Astrium in the Hunt for U.S. Remote Sensing Services Firms

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LES MUREAUX, France — The head of Europe’s Astrium space hardware and services provider on Jan. 12 said his company is hunting for Earth observation services acquisition targets in the United States.

Astrium Chief Executive Francois Auque said bolstering the Astrium Services division’s Earth observation profile to sell imagery in the United States is a priority, and that Astrium is confident its parent company, EADS, will give it the resources needed to expand.

“It is clear that the U.S. is on our radar screen,” Auque said of a possible acquisition during a briefing with reporters at Astrium’s Space Transportation facility here.

EADS Chief Executive Louis Gallois, addressing reporters earlier here, said the company’s cash reserve of more than 10 billion euros ($13 billion) likely would be used to fund acquisitions in 2011, especially since the company’s Airbus commercial aircraft division is growing so fast.

Gallois has said EADS would like a 50-50 revenue balance between Airbus and non-Airbus activity, a goal that has been made more difficult because of the Airbus expansion.

Auque said EADS in 2010 permitted Astrium to spend 450 million euros on internal research and development, small additions to its physical infrastructure, the purchase of a Skynet 5D military telecommunications satellite and the purchase of two optical Earth observation satellites, Spot 6 and Spot 7.

Astrium Services has ordered a Skynet 5D satellite following an extension, to 2022, of its long-term services contract with the British Ministry of Defence. The company also is financing, for an estimated 300 million euros, the development and launch of the Spot 6 and Spot 7 Earth observation spacecraft following a French government decision not to share development costs. The government had financed all or most of the previous Spot spacecraft.

Auque said Astrium is worried that commercial Earth observation — an industry that was all but invented in France — is changing its shape following a 10-year, $7.3 billion contract from the U.S. government to two Astrium competitors, GeoEye and DigitalGlobe of the United States.

Astrium’s Earth observation services division, which includes Spot Image of Toulouse, France, and Infoterra of Britain and Germany, continues to grow its revenue base but has been held back because of the long delay in the launch of two French Pleiades high-resolution optical Earth observation satellites.

Both Pleiades satellites, financed by the French government, have reserved capacity for commercial and government customers and were designed for launch, one at a time, aboard the European version of Russia’s Soyuz rocket. That vehicle’s inauguration at Europe’s French Guiana spaceport has been delayed repeatedly, forcing delays in the Pleiades launch and depriving Spot Image of the expected revenue.

Astrium’s investments in 2010 also included its purchase of Jena-Optronik GmbH of Germany, the space division of Jenoptik; and a majority share in German ground hardware manufacturer ND Satcom.

In what Auque said is proof of EADS’s faith in Astrium’s future, the company has agreed to permit Astrium to spend 10 million euros in 2011, as it did in 2010, continuing to perfect the design and identify customers for a suborbital space plane for wealthy adventurers.

Astrium and EADS have not yet closed their 2010 financial accounts but Auque said Astrium will report 2010 revenue of about 5 billion euros, up 4 percent from 2009. New orders totaled some 6 billion euros, up 43 percent over 2009 once a 4.1 billion-euro order for Ariane 5 rockets is removed from the 2009 figures.

Total Astrium backlog at the end of 2010 stood at about 15.8 billion euros, up 7 percent over where it was in 2009.

Auque said 2010 was a better year for Astrium than he had expected, but that 2011, with government space spending in Europe likely to come under heavy pressure, will be a difficult year.

One possible major 2011 contract, for which Astrium will be competing against its French-Italian rival, Thales Alenia Space, will be the French government’s long-discussed plan to sell its Syracuse 3 military satellite telecommunications system, including the Syracuse satellites in orbit, to a private operator. The government then would purchase telecommunications services from the operator in a multiyear agreement similar to what the British Defence Ministry has done with Astrium’s Paradigm division.