Malta’s largest gaming company, Betsson, started off the year with 130 pay-offs and the news got worse as its financials showed profit margins dropping. But its CEO Jesper Svensson is upbeat, telling Vanessa Macdonald that the tough decisions – and a clear vision – were paying off.

You lost a number of key people at group head level recently. Isn’t that rather negligent?

Ultimately people do come and go. Strategically, we decided to build out some parts of the business but not others. These decisions have an impact on some of the people working in those areas. At times, the company cannot fulfil their ambitions – which is natural – and vice versa. So there is a parting of the ways.

But doesn’t it create a demoralising atmosphere for the rest of the workforce?

I would not say so… It is super-important for us to have strongly motivating leaders within the company. It is our responsibility to make sure that is the case with all the key positions so that they can drive the business forward. If they are not there, then the staff get demotivated. If we don’t see the level of leadership and performance we really need to get Betsson to stronger growth, then we need to make sure that we find that.

There are very few things as demotivating for people than working in an environment where there is not that drive.

We still have a lot of talent within the organisation. In many of those areas, things are going really well.

We now have 11 different jurisdictions, with more than 20 brands. Of course, some of the businesses will be doing extremely well and others will need to be lifted. That is what the recent changes have been about.

Malta Employers’ Association president Dolores Sammut Bonnici recently said that foreign workers were being put off by the rising cost of living. Is that exacerbating an already tight labour market for you?

It depends what you compare the cost of living with. In Malta, it is definitely going up. We have seen salaries in some areas also going up in order to make sure we can keep attracting talented people.

There are a few areas where we have not been able to fulfil our needs, mainly high technology, where there are simply not enough people here. So we opened tech offices in other places to support our opera­tions: Stockholm, Budapest and Kiev.

Are you finding it difficult to recruit people from overseas and to keep them here?

We are still attracting and hiring people – quite a few here and in other centres – but Malta is getting more and more expensive. Malta has a lot to offer and we also start to see more interest from places where it was more difficult in the past, such as the UK, because of the changes happening there.

One thing that is important – if this is to continue – is to have enough schools and kindergartens, as for senior people who come here with families that is the key component.

There were a number of times when this was a core question. Those who find places are very happy with the schools – but there seems be a greater demand for places than the supply, and it will become more important as the number of foreigners grow.

So did the news that Bet365 was coming to Malta make you sweat or smile?

(Laughs) Somewhere in between. It is good that Malta is strengthening its position as a hub. Bet365 will be bringing a lot of people to the island, so all in all I do not see it as a negative. But as I said before, it means even more pressure to facilitate the infrastructure.

One thing that is important is to have enough schools and kindergartens, as for senior people who come here with families that is the key component

It is quite striking to see from your annual reports that you went from acquisitions almost every quarter to a quieter period of organic growth. Is your head, Pontus Lindwall, more conservative or just consolidating?

For a period of time, growth was not as high as we wanted it to be. When you make as many acquisitions as we were, you have to integrate them, which takes up a lot of resources. Now we want to use those resources to build up our core platforms, to make sure the customer experience is better from a product point of view.

In the long run, if you buy a company to extract synergies from it, you have to make sure you can also improve the experience for that company. That is where we are now really working hard. We need a bit of time to reach the place we want to be.

So are you rethinking some of the acquisitions you have already made?

The ones that were done, were done, in that sense. We are just making sure that they are working as well as we wanted them to.

Of course, as a listed company, I cannot give specifics, but I can say that to make specific acquisitions, you have to make sure you also have solid organic growth.

It is clear from your company reports that you are trying to go for ‘white markets’ rather than grey ones. But the return is very different when you have a local licence – as you may have to do in Sweden and the Netherlands when regu­latory changes come into force next year – and pay local taxes, which are higher than in Malta.

It depends. Of course, the tax element is there, but in various markets that are facing new regulation there is a structural growth, so while there might be pressure on the margins, you have to get higher volumes to grow the business overall.

We have around 25 per cent of our re­venue that is locally regulated and taxed, and with Sweden coming in, that will rise towards a 50/50 split.

There is also a geographical split, and your 2016 annual report indicates that Turkey – where a Malta-licensed Betsson associate operates – was a risky strategy. Although you have legal advice that the associate is immune from prosecution, you cannot be sure where this is going to go…

We are a technology provider for the associate. Revenue derived from Turkey in Quarter 1 only represents around six to seven per cent. This is not a small percentage but the amount has been decreasing over the years, not due to business performance per se but because of the decline of the Turkish lira year on year.

You started the year with a downsize. Where do you see the company going now that this hurdle is over?

We have been through a period with a lot of changes. Obviously that has been visible in various ways. But if you look at where we stand today, we are making Betsson strong for the future and for the long term.

We have been in Malta since 2004, but Betsson has been around since 1963. It will be there for a while so we need a long-term focus for the company and we are starting to see the initiatives take traction.

You were brought in as a change mana­ger, a very tough job. But can employees then accept you as a growth manager? Can you be first the ‘destroyer’ and then the ‘builder’?

I see us as the rebuilding team. Of course, the mission is to get back on track to higher growth, especially to the organic growth we had before. There were a lot of changes that had to happen before we could feel that we were back in the right direction. It is a very inspiring task.