Value for owners and society
Svenska Spel creates value for the owner, the Swedish State, and ensures that separately decided social mandates are performed well. This also means a responsibility for ensuring that the long-term value development in the Company is the best possible, and that operations are conducted in a manner conducive to sustainable development, in economic, social and environmental terms.
Svenska Spel is a strong, well-known brand that gets its strength from gaming enjoyment, a strong product portfolio, responsibility initiatives and broad physical distribution with more than 5 million customer relationships as well as its long-standing partnership with Swedish sports. Our logo symbolises a happy winner, arms in the sky. The symbol stands for responsibility, gaming enjoyment and returns to the Swedish population.
The public’s trust in Svenska Spel, its brand and its responsibility is decisive in a situation where the competitors can offer similar games, sometimes under more favourable conditions than Svenska Spel can offer. The Company endeavours to offer customers enjoyable, exciting and safe games.
Gambling problems comprise a high cost to society, however no actual figures exist for what one person with gambling problems costs society. 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 gambling problems in society and, thereby, help to reduce the costs.
The operating margin for 2015 was 22.6% compared with 22.2% in 2014. The average over the past five years is 22.3%. Realisation of the operating margin in recent years is due to distinct target-driven management, streamlining efforts as well as changes in the product mix, where primarily, the share of the sales attributable to Vegas has declined.
Streamlining efforts are conducted continuously through constant process improvements and effective procurement coupled with regular cost reviews. Since 2010, streamlining efforts corresponding to over SEK 450 million have been carried out, thereby freeing resources for new prioritised investment areas to strengthen our competitiveness.
A process development initiative in the Company started in 2014. The objective was to increase customer focus and identify streamlining areas. The initial phase of identifying and defining Svenska Spel’s business processes has been completed and implementation is now underway.
Operating margin trend, %
Changes in the product mix, cost awareness and greater operational efficiency generated an operating margin of 22.6%, which is in line with the owner’s target.
Investing in the future
In a situation where the design of the future gaming market is under investigation, the Company’s challenge is to retain its market shares and fulfil its channelling mandate. The main reason for this is that an online casino permit has not been received, and that unregulated, offshore gaming companies continue to market themselves freely without any sanctions.
State companies are expected to lead the way for innovation, digitisation and sustainable business. The growth of digitisation which alters customer behaviour demands constant development of new and improved forms of games and services that provide superior customer protection.
Svenska Spel focuses on building a large, stable customer database of good quality to be able to offer the customer more relevant and personal communication after receiving consent from its customers. Obligatory registration means customers have access to clear statistics over their gaming, regardless of whether gaming takes place in a digital or physical environment, and they can use the responsible gaming tools offered in a relevant manner.
In recent years, major investments have been made in new technical platforms that create the preconditions for an attractive and consistent experience in all digital channels, which has also improved availability for the customers. Growing online access also places demands on the Company’s availability in other channels. The Company’s customer service is open and staffed 24-hours a day, seven days a week.
Code of Conduct guides employees
Svenska Spel highlights and prevents 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 operations. Svenska Spel’s Code of Conduct describes the Company’s overall approach to responsible and professional conduct. The Code describes how Svenska Spel’s employees are expected to behave towards each other, customers, suppliers, retailers, business partners and other external parties. All employees are to be certified in the code of conduct during 2016.
Svenska Spel has a whistle-blowing system through which employees can report irregularities within the Company. In 2015, one case was reported in the system and managed as per the Company’s procedures.
Henrik Fröjmark, human rights organisation Swedwatch
Svenska Spel wants to act in an exemplary manner in terms of sustainable business which includes the areas of business ethics, anti-corruption, diversity, gender equality, working conditions, human rights and the environment.
Contributing to the community is important to Svenska Spel. The Company does so primarily through its responsible gaming efforts, sustainability initiatives in areas such as gender equality and diversity, and through a lot of commitment to Swedish sports. Svenska Spel’s commitment to sports is aimed at driving development, both in terms of sports accomplishments and a positive impact on society in the form of public health, integration and diversity. Today, the Company sponsors five large national teams, but also invests in developing talent, breadth and youth sports through, for example, Grass Roots, Tipselit and Hockeyakademin (the Hockey Academy). In collaboration with the sponsored sports associations, Svenska Spel drives several special projects aimed at improving gender equality and integration within football and other sports. The Company’s sponsorship is always based on a clear business basis.
Sustainable business is a key issue for Svenska Spel and, together with its business partners, the Company wants to develop these areas. During 2015, a sponsorship agenda was formulated that, together with Svenska Spel’s code of conduct for suppliers, will be gradually implemented into all sponsorship agreements. The guidelines stipulate, among other requirements, that the recipient of the Company’s sponsorship must comply with international guidelines and actively promote greater diversity and gender equality.
Showcases human rights efforts
The area of human rights has received more attention. Following criticism from the human rights organisation Swedwatch in conjunction with the 2014 Hockey World Championships, Svenska Spel has started a dialogue with sports associations to ascertain how the Company can contribute to ensuring that human rights are respected. The requirements in the sponsorship agreements concerning human rights have been clarified and tightened during the year, and Svenska Spel has even held a human rights course for the sports associations. Svenska Spel also initiated a round-table discussion with representatives for organisations, sports associations and the Government Offices of Sweden about ways to highlight the issue and minimise the negative impact within sports.
Low risks in the supplier chain
Svenska Spel has about 2,400 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 and IT. They are primarily based in the EU and most are based in Sweden. Svenska Spel’s risk analysis indicates no specific risks in the supplier chain.
Svenska Spel has a code of conduct for suppliers and, ahead of 2016, is working to increase follow-up of this code among the Company’s partners.
Extensive climate efforts
Svenska Spel has long conducted extensive climate efforts that have generated substantial environmental savings. The area where the Company has the greatest climate impact is travel and transportation, but also materials and energy.
What is happening in 2016?
- Continued implementation of process-oriented working methods.
- New systematic process for following up suppliers.
- Implementation of a clear innovation process.
- In-depth collaboration with sponsorship partners concerning human rights, diversity and gender equality.
Svenska Spel’s social contribution
|Pay and remuneration to employees||Employees||–1,024||–1,011|
|Payment to the Swedish State2||Owner (society)||–4,763||–5,269|
|Sponsorship of Swedish sports3||Society||–238||–246|
|Scholarships to Swedish sports5||Society||–3||–3|
|Other operating costs||Suppliers||–1,211||–1,297|
2 Dividends to the owner, the Swedish State, for 2014 and 2013 respectively.
3 Sponsorship and activities for sports associations and federations. Grass Roots sponsorship is reported separately.
4 Sponsorship of the country’s sports associations and their youth operations.
5 Elite sports scholarship, Swedish Sports Leader Prize and the Sports Journalist Scholarship.