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Svenska Spel Annual Report 2006 Table of Contents

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Svenska Spel Annual Report 2006 Table of Contents in ined 724 retailers and em- ployees tra responsible gaming 1 Annual Report 2006 Svenska Spel ,370 new millionaires 243 million SEK to organisations for children and youth 1 SVENSKA SPEL ANNUAL REPORT 2006 Table of contents 2 CEO commentary 5 The Swedish gaming market Svenska Spel now and 11 in the future 14 Retail Division CEO commentary Direct Division Profi ts growing fast2er 20 than gaming, the ideal 26 Brand Retail Division combination. The Retail and14 Direct Divisions 29 SOCIAL RESPONSIBILITY REPORT are the pillars of the business. Svenska Spel has partnerships 30 Responsible gaming with more than 6,000 retail 36 Ethical marketing outlets, some 2,000 restaurants and several sports clubs. 38 Security 40 Employees 44 Environment 1724 46 Profi t retailers and em- ployees trained in FINANCIAL STATEMENTS Social responsible gaming 49 Responsibility Repo29rt 50 Directors’ Report Svenska Spel is a major employer and 54 Distribution of profi ts market leader in the gaming industry, 54 Risks and risk management important reasons for contributing to society’s healthy development. 56 Group 59 Parent Company 64 Notes Financial Calendar 2007 81 Audit report Annual General Meeting 25 April 2007 Interim report, January–March 20 April 2007 82 Corporate Governance Report Interim report, January–June 20 July 2007 88 Board of Directors Interim report, January–September 23 Oktober 2007 90 Key management The Annual General Meeting will be held at 4 p.m. on 92 Chairman’s statement Wednesday 25 April at the Wisby Hotel in Visby, Gotland. 93 Two 20-year anniversaries in 2006 Svenska Spel Annual Report 2006 Svenska Spel in summary Group Retail Division Direct Division The organisation has two divisions – Retail and Direct – Retail Outlet, Restaurant and Association Internet & Mobile, Casino and Bingo Hall each with associated business areas. The International business areas. business areas. business area reports directly to the CEO. Key indicators 2006 2005 2006 2005 2006 2005 Revenue from gaming, SEK m 20,281 19,287 Revenue from gaming, SEK m 17,599 17,768 Revenue from gaming, SEK m 2,790 2,152 Net revenue from gaming, SEK m 8,905 8,506 Net revenue from gaming, SEK m 7,050 7,093 Net revenue from gaming, SEK m 1,855 1,413 Operating profi t, SEK m 4,763 4,521 Operating profi t, SEK m 4,044 3,966 Operating profi t, SEK m 920 792 Operating margin, % 23.5 22.8 Operating margin, % 23.1 22.5 Operating margin, % 35.9 40.9 Full-time positions* 1,486 1,425 Full-time positions 203 205 Full-time positions 910 841 * others are full-time staff positions Signifi cant events in 2006 ■ Increased sales and record profits led to increased ■ Nearly 700 retailers certified in responsible gaming ■ Poker on svenskaspel.se rapidly gained 30% sporting grants ■ All gaming and lottery retailers equipped with new market share ■ Further applications for modified concessions, online terminals ■ Strong growth on svenskaspel.se but no permits granted yet ■ 2,000 Winwave VLTs replaced older terminals ■ Increased sales, more guests and improving ■ WLA audit of responsible gaming ranks Svenska in restaurants attitudes to casino operations Spel amongst world best ■ More than 500 new lottery retailers established ■ The SOU 2006:64 casino survey reports that Casino ■ Gaming support centralised in Visby ■ New business area being established: Association Cosmopol easily meets expectations ■ Strategy introduced for long-term management business area ■ New business areas being established: Bingo Hall development ■ Triss celebrated the 20-year anniversary with its and Subscription business areas ■ Limbo project started, also Project P – a unique successful Triss Jubileum package future investment in responsible gaming ■ Oddset celebrated its 20-year anniversary and ■ Annual sales for Oddset reached record levels largely launched three matches on Hockey-Bomben due to successful World Cup ■ New lottery tickets with shorter life: Monte Carlo ■ Keno also recorded record sales. and Skrap-Sudoku. Priorities for 2007 ■ World leader in responsible gaming ■ Continue trying to achieve earlier concession ■ Develop new and existing distribution channels ■ Grow to retain: Implement strategies to maintain changes ■ Introduce more objects on Oddset Lången market share and competitiveness ■ Develop the new Association business area ■ Development and evaluation of responsible gaming ■ Reduce operational costs ■ Launch Project P tools ■ Introduce and certify an information security man- ■ 18-year age limit ■ Efforts to increase market share for svenskaspel.se agement system in compliance with international ■ Implementation of new responsible gaming training ■ Improve the gaming experience on svenskaspel.se standards SS-ISO/IEC 27001 for restaurant proprietors ■ Further improve the gaming and guest experience ■ Initiatives for environmental protection continue ■ Launch Limbo in early 2007 at Casino Cosmopol Introduce