earth observation: state of play and future …challenge on price, but growing commercial...

EARTH OBSERVATION: STATE OF PLAY AND FUTURE PROSPECTSEUROCONSULT 2018 – CONFIDENTIAL

EARTH OBSERVATION: STATE OF PLAY AND FUTURE PROSPECTS

18th October 2018

Advisory Committee On Commercial Remote Sensing (ACCRES) Meeting

Presented bySima Fishman, Managing DirectorEuroconsult USA


• 162 satellites (>50kg) launched for civil/commercial Earth observation and 31 for GEO/LEO meteorology over 2008-2017, from 36 countries

• To expand to approximately 650 satellites for civil/commercial Earth observation from 2018-2027 as further governments and commercial enterprises launch capacity

• Nearly 1,500 smallsats (less than 500 kg) are anticipated to be launched to serve EO applications, the vast majority being less than 50 kg

• Majority of satellites launched from government space agencies; civil government investment topped $10 billion in 2017

• Commercial data market totaled $1.4 billion in 2017:

• 5%, 5-year CAGR - defense remains the main growth driver

• Value-added services market reached $3.2 billion in 2017

- 7%, 5-year CAGR environment monitoring and infrastructure projects lead.

2

SNAPSHOT OF THE INDUSTRY


3

SATELLITES LAUNCHED BY CLIENT TYPOLOGY*

2008-2017 2018-2027M

AR

KET

VA

LUE

SAT.

LA

UN

CH

ES

*civil and commercial only, non-meteorological

162 satellites

Other Leading

Gvmt(59%)

Dual-use (5%)

Developing(20%)

Comm. Constellation

(14%)

Commercial (other) (4%)

$15.8 billion

Other Leading

Gvmt(65%)

Dual-use (8%)

Developing (14%)

Commercial constellation (2%)

Commercial (other)(11%)

650 satellites

Other Leading

Gvmt(27%)

Dual-use (2%)

Developing(15%)

CommercialConstellation

(52%)


$35 billion

Other Leading

Gvmt(62%)

Dual-use (6%)

Developing (11%)

CommercialConstellation

(14%)



4

SATELLITES MARKET BY REGION2017 2012-2027

VA

SC

OM

M. D

ATA

Europe18%

Africa 3%

$1.4 BILLION

NorthAm

43%

Rest of Asia 12%

Latin America 8%

Middle East 7%

Russia & CIS 3%

SE Asia 6%

Latin America

Middle EastRussia & CIS

Africa$ US million

Europe17%

Africa 3%

$3.2 BILLION

NorthAm

49%

Rest of Asia 11%

Latin America 7%

Middle East 6%

Russia & CIS 3%

SE Asia 4%

$ US million Upside scenario

SE Asia

North America

Latin AmericaMiddle EastRussia & CIS

Africa

SE Asia

North America

Europe


5

GOVERNMENT EO PROGRAMS

< $10 million$10 - $50 million$50 - $100 million$100 - $200 million$200 - $500 million$500 - $1000 million>$1000 million

*Inclusive of both satellite manufacture and programs supporting application development. European budgets include contributions to ESA where relevant.


6

EO COMMERCIAL DATA SALESBY CUSTOMER

BY DATA

U.S. Defense

Non-U.S. Defense

Non Defense

Very High Resolution (≤1m)

SAR

$mill

ion

• Commercial data market reached $1.4 billion in 2017

• Defense markets dominate, topping $860 million. Reflected in the procurement of VHR data

• Defense/maritime remains first destination for SAR

• Non-US defense remains most significant growth driver (9% 5-year CAGR)

• Business-to-business markets are developing, with a focus on change detection analytics

• The <0.5m is considered to be taking away revenues from the <1m market as customers, particularly in defense, shift to even higher ground resolutions

Very Very High Resolution (≤0.5m)

Years


7

FORECAST COMMERCIAL DATA SALES

LatamEurope

Middle EastRussia/Cis

Africa

SE Asia

$mill

ion

BY REGION

BY SECTOR

Defense

Civil & Enterprise Markets

• Commercial data market to reach $2.4 billion in 2027 (5% CAGR)

• Defense remains the main regional driver, with the NGA remaining the single largest procurer of commercial imagery globally

• Regionally, Asian markets in double-digit growth, expected to become second largest market for data sales

• LBS and infrastructure markets fast developing – LBS Is expected to remain the fastest growing market through the decade to support activities such as Smart Cities

North America


8

VALUE ADDED SERVICES MARKET

9%

DATA: $1.4 Bn.

