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Discover DigitalGlobe's vast collection of high-resolution satellite imagery, products, and services for various applications. Learn about their innovative technology and strategic growth plans.
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October 2007 DigitalGlobe Proprietary
Dubai, UAE DigitalGlobe Proprietary
Statue of Liberty DigitalGlobe Proprietary
London, England DigitalGlobe Proprietary
WorldView Update DigitalGlobe Proprietary WorldView 1 Image Houston, Texas October 2, 2007
WorldView Update DigitalGlobe Proprietary WorldView 1 Image Yokohama, Japan October 5, 2007
About DigitalGlobe DigitalGlobe is a global leader in geospatial content, products and related services for commercial, civil government and defense & intelligence applications • Largest combined library of high resolution satellite and aerial imagery • 300,000,000 km2 of the most accurate earth imagery at 60cm or better • Over 70 million km2 of satellite and 850,000 km2 of 15-30cm aerial imagery added annually • Highest resolution commercial imaging satellites: Quickbird and WorldView 1 • Part of a growing constellation of satellites; launched WorldView 1 in September 2007 • Building one next generation WorldView satellites • Only company with 2 high-res (50cm) satellites under contract • Will have 10x QuickBird capacity by 2009 • Comprehensive suite of options for consuming content • Recent acquisition of GlobeXplorer DigitalGlobe Proprietary
Improved Accessibility & Integration Consolidated of collection process Integration of Multiple Content Types Widespread Usage End-to-End Solution Provider DigitalGlobe Proprietary
Extraordinary Content Library • DigitalGlobe believes that its ImageLibrary houses the most current and complete commercially available high resolution satellite images in the world Note: Black represents stored QuickBird images • Currently contains >300 million km2 of total imagery • 230 million km2 at better than 60 cm of resolution • 100% of Earth at 15 meter resolution • Growing at a rate of 4 million km2 per month (QuickBird only) DigitalGlobe Proprietary
Gen1 QuickBird Operations Predicted EOL assumes +2 high solar environment WV1 Dev & Launch WV-1 Operations Gen2 WV2-1 Dev & Launch WV-2 Operations FY2010 FY2008 FY2011 FY2013 FY2009 FY2007 FY2012 FY2006 FY2005 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Gen3-1 Dev & Launch Gen3-1 Operations Gen3 Gen3-2 Dev & Launch Gen3-2 Operations Existing And Planned Constellation Gen1: On Orbit Gen2: On Contract and Under Construction Gen3c: Planned Capacity DigitalGlobe Proprietary
DG’s Strategic Imperative • Emergence of web-based mapping has redefined expectations • Strong traditional markets; new requirements • Emerging “contextual” customers; multiple industries and constituencies • DG well-positioned to lead DigitalGlobe Proprietary
A Quick Look At Business Case Justification DigitalGlobe Proprietary
Developing the Business Case • Elements of the business case will include: • Qualitative Analysis • Does the proposed project meet our business objectives, broadly defined • Quantitative Analysis • Does the proposed project meet our financial objectives, specific return on investment requirements • In order for a project to make it to the Quantitative Analysis phase, it must first pass the Qualitative Analysis gate, ie “Does this make sense in the context of our strategy?” DigitalGlobe Proprietary
Qualitative Analysis • Detailed assessment as to a “Close enough” fit with our broader decision-making criteria: Objective Attractiveness Fit With Strategy Capability Order And Importance Of Evaluation Source: Human Synergistics, Int’l
New cost, activities, staff, etc. needed (including effort to integrate whether it’s M&A or manage outsourcing) Leverage existing cost, experience, capacity, technology, etc. base What is our ability to execute successfully? Band width, execution risk, etc. Qualitative Analysis - Decision-Making Criteria Objective Attractiveness Fit With Strategy Capability • Size of Opportunity • Margins / returns • Market share potential • What does it rule out? Opportunity cost • Regulatory, legal acceptability • Liquidity event impact • Will doing this accelerate or delay any potential liquidity event? • Business focus relative to stated strategy • How compatible is this with our strategy in terms of people, technology, etc. • Risk • Portfolio • Allocation of bets (how many, what size) • Timing • Opportunity cost: ie the cost of “not now” • Deter creation of competitors Source: Human Synergistics, Int’l
Quantitative Analysis - Key Elements • Increased revenue (or potential, via capacity) • Enhanced margin via improved pricing, cost reduction or cost avoidance • Increased efficiency, improved order fulfillment through faster cycle time • Greater customer satisfaction • increased market share, customer retention) • Improved employee morale (lower cost to retention, recruitment and training) • Consistent and understood process • Ongoing risk mitigation • Decreased margin via lower pricing or cost increase • Increased labor costs due to increased skill level (wage), number of positions, etc. • Increased use of contract or consulting labor • Higher assets / carrying costs • New risks Ongoing Time Frame • Investments in equipment, software/ programming, or other assets • Consulting costs to assist in transition • Lower efficiencies during transition • Transition risks, timing risks • Opportunity cost of time to pursue other projects • Training costs • Contingency costs to execute (think of everything and add some margin for error (<10% of total) • Elimination of a specific risk • Proceeds from an asset sale • “Lessons learned,” and increased knowledge base One- Time Costs Benefits Type of Impact Must Be Quantified!
