ATG Annual and Sustainabilty Report 2018
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® ENGINE IN THE HORSE INDUSTRY SINCE 1974 ANNUAL AND SUSTAINABILITY REPORT 2018 2 ATG // ANNUAL AND SUSTAINABILITY REPORT 2018 3 CUSTOMER PROMISE Exciting betting experiences in a fair and convenient manner. ANNUAL AND SUSTAINABILITY REPORT 2018 // ATG 4 ATG // ANNUAL AND SUSTAINABILITY REPORT 2018 5 MISSION We are the engine in the horse industry. That is our higher purpose. We aim to be a pioneer and a role model, and to contribute to a betting market that is healthier tomorrow than today. We want to be the betting industry’s compass. ANNUAL AND SUSTAINABILITY REPORT 2018 // ATG 6 ATG // ANNUAL AND SUSTAINABILITY REPORT 2018 7 VISION We want to offer our customers the world’s best betting experiences. ANNUAL AND SUSTAINABILITY REPORT 2018 // ATG 8 CONTENTS PAGE Message from the CEO 10 ATG’s Manifesto 12 Business model 14 Strategy 16 Market 18 Operations 22 Sustainability 34 Administration Report 46 Risks and risk management 50 Corporate governance 53 Board and Group management 60 Financial statements 64 Accounting policies 73 Notes 82 Board’s signatures 99 Auditor’s Report 100 2018 Sustainability Report 104 GRI content index 118 Definitions 121 © 2019 ATG® – Aktiebolaget Trav och Galopp. This publication is protected by the Copyright Act (1960:729). The Act covers the brands, text, photographs, drawings and pictures. Photographers: Lars Jakobsson, Thomas Blomqvist, Olof Holdar and others. ATG // ANNUAL AND SUSTAINABILITY REPORT 2018 9 THIS IS ATG ATG is the betting company that knows horse racing. The company was founded in 1974 with the mission to safeguard the long-term development of trotting and thoroughbred racing by offering responsible betting. ATG has provided quality excitement and entertainment to the Swedish people since 1974. The company intends to continue doing so. Our vision is to deliver the world’s best betting experience. Our offering is: exciting betting experiences in a fair and convenient manner. Fair means that the company cares and accepts responsibility; it means offering a fair betting experience in a reliable environment. The surplus from our operations is returned to horse racing, which enables more horses, more horse racing and more betting experiences. In 2018, ATG offered betting on more than 9,000 Swedish races and more than 13,000 foreign races, amounting to more than 22,000 bettable races. Since 1 January 2019, ATG has offered horse betting, sports betting and casino games. 1,000,000 registered active customers BSEK 9.2 BSEK 2 Paid-out winnings Paid out funds to horse racing 78 26 Employee index Attractive employer index (benchmark: 75) (benchmark: 9) THE PAST YEAR 22 FEBRUARY 29 MAY 22 OCTOBER 10 NOVEMBER 30 NOVEMBER ATG offered New Four associations Harry Boy® Notification of betting on horse record turnover received funding celebrated 25 license to offer riding during for ATG on from the ATG years. New sports betting and the Gothenburg Elitloppet Dream Fund® record turnover casino games Horse Show for V75® ANNUAL AND SUSTAINABILITY REPORT 2018 // ATG 10 MESSAGE FROM THE CEO UNIQUE YEAR WITH RECORD-HIGH FUNDS TO HORSE RACING 2018 was an eventful year to say the least. It is with pride that I recap 2018, which was a record year in terms of funds to horse racing. And now we can finally compete on equal terms – an assignment I shoulder with dedication and humility. The new gambling legislation is now in place and we can want our customers to bet a higher proportion of their compete on equal terms. We have been working hard for betting wallet with ATG. In 2018, an average customer bets this since 2011. 2018 was the year we faced the challenge about SEK 24 of SEK 100 with us – they bet the remaining of focusing on two prioritised areas: to further develop SEK 76 with our competitors. high-quality horse betting and to prepare the organisation for the launch of sports betting and casino games. JOINT RESPONSIBILITY The betting industry has undeniably a lot of work to do to im- The new betting market opens up fantastic opportunities prove its reputation with the Swedish people. It is up to all of for ATG. We will now be able to grow both nationally and us in the industry to take our responsibility and show that we internationally. We took the first step in March by acquiring are credible operators who really want to make a difference. the Danish gaming group Ecosys. We want to be the fair betting company that cares about our customers. We aim to be a pioneer and a role model, and to Acting fairly amidst intense competition will be crucial to contribute to a betting market that is healthier tomorrow than the company’s future success. Our strategy is simple. We today. To achieve this goal, responsible betting is