CGI Group Inc. (TSE: GIB.A; NYSE: GIB) today announced results for the six months and three months ended March 31, 2000. All amounts are in Canadian dollars. For the first six months of fiscal 2000, revenue increased 16.7% to $785.2 million, from $673.1 million in the first half of fiscal 1999. The increase reflects the acquisition of a U.S.-based systems integrator in July 1999 and new contracts.
EBITDA increased 16.5% to $118.0 million, from $101.3 million in the first half of fiscal 1999. Earnings before amortization of goodwill were ahead 17.2% to $55.1 million or $0.20 per share, from $47.1 million or $0.18 per share the previous year. Net earnings increased 17.4% to $46.4 million or $0.17 per share, fully diluted, from $39.5 million or $0.15 per share fully diluted the same period a year ago. The net margin was 5.9%, compared with 5.9% for the first half of fiscal 1999. Operating cash flow increased by 29.7% to $82.6 million ($0.31 per share) from $63.7 million ($0.24 per share) in the first half of fiscal 1999.
For the three months ended March 31, 2000, revenue increased 12.3% to $380.5 million from $338.8 million. EBITDA increased 9.9% to $57.9 million from $52.7 million. Earnings before amortization of goodwill increased 10.8% to $27.8 million ($0.10 per share) from $25.1 million ($0.09 per share) in the second quarter of fiscal 1999. Net earnings increased 10.2% to $23.4 million or $0.09 per share fully diluted, from $21.3 million or $0.08 per share fully diluted the previous year. The net margin was 6.2%, compared with 6.3% in the second quarter of fiscal 1999.
The company's balance sheet remains strong with $37.4 million of cash, $172.9 million of working capital and a debt to equity ratio of 0.09:1.
"After devoting significant time and financial resources to ensuring their Year 2000 preparedness, our clients have reviewed their IT plans in the first months of calendar 2000," said Serge Godin, CGI's Chairman and CEO. "We are now noticing an acceleration in the launch of new projects and our clients' immediate focus is to invest in achieving the Web-enabling of their organization and realizing their e-business vision. Over the mid-term, we expect companies to make significant investments to overhaul their legacy systems."
Since the first quarter of fiscal 2000, there have been a number of initiatives:
- In January, CGI announced agreements with the federal government for the implementation of several thousand installations of records, documents and information management systems (RDIMS) software amounting to $8 million in licences and services. Initially awarded by the Treasury Board in 1998, the contract has a potential value of up to $109 million.
- In February, CGI announced a $50 million investment over two years to consolidate its position in the e-business sector. The company is investing in its web-enabling capabilities and related intellectual property, including developing its portfolio of solutions and extending its network of centres of expertise.
- In March, CGI announced the creation of a joint venture with Loto-Québec to offer solutions and services to the gaming industry around the world, including the development and sale of IT solutions, consulting and management services. CGI and Loto-Québec estimate that the venture will generate revenue of approximately $100 million over five years.
- In March, CGI, known in Europe as Certis, announced a $7.5 million five-year agreement to provide eircom, an Irish telecommunications company, with training and other support services related to eircom's call centre offering.
- In March, CGI announced a strategic agreement whereby Nordic-based property and casualty insurance company If P&C has selected CGI's web-enabled insurance solution GIOS to become the foundation for its overall product offering. GIOS is a highly flexible component-based solution for all aspects of administration for all forms of insurance products. It is adaptable to any market with multi-language, multi-currency capability for multiple distribution channels.
Subsequent events
- Earlier this month, after the end of the second quarter, CGI announced an application service provider (ASP) alliance agreement with SAP Canada for medium and large-sized enterprises in Canada. The partnership makes CGI one of SAP Canada's key business solution services providers for clients who wish to acquire enterprise resource planning (ERP) solutions through a hosted, ASP model. This partnership is another step in CGI's overall e-business strategy.
- CGI recently announced the signing of a $100 million, five-year renewable contract with The Co-operators General Insurance Company. The agreement represents the expansion of an IT services contract initially signed in 1997. As part of the new agreement, The Co-operators General Insurance Company has committed to acquiring IT services from CGI with a total value of at least CDN$100 million. CGI also becomes a preferred IT services supplier for The Co-operators General Insurance Company, which ranks as Canada's third largest property & casualty insurance company.
CGI is the largest Canadian information technology consulting firm and the fifth largest independent IT consulting firm in North America, based on its revenue run rate of CDN$1.5 billion. Its order backlog totals CDN$7.2 billion. CGI has 10,000 professionals and provides end-to-end IT services and business solutions to 2,500 clients in Canada, the United States and more than 23 countries around the world. CGI's shares are listed on the New York Stock Exchange (GIB), as well as on the Toronto exchange (GIB.A). They are included in the Toronto Stock Exchange's TSE 300 Composite and TSE 100 indexes. Web site:www.cgi.ca.
All statements contained in this or any other press release of CGI Group Inc., or in any document filed by the Company with the U.S. Securities and Exchange Commission, or in any other written or oral communication by or on behalf of the Company, that do not directly and exclusively relate to historical facts, constitute "forward looking statements" within the meaning of the U.S. Private Securities Litigation Report Act of 1995. These statements represent the Company's expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved.
This press release may contain forward looking statements that involve a number of risks and uncertainties, including statements regarding the outlook for the company's business and results of operations. There are a number of factors that could cause actual results to differ materially from those indicated. Such factors include, without limitation, the various factors set forth in the Company's annual report or Form 40F filed with the SEC and its Annual Information Form filed with Canadian securities commissions, which important factors are included here by reference.
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For further information, contact:
CGI
André Imbeau
Executive Vice-President and Chief Financial Officer
Tel: (514) 841-3200
Paule Doré
Executive Vice-President, Corporate Affairs
Tel: (514) 841-3200
