Group financial results and position

Revenue

Net gaming revenue amounted to SEK 9,624 million (9,905), down SEK 281 million compared with the preceding year. The Gaming & Lotteries business area reported a decline of 3.2 %, while the Vegas business area saw a decrease of 2.0 % compared with 2009. The Casino Cosmopol business area declined by 0.7 %.

Net gaming revenue from gaming operations and so forth totalled SEK 7,885 million (8,096), down SEK 211 million, or –2.6 %, from 2009.

Earnings

Operating profit for 2010 amounted to SEK 4,795 million (4,921), or SEK 126 million lower (–2.6 %) than in the preceding year.

Operating expenses decreased by SEK 96 million compared with the preceding year, which is attributable to such factors as lower marketing and PR, as well as discontinuation expenses related to the Bingo Hall operations in 2009. However, the fall in operating expenses failed to offset the decline in sales during the year. An action programme was initiated to raise cost-efficiency in operations in a bid to attain the set objectives at minimum cost. However, the effects of these actions will not emerge for another few years.

The operating margin declined by 0.1 percentage points to 21.8 %.

Net financial items amounted to an expense of SEK 27 million (income: 56). The change was primarily due to value changes in respect of investments aimed at future payments to winners of the Triss Månadsklöver lottery.

Consolidated comprehensive income for 2010 amounted to SEK 4,766 million (4,977), or SEK 211 million lower (–4.2 %) than the preceding year. The fall in income resulted primarily from a decline in net gaming revenue throughout all business segments.

Cash flow

Cash flow from operating activities totalled SEK 5,785 million (5,737). Cash flow from investing activities amounted to a negative SEK 294 million (negative: 365). Of this amount, SEK 97 million pertains to net investments in financial assets, while investments in tangible and intangible fixed assets are included in a negative amount of SEK 203 million (positive: 291). Cash flow from financing activities totalled a negative SEK 4,977 (negative: 5,108) and pertains in its entirety to the payments made to the Swedish State.

Financial position

Equity at 31 December 2010 was SEK 4,766 million, or SEK 211 million lower than on 31 December 2009. The change corresponds to income for the period less payments to the owner. The equity/assets ratio was 63.7 % (62.2).

Svenska Spel is not a profit-maximising company. Operations are to be conducted as cost-effectively as possible and the Company’s articles of association state that profits available for distribution shall be disposed of as prescribed by the Swedish Government and no amount shall be distributed to the shareholder.

Segment reporting

Svenska Spel’s executive management monitors the business based on separate operating segments that are created on the basis of Svenska Spel’s range of gaming options. The Group’s different operating segments correspond to the organisation’s business area divisions: Gaming & Lotteries, Vegas and Casino Cosmopol; refer to section Svensk Spel's business areas.

Parent Company

The Parent Company includes all gaming activities except the casino operations. Net gaming revenue in the Parent Company in 2010 totalled SEK 8,434 million (8,707). The Parent Company’s share of the total net gaming revenue in the Group was 87.6 % (87.9). Net sales from gaming operations and so forth amounted to SEK 6,614 million (6,831). Profit after financial items and tax was SEK 4,770 million (4,970), representing a fall in profit of SEK 200 million.

Investments in tangible and intangible fixed assets totalled SEK 165 million (271). Net investments in financial assets amounted to SEK 37 million (76).

The average number of employees was 744 (752), of whom 62 % were men.