CGI posts strong Q2 results

Montréal, QC - 30 April 2014

Revenue grows 7% and EPS doubles year-over-year  

Q2-F2014 year-over-year highlights

  • Revenue of $2.7 billion, up 7.0%;
  • Bookings of $2.9 billion, or 105.4% of revenue;
  • Backlog of $19.5 billion, up $1.5 billion;
  • Adjusted EBIT of $341.5 million, up 30.5%;
  • Adjusted EBIT margin of 12.6%, up 220 basis points;
  • Net earnings of $230.9 million or diluted EPS of $0.73;
  • Net earnings of $229.6 million, or diluted EPS of $0.72 excluding specific items;
  • Cash provided by operating activities of $350.7 million;
  • Repurchased 346,700 shares during the quarter;
  • Return on invested capital of 13.4%.

*All figures in Canadian dollars. Q2-F2014 MD&A, interim condensed consolidated financial statements and accompanying notes have been filed with both SEDAR in Canada and EDGAR in the U.S.

CGI (TSX: GIB.A) (NYSE: GIB) reported fiscal 2014 second quarter revenue of $2.7 billion, compared with $2.5 billion in the year ago period, representing growth of 7.0%.

During the quarter, the Company booked $2.9 billion in contract awards, of which 40% was new business, for a book-to-bill ratio of 105.4%. This brings the global trailing twelve months bookings to $10.9 billion or 105.3% of revenue. At the end of March 2014, the Company’s backlog of signed orders stood at $19.5 billion, up $1.5 billion compared with the same period last year.  

Adjusted EBIT was $341.5 million, for a margin of 12.6%. This represents an improvement of 30.5% compared with $261.6 million, or 10.4% of revenue in the year ago period.

Net earnings in the quarter were $230.9 million or 73 cents per diluted share. This compares to $114.2 million or 36 cents per diluted share in Q2-F2013. 

Excluding specific items, net earnings were $229.6 million or 72 cents per diluted share. This compares with $175.9 million or $0.56 per diluted share in Q2-F2013, representing an improvement of 28.6%.

The company generated $350.7 million in cash from operating activities during the quarter, and $400.5 million when excluding the $49.8 million of integration-related payments. Over the last twelve months, excluding the integration-related cash disbursements, CGI has generated $949.1 million in cash or $2.98 per diluted share.

In millions of Canadian dollars except earnings per share and where noted  
 Q2-F2014 Q2-F2013
Revenue2,704.32,526.2
Adjusted EBIT
Margin
341.5
12.6%
261.6
10.4%
Net earnings, excluding specific items*
Margin
229.6
8.5%
175.9
7.0%
Earnings per share (diluted), excluding specific items*0.720.56
Net earnings
Margin
230.9
8.5%
114.2
4.5%
Earnings per share (diluted)0.730.36
Weighted average number of outstanding shares (diluted)316,695,250315,760,249
Net finance costs25.030.3
Net debt2,678.22,914.3
Net debt to capitalization ratio35.6%43.0%
Cash provided by operating activities350.7147.2
Days of sales outstanding (DSO)4746
Return on invested capital13.4%11.1%
Bookings2,850.32,210.2
Backlog19,47618,019

*Specific items include: $26 million in integration-related expenses ($81.4 million in Q2-F2013), a tax benefit of $11.9 million and the resolution of acquisition-related provisions in the amount of $11.7 million.

“Our strong performance in the quarter is a clear reflection of our ongoing ability to execute our business model on a global basis,” said Michael E. Roach, President and CEO.  “Our ability to generate increased cash from operations is becoming more visible as we complete the $525 million investment in our integration program. Looking ahead, our focus will be on intensifying the expansion and conversion of our pipeline of opportunities into bookings and high quality revenue, reflecting our diversified market coverage.” 

During the quarter the Company repurchased 346,700 shares for $11.5 million, at an average price of $33.08. Net debt was $2.7 billion at the end of March 2014, representing a net debt to capitalization ratio of 35.6% compared to 43.0% at the end of March 2013. At the end of Q2-F2014, the Company had approximately $1.5 billion in available cash and unused credit facilities.

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