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Svenska SpelSvenska Spel

Sound professionalism

TARGET AREA PROFESSIONALISM

Svenska Spel's operations shall be characterised by clear target-driven objectives and high cost-efficiency.

Sound professionalism

Svenska Spel’s mandate is based on counteracting gaming problems while offering customers attractive games that are in demand. The fact that Svenska Spel is not subject to owner earnings requirements is a prerequisite for being able to focus intently on responsible gaming. Being our customers’ first choice due to an attractive offering in combination with a safe, secure and responsible gaming environment will ensure long-term profitability.

Targets

Svenska Spel applies a target-driven approach throughout the organisation and has a process-oriented outlook that ­promotes more efficient operations with clearer roles and responsibilities. Svenska Spel promotes good relations with its business partners.

Over the course of an economic cycle, the operating ­margin must be at least 22%. Investments in responsibility measures assessed as positively impacting customer protection and reducing levels of gambling addiction are always prioritised over profit.

Target fulfilment in 2014

Continuous efficiency enhancements and cost reviews are conducted to secure the operating margin and create scope for new investments. By identifying possible savings and efficiency enhancements, resources can be made available to invest in prioritised areas. The measures taken have created scope for prioritised investments that have strengthened the customer experience, brand and responsible gaming. In 2014, process development work was started to create a faster and more efficient organisation with substantial ­customer focus. Costs decreased by SEK 17 million (1%) in 2014 but included non-recurring costs for the launch of the new responsible gaming programme, impairment of goodwill and increased depreciation costs. The implementation of obligatory registration and other responsible gaming measures had a negative impact on revenue and is entirely according to plan.

The operating margin for 2014 was 22.2% compared with 22.6% in 2013. The average over the past five years is 22.1%.

Svenska Spel follows up its relations with retailers and ­business partners through its Partner Satisfaction Index (PSI). In 2014, PSI was 82 (90).

Svenska Spel promotes clean sports

As the largest sponsor of Swedish sports, it is important for the Company to distance itself from doping and to actively drive the issue of clean and fair sports. Therefore, Svenska Spel’s Executive Vice ­President Marie Loob participates in the anti-doping organisation Ren Idrott, which methodically works to combat drugs and doping in Swedish sports. Clean sports mean clean games and fair play. It is crucial for Svenska Spel’s operations that sports are pursued fairly and free from illegal substances.

Retailers and business partners play a central role in the business model

Svenska Spel must provide a well-developed service in both urban and rural areas. The nationwide distribution network of retailers is, alongside the Company’s strong brands, an important success factor. Svenska Spel works in partnership with slightly more than 5,400 retailers, about 760 of which are located in a rural area or is the only gaming retailer in a small region. Svenska Spel has lower requirements of profitability for such retailers.

Business partners and retailers are key to the business model and the Company’s outward face to the customers. Svenska Spel continuously works to strengthen and develop relations with its business partners and monitor how they perceive the relationship through its Partner Satisfaction Index (PSI).

Svenska Spel pursues an ongoing dialogue with its retailers and works in partnership to enhance customer interaction in stores in the best possible way. In 2014, dialogue pertained mostly to the introduction of obligatory registration. In many cases, responsibility measures reduced revenue for retailers but, generally, retailers have shown considerable understanding for Svenska Spel’s customer consideration and appreciate the idea of a healthier customer base.

Through the stakeholder survey, some business partners have expressed a need for strengthening responsible gaming in interaction with customers. The Retailer School trains new retailers in such areas as responsible gaming, gaming forms and customer interaction. In 2014, 319 individuals (344) completed the Retailer School and 1,286 (1,456) participated in other training courses.

Social contribution

Gaming problems comprise a high cost to society, however no actual figures exist for what one person with gaming problems actually costs. Through the responsible gaming measures being implemented by Svenska Spel and the surplus that is delivered each year to public finances, the Company wants to reduce gaming problems in society and, thereby, reduce the costs linked with it. In addition, Svenska Spel also sponsors Swedish sports, distributes scholarships to promote education and, each year, distributes SEK 50 million to youth sports.

Sponsorship

Svenska Spel has a long relationship with Swedish sports. Sponsorship strengthens Svenska Spel’s corporate brand and product brands while also contributing to a rich leisure life and to Swedish sports successes. The Company’s stakeholders expect Svenska Spel to contribute to social welfare through sponsorship.

Sponsorship covers the Swedish Sports confederation, football, ice hockey, handball, floorball and bandy. Support is provided both at the elite and national levels, as well as to youth sports programmes. Thanks to its Grass Roots initiative, Svenska Spel contributes to an increasing number of youngsters, both boys and girls, gaining better opportunities to participate in and develop within their respective sports, while it also creates better conditions for a competitive elite.

