SSC’s story for much of the last decade was one of strong growth but poor profitability. A low-water mark came in 2011, when the services and hardware provider, formerly known as Swedish Space Corp., posted an operating loss of 112 million Swedish krona ($16 million ) on sales of 856 million Swedish krona.

Stefan Gardefjord, who took over the government-owned company in May 2012, attributed the tough 2011 primarily to write-downs related to unprofitable acquisitions, and to the money-losing satellite manufacturing division, which was sold in mid-year to Germany-based OHB System AG for the symbolic price of 1 Swedish krona. 

Things have since turned around. After a shaky start, 2012 was profitable, and Gardefjord is guardedly optimistic about 2013 and beyond.

SSC’s satellite management services business, which provides satellite operations and communications support to customers including NASA and other space agencies, is its biggest, accounting for nearly 50 percent of total sales. Gardefjord says that business, which includes SSC’s U.S.-based Universal Space Network subsidiary, is expected to be the company’s biggest growth engine in the years ahead. But Gardefjord sees great potential in SSC’s ECAPS line of environmentally friendly satellite thrusters, part of the company’s technology business. Early this year SSC recorded its first commercial sale of ECAPS, to startup Skybox Imaging, which plans to use the hardware on its third satellite.

SSC also provides engineering services to a wide variety of clients and is the owner and operator of Sweden’s Esrange sounding-rocket and research-balloon launching facility.

Gardefjord spoke recently with SpaceNews editor Warren Ferster.

What’s your growth strategy?

Our strategy is basically twofold. One is to leverage our existing customer base; for example, NASA and the Japanese, German and European space agencies and so forth are all established in the Western space world. They are under pressure. We have sequestration in the United States, the European economy is in shambles and it’s obviously affecting budgets within the space organizations. We think that we have an ability to grow our share of their spending because they need to think out of the box and could be externally sourcing some of the things that they are doing internally today. The other one is to expand into new markets with emerging space nations, both in Europe and in Asia. If you look in Europe you could see a lot of countries, like Poland, like Turkey, where they have aspirations to step into the space era, and we have a lot of the competencies and services that they would need to build a space presence. 

What accounted for SSC’s turnaround in 2012?

We made some structural changes, some of the old leadership left the company, we recruited new key resources that gradually came on board and we got better control of the company. I’m of course also part of it, because I’m the chief executive, but to me it’s a lot more about better structure, focus and professionalism, and restructuring activities and investments, which are starting to pay off. 

What kinds of investments?

We made substantial investments in 2011 and 2012. For 2012 I think the official number is 113 million Swedish krona. The majority of that has gone into ground station activities that are now up and running and actually starting to generate revenue. So what you can see as an example is that the U.S. business has made an impressive turnaround and is now contributing substantially to the financial improvement of the company. In 2012, the U.S. business went from negative growth to almost 30 percent growth, and it continued to grow in 2013 and the profit margins are moving upward towards healthy levels.

What do you expect will be your biggest growth engine over the next five years?

It’s satellite management services. That’s where we definitely believe we can have double-digit growth and double-digit margins. And it’s a necessity because it’s so capital intensive. We need to invest a lot of money in our own infrastructure — ground stations, communication equipment, etc. — so we need good profit margins in order to support those investments. We can see some new science services in sounding rockets and balloons and drop tests — this summer we’re doing drop tests with the Japanese space agency, for example. We can grow that maybe 3, 4, 5 percent per year. When it comes to engineering services, it’s difficult to grow quickly organically. We think that with the combination of organic growth and then some bolt-on acquisitions we can get to reasonable growth levels but it will definitely be single-digit organic growth. Technology is more a matter of when we move from technology development into production and commercial delivery of thrusters. We have made a breakthrough commercial deal in the United States with Skybox. If that is successful we could get add-on orders for that and then get into a pretty steep revenue increase but from a low level. There we could probably see the highest percentage-wise revenue growth but still it wouldn’t be a massive part of our overall business, which is basically geared around satellite management and engineering services. If you add those two together you have two-thirds of the business. 

How much potential do you see in the ECAPS thruster technology?

I only have a year in this industry but I was surprised in my first week when I went to a space propulsion conference in France and the momentum and the interest in green propulsion was really amazing. Everybody was talking about this, everybody was so focused on the necessity of having some substantial progress on green propulsion as opposed to hydrazine and so it’s a very hot item. It’s getting a lot of attention and it’s really, really sophisticated technology. 

What are the market trends that have you so excited about the thruster business?

In many areas for many applications we are moving toward smaller and smaller satellites, including nanosats and cubesats. Many of these cubesat missions have been student programs and the like, but now I think we’re actually seeing strong commercial and defense and other applications that would require these smaller satellites to actually have a propulsion system. And one of the drivers would be to get out of the huge traditional satellite program cost structure with long lead times and get into something that is much more agile and that you can get into orbit much quicker but with strong capabilities and maybe not 10-, 15-year missions but maybe three months, six months, 12 months, what have you. Having green propulsion as a ready-made module off the shelf just to integrate into the satellite could give you a tremendous benefit as far as lead times and flexibility are concerned. 

You can put an ECAPS thruster on a cubesat?

The thrusters we have in the ECAPS program start from 1 newton up to, in the development road map, about 400 newtons. But for the cubesats we have our micropropulsion thruster, which is not flight proven but it’s at least right now on the QB50 program — we have been selected to fly on one of those satellites, called Estelle — and here we’re talking about cold gas propulsion using micro-electromechanical systems. 

Are you doing much business with the U.S. Defense Department? 

We see in the United States growing interest from the Defense Department. I wouldn’t say it’s huge today but we certainly see some movement in the opportunity. I think it’s official now that the Air Force has come out with a request for information regarding commercial sourcing of telemetry, tracking and control, so that could definitely become a growing sector for us. We’re operating under the Special Security Agreement in the United States, and that probably implies we are to some extent already providing services also to the Department of Defense sector. 

There’s a lot of concern these days about unauthorized signals being transmitted to satellites. What measures are you taking to secure your facilities?

It is definitely the No. 1 topic both at the board level and executive management of how we can ensure that we have the highest possible security standards. Obviously we understand that to be a viable external provider of these sorts of services, security must be part of our DNA. We have spent considerable time and effort on studies of our own vulnerability, penetration tests, also using external sources to give us challenges on where could there be gaps. We have recruited a strategic security officer with a very interesting military and risk management background and he’s driving a lot of activities within our organization to strengthen our security. We have, at the nonexecutive board level, recruited Hakan Syren, who is the former supreme commander of the Swedish Armed Forces and also the most recent chairman of the European Union military committee, to make sure that we enhance and build our security awareness and capabilities. 

Have there been any attempts by outside entities to penetrate your network?

We are constantly monitoring that, and I think that anybody who believes they are not approached through a hacking attempt is naïve. We can definitely identify all those activities and constantly assure ourselves that we have all the necessary mechanisms in place to detect that and prevent that. 

Warren Ferster is the Editor-in-Chief of SpaceNews and is responsible for all the news and editorial coverage in the weekly newspaper, the Web site and variety of specialty publications such as show dailies. He manages a staff of seven reporters...