Souparis Hughes graduated from the Engineering School of Marseille. He founded Hologram Industries in 1984 and introduced his company public four years later. He is also a member and director of OSEO innovation since 2001.
Hologram Industries provides holograms for security and authentication of banknotes, identity documents or branded products. Your business has suffered from the crisis ?
Our recurring activities related to authentication of travel documents (passports) and license (car tax) have indeed experienced a significant decline in volumes due to the decline in air traffic and the collapse of the automotive market. In contrast, growth was driven by the identity document, via the replacement in many countries identity cards paper plastic cards. This also applies to renewal license, particularly in the European Union where all countries will have to comply with a new format set out in a directive. In the end, we were able to increase our sales by 6.2% in 2009 to 28.3 million euros. Our operating income decreased 17.1% to 5.7 million, but we maintained a 20% operating margin in line with our medium-term objective. As for the net margin profit grew by 16.1% to 5.5 million.
What are your main markets ?
We produce about 75% of our revenue internationally. We have many customers in Eastern Europe (Poland, Hungary, Slovakia, the Baltic States, etc.) which represent approximately 25% of our turnover.
Asia is also an important area and is close to 24% of turnover. We have customers in the Philippines, Indonesia, Malaysia or Taiwan.
The United States accounted for until this year less than 10% of sales, but this will increase significantly from 2010. We actually bought two small companies the end of December, and Ariston Reflective Decal SecureMark, we offer a real presence in the United States.
Are you considering other acquisition ?
Our strategy is focused primarily on organic growth, which does not prevent us from looking. We are ready for acquisitions, provided they bring us new technologies that could be sold through our network. We have the budgets to do so. We still have more than 7 million cash after buying Advestigo and this amount will increase by the end of the year. We have not used our debt capacity, which gives us the opportunity to spend 30 to 50 million euros for an operation. I note however that the prices charged by sellers are very high in comparison with our company.
What are your goals in the U.S. market ?
The technological level of competition is not as high in the United States and Europe. We think there is really a niche in the market for a company like ours. We have also the possibility to enter slowly, state by state, as each state has jurisdiction over American identity documents and license, which are part of our heart activity. SecureMark Decal only works with the public sector, which provides security labels for plates. We plan to increase the capacity of the factory Chicago (note: it currently employs ten people) and to make other optical elements. Over the next two years we expect to invest between 4 and 5 million. Therefore we do not intend to make a profit in the United States in 2010.
What are your most innovative products ?
We launched in late 2009 holograms customizable. It is a transparent hologram printed on the surface of an identity document, which is customizable, that is to say, we can put your portrait. Besides technological breakthrough, it helps strengthen the effectiveness of controls. This is a product that attracts many police, customs which we have presented. However, it will take time for states to take the plunge. I do not think you can expect to make revenue product this year. We also rely heavily on the identification and verification of digital documents on the internet. We bought early 2009 Advestigo specialized in this field. I think this is a very promising market that will contribute significantly to our growth in the coming years.
How these products are developed? Have you partnered with university laboratories ?
We have always devoted a large part of our turnover in research and development – 13.5% in 2009. I am an engineer myself, and I’ve always been attracted by the innovation. Like any innovative company, we received funding from OSEO, but we have developed our expertise independently, because there is currently no specific industry sector. Success helping, we draw more. Today, we have several partnerships being developed with university laboratories French, but they remain confidential for the time being.
Hologram Industries is one of the few values increased on the beginning of the Paris Stock Exchange (14%). How do you explain this performance against the current market ?
We are not surprised by this performance. If there was no crisis, the title would be much appreciated! Indeed, the year 2011 is for us a year of strong growth in both revenue and earnings, as illustrated by our results on nine months. However, this growth we announced last year in light of the new contracts we signed, notably in the field of the protection of banknotes, we offer great visibility on our sales. We are a highly technological society, very little cyclical and is used to fulfill its objectives, where the confidence shown by investors.
What have been the drivers of your growth in the third quarter of 2011 (+23% to 9.9 million)?
We experienced strong growth in our volumes (+28%) in identity documents. This is mainly based on the return to normal volumes in the travel documents (passports, etc.) and conversion into sales projects won in 2010. The integration of LSA (American company bought in 2010) in early 2011 enabled the Group to strengthen its position in the protection of marks (73%). Finally, the commercial successes in late 2010 banknotes have generated a 53% growth in this segment.
In contrast, our solutions fights against piracy on the Internet are still struggling to find their market. Music publishers and audiovisual content (TV, etc.) do not seem willing, for the moment, to pay to protect their content on the web. But we remain very confident about the future of this activity fingerprint identification that will be a source of growth for our company.
What are your hopes on emerging markets ?
We continue to make progress in these countries since the activity carried out directly or indirectly with Asia represents a quarter of our turnover. We have many contacts with countries such as Indonesia, the Philippines, Malaysia and Korea. Today we are working mainly in the field of security of identity documents. Then the vehicle identification and brand protection. We have for example a big project in Malaysia with the State decided that all pharmaceutical products must have the same hologram. This kind of project is a long time to implement, but once it is finalized, it focuses on large volumes and over many years.