Galileo Win, Acquisitions Boost OHB Earnings to New Heights

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PARIS — Satellite and rocket-component manufacturer OHB AG reported record revenue and profit in 2011, with acquisitions during the year and continued work on Europe’s Galileo satellite navigation constellation maintaining a momentum that the company said should carry through 2012.

Bremen, Germany-based OHB, which has been one of the fastest-growing space hardware companies in recent years and remains one of the few whose stock is publicly traded, said longer-term prospects will depend in part on the results of a competition to build the German military’s second-generation SAR-Lupe radar reconnaissance satellites.

OHB is prime contractor for the five-satellite first-generation SAR-Lupe system. The company said the German armed forces are expected to issue a request for bids for a replacement generation by mid-2012, with an award likely in 2013. OHB is almost certain to confront its main German competitor, Astrium, for the contract.

For now, it is OHB’s work in building 14 Galileo positioning, navigation and timing satellites for the European Union that is feeding the company’s revenue base. OHB and its partner, Surrey Satellite Technology Ltd. of Britain — an Astrium affiliate — in February won a second order for eight Galileo satellites.

OHB is also a major contractor, with Thales Alenia Space of France and Italy, for the six Meteosat Third Generation meteorological satellites under construction for the European Space Agency (ESA) and Europe’s Eumetsat meteorological satellite organization. The contract for this work was signed in February.

OHB in 2011 reported revenue of 555 million euros ($716 million), up 23 percent over 2010. EBITDA, or earnings before interest, taxes, depreciation and amortization, was up 28 percent, to 43.1 million euros.

Backlog at Dec. 31 stood at 1.05 billion euros, down 9 percent from a year earlier.

The revenue, profit and backlog figures include contributions from aircraft engine builder Aerotech Peissenberg and satellite systems builder OHB Sweden, whose acquisitions by OHB closed in February and July, respectively.

Adding OHB Sweden — formerly the space systems division of Swedish Space Corp. — adds a fifth nation to OHB’s European operational base after Germany, Italy, Belgium and Luxembourg. Most ESA contracts are awarded on the basis of geographic return, which guarantees that nations participating in ESA programs will see 90 percent of their investment return in the form of contracts to their national industries.

While OHB is expanding its product line into commercial markets, most of its space system business is done through government contracts, led by the SAR-Lupe, Galileo and next-generation Meteosat work.

These showcase efforts combined with continued business, including the provision of components for Europe’s heavy-lift Ariane 5 rocket from OHB’s MT Aerospace division, are expected to permit the company to grow revenue by an estimated 11.7 percent, OHB AG Chief Executive Marco R. Fuchs said in the company’s annual report, published March 23.

OHB said its employee headcount stood at 2,352 people as of Dec. 31, a 40 percent increase over the previous year. While the two acquisitions accounted for most of the increase, OHB has been adding staff to handle its new contract work.

OHB has been able to leverage its work on ESA’s Small-Geo multimission satellite platform to win a contract with commercial telecommunications satellite operator Hispasat of Spain. The satellite, called Hispasat AG1, is scheduled for launch in 2013 and will inaugurate the Small-Geo platform. The Meteosat Third Generation satellites are also based on the Small-Geo design, as is a data-relay satellite being built by OHB for Astrium Services as part of an ESA program to relay Earth observation data to users via a geostationary-orbiting data-relay spacecraft.

OHB said in the annual report that it is continuing design work on a German national telecommunications satellite called Heinrich Hertz, but that it is still waiting for a full contract. Similarly, the German space agency, DLR, has yet to confirm that it will proceed with development of an in-orbit servicing vehicle, called Deos.