Quantitative Analysis – Why Use IRR? • Many available metrics to determine the economic efficiency of an activity • IRR • Pay back Period (implied IRR) • NPV (converts IRR to a specific $ value) • Return on Investment (implied IRR) • All are legitimate metrics, however, IRR most directly correlates the net economic benefits of an activity relative to our Cost of Capital • What is DGs Cost of Capital? • In order to create value for our shareholders, the sum total of our activities need to exceed our cost of capital DigitalGlobe Proprietary
GlobeXplorer Case Study DigitalGlobe Proprietary
Recent Acquisition of GlobeXplorer Transaction Highlights • Acquisition Target: GlobeXplorer, LLC (“GlobeXplorer”) • Purchase Price: $22 million in cash and DG shares for 100% ownership of GlobeXplorer • Selling Shareholder: Stewart Information Services, Inc. (NYSE – STC), owns 100% of GlobeXplorer shares • GlobeXplorer 2006E Financials: Revenue - $14.2 million, EBITDA - $7.5 million, No Debt Balance, $1.1 million of Cash • GlobeXplorer Employees: 71 • Closed: January 2007 (no regulatory approval required) • Website – www.globexplorer.com; www.airphotousa.com DigitalGlobe Proprietary
GlobeXplorer - Business Description • GlobeXplorer is a leading online portal that distributes and hosts satellite and aerial imagery • Two primary business lines • Subscription based hosting platform • Accounts for approximately 55% of revenue – higher growth • Customers pay a fee for GlobeXplorer to host imagery on their site • Company sells imagery with value-added components such as property lines mapping software • Strong B2B customer base • Ask.com, Zillow.com, Navteq, Tele-Atlas, etc. • Discrete Distribution business • Accounts for approximately 45% of revenue – lower growth • Primarily one time sales of processed imagery data • Customers focused in the Civil government, agency market, real estate as well as value-added imagery services providers DigitalGlobe Proprietary
Acquisition Rationale • DigitalGlobe is executing a strategy in which completeness of and accessibility to its information provides platform for growth • Completeness is achieved through the investment in satellite collection capacity and inclusion of third party aerial imagery and geospatial data • GlobeXplorer provides significant complementary content – including a basemap of US, …. • Accessibility to DigitalGlobe’s information is a major area of focus, however limited investment has been made to date • Strong capabilities exist in the internally-focused areas of storage NO, processing and production of imagery information • Limited prior investment in externally-focused areas of browse, discovery, order entry and searchable archive • Core target market for growth is “image as context” customers • Non-professional users, seeking to easily incorporate geospatial data into apps and/or workflow • Extensive buy vs build review conducted during 2006; acquisition of capabilities to accelerate DG’s ability to provide easier access to an archive, complementary content and and entry into the hitherto untapped market is lowest risk path to success DigitalGlobe Proprietary
Acquisition Benefits • GlobeXplorer acquisition represents attractive growth platform • Technology platform: • Web-based discovery and order entry: accelerates DG’s ability to meet (common) needs of all customer segments • On-line delivery and hosting: accelerates needs of its emerging customers (“imagery as context”) • Content: Accelerates DG’s ability to fulfill customers’ needs for more complete archived imagery and ready-to-integrate solutions • Customers: Provides DG with $14M+ of commercial revenue and attractive customer base of “imagery as context” users, with potential for growth • Acquisition of GlobeXplorer appears to be superior option to alternatives • Other acquisition options are incomplete and would require significantly more investment • May be able to build, but long lead time DigitalGlobe Proprietary
Complementary Technology Platforms DigitalGlobe Proprietary
Complementary Content DigitalGlobe Proprietary
GlobeXplorer – Historical & Projected Financial Summary DigitalGlobe Proprietary
Projected Synergies • DG has identified specific headcount-related savings equal to approximately 10% of GlobeXplorer’s 2006 operating expenses DigitalGlobe Proprietary
GlobeXplorer – Projected IRR Acquisition Returns Should Meet Threshold Before Synergies DigitalGlobe Proprietary