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CEO Special 2020: Fortuna Entertainment – A continental career

David Cook gets to know Fortuna Entertainment Group CEO Per Widerström, whose career has encompassed several industries and countries, and he's still got plenty of energy left in the tank.


David Cook gets to know Fortuna Entertainment Group CEO Per Widerström, whose career has encompassed several industries and countries, and he's still got plenty of energy left in the tank.

When you watch an event that brings the nations of Europe together, such as the Eurovision Song Contest or football's men's Uefa European Championship later this year, there is a decent chance that several of the nations taking part will have one thing in common in particular; at some point, Per Widerström will have lived and worked there.

As we speak with Widerström for close to an hour, we learn of different lessons that have been learned while taking his business career, which has spanned 27 years, across the continent. Now at the age of 53, and jokingly admitting himself that he's "starting to get some grey hairs," he can reflect on a career that has seen him live and work in eight other European countries/territories outside his native Sweden. The list includes: Norway, Denmark, the UK, Ukraine, Malta, Gibraltar, Spain and Czech Republic.

Widerström has been CEO of operator Fortuna Entertainment Group since November 2014 and is a non-executive board member for affiliate holding company Catena Media and Nordic digital bank Nordnet. His gaming industry career stretches back to 2006 (which we will come on to later).

We are slightly taken aback when asking Widerström if he was always likely to pursue a career in the business world. He informs us he played semi-professional football for his local team, Örebro SK, where he advanced into the first team and was coached by Roy Hodgson, who would go on to manage the likes of Inter Milan, Liverpool and the England national team.

Widerström says: "It looked rather promising when I was 18 or 19. We won the Swedish Championship at junior level. When I was 18, I was promoted to the senior squad at Örebro SK, and I had the opportunity to get to know Roy Hodgson and his way of coaching. He then left and was succeeded by Stuart Baxter [another English manager whose last management role was with the South African national team].

"I then got injured when I was around 20, so I focused on my studies. When I was ready to go to university, it became rather natural to move to the business sector. It was not 100% clear what exactly I would do, but I was starting to move into the job market in the beginning of  the 1990s, which feels like the Stone Age now!" Widerström is still a supporter of Örebro SK, along with whichever team employs Swedish football legend Zlatan Ibrahimovic.

After studying for his bachelor's degree in business administration at the University of Gothenburg, he moved to London in 1990 to study for a master's degree in international accounting and finance at the London School of Economics. Reflecting on his time with his fellow students in London, he says: "That was exciting. We were four Swedish guys that came over from Gothenburg. We all shared an apartment in Earl's Court. There was quite an intense focus on studying there, which was quite different to what we were used to back home in Sweden."

Then, perhaps akin to Hodgson's managerial career, Widerström would build up an extensive amount of experience in different types of roles across Europe. After graduating, he started out as a Management Consultant for Andersen Consulting (now Accenture), where he was a project team member for a systems installation project.

Two of his next three positions were what Widerström would define as where he learned how to "really implement and put in place business fundamentals, operational excellence, and in essence how to thrive on a global scale." The two roles in question were as Senior Project & Supply Chain Manager for consumer goods corporation Procter & Gamble (spot the irony there) for just short of four years and a similar-length spell in the Nordic & Baltic Division of the Coca-Cola Company. Sandwiched in between these jobs was a year-long stint as a Senior Management Consultant, with a specific focus on the telco market.

The turn of the century brought with it various roles in tech, including his first CEO position at Telenor Mobile Sweden between 2001 and 2004, followed by two years as Vice President & COO of mobile operator Kyivstar. "It was there that I learned how to establish a strategy to drive growth in a sector and for a company," Widerström says. "It was building a strategic framework that enabled us to go from the number two position in the market to number one in two years. It was hyper-growth. We went from three million pre-paid subs to 13 to 14 million subs in two years. I had my first experience of working in Eastern Europe, so I learned the culture.

