CGI REPORTS SOLID RESULTS IN THIRD QUARTER FISCAL 2003

Click here to access the Q3 F2003 financial results

CGI Group Inc. (NYSE: GIB; TSX: GIB.A), a leading provider of end-to-end information technology ("IT") and business processing outsourcing ("BPO"), today reported unaudited results for the quarter ended June 30, 2003. All figures are in Canadian dollars unless otherwise indicated.

Third Quarter Financial Highlights

• Revenue of $734.0 million was 32.7% higher than revenue reported in the third quarter of fiscal 2002 and essentially flat compared with the second quarter.
• Net earnings increased 29.0% to $47.1 million from last year's third quarter net earnings, and were up 5.0% sequentially.
• Basic and diluted earnings per share of $0.12 were up over basic and diluted earnings per share of $0.10 reported in the third quarter of fiscal 2002 and $0.11 reported in the previous quarter. The net earnings margin increased to 6.4% from 6.1% in the second quarter.
• Cash flow from operating activities was $117.0 million; free cash flow was $95.5 million.
• CGI's business process outsourcing activities represented approximately 20% of total revenue.
• New contract bookings, renewals and extensions totaled $429.2 million in the quarter.
• As a result of $2 billion in bookings announced since the end of the third quarter, including $1.5 billion attributable to BCE, CGI's backlog of signed contracts stands at $12.5 billion, with a weighted average remaining contract term of 7.7 years.
• The current pipeline of bids for large outsourcing contracts being reviewed by potential clients remains at $5 billion.

Serge Godin, CGI's chairman and CEO said, "We are pleased with the results we achieved in the third quarter. Despite several tough markets, CGI has signed a good combination of new contracts, extensions and renewals with new and existing clients, while driving improved margins and strong cash flow. The strong bookings trend realized since the end of the third quarter with a total value of $2 billion is a reflection of CGI's momentum and confirms our ability to dynamically transform our pipeline of bids into a firm backlog."

Third Quarter Results (See also: Q3 FY03 MD&A filed with Sedar & Edgar and available at www.cgi.com)
Revenue for the third quarter ended June 30, 2003 increased 32.7% to $734.0 million, from $553.4 million in the same quarter last year. The contribution of acquisitions made during the fiscal year, in particular INSpire, UAB and Cognicase, represented 30.2% year-over-year growth. Third quarter revenue, when compared to second quarter revenue of $736.1 million, was impacted by approximately $10.9 million as a result of the strong Canadian dollar and resulting exchange rates of reported foreign revenue. The Company's decision to shut down certain former Cognicase operations, or withdraw from unprofitable engagements entered into by the former Cognicase, also reduced revenue in the quarter by approximately $4.4 million.

In the third quarter, revenue from long-term outsourcing contracts represented 71% of the Company's total revenue, while project oriented systems integration and consulting ("SI&C") work represented 29%. Business Process Outsourcing services represented approximately 20% of total revenue. Geographically, clients in Canada represented 80% of revenue; clients in the US represented 16%; and clients in all other regions, 4%. Clients in the financial services sector represented 41% of revenue; clients in the telecom sector represented 19%; manufacturing, retail and distribution clients, 16%; government clients, 14%; utilities and services, 8%; and healthcare, 2%.

Earnings before interest and income taxes ("EBIT") were $80.6 million in the third quarter, up 29.1% over last year's third quarter EBIT of $62.4 million and up 3.0% over second quarter EBIT of $78.2 million. The EBIT margin was 11.0%, down slightly from 11.3% in last year's third quarter, but improved over the second quarter's EBIT margin of 10.6%. The sequential improvement in EBIT and the EBIT margin resulted from a combination of improved profitability in the US, European and BPS business units, greater economies of scale, including further synergies realized from the acquisition of Cognicase, as well as the continued focus on project and cost management.

Net earnings in the third quarter increased 29.0% to $47.1 million, compared with $36.5 million in the same quarter a year ago. Basic and diluted earnings per share increased to $0.12 for the quarter, compared with $0.10 reported in last year's third quarter and $0.11 in the previous quarter. CGI's weighted average number of outstanding shares was up 5.6% compared with the third quarter of 2002 and up 1.1% sequentially. The net margin was 6.4%, compared with 6.6% in the third quarter of fiscal 2002, but up sequentially from 6.1% in the second quarter. The year-over-year difference is partly a result of higher interest expenses in the quarter associated with debt incurred for the acquisitions of UAB and Cognicase.

