Second Quarter Fiscal 2013

Investment profile (as of April 2013)

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
  • 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 69,000 professionals. CGI provides end-to-end IT and business process services to clients worldwide from offices and centers of excellence across the Americas, Europe and Asia Pacific. CGI's shares are listed on the NYSE (GIB) and the TSX (GIB.A) and are included in 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

Q2 F2013 highlights

  • Revenue of $2.53 billion, up 137%;
  • Bookings of $2.2 billion, up 180.8%;
  • Backlog of $18.0 billion, up 37.4%;
  • Adjusted EBIT of $261.6 million, up 67.3%;
  • Adjusted EBIT margin of 10.4%;
  • Net earnings of $175.9 million or diluted EPS of 56 cents excluding integration costs;
  • Net earnings of $114.2 million, or diluted EPS of 36 cents including integration costs;
  • Cash provided by operating activities of $147.2 million, or 47 cents per diluted share;
  • Net debt reduced by $50.6 million during the quarter;
  • Return on invested capital of 11.1%.

Revenue distribution

  • Contract types:

57%     Management of IT and business functions
             - IT services 46%
             - Business process services 11%
43%     Systems integration and consulting

  • Geographic markets* :

27%     United States
17%     Canada
13%     France
13%     U.K.
  9%     Sweden
  6%     Finland
15%     Rest of the world

*Based on client's domicile

  • Targeted verticals:

31%   Government
29%   Manufacturing, retail and distribution
17%   Financial services
15%   Telecommunications and utilities
   8%   Health

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


Our Build and Buy profitable growth strategy

Organic growthGrowth 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

 

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

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