Svenska Spel also works with values in sports and participates in the programme aimed at stopping violence in the arenas.

Tipselit is a more than 20-year partnership between Svenska Spel, the Swedish Football Association, Elitfotboll Dam (Women’s Elite Football Association) and Föreningen Svensk Elitfotboll (the Swedish Elite Football Association). The aim is to develop Swedish football through targeted investment in talents between the ages 14 to 19 and in trainers and player coaches. The Tipselit project also takes responsibility for the players’ social environment which includes studies and vocational training. The clubs receive financial support from Svenska Spel and the criteria for participating in the project were drawn up by the parties together.

Hockeyakademin (the Hockey Academy) is a collaboration between Svenska Spel and the Swedish Ice Hockey Association whose aim is to secure the quality of trainers and players’ education. The Hockey Academy is an investment comprising 11 hockey consultants, experienced and well-educated hockey trainers, who are chosen particularly to inspire young talents and trainers.

Elite sports scholarship

The Swedish Sports Confederation and Svenska Spel’s elite sports scholarship is distributed each year to some 50 elite athletes at the National team level who are enrolled at least half-time at a university, college or other higher-learning programme. The scholarship takes the shape of SEK 50,000 for each athlete and is awarded in conjunction with the Swedish Sports Awards. In 2014, 59 elite athletes received SEK 50,000 each.

Business ethics and anti-corruption

Svenska Spel’s overriding goal is to highlight and prevent unethical behaviour, both internally and externally. It is Svenska Spel’s responsibility to ensure that people are not abused, deceived or in any other manner exploited by the Company’s operations. Svenska Spel’s Code of Conduct summarises the Company’s overall approach to responsible and professional conduct. The Code describes how employees and ambassadors of Svenska Spel are expected to behave towards each other, customers, suppliers, retailers, business partners and other external parties.

In 2013, Svenska Spel introduced a whistle-blowing system through which employees can report irregularities within the Company. In 2014, there were no reports.

Low risks in the supplier chain

Svenska Spel has about 2,500 suppliers and the value of items purchased amounts to about SEK 2 billion per year. The Company’s suppliers are primarily service suppliers in market-related services but also IT (hardware, software, IT communication and IT consultants). The suppliers are mainly based in the EU but a clear majority are in Sweden. An overall risk analysis has been carried out but showed no specific risks in the supplier chain. Svenska Spel is subject to the ­Public Procurement Act, which allows the Company’s suppliers to compete on equal terms for each procurement. Svenska Spel has a code of conduct for suppliers and the Company is working actively to prepare a procedure for following this up.

Criticism from Swedwatch

In conjunction with the arrangement of the 2014 Ice Hockey World Championships in Minsk, Belarus, reports came in of forced labour and human rights violations. The human rights organisation Swedwatch criticised the Swedish Ice Hockey Association and its sponsors, including Svenska Spel, for not acting to ensure human rights were respected in connection with the championship.

Svenska Spel is emphatically against any violation of human rights. However, as main sponsor it is beyond the Company’s powers to be able to influence, for example, the choice of host nation for a championship. Following the criticism from Swedwatch, Svenska Spel has started to discuss with sports associations how the Company could promote human rights efforts.

Svenska Spel has also met other state-owned companies to discuss these issues and see how, together, higher requirements can be set for this area and how to minimise negative impacts on human rights in our own and business partners’ operations.

Svenska Spel’s social contribution

SEK million 2014 2013
Revenue 7,578 8,126
Operating costs1 –1,297 –1,393
Employee benefits –1,011 –995
Payments to capital providers2
Payment to the Swedish State3 –5,269 –5,137
Grass Roots4 –57 –53
Sponsorship of Swedish sports5 –246 –223
Scholarships to Swedish sports6 –3 –3
Research Council –4 –2
Economic value retained –309 319
     
  1. Excluding sponsorship and scholarships which are reported separately.
  2. Svenska Spel is owned by the Swedish State and the Group’s unappropriated funds are to be allocated as prescribed by the Government.
  3. Dividends to the owner, the Swedish State, for 2013 and 2012 respectively.
  4. Sponsorship of the country’s sports associations and their youth operations.
  5. Pertains to other sponsorship and activities for sports associations and federations. Grass Roots sponsorship is reported separately.
  6. Elite sports scholarship, Swedish Sports Leader Prize and the Sports Journalist Scholarship.

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What is happening in 2015?

Continued work on enhancing operational efficiency and thereby liberating funds for new initiatives and customer experiences.

Development of the Company’s business processes, working methods and securing clear, target-driven management.

Completing internal training in anti-corruption.

Continued dialogues with stakeholders on human rights.

Operating margin trend, %

Strengthened cost control and greater operational efficiency generated an operating margin of 22.2%, which is in line with the owner’s target.

Related information

Stakeholder interviews