This Research Note examines the wireless IoT business of LumenRadio AB, a Swedish public company listed on Nasdaq First North Growth market since 8th December 2022.

We focus on the company’s product portfolio, OEM customers, acquisitions, and 2023 financial highlights, based on LumenRadio’s IPO prospectus, its Year-End Report 2023, and recent press releases.

Founded in 2008 and headquartered in Gothenburg, Sweden, with sales offices in Germany, the US, and Norway, the company has approximately 75 employees. LumenRadio currently offers solutions within two business areas: Lighting & Smart Cities (L&SC) and Building & Infrastructure Control Systems (B&ICS). During 2023, the L&SC business area accounted for 76.5% of sales, while B&ICS accounted for 23.5%.

LumenRadio Product Portfolio

LumenRadio provides wireless product-to-product connections for mission-critical Internet of Things applications. Their scalable solutions are based on patented wireless technology for lighting control, building automation and industrial communication.

The company offers its technology in three different packages: 1) stand-alone end user product that replaces cable, 2) integrated radio module and 3) fully integrated software.  Regardless of the package, LumenRadio’s software, MiraOS, is the central component in each offering.

Acquisitions

Wireless Solution Sweden AB, a competitor in the field of professional lighting, was acquired at the start of 2020. This extended the company’s product range and paved the way for continued growth.

In July 2023, LumenRadio announced that it had entered into a binding agreement to acquire Radiocrafts AS, a wireless communications technology company, for an initial purchase price of NOK 85 million.

This strategic acquisition adds an additional business area (Smart Metering) for LumenRadio and broadens the company's existing product portfolio and customer base. Founded in 2003, Radiocrafts achieved 2022 revenues of NOK 38.8 million. The company currently has 12 employees.

2023 Financials

Net sales for the period amounted to SEK 252.5 million (199.7). This represents growth of 26.4% compared to the previous year. Building & Infrastructure Control Systems (B&ICS) is growing the most, both in absolute and in percentage terms. A contributing factor is the acquisition of Radiocrafts.

Operating profit (EBIT) amounted to SEK 59.6 million (40.2). EBITDA amounted to SEK 69.9 (47.6) million, corresponding to an EBITDA margin of 27.7% (23.8). Diluted earnings per share after tax for the period amounted to SEK 3.69 (2.96).

For LumenRadio, 2023 has been marked by both highlights and challenges. The CEO reported that the year started with a positive trend in all customer segments. During the first half of the year, the Lighting & Smart Cities (L&SC) business area experienced strong demand from the film industry, but in the second half of the year, the strike in Hollywood led to a slowdown in order intake.

At the same time, the Building & Infrastructure Control Systems (B&ICS) business area has been confronted with growing uncertainty in the property market, due to inflation and escalating interest rates.

Although the company has faced challenges during the year, L&SC has made significant progress in China in professional lighting, while the B&ICS business area has achieved success in the hotel and office sector.

OEM Customers

A Design Win is defined as a framework agreement with an OEM customer, where the customer is given the right to integrate LumenRadio’s technology in its products, while LumenRadio is entitled to receive revenue throughout the product’s lifecycle.

In 2023, the Group secured 10 new Design Wins, giving the company a total of 106 Design Wins including Radiocraft's OEM customers.

Many leading OEMs, like Swegon, Munters, S+S, TROX and Produal, have chosen to directly integrate radio modules from LumenRadio into their building automation devices.

Connected Power from MK Electric and Trend, two Honeywell brands, has LumenRadio’s MiraMesh embedded – making it scalable across large estates and campuses. Connected Power is a smart socket solution, designed to easily allow building and energy managers to monitor their site’s use of small power, which can account for more than 25% of a building’s energy.

A selection of case studies from some of their OEM customers showcases products where LumenRadio’s wireless technology has been embedded and includes applications for smart indoor climate control, remote humidity monitoring and air quality control.

OEM Customers account for approximately 75% of LumenRadio’s net sales.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.