a sustainable and profitable future.