crucial. ATG // ANNUAL AND SUSTAINABILITY REPORT 2018 MESSAGE FROM THE CEO 11 BSEK 2 TO TROTTING AND NEW MANIFESTO – INTERNAL COMPASS THOROUGHBRED RACING Despite the challenges of last year, I feel confident about The new betting market brings many new aspects. But fun- 2019. We know where we are going and we have a plan for damentally, ATG will remain a horse betting company and getting there. Last autumn, we launched a revised manifesto do what we have done for more than 45 years – ensure that that set the course forward for all employees. We will still Swedish trotting and thoroughbred racing has the economic be the “horse betting company” even though the new bet- conditions to continue developing. Since the start in 1974, ting market will give us a slightly new identity because we ATG has contributed more than BSEK 40 to horse racing. are broadening our customer offering. The manifesto will be That is something we are very proud of. In 2014, the Swed- regularly monitored in the form of mini-manifesto meetings ish Trotting Association and Swedish Jockey Club decided to and workshops for all employees. assign ATG with the task of generating a considerably higher financial return in 2018. To give ATG the scope to fulfil this RESPONSIBLE BETTING – OUR MOST assignment, the owners decided on a moderate increase in IMPORTANT SUSTAINABILITY TOPIC funding between 2015 and 2017 to enable investments and We will now continue our important sustainability efforts, development of the company. which for us, are mainly related to responsible betting and animal welfare. Because we strive for long-term sustainable Funds to trotting and thoroughbred racing 2014-2018 customer relationships, we welcome the mandated duty of care that strengthens the protection of bettors. 200 2000 Good animal welfare for racehorses is a basic requirement 100 for ATG’s ability to offer betting on horses, and it is also our customers’ highest priority when it comes to the company’s 1000 responsibility for sustainability. Good horse husbandry is 00 also fundamental to the operations of the Swedish Trotting Association and the Swedish Jockey Club. 0 201 201 201 201 2018 One of our primary drivers is to be the equine industry’s en- I am pleased and proud that we succeeded in raising funds gine. The Swedish equine industry contributes to jobs, mean- for our owners. Despite the fact that we have generated ingful recreation and an open landscape for many people. more funds for our owners since I took over, and invested heavily in new forms of betting, our own equity is higher Financial contributions to horse racing and the prevention of now than in 2014. In 2018, our owners received a record problem betting are our strongest contributions to the UN high amount of more than BSEK 2 – money that will even- Sustainable Development Goals. For us, supporting the UN tually benefit the entire Swedish equine industry. That the Global Compact principles is also a given. money goes to horse racing means a lot to many people. It makes us unique in the betting market. THANK YOU FOR A JOB WELL DONE I want to thank all of our fantastic employees for their CHALLENGES IN 2018 outstanding efforts in 2018. A few seconds after the strike In 2018, we developed and launched new systems in our of 12 on New Year’s Eve, we launched our two new types of IT environment. These were extensive and transformative betting, sports betting and casino games. We continue now technical changes that, unfortunately, led to three major to develop the games in order to offer our customers the incidents that affected our customers. The incidents had world’s best betting experiences. And thank you to all our different causes. Despite these incidents, the availability of customers for taking an early and clear interest in our new our systems was 99.9 per cent. forms of betting. Another challenge during the year was the increasingly The forecast is that competition will increase in the horse intense competition that mainly affected each-way betting. betting area. But I am not worried. With competition on We can also confirm that the record-warm summer, the FIFA equal terms, we are confident that ATG’s success will con- World Cup and the responsible betting measures intro- tinue in the long term, and enable us to increase funds to duced in the autumn had a negative impact on our turnover. trotting and thoroughbred racing. Long-term, the responsible betting functions are extremely important since we are convinced that long-term, sustainable Hasse Lord Skarplöth customer relationships are crucial to the company’s success. Managing Director and CEO ANNUAL AND SUSTAINABILITY REPORT 2018 // ATG 12 ATG’s MANIFESTO THE MANIFESTO ALIGNS ATG The way forward. This must not remain a paper exercise – it should be communicated often and well.