CSR Report and Annual Report 2014

A year of reforms yielded an excellent result for the benefit of Finns

Veikkaus’ year 2014 was a success in many ways. We were able to achieve an excellent financial result in spite of the economic recession and the weak growth of 0.4 percent of the gaming market. Veikkaus’ share of Finnish gaming went up to over 50 percent in 2014.

Thanks to customer-oriented development and cost-efficiency, we managed to increase our turnover by 5.4 percent. Thus, our financial result improved by 2.8 percent over the previous year, reaching EUR 520.4 million.

Our game reforms were especially successful in the past year: a majority of Finns now know the new Neighbours game, and over 340 000 of them have played it. Nearly one million Finns have already tried Lotto’s new Double-Up feature. The Fixed Odds Betting reform was also well received among our customers.

In addition to conscious efforts to develop our games and consumer web store veikkaus.fi, we made significant changes to our ways of operating in 2014. For example, we revised the way our development processes are carried out, in order to respond better to customer feedback and to improve our offerings in an even more flexible and nimble way in the middle of the digitalising operating environment.

We wish to offer joy of gaming to a wide customer basis playing with moderate stakes. In 2014 the number of our loyal customers already exceeded the limit of 1.6 million. Around sixty percent of the gaming took place through our comprehensive point-of-sale network covering the entire country, whereas forty percent of the games were played via our digital channels. Our loyal customers can play registered both on the net and at the points of sale. This assures that the prizes are paid directly to the winners’ accounts, reinforces our customers’ consumer protection, and enables us to develop the tools for the self-control of gaming. From a social point of view, registered gaming prevents, e.g., the risk of money laundering.

Responsibility was a salient part of our operations in 2014. At the beginning of the year, we updated our core responsibility tools, and in the autumn, we carried out a prominent campaign to raise the awareness for recognizing the risks of problem gambling. We are working persistently in favour of responsible gaming, bearing our responsibility for the prevention of the drawbacks of gaming, and encouraging people to always seek help to potential problem gambling.

In December the Cabinet Finance Committee decided to launch a project for analysing possible development models for the Finnish gaming system. The analysis will be based on a continued commitment to the exclusive rights system and securing the position of the beneficiaries of the gaming proceeds. The project, which will be carried out under the Ministry of the Interior, will also cover an assessment of the structure of the current three gaming companies. We at Veikkaus trust that our responsible, skilful, and forward-looking operations will be useful whatever the corporate structure will be.

Gaming operations that are supervised and guided by society enjoy strong support in Finland. However, there are still many factors causing insecurity. Weak consumer demand, the shift of gaming towards electronic channels, the illegal gaming offerings and marketing that are trying to enter the Finnish market, and the development of EU legislation make it necessary for us to innovate very fast.

We want to be the best gaming company in the world. To achieve this ambitious goal, we need to set out targets high. In 2015 we will aim at even better results. Besides our customer-oriented, responsible, and nimble ability to innovate, it is our first priority to assure broad-ranging knowhow whilst building the future. We will start our year 2015 on a strong basis, although the overall economic situation and weak consumer demand add to our challenges.

The year 2015 is a celebratory year for Veikkaus: It has been 75 years since the company was founded and the first line of Football Pools was played. It is a respectable period of having provided responsible games to be enjoyed by all Finns.

We are celebrating our persistent work under the theme ”You are already a winner”. It intends to remind people of the fact that the proceeds of Veikkaus games are channelled to the benefit of Finnish arts, sports, science, and youth work – i.e. to the benefit of each and every Finn.

I wish to express my warmest thanks to Veikkaus’ personnel and our partners in cooperation for their persistent work and commitment. My special thanks go to all Veikkaus’ customers, who have given their important support to Finnish wellbeing by playing our games.

Juha Koponen