Second Quarter Fiscal 2012

Investment profile (as of April 2012)

At CGI, our goal is to be recognized as an investment of choice. We have a passion for running a competitive and financially strong business. For more than 35 years, we've maintained best practices in managing and measuring how we create long-term value, resulting in consistent performance, no matter the economic environment.

Stock overview

  • TSX: GIB.A
  • NYSE: GIB
  • 52 week range: $17.02-$24.30
  • Shares outstanding: 258.4M
  • Market cap. at March 31, 2012: $5,744M
  • Fiscal year end: September 30

Company overview

Founded in 1976, CGI Group Inc. is one of the largest independent information technology and business process services firms in the world. CGI and its affiliated companies employ approximately 31,000 professionals. CGI provides end-to-end IT and business process services to clients worldwide from offices and centers of excellence in Canada, the United States, Europe and Asia Pacific. CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB) and are included in both, the Dow Jones Sustainability World Index and the FTSE4Good Index.

Investment highlights

  • Strong profitability and cash flow
  • Value proposition and critical mass position CGI to increase its market share in Canada, the US and Europe
  • Proven growth strategy—a balanced mix of organic growth and acquisitions guided by a disciplined financial model and supported by CGI's commitment to quality processes
  • Competitive global delivery model, which includes the leading nearshore offering
  • CGI's significant backlog provides good revenue visibility

Latest results

  • Revenue (in millions of dollars): $1,065.8
  • Net earnings margin (in %): 9.9%
  • Basic EPS (in dollars): $0.40
  • Cash provided by continuing operating activities (in millions of dollars): $104.2

Business highlights

  • Contract types:

64%     Management of IT and business functions
             - IT services 45%
             - Business process services 19%
36%     Systems integration and consulting

  • Geographic markets* :

52%     United States
42%     Canada
  6%     Europe

*Based on client's domicile

  • Targeted verticals:

42%   Government
23%   Financial services
13%   Telecommunications and utilities
12%   Manufacturing, retail and distribution
10%   Health

  • Backlog of long-term, signed contracts:

$13.1 billion
The backlog includes new contract wins, extensions and renewals, partially offset by the backlog consumed during the quarter as a result of client work performed and adjustments related to the volume, cancellation and/or the impact of foreign currencies to our existing contracts. Backlog incorporates estimates from management that are subject to change.

Competitive strengths

CGI's competitive strengths provide an enhanced value proposition for clients. CGI combines strategic and technical expertise in five high growth vertical markets. It provides flexibility and cost competitiveness through its end-to-end service offerings and global delivery model. It achieves client intimacy through its metro market approach and a strong local presence. It consistently provides high quality service through the application of its management frameworks.

Enhanced value proposition

  • End-to-end IT services
  • Deep industry expertise (five verticals)
  • Unique global delivery model
  • Quality delivery track record
  • Flexible client partnerships

Financial highlights

(Millions of CDN dollars except per share amounts)

 

 3 months ended
Mar. 31/12 		3 months ended
Dec. 31/12		 3 months ended
Mar. 31/11		 F2007-F2011
CAGR
Income statement $ $ $ %
Revenue 1,065.8 1,032.1 1,117.7
 3.8
Net earnings
 105.7 106.5 118.7
 16.5
Diluted EPS 0.40 0.40 0.43 22.3
Cash provided by operating activities 104.2 148.7 192.4
 1.2
Balance sheet        
Cash, cash equivalents, bank overdraft and short-term investments 70.2 63.9 66.4 -5.5
Total assets 4,550.4 4,578.8 4,538.9 7.6
Shareholders' equity 2,437.9 2,353.3 2,202.4 6.6
Weighted average number of shares outstanding - diluted 266.9 268.9 276.6  

Share information as of April 30, 2012:
Total Class A subordinate shares outstanding: 224,846,231
Total Class B shares (multiple voting) outstanding: 33,608,159

Recent developments

  • CGI generated $104.2M in cash from operating activities during the quarter, or 9.8% of revenue. Over the last twelve months CGI has generated $532.7M or $1.97 in cash per diluted share.
  • During the quarter, CGI booked $787M in new contract wins, extensions and renewals, bringing the total bookings over the last twelve months to $5.1B, for a book-to-bill of 124.0%.
  • In Q2-12 CGI’s backlog of signed orders stood at $13.1B, up $659M compared Q2-11. The backlog represents approximately 3.2 times revenue on a trailing twelve-month basis.
  • In Q2-12 CGI reduced debt by $77.3M for a net debt of $795.3M, representing a net debt to capitalization of 24.0%. At the end of Q2-F2012, the Company had approximately $1.3B in available cash and unused credit facilities.


Our Build and Buy profitable growth strategy

Organic growth
Growth by acquisitions
Systems integration
contracts and
projects		 Outsourcing
contracts		 Niche market
acquisitions
 Transformational
acquisitions
  • Extend service offerings to existing clients
  • Win new contracts and renewals
  • Develop new client relationships
  • Grow pipeline of outsourcing proposals
  • Win outsourcing contracts with new and existing clients
  • Enhance vertical offerings
  • Increase geographic presence
  • Strengthen our solutions portfolio
  • Increase critical mass to qualify for more large contracts
  • Increase geographic presence
  • Ensure strategic fit and accretion to net earnings


Contact information

Lorne Gorber
Senior Vice-President, Global Communications and Investor Relations
CGI
514 841-3250
lorne.gorber@cgi.com

 

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Note: All amounts in Canadian dollars unless otherwise specified. This is CGI's first interim reporting under International Financial Reporting Standards ("IFRS"). All prior periods presented here have been retrospectively revised in accordance with IFRS.

1,120.7