environmental standards and key indicators ■ Launch new lotteries ■ Develop the new business areas ■ Introduce 18-year age limits for all games other ■ Introduce new central system in the Restaurant ■ Further channel development than lotteries business area Our games Sports betting Numbers games Lotteries Casino games and exclusive ■ Oddset ■ Lotto ■ Triss internet games ■ Stryktipset ■ Viking Lotto ■ Tia ■ Casino games ■ Europatipset ■ Joker ■ Skrap-Spel (table and slots) ■ Måltipset ■ Keno ■ Penning ■ Poker on svenskaspel.se ■ Limbo ■ Association lotteries ■ Bingo on svenskaspel.se (introduction 2007) ■ Lotteries with short life ■ Pick’n’Click on svenskaspel.se Svenska Spel in summary 2006 in summary Group Retail Division Direct Division A somewhat dismal winter was followed by a radiant spring, Meanwhile, gaming on Jack Vegas VLTs recovered after the summer and autumn. We ended 2006 by handing over a decline caused by the previous year’s smoking ban. The organisation has two divisions – Retail and Direct – Retail Outlet, Restaurant and Association Internet & Mobile, Casino and Bingo Hall each with associated business areas. The International business areas. business areas. cheque for SEK 1.2 billion to the sports movement. Old faithfuls Lotto and Keno gained steadily throughout business area reports directly to the CEO. Internet poker was launched on svenskaspel.se during the the year. Dream winnings on Lotto and Joker were won on spring, with some 137,000 players joining the new poker three occasions, at best paying out SEK 93.3 million to a lucky Key indicators room with integrated responsible gaming. It didn’t take long svenskaspel.se customer. Keno ended the year with a new 2006 2005 2006 2005 2006 2005 before Svenska Spel’s internet poker had achieved a market sales record having not run any campaigns other than profes- Revenue from gaming, SEK m 20,281 19,287 Revenue from gaming, SEK m 17,599 17,768 Revenue from gaming, SEK m 2,790 2,152 share of 30%. sional marketing and yet another successful Keno festival. Net revenue from gaming, SEK m 8,905 8,506 Net revenue from gaming, SEK m 7,050 7,093 Net revenue from gaming, SEK m 1,855 1,413 2006 was a great year for sports. The big event of the sum- The change of government last autumn also means delays Operating profi t, SEK m 4,763 4,521 Operating profi t, SEK m 4,044 3,966 Operating profi t, SEK m 920 792 mer was the Football World Cup, which boosted interest in can be expected in the review of the Swedish gaming market. Operating margin, % 23.5 22.8 Operating margin, % 23.1 22.5 Operating margin, % 35.9 40.9 our sports betting and contributed strongly to sales records Full-time positions* 1,486 1,425 Full-time positions 203 205 Full-time positions 910 841 for the 20-year old Oddset game. * others are full-time staff positions Two 20-year anniversaries in 2006 Signifi cant events in 2006 ■ Increased sales and record profits led to increased ■ Nearly 700 retailers certified in responsible ga ming ■ Poker on svenskaspel.se rapidly gained 30% Triss and Oddset were both introduced in 1986 and are today sporting grants ■ All gaming and lottery retailers equipped with new market share amongst the most popular games on the market, with annual ■ Further applications for modified concessions, online terminals ■ Strong growth on svenskaspel.se sales over the SEK billion mark. but no permits granted yet ■ 2,000 Winwave VLTs replaced older terminals ■ Increased sales, more guests and improving ■ WLA audit of responsible gaming ranks Svenska in restaurants attitudes to casino operations Spel amongst world best ■ More than 500 new lottery retailers established ■ The SOU 2006:64 casino survey reports that Casino Triss – Sweden’s most popular lottery ■ Gaming support centralised in Visby ■ New business area being established: Association Cosmopol easily meets expectations When the Triss lottery was launched on 29 September 1986 it was ■ Strategy introduced for long-term management business area ■ New business areas being established: Bingo Hall Profi t for the year priced at SEK 20, with the biggest prize being SEK 100,000. Triss ■ development Triss celebrated the 20-year anniversary with its and Subscription business areas sales grew from SEK 360 million in 1986 to some SEK 1,500 mil- ■ Limbo project started, also Project P – a unique successful Triss Jubileum package future investment in responsible gaming ■ Oddset celebrated its 20-year anniversary and lion in 1990. The price was increased to SEK 25 in 1992. Sales The entire profi t is used for the benefi t of Swedish society. Guidelines for the ■ Annual sales for Oddset reached record levels largely launched three matches on Hockey-Bomben Distribution of profits really gained momentum in 1994 when the “TV scratch” was ■ distribution of the profi t are determined by the Swedish Parliament and pro- due to successful World Cup New lottery tickets with shorter life: Monte Carlo 2002–2006 introduced and the winner could scratch up winnings of between ■ Keno also recorded record sales. and Skrap-Sudoku.
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