Fast-growing OHB Resumes Hiring Spree

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PARIS — Satellite and rocket-component manufacturer OHB Technology of Germany has restarted its massive hiring program to meet the demands of its satellite contracts after a three-month pause, OHB officials said.

The Bremen-based company’s business has grown so fast in the past two years that its ability to maintain the schedule demands of its contracts, mainly those with European governments, has been a subject of concern among its customers.

That concern was not eased when OHB dismissed the head of its OHB System satellite building arm this year following disclosures by the WikiLeaks website of undiplomatic remarks made by the official that found their way into U.S. diplomatic correspondence.

OHB is prime contractor for the next 14 satellites in Europe’s Galileo positioning, navigation and timing project, which is being funded by the European Commission and overseen by the European Space Agency (ESA). OHB also has a major role in the six-satellite Meteosat Third Generation meteorological satellite program, managed by ESA and the Eumetsat meteorological satellite organization.

The company is developing a satellite platform, called Small-Geo, which will be used for government and commercial spacecraft. The first Small-Geo-based satellite, called Hispasat AG1, is being built for Spain’s Hispasat commercial satellite fleet operator.

The influx of contracts has given OHB the stature of a satellite integrator alongside Astrium Satellites and Thales Alenia Space, Europe’s other two major satellite prime contractors.

The flood of new business has also forced a major infrastructure investment by the company. In its quarterly financial report issued May 11, OHB said it has recently completed a nearly sixfold increase in its satellite clean-room space, which now covers 690 square meters compared with 120 square meters previously. New laboratory and office facilities have been added as well.

The company’s total employment has increased by 40 percent, to 2,206 people, in the past year. To take stock of the employment status and to assure that the new recruits were being well integrated into the company, OHB issued a freeze on new hiring earlier this year.

In response to Space News inquiries, OHB said May 17 that the freeze was only to give company managers a chance to take stock of the situation. It has now been lifted, and between 50 and 70 new employees are expected in the coming months for the satellite and program-development departments. Since 2009, the Bremen site alone has increased its head count to 450 from 330.

In its financial report, OHB said the Galileo satellites’ Common Security Unit, which encrypts signals sent to the satellites, has cleared engineering reviews with ESA. Similarly, the Galileo satellites to be built by OHB passed their preliminary design review, also under ESA oversight, in January, OHB said.

OHB’s holdings include CGS in Italy, a builder of small satellites. The company is purchasing Rheinmetall Italia’s space division to extend its Italian branch, a transaction expected to close in the coming weeks. The Rheinmetall space business has annual revenue of about 3 million euros ($4.2 million) and an order backlog of 7 million euros. Its 12 Rome-based employees are involved with projects in which CGS is already a contractor. Financial terms of the transaction were not disclosed.

In a conference call on the company’s financial results, OHB Chief Executive Marco R. Fuchs said May 11 that the company’s internal and external expansion is proceeding smoothly despite the rapid growth and the increase in costs and revenue that accompany it.

For the three months ending March 31, OHB Technology reported revenue of 119.8 million euros, a 23 percent increase over the same period a year earlier. Fuchs said the Galileo contract, which features substantial upfront cash payments, is the main reason for the increase.

Staff costs also increased, by 29 percent, in the same period as the head count grew.

EBITDA, or earnings before interest, taxes, depreciation and amortization, was up 16 percent during the period, to 8.8 million euros. OHB is forecasting that its full-year 2011 revenue will surpass 600 million euros, which would be a 30 percent increase over 2010. EBITDA, in part because of new acquisitions, will be greater than 41 million euros, the company said.

 

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