The wholly state-owned company Svenska Spel, operating in the gaming market in Sweden, has provided the state coffers with an annual average dividend of SKr 5 billion over the past decade. However, competition is stiffening and CEO Lennart Käll warns that revenues will decline.
“We’re seeing the market grow more rapidly than we’re growing, which means we’re lagging behind. We don’t provide online casino gaming, which accounts for sales of SKr 2.4 billion in Sweden. Instead customers turn to unregulated online providers that don’t pay tax in Sweden,” says Käll.
The Swedish digital platform Tictail has announced a SKr 189 million round of funding from Swedish private equity company Creandum, US firm ThriveCapital, British Balderton Capital and German Acton Capital. The funding will be used to develop Tictail’s marketplace, which is similar to the US company Etsy and New York listed Shopify.
“We have digital shops in 140 countries. Our goal is to become the local digital platform in every country where we have a presence. It’s all about providing the product in the local language and via local distribution channels,” says Carl Waldecranz, Tictail CEO.
A closer look by Dagens Industri at the interim reports of Swedish top listed companies shows a majority of CEOs airing cautious optimism about the outlook for the European economy. They feel less preoccupied with how the Greek crisis may impact on economic growth in the region.
“The CEOs are surprisingly positive about growth in Europe,” says Mattias Eriksson, equity strategist at Nordea, and adds that future messages from CEOs should focus on how each company can grow organically.
Two years ago, state-owned utility group Vattenfall and mining company LKAB paid SKr 6.8 and SKr 5.5 billion respectively in dividends to the state. However, the decline in electricity and commodity prices over the last few years has meant that the dividend paid into the state coffers by LKAB for the 2014 financial year shrunk to SKr 139 million, and the forecast for the next few years is gloomy.
The National Financial Management Authority (ESV) forecast in its June report that Vattenfall will pay a dividend of SKr 2.6 billion, and that LKAB will pay SKr 1.6 billion for the 2015 financial year.
The Ministry of Enterprise provides an overall assessment of the dividend pay-out from all of the state-owned companies, rather than predicting dividend pay-outs for individual companies, and will do so in conjunction with the autumn budget proposal.
“Of course we took into account in the spring already that it’s a new situation for many companies in the state portfolio, not least for Vattenfall and LKAB,” says Anna Magnusson, head of division for corporate governance at the Ministry.
The SKr 30 billion merger deal between British bookmakers Ladbrokes and Gala Coral on Friday was second major betting deal to take place last week. However, Swedish betting group Betsson does not appear perturbed by the enlarged competition.
“The two companies are very big in England, but they’re rather insignificant on our major markets,” says Pontus Lindwall, MD of Betsson.
Betsson was granted a gaming licence in the UK this spring and will continue to focus on its existing brands, Mr Smith and Betsafe, on the online market.
Swedish gaming software supplier Net Ent signed a separate agreement with Gala Coral on Friday, and sees the British merger as a positive move.
“It increases our influence among the larger companies that operate on a more global scale…,” says Per Eriksson, MD of Net Ent, who believes this will help the company on the US and the UK markets.
The government is planning to launch an inquiry into the taxi industry, clearly setting its sights on Uber and its taxi services. Infrastructure Minister Anna Johansson is admittedly wary of pointing out Uber, but the inquiry has been initiated because of the problem with “taxis’ with carpooling options”.
Anna Johansson admits that no other company offers such options in Sweden at the moment, but says: “This is not about making life difficult for a particular company. It’s about ensuring that we have a fair and well-run taxi industry”.
Thirty years ago Shenzen was a sleepy fishing village just north of Hong Kong, today it is a city of 15 million and home to a number of the biggest companies in the world, including telecoms giant Huawei. However, Shenzen, along with other cities in China, must make the shift to high technology and creative industries, as businesses move abroad in search of cheap labour.
As part of the process, China is sending a delegation to Sweden that will include representatives from the Shenzen Stock Exchange and the China Development Institute. The delegation, which will arrive in Stockholm on Saturday, will meet Nasdaq OMX, Handelsbanken and Sweden-China Trade Council representatives to find out more about Sweden’s financial system.
“Sweden’s banking system is internationally lauded. China is currently trying to reform and internationalise its banking system, and we have much to learn, particularly in risk management and supervision,” Guo Wanda, deputy head of CDI, has said.
A team of scientists at the Swedish Institute of Space Physics are developing two instruments that will be used on ESA’s Jupiter mission, which will launch in 2022. One instrument will measure the different particles around Jupiter and its icy moon. The second instrument will measure radio waves, electric and magnetic fields as well as charged gases to see if there could be life under Jupiter’s icy moon.
The group of Swedish industrialists that last week bought the Kaunisvaara processing plant from bankrupt miner Northland Resources had hoped to strike a deal with state-owned LKAB to buy iron ore below the market price . However, LKAB is not interested, saying it cannot afford to indulge the industrialists, merely to save jobs in northern Sweden.
“A state-owned company does not have the right to give any kind of support to a private company, and we cannot afford to either. We are ourselves working hard to save money in order to keep profitability at a reasonable level,” remarks LKAB chairman Sten Jakobsson.
According to Mats Leifland, the spokesman for the industrialists, who include BP chairman Carl-Henric Svanberg, the aim within the next 3-6 months is to find a solution with LKAB that is beneficial to both parties. If this does not happen, operations will be discontinued.
A large portion of the SKr 70 million the government is investing in tourism in the coming years will be used to promote Sweden as a tourist destination to the Chinese and Indians, Enterprise Minister Mikael Damberg has said.
As of September, SAS will start a direct service between Stockholm and Hong Kong, while Visit Sweden will promote Sweden directly to Chinese tour operators.
Damberg hopes there will eventually be a direct service between Stockholm and New Delhi as well. The government’s goal is that the number of Chinese and Indian visitors to Sweden will increase by 10 per cent.