In this Research Note, we examine Nordomatic, the largest independent integrator of open, cloud-based smart building solutions in the Nordic region. This analysis is based on the Nordomatic 2021 Sustainability Report and their strategy to achieve global impact leadership within Smart Buildings by 2025.
Founded in 1967 and headquartered in Stockholm, Sweden, Nordomatic reports a turnover of around SEK 1 billion (around $100 million), with almost 600 employees. With a presence in Sweden, Denmark and Norway, the group offers full lifecycle capabilities for its customers – from new project integrations, retrofits and upgrades to aftermarket service and support. Its BMS solutions integrate and manage a building’s heating/cooling, lighting, access control and security as well as fire control.
Nordomatic’s business delivery model is split between:
- BMS Integration solutions and services: for new buildings or total refurbishments. This represents approximately 45% of total revenues.
- BMS Upgrade & Service for existing buildings, which represents ca 52% of total revenues.
- BMS Managed Cloud Services: Internet of Things and Cloud technologies to connect different parts of the building and provide a managed BMS service. Today, the Smart Cloud business represents 3% of Nordomatic’s revenue.
Nordomatic also offers Ecopilot, an AI-powered HVAC energy optimization service which enables the reduction of buildings’ energy costs by up to 40%, thus helping users to meet the EU’s climate and energy goals. The software was acquired in September 2019 from Bemsiq AB, part of Latour Industries. Since its first commercial installation in 2008, Ecopilot has been deployed in more than 1,000 installations in Sweden, Germany, Norway, Switzerland, Denmark, the UK and Canada.
In July 2020, Trill Impact, a private equity firm targeting mid-sized companies in Northern Europe with the potential to accelerate value creation while contributing to Sustainable Development Goals, acquired Nordomatic. Through customer integrations, 83 000 tons of CO2 emissions were avoided in 2021, according to Nordomatic’s 2021 Sustainability Report.
Their strategic direction has been reinforced by their ambitious vision statement for 2025: Nordomatic aims to achieve global impact leadership within Smart Buildings.
By ‘impact leadership’, the company means leading the way to achieve the UN’s Sustainable Development Goals. As an IMPACT company, they do not want to just comply with regulations, but to take steps actively towards increased environmental and social sustainability, and they wish to lead a transformation of the Smart Buildings market on a global scale.
Nordomatic has developed five strategic initiatives that form the basis of its Value Creation Plan 2025.
For the past decade, Nordomatic has pursued an aggressive expansion strategy completing 14 acquisitions to further strengthen its value proposition and gain market share in the Nordics.
The group has recently targeted expansion beyond Scandinavia and in 2022 to date, the group has completed four further acquisitions as part of its European expansion strategy:
- the acquisition of Y-con, a Dutch BMS provider, expands its market in the Benelux region.
- the acquisition of Nortech Byggautomasjon, based in Oslo, strengthens Nordomatic’s position in the Norwegian market.
- the acquisition of Birmingham-based Spica Technologies enables Nordomatic to enter the UK market.
- the acquisition of Demma Group Ltd, a UK systems integrator augments their continued growth in the UK market.
With the acquisition of Spica, Nordomatic entered the fast-growing Smart Workplace segment with the intent to combine Spica’s solution portfolio with their existing Smart BMS and Smart Energy service offerings to create a new Nordomatic PropTech division (to be headed up by former Spica CEO, Tim Streather), predicated on the core themes of ESG and Workplace Experience.
Time will tell whether Nordomatic’s systems integration business, their portfolio of BMS, energy efficiency and workplace software and cloud services, and their aspirations to achieve global impact leadership in smart buildings will complement each other well. Bearing in mind many clients wish that systems integrators remain independent of specific solutions and given the high level of competition that Nordomatic also faces in the smart buildings sector.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.