We set up a target model to revamp Gala Coral. We took down or terminated the UK operation to a large extent, so the main part of the business was operated from Gibraltar. We grew underlying EBITDA by three times in three years

"From a telco perspective, I had the opportunity to see two materially different jobs. One was managing a start-up from scratch, giving me the chance to be an entrepreneur in Sweden, which was one of the most competitive mobile markets. Kyivstar was very different."

Another role in tech was calling, and his time in gaming began in 2006 with his move to – now the owner of Betclic Everest's online arm and Bet-at-home - where he was CEO and Director. Widerström describes this as a "transformation" for the company.

What was to come next presented the challenge of bringing together what was at that time arguably the most significant merger to have taken place in the history of online gaming. Widerström was appointed COO of PartyGaming in 2010, and he was part of the team assembled to merge the company with fellow operator Bwin. The thinking was to bring two brands together that complemented each other well. PartyGaming needed a stronger sportsbook vertical, which Bwin provided, and Bwin required a rounded offering outside sports betting. It seemed to be a well-made match when the companies merged in 2011, with plans to create €55m ($61m) in synergies.

Despite these synergies being achieved, there is an overbearing sense of disappointment in Widerström's voice when discussing how the merger played out before BwinParty was sold to GVC Holdings for £1.12bn, in a deal which completed in 2016. It would not be the last time he would be preparing a business for an eventual takeover by GVC.

Widerström left in 2011, but it was widely perceived the merger did not work out as planned, with the company making a loss in two of its three full years in operation – the after-tax loss for 2014 was €94.3m. Shares in BwinParty dropped from just north of 200p per share in April 2011 to below 80p in March 2015.

Widerström says: "Without going too much into specifics, I truly believe, and I'm not the only one, that it could have been more effective and successful. I think ultimately, we had a good basis when it comes to the assets – brands, platform, people.

"What we could have done better is how we led the organisation through this transformation. If you ask me, my learning, which has nothing to do with Jim Ryan and Norbert, it is always a challenge having co-CEOs [Ryan and Norbert Teufelberger ran the business on a joint basis]. You have to have a distinct vision when following execution and I think the co-CEO setup made it more challenging than having one CEO.

"I think we were aligned, but in the context of BwinParty, I do not think it helped."

It is refreshing to hear a senior management executive accept mistakes were made and to not attempt to shift the blame to external factors; albeit Widerström worked in the merged business for less than a year. But it seems after his next move, Widerström was certainly part of a more successful team.

Widerström left BwinParty to take on two positions in November 2011; as Managing Director & Chairman of the Board at Gala Interactive, and as Chairman of the Board at Gala Coral Interactive. While he had been brought in at PartyGaming as part of a bigger plan to merge the business, there was clearly still some work to be done at Gala Coral.

"We were setting up in Gibraltar what was in essence an operation from scratch," Widerström says. "I was one of the few in the office there. We set up a target model to revamp Gala Coral. We took down or terminated the UK operation to a large extent, so the main part of the business was operated from Gibraltar. We moved to the Playtech platform. It was a full-blown transformation when it comes to people, technology, processes. We grew underlying EBITDA by three times in three years."

Consolidation would have to become essential to Widerström's employer once again though, as an M & A craze began to sweep the operator space following the implementation of the point-of-consumption tax in the UK in 2014. The 15% gaming tax placed on operators' online net revenue meant moves to Gibraltar may not be so fruitful, and talk of a merger would be inevitable. Gala Coral agreed to merge with Ladbrokes in 2015, just less than a year
after Widerström left the business. Gala Coral, like BwinParty, would become part of GVC when it acquired Ladbrokes Coral in 2018, in a deal worth up to £4bn.

