Hologram. Industries: 2009 First-Half Results: Revenue of €13.6 Million (+10%) Ramping up of the Development Program

Regulatory News:

Hologram. Industries (Paris:HOL):

• First half: 10% growth in revenue

Continuing the robust trend of the first quarter, revenue in the second quarter remained high at €7.3 million. As expected, the growth rate in the second quarter (+3%) takes into account an unfavorable comparison base (€7.1 million in the 2008 second quarter, at the time a record sales performance). For the first six months overall revenue expanded 10%.

New business gains contributed total revenue of €2 million in the first half.

This growth was in large part driven by identity and travel document applications that expanded 10% in sales volume on H1-08 (+€0.7 million). This product line now accounts for 48% of total revenue, in line with the level of the 2008 first half.

In addition to identity and travel documents, the main markets remain vehicle identification that represents 31% of total revenue, up 22% on the 2008 first half, and brand protection products (13%), with the balance from fiduciary document markets and engineering and services.

Hologram. Industries has a balanced revenue mix with sales from three major geographical regions:

• Results and financial position: margins remain at high levels despite the ramping up of the development program

The Group ramped up its proactive strategy of investment and technological diversification with effects expected to be significant over the medium term.

These initiatives have resulted in notably:

• A temporary decline in the gross margin (84% in H1-2009 versus 86.8% for the same period last year);
• Increased operating expenses mainly in connection with the integration of Advestigo teams and implementation of synergy projects;
• Capital investments of €1 million in industrial equipment.

Despite the impact – temporary in nature – of this ambitious program, Hologram. Industries has maintained high margins. Accordingly, it had a current operating margin of 17.5% in the period. This performance confirms the pertinence of Hologram. Industries’ business model that combines tight control over expenses with profitable commercial operations. The company moreover registered non-recurring book income of €0.7 million representing the net value of assets and liabilities from the Advestigo acquisition measured at fair value.

In this period, net income attributable to parent company equity holders totaled €2.3 million (representing a net margin of 16.9%), in line with the level of the 2008 first half (17.3%). Net earnings per share totaled €0.45 (€0.41 at H1-08).

The Group's financial structure remained solid with net cash of €0.7 million (€10 million at December 31, 2008). This level takes into account:

• The early payment of a dividend on June 26, 2009 of €0.30 per share, up 50% in relation to the prior year (paid on July 4, 2008), for a total of €1.5 million;
• An initial payment of €1.6 million in March 2009 for the acquisition of Advestigo;
• Pursuit of the share buyback program for €0.7 million.
• 2009 outlook: confirmation of targets

In light of the current volume of orders as well as projects under negotiation, the Group anticipates further revenue growth in the second half in relation to the first six months. In light of the less favorable comparison base in the second half (sales of €14.3 million in H2-08), growth in the 8%-12% range is expected for the 2009 full year.

The operating margin in the second half should benefit from a positive volume effect to attain a level significantly higher than in the first six months. On this basis, the Group maintains its target for the full year for a current operating margin of approximately 20%.

The complete half yearly financial report is available at the company's website: www.hologram-industries.com/infos_financieres_comm (under "regulated information").

Next press release: Q3-2009 sales
Tuesday, October 13, 2009

Hologram. Industries designs, manufactures and sells high security optical solutions worldwide. The Group had sales of € 26.6 million in 2008 within three major markets:

- The security of identity documents;
- The vehicle identification;
- The protection of brand name products. www.hologram-industries.com

Euronext Paris– Code ISIN: FR0000062168