As such, we asked CEO Patrik Hofbauer where future growth could come from and whether the executive was pleased with current operating profit levels (SEK 500m), especially considering online competition.
Is Svenska Spel happy overall with its operating profit levels?
I am happy to see that we again deliver a solid quarter with increased profitability despite headwinds for our land-based casino operations. Our priority is to build sustainable growth and to be disciplined on cost. We can all read in the newspaper about higher interest rates, inflation and general uncertainties affecting societies, and with these market conditions I am satisfied with our group performance. Two out of three business areas are growing their revenues, improving profitability and we have an all-time high on sustainable revenues and customers. This is a great achievement and the result of a clear focus on responsible gambling and sustainable revenues.
What can you do to reverse your performance in the Casino Cosmopol & Vegas business area?
Our biggest challenge for our land-based casinos is the competition from online casino and our focus on responsible gambling and AML. We have lower customer activities this quarter, which is impacting both revenues and profitability. It is not a new trend, but it has escalated after our land-based casinos were closed during the Covid-19 pandemic. Our Casino Team's focus is to turn these trends and transform the operating model into a more cost-effective operation.
Although revenue has not fallen, what can you do to find growth from somewhere?
To better understand how our revenues are built up, we need to look into our three business areas. Sport & casino have grown their revenues by +4% during H1 2023 and TUR are also growing their revenues by +2% YTD 2023. So, two out of three business areas are growing. They grow, for example, thanks to regularly launching new games, enhancing the customer experience, and creating a high level of customer satisfaction and loyalty. Our main challenge now is the third business area, Casino Cosmopol & Vegas, as described above.
What kind of ideas have you had to try and combat the impact of online games?
Assuming you mean the impact of online games on our land-based casinos, we can get back in the autumn with more details on the transformation of the operating model. It is a unique experience to visit a real-life international casino with games, entertainment and restaurants. We want more guests to get the opportunity to visit our Casino Cosmopol located in the three biggest cities in Sweden. Between online games and land-based casinos, it is not one or the other, we think the customers can enjoy both because they offer different experiences of gambling.
Separately, how do you respond to discussions about the potential divestment of Svenska Spel among politicians etc?
This is a question for the owner of Svenska Spel.