Widerström says: "It was a natural next step, I would say. I was not part of that process, as I had left. Across the sector, you could see consolidation. When it comes to what GVC is today, and I have a lot of ex-colleagues and friends at GVC, I see the opportunity they got to capitalise on. It's quite interesting to see. Me and my team established the foundations for BwinParty to be acquired and likewise when it comes to Gala Coral. I think we did a very good job and that is what GVC is capitalising on now, so well done them."

We now come on to the assignment that has allowed Widerström to make his way into this particular feature within Gambling Insider. Fortuna Entertainment Group had a five-year plan to become the number one operator in Central Eastern Europe (CEE), and headhunted Widerström in an attempt to generate support for the plan. Fortuna operates shops and online across five markets; Romania, Croatia, Czech Republic, Poland and Slovakia. Widerström tells us Romania is by far its biggest market. Fortuna's total retail portfolio encompasses about 3,400 shops. When joining a little more than five years ago, Widerström embarked on what has been, in his words, "the most challenging
task of his life."

We truly believe we can organically double the size of the company over the next four to five years. We have seen that we have been able to build the business model that is replicable. We have found opportunities that give an incentive to further M & A

Fortuna, by Widerström's own admission, did not have a holding function in place and was in a sense being managed as separate companies in each individual market. His task was to put the grounding in place to centralise operations and grow annual EBITDA from about €20m to €50m within five years. On top of this and its plans to conquer CEE, Fortuna also wanted to expand its offering beyond sports betting.

Widerström explains: "For 2015 to 2017, it was all about investing into the foundations for Fortuna Entertainment. From 2017 onwards, it was all about going for the vision. To start with, we wanted to invest in operational excellence, human capital and technology. The foundation was the first phase and the second phase was to capitalise on that foundation. To a large extent, we have taken learnings from what we did at BwinParty and Gala Coral Interactive."

This time, Widerström did not find himself at a company that was looking for a large-scale merger from the outset, but he has still been involved in crucial acquisition deals. Penta Investments took the company private in 2017, in a deal which valued Fortuna at $447.8m; Penta has been an investor in the business since 2005. Widerström tells us this was not part of the plan when he became CEO, but was decided along the way as part of a move to grow across the Central European region.

Externally, Fortuna agreed to pay up to €135m for Irish operator Hattrick Sports Group, also in 2017. This brought with it Romanian operator Casa Pariurilor, and PSK, which Fortuna described as "the second-largest operator in Croatia." The deal completed in May of that year, and in September, Fortuna flexed its M & A muscles again by purchasing four more Romanian operators from Fortbet Holdings. The deal was worth €47m and allowed Fortuna to buy Bet Active Concept, Bet Zone, Public Slots and Slot Arena.  According to Widerström, there could be plenty more to come on this front and annual EBITDA is now more than €100m, smashing the €50m target that had been set for Widerström.

"We have in essence grown the company four-and-a-half times," he says. "That growth is 60% driven by M & A. We truly believe we can organically double the size of the company over the next four to five years. We have seen that we have been able to build the business model that is replicable. We have found opportunities that give an incentive to further M & A. We are actually very keen when the right opportunity arrives to consolidate not just in Central Europe, but also the whole European continent."

There is no doubting Fortuna is making its way towards Europe's elite level of operators at a very healthy speed. The last publically-available annual figures at the time of writing show Fortuna's gross win for 2018 was €483.6m, an increase of 58%. Online made up 57% of that total with €276.98m, with retail making up the rest. Operating profit was €61.9m, up 54%. The 2019 figures have not been released yet, but Widerström informs us annual gross win for 2019 would have been around €600m.

Widerström's enthusiasm and ambition to keep moving companies forward is clear to see, and he certainly doesn't seem to be running out of steam after almost three decades in the business world.

What advice would he give to someone at the start of their journey though? "I think a newcomer in any sector should really understand the customer behaviour and the customer data and to have an excellent view into customer insights," he says. "It’s all about people, building a theme and striving to make history.

"We are learning every day. We can always improve and do better. That’s what makes us wake up in the morning."

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