Cherry CEO Anders Holmgren looks beyond the horizon
Fresh from reporting triple-digit Q1 growth, Holmgren talks expansion, business structure and becoming the Nordics’ number one operator
Swedish operator Cherry has had a prolific start to 2017. The firm’s first quarter has been characterised by the seismic integration of the ComeOn brand – a process CEO Anders Holmgren says has been smooth sailing – and the operator reporting triple-digit revenue growth.
Ranking 27th in last year’s EGR Power 50 list, Cherry is attempting to fight its way to the forefront of the Nordics pack with a pledge to take the number one spot in the region.
“We don’t feel the pressure,” Holmgren explains. “I think we have the momentum, and we are unique in a sense, with the five businesses we own covering a 360-degree view of the industry. I believe we are definitely in a position to really grow,” he adds.
Holmgren is happy to share Cherry’s recipe for success, breaking down the company’s five core business operations. “It’s a more or less entrepreneur-led company where each arm has its own CEO. We feel it is best to help the companies by having specialised boards geared towards each specific business. That will become more obvious in the future,” he says.
The driving force of the operation is the relationship between the companies’ leaders. When it comes to M&A, a lengthy period of courting pre-determines any decision to take on a new business. “We maintain good relationships with a lot of companies, maybe even for years, before we do anything.
“The relationship between people is the key and what drives things. If we feel that [another firm] is like us and we can help each other, then it’s perfect. We have been lucky to be able to do that with certain companies. That’s very much the DNA of what Cherry is today.”
Cherry AB CEO Anders Holmgren
M&A from all sides
Holmgren says the group is always on the lookout for new additions, with each company having its own trail meticulously mapped out. Most recently, Cherry acquired a 25% stake in UK-based virtual sports supplier Highlight Games.
The move signifies a drive to boost gaming technology business XCaliber, which also signed its first external customer in April. “This is looking super promising,” Holmgren beams.
“[The customer agreement] does not have a massive financial impact but it does look promising. As I’ve said before, this area doesn’t look for quantity it looks for quality and size in its partners.”
Cherry also purchased an additional 7.5% stake in Germany-focused casino and sportsbook firm Almor in April taking its total stake to 82%, after marked online success in German-speaking markets. For ComeOn’s next move Holmgren is eyeing up jurisdictions on the cusp of regulation, looking to Sweden’s upcoming regulatory framework with particular zeal.
He is certain Sweden will open its doors for them with additional licensing for developers and suppliers, potential links with the lottery and sportsbook monopolies, a new production studio for Yggdrasil in the heart of Stockholm, and cross-customer opportunities between ComeOn and its retail casino business Cherry Spelglädje.
Moving into Asia
Holmgren also reveals details of Game Lounge’s penetration into the Asian market, following a recent launch in Japan. He adds: “The launch there is continuing and we’re creating sites, but I think the fruits will come in the coming quarters.
“We are really optimistic about that. It would be strange if we didn’t follow with other businesses there. We’re looking everywhere, well maybe not so much towards the US, but the rest of the world is interesting.”
Development arm Yggdrasil, one of the stars of its first quarter’s results, is plotting a UK push having just finalised further physical expansion in Krakow and Stockholm. Yggdrasil boss Fredrik Elmqvist insists it is untapped territory for them.
“A few of the Nordic guys have increased their presence in the UK so of course we’ve piggybacked onto that,” he adds. “We will probably need to increase and expand our distribution a bit before but given the pace of things it’s looking good.”
Set to launch in June, Cherry’s listing on NASDAQ Stockholm will reveal further growth opportunities and even more momentum for a Nordics lead. Holmgren emphasises the firm’s upcoming focus on organic growth, concluding: “The company has become much bigger than it was two years ago.
“We have a good number of companies and people, which is a combination of organic and non-organic growth. If we can continue to attract these people then I definitely believe we will be a challenger to the biggest firms.”