Cash provided by operating activities increased to $117.0 million, compared with the second quarter when several one-time items contributed to the $16.8 million required for operating activities. Notwithstanding the positive effect of $36.7 million in tax credits received for E-Commerce Place, operating cash flow improved to more normalized levels in the quarter. These tax credits are accrued for throughout the year, but the payment is generally received in the third quarter.

CGI's balance sheet remains strong, giving the company plenty of flexibility to finance future growth from large contract wins and acquisitions. At June 30, 2003, CGI had cash and cash equivalents of $126.6 million and a total credit facility available of $223.4 million. CGI's debt decreased by $18.1 million since March 31, 2003 and represents a debt to equity ratio of 17.8%.

Nine-month Highlights
For the first nine months of fiscal 2003 ended June 30, 2003, revenue increased 28.9% to $2,059.1 million, from $1,597.8 million in the corresponding period of fiscal 2002. EBIT for the first nine months of fiscal 2003 increased 27.6% to $219.5 million from $172.0 million in same period a year ago. Net earnings in the first nine months increased 28.5% to $128.9 million compared to net earnings for the nine-month period ended June 30, 2002 of $100.3 million. Finally, basic and diluted earnings per share of $0.33, based on a 4.4% increase in weighted average number of outstanding shares, compared to $0.27 for the same period one year ago.

Initiatives and Outlook
Based on results to date and current expectations, CGI is narrowing its guidance for fiscal 2003 and expects revenue of between $2.75 and $2.825 billion and earnings per share in the range of $0.45 to $0.46, representing year-over-year top and bottom line growth rates of 25%-28%. This guidance reflects recent actions taken relative to the acquisition of Cognicase, to protect bottom line performance at the short-term expense of modestly reducing the revenue run rate. In the third quarter these actions included the termination of unprofitable SI&C and IT outsourcing contracts, the sale of the engineering and construction activities in Saguenay, and the closing of the Company's Calgary-based accountant placement agency. This guidance is also based on what is known today about current market conditions and the fluctuation of currency exchange rates. It excludes the impact of other acquisitions or large outsourcing contracts contributing more than $100 million per year in revenue.

CGI will provide guidance for fiscal 2004 when reporting its fourth quarter results. Although still in the planning process for its fiscal year 2004, CGI expects to achieve double-digit organic growth in the next year and to outpace the average of its industry peers. This growth objective is before the effect of large acquisitions.

Mr. Godin added, "As evidenced by our improving margins and cash flow in the third quarter, CGI's business unit managers achieved further operational efficiencies in our integration of Cognicase. They also refocused on internal growth initiatives and the strong bookings recently announced reflect their initial efforts. With the recent announcement of our renewed partnership and amended Shareholders Agreement with BCE, the future of CGI's of ownership and management is perfectly clear. CGI, our members and our clients can focus completely on achieving strong growth in all our markets, especially for large IT and business process outsourcing opportunities."

Quarterly Conference Call
A conference call for the investment community will be held today, July 29, at 9:00 am (Eastern Time). Participants may access the call by dialing 888-575-8230 or through the Internet at www.cgi.com. Supporting slides for the call will also be available at www.cgi.com. For those unable to participate on the live call, a webcast and copy of the slides will be archived at www.cgi.com.

Forward-Looking Statements
All statements in this press release that do not directly and exclusively relate to historical facts constitute "forward-looking statements" within the meaning of that term in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. These statements represent CGI Group Inc.'s intentions, plans, expectations, and beliefs, and are subject to risks, uncertainties, and other factors, of which many are beyond the control of the Company. These factors could cause actual results to differ materially from such forward-looking statements.

These factors include and are not restricted to the timing and size of contracts, acquisitions and other corporate developments; the ability to attract and retain qualified employees; market competition in the rapidly-evolving information technology industry; general economic and business conditions, foreign exchange and other risks identified in the Management's Discussion and Analysis (MD&A) in CGI Group Inc.'s Annual Report or Form 40-F filed with the SEC, the Company's Annual Information Form filed with the Canadian securities authorities, as well as assumptions regarding the foregoing. The words "believe", "estimate", "expect", "intend", "anticipate", "foresee", "plan", and similar expressions and variations thereof, identify certain of such forward-looking statements, which speak only as of the date on which they are made. In particular, statements relating to future growth are forward-looking statements. CGI disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

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12 pages of financial tables and notes accompany this release.

For more information:

CGI Investor Relations
Julie Creed
Vice-president, Investor Relations
(514) 841-3200 or (312) 201-4803

Ronald White
Director, Investor Relations
(514) 841-3230

CGI Media Relations
Eileen Murphy
Director, Media Relations
(514) 841-3430