61%6%

9%

4%

2%

2%

5%

SERVICES: $3.2 Bn. Defense

(18%)

Energy(8%)

Natural Resources

(14%)

Infrastructure (26%) Disaster

Management (5%)

Environment Monitoring (22%)

Maritime (2%)

LBS (4%)

• Total VAS + Data market = $4.6Bn (of which $3.2 VAS)

• Key markets those which leverage lower-cost/free data sets

• Defense sector data sales do not translate in VAS > much work done in-house

• Current market forecast to reach $5.7 by 2027 (6% CAGR)

• The key market is infrastructure—encompassing cartography and land-cover classification, which are well established in the industry.

• The LBS and Finance markets are the strongest growing, albeit in the take-up phase. Both sector have much potential, but rely on uptake of new services to a developing B2B client base.

Finance (1%)


9

SIGNIFICANT COMMERCIAL SUPPLY EXPANSION

0

50

100

150

200

250

300

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Operational Satellites Based on Future

Launches

#sat

ellit

es

SAR W/IN CONSTELLATION

SAROPTICAL

Operational satellites (>50kg) based on anticipated lifespans

* Commercial refers to commercially operated and commercial data availability fromgovernment satellites with data <2.5m optical or <5m SAR

Launched and in Operation

OPTICAL W/IN CONSTELLATION


10

ADDING EVEN MORE INTO THE MIX

• Numerous companies putting forward constellation solutions

• Sector attracted $1 billion in investment over the last five years

• Many new constellations plan to provide data to build change detection analytics

• Nearly 1,500 smallsats are expected to be launched to serve EO

< 10 kg Cicero US

Planet US

SPIRE US

11 to 50 kg Aleph Argentina

BlackSky US

Capella US

Land mapper HD US

51 to 250 kg BlackSky US

Iceye Finland

Jilin video China

Planet HD US

Scout US/Saudi Arabia

Zhuhai-l hyperspectral China

Zhuhai-l video China


11

PRICING STRATEGIES

OPTICAL COMMERCIAL DATA PRICING• Current prices for EO data range from free to $500/km2:

Ranges due to GSD, spectral res., geolocation accuracy, and whether data is archived, newly acquired or tasked

• … 1m optical data can be acquired for $5/km2 if there’s compromise on accuracy

• With competition prices are expected to fall faster than the current 3-5%/year rate

• New lower-cost solutions expected to challenge on price, albeit with expected compromises on geolocation accuracy.

• SAR data remains more highly priced, and is viewed as an issues in moving away from defense orientated markets

*Newly acquired level 1 data, data prices

from the last 12 months

Resolution (m)

$/km2

Pressure on price data for High/med. res. data, less accuracy

Announced: Hera Pricing

Shift toward higher resolution and accuracy, but high prices

New highest resolution and accuracy priced higher: WorldView-3 and 4

Few comm. options +5m

Announced: Blacksky pricing


12

SNAPSHOT OF THE INDUSTRY

• EO supply expected to expand rapidly in the coming years; this will add competition and challenge on price, but growing commercial capabilities (in hyperspectral, GPS-RO, meteo…)

• Possible for supply to start outstripping demand… unless new markets are opened up?

• Noticeable shift from investment into new satellite operators to new services companies aiming to exploit data based on change detection and predictive analytics

ON SUPPLY

ON DEMAND

• VAS more commonly using lower-cost datasets, argument for allowing certain data types to go for free (as supported by Copernicus, Landsat)

• Two differing markets? Or two tiers of data? One for high-end data to support defense, lower-cost, high revisit data building services?

• Defense expected to remain first market for commercial data; infrastructure, environment and emerging LBS for value-added services


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leading

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insight

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Promoting forward thinking, facilitating

projects & deals for over 1,000 executives

TEAM

+Senior affiliate consultants in

>40 countries

Expertise at each level of the

Value Chain/Ecosystem

13

WHO WE ARE

RESEARCH


UNIQUE COMBINATION OFFERED BY EUROCONSULT AND SATCONSULT

Strategic support

Business plan design

Due diligence - project financing / M&A

Support to government programs

Market and industry analysis

Executiveevents

Training

Feasibility studies

RFI/RFP

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Research

55% owned by Euroconsult

14


EUROCONSULT SUPPORT TO DECISION MAKERS

2Million data points in

our research database

>1,500 Top executives come

to our summits

Mandates

600Clients from

50 countries

>500

Leader for

strategic

positioning

Latest mission for Tier 1

telecom operator

Leader for

due diligence

$30B+investment M&A & project

financing

Leader for

independent asset

procurement &

monitoring

~20 commercial

& defense

programs for

$4B+ value

15

France · USA · Canada · Japan · Singapore

Շնորհակալություն

Danke

спасибо

Thank you

Дякую

MERCI POUR VOTRE ATTENTION

Muchas Gracias

Shukran

谢谢

[email protected]

EUROCONSULT GROUP

earth observation: state of play and future …challenge on price, but growing commercial...

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