In a candid conversation with CEO Patrik Hofbauer, Svenska Spel’s recent financial performance and future growth prospects are put under the spotlight. Amidst challenges posed by online competition and evolving market conditions, Hofbauer reflects on the company’s achievements, its response to declining performance in the Casino Cosmopol & Vegas business area, and strategies for sustainable growth.
Svenska Spel’s Operating Profit Levels:
Svenska Spel’s CEO, Patrik Hofbauer, acknowledges the evolving landscape, marked by increasing competition, higher interest rates, and economic uncertainties. Despite these challenges, Hofbauer expresses satisfaction with the company’s current operating profit levels, which stand at SEK 500 million. He emphasizes the importance of sustainable growth and cost discipline, which have contributed to a solid performance. Notably, two out of three business areas have witnessed revenue growth and improved profitability, driven by a steadfast commitment to responsible gambling and sustainable revenues.
Addressing Challenges in the Casino Cosmopol & Vegas Segment:
One of Svenska Spel’s notable challenges lies in the Casino Cosmopol & Vegas business area, where competition from online casinos and a focus on responsible gambling and Anti-Money Laundering (AML) have impacted customer activity, revenues, and profitability. Hofbauer outlines the Casino Team’s determination to reverse these trends by transforming the operating model into a more cost-effective operation. The challenge is not new but has intensified following the pandemic-related closure of land-based casinos.
Seeking Growth Opportunities:
Hofbauer underscores the importance of understanding the revenue dynamics within Svenska Spel’s three business areas. Sport & Casino and TUR have both demonstrated growth in revenues during H1 2023. This growth is attributed to factors such as the regular launch of new games, an enhanced customer experience, and a focus on customer satisfaction and loyalty. The primary challenge now lies in revitalizing the Casino Cosmopol & Vegas segment.
Combating the Impact of Online Games:
In response to the impact of online games on land-based casinos, Hofbauer hints at forthcoming details on the transformation of the operating model in the autumn. He highlights the unique experience of visiting a physical international casino with games, entertainment, and restaurants, expressing a desire to attract more guests to Svenska Spel’s Casino Cosmopol locations. Hofbauer emphasizes that online games and land-based casinos offer distinct gambling experiences, and customers can enjoy both for their unique offerings.
Divestment Discussions:
Addressing discussions about the potential divestment of Svenska Spel among politicians and stakeholders, Hofbauer defers this question to the company’s owner, underlining that such decisions rest with them.
Patrik Hofbauer’s insights into Svenska Spel’s current performance and growth strategies provide a clear picture of the challenges and opportunities facing the company. With a focus on responsible gambling, cost-effective transformations, and a commitment to offering unique gaming experiences, Svenska Spel remains poised to navigate the evolving landscape of the iGaming industry.