CGI reports strong first quarter Fiscal 2021 results

Q1-F2021 performance highlights

• Revenue of $3.02 billion;
• Adjusted EBIT of $495.7 million, and margin of 16.4%, up 90 basis points year-over-year;
• Net earnings of $343.5 million, up 18.4%, for a margin of 11.4%;
• Diluted EPS of $1.32, up 24.5% year-over-year;
• Net earnings excluding specific items* of $347.2 million and diluted EPS of $1.33;
• Cash from operating activities of $597.5 million, up 28.4% year-over-year; and
• Bookings of $3.40 billion, for a book-to-bill ratio of 112.5%.

To access the financial statements – click here (PDF)
To access the Q1-F2021 MD&A – click here (PDF)

MONTRÉAL, Jan. 27, 2021 - CGI (TSX: GIB.A) (NYSE: GIB) reported Fiscal 2021 first quarter results this morning.

"CGI started fiscal 2021 with strong results as our operational discipline and quality client delivery contributed to earnings growth" said President and Chief Executive Officer, George D. Schindler. "Our business pipeline continues to improve, with bookings up 24% year-over-year as clients are increasingly turning to technology, and CGI, to assist them as they navigate the continuing pandemic and prepare for a post-pandemic environment. Our ability to offer relevant, timely and actionable insights to our clients combined with our strong cash generation will continue to drive profitable growth."

For the first quarter of F2021, the Company reported revenue of $3.02 billion, compared with $3.05 billion in the same period last year.

Adjusted EBIT was $495.7 million, with EBIT margin of 16.4% representing an improvement of 90 basis points from 15.5% in the same period last year.

Net earnings were $343.5 million in Q1-F2021, up 18.4% compared with the same period last year, primarily due to improved margins and lower restructuring and integration expenses. Diluted earnings per share, as a result, expanded to $1.32 compared to $1.06 last year representing an increase of 24.5% year over year.

Excluding acquisition-related integration and restructuring costs, both net of tax, net earnings were $347.2 million in Q1-F2021 and margin of 11.5%. On the same basis, diluted earnings per share expanded by 8.1% to $1.33, up from $1.23 from the same period last year.

Bookings were $3.40 billion in Q1-F2021, up 23.5% year-over-year and representing a book-to-bill ratio of 112.5%. At the end of December 2020, the Company's backlog stood at $22.77 billion.

Cash provided by operating activities was $597.5 million, or 19.8% of revenue, representing an increase of 28.4% or $132.2 million compared with Q1-F2020.

At the end of December, net debt stood at $2.67 billion dollars, representing a net debt-to-capitalization ratio of 23.2%, down from 27.7% at the same time last year.

With cash of $1.68 billion on hand at the end of December 2020 and its revolving credit facility, the Company has $3.19 billion in readily available liquidity to pursue its Build and Buy profitable growth strategy.

Normal Course Issuer Bid
On January 26, 2021, the Company's Board of Directors authorized the renewal of its Normal Course Issuer Bid, which, subject to approval by the Toronto Stock Exchange, allows for the purchase for cancellation of up to 19.2 million Class A subordinate voting shares over the next 12 months, representing approximately 10% of the Company's public float as of the close of business on January 22, 2021. The current program will terminate on February 5, 2021 and repurchases of Class A subordinate voting shares under the renewed program may commence on February 6, 2021. For further information, please refer to the Company's press release regarding the renewal of its Normal Course Issuer Bid.

Q1-F2021 results conference call
Management will host a conference call this morning at 9:00 a.m. Eastern time to discuss results. Participants may access the call by dialing 1-877-879-0631 Conference ID: 7189191 or via cgi.com/investors. For those unable to participate on the live call, a podcast and copy of the slides will be archived for download at cgi.com/investors.

Annual General Meeting of Shareholders
This morning the company will hold its Annual General Meeting of Shareholders. The meeting will be held at 11:00 a.m. (EST) via live audio webcast at www.virtualshareholdermeeting.com/CGI2020.

About CGI
Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 76,000 consultants and other professionals across the globe, CGI delivers an end-to-end portfolio of capabilities, from strategic IT and business consulting to systems integration, managed IT and business process services and intellectual property solutions. CGI works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. CGI Fiscal 2020 reported revenue is C$12.16 billion and CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB). Learn more at cgi.com.

Non-GAAP financial metrics used in this press release: Constant currency growth, adjusted EBIT, adjusted EBIT margin, net debt, net debt to capitalization ratio, bookings, book-to-bill ratio, backlog, DSO, ROIC, ROE, net earnings margin, net earnings excluding specific items, net earnings margin excluding specific items, and diluted EPS excluding specific items.
CGI reports its financial results in accordance with IFRS. However, management believes that these non-GAAP measures provide useful information to investors regarding the company's financial condition and results of operations as they provide additional measures of its performance. Additional details for these non-GAAP measures can be found on pages 3 to 5 of our Q1-F2021 MD&A which is posted on CGI's website, and filed with SEDAR in Canada and EDGAR in the U.S.

Forward-looking information and statements
This press release contains "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbours. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbour provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI's intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as "believe", "estimate", "expect", "intend", "anticipate", "foresee", "plan", "predict", "project", "aim", "seek", "strive", "potential", "continue", "target", "may", "might", "could", "should", and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of CGI, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic and political conditions, external risks (such as pandemics) and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to attract and retain qualified employees, to develop and expand our services, to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws, our ability to negotiate favourable contractual terms, to deliver our services and to collect receivables, and the reputational and financial risks attendant to cybersecurity breaches and other incidents; as well as other risks identified or incorporated by reference in this press release, in CGI's annual and quarterly MD&A and in other documents that we make public, including our filings with the Canadian Securities Administrators (on SEDAR at www.sedar.com) and the U.S. Securities and Exchange Commission (on EDGAR at www.sec.gov). For a discussion of risks in response to the coronavirus (COVID-19) pandemic, see Pandemic Risks in section 10.1.1. of our annual and quarterly MD&A. Unless otherwise stated, the forward-looking information and statements contained in this press release are made as of the date hereof and CGI disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this press release, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in the section titled "Risk Environment" of CGI's annual and quarterly MD&A, which is incorporated by reference in this cautionary statement. We also caution readers that the above-mentioned risks and the risks disclosed in CGI's annual and quarterly MD&A and other documents and filings are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

SOURCE CGI Inc.

For more information:

Maher Yaghi, Vice-President, Investor Relations, maher.yaghi@cgi.com, +1 514-415-3651