48 slides from Cgi Inc. Class A's earnings presentation, Jul 27, 2006
Slide 1: CGI Group Inc. Quarterly Report
CGI Group Inc. Quarterly Report 3 For the third quarter ended June 30, 2006 Stock Exchanges Toronto Stock Exchange: GIB.A* New York Stock Exchange: GIB * Effective May 29, 2006, the TSX Group discontinued the “special voting” (.SV) extension on its equity exchanges. Shares Outstanding (as of June 30
Slide 2: Table of Contents
CGI Group Inc. Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Table of Contents INTRODUCTION ................................................................. 3 Gain on Sale of Assets ....................................
Slide 3: Introduction and Forward-looking Statements
CGI Group Inc. Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 July 26, 2006 Introduction Throughout this document, CGI Group Inc. is referred as to “CGI”, “we” , “our” or “Company”. This Management’s Discussion and Analy
Slide 4: Non-GAAP Measures
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 2. Net earnings from continuing operations prior to restructuring costs related to specific items. Adjusted EBIT is used by our management as a measure of our operating perf
Slide 5: About Our Business
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Our operations are managed through two lines of business (“LOB”), in addition to Corporate services, namely: IT services and BPS. The focus of these LOBs is as follows: • Th
Slide 6: Overview of the Quarter and New Contracts
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 in the third quarter bringing the total charge of the program thus far to $46.3 million. The Company expects to incur the remaining charge of approximately $44 million over
Slide 7: Key Performance Indicators
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 warrants are related to La Fédération des caisses Desjardins du Québec (“Desjardins”) warrants exercised during the second quarter 2006 in connection with a 10-year outsourc
Slide 8: Financial Review: Revenue Variation
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Financial Review Revenue Variation 3 months 3 months 9 months 9 months ended June ended June ended June ended June 30, 2006 30, 2005 30, 2006 30, 2005 Restated Restated Reve
Slide 9: Revenue by LOB
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Revenue by LOB 3 months 3 months 9 months 9 months ended June ended June Change ended June ended June Change 30, 2006 30, 2005 30, 2006 30, 2005 (in '000 of dollars) $ $ % $
Slide 10: Revenue Distribution
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Revenue distribution The following tables provide additionnal information regarding our revenue mix: C E D A B i A B A C ii B Contract Types Geographic markets Targeted Vert
Slide 11: Expenses
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Expenses 3 months 3 months 9 months 9 months ended June ended June Change ended June ended June Change 30, 2006 30, 2005 30, 2006 30, 2005 (in '000 of dollars) $ $ % $ $ % R
Slide 12: Adjusted EBIT by LOB
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Adjusted EBIT by LOB 3 months 3 months 9 months 9 months ended June ended June Change ended June ended June Change 30, 2006 30, 2005 30, 2006 30, 2005 (in '000 of dollars) $
Slide 13: Income from Continuing Operations before Income Taxes
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Income from continuing operations before income taxes The following table provides, for the periods indicated, a reconciliation between our adjusted EBIT and earnings from c
Slide 14: Restructuring Costs and Interest Expense
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 The following table details the restructuring costs related to specific items recorded in the statement of earnings during the nine months ended June 30, 2006: Consolidation
Slide 15: Earnings
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Earnings The following table includes a reconciliation between net earnings from continuing operations prior to restructuring costs related to specific items and net earning
Slide 16: Liquidity and Capital Resources
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 There were no discontinued operations in the third quarter of 2006. The gain of $1.1 million reported in the third quarter of 2005 was partially due to the settlement of lit
Slide 17: Investing and Financing Activities
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Other investing activities in the third quarter of 2006 included investments in finite-life intangibles and other long-term assets of $16.9 million, fixed assets of $5.1 mil
Slide 18: Capital Resources and Contractual Obligations
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 and a US tranche equivalent to $150.0 million. As at June 30, 2006, an amount of $381.6 million was available under this agreement. The agreement has a five-year term expiri
Slide 19: Financial Instruments and Off-Balance Sheet Financing
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 instrument contracts to hedge its net investment in foreign subsidiaries. Foreign exchange translation gain or loss on the net investment is recorded under foreign currency
Slide 20: Related Party Transactions
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Related Party Transactions In the normal course of business, CGI is party to contracts with Innovapost, a joint venture, pursuant to which CGI is its preferred IT supplier.
Slide 21: Critical Accounting Estimates
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Consolidated statements of earnings Restructuring Consolidated Costs of services, Amortization/ costs related balance selling and Impairment to specific Income Areas impacte
Slide 22: Critical Accounting Estimates (continued)
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 conclusion of whether it is more likely than not that future assets will be realized includes making assessments of expectations of future taxable income. The ultimate amoun
Slide 23: Contract Costs and Investment Tax Credits
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Contract Costs Certain costs incurred upon initiation of an outsourcing contract are deferred and amortized over the contract life. These costs consist primarily of incentiv
Slide 24: Summary of Significant Accounting Policies
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Summary of Significant Accounting Policies The interim consolidated financial statements for the three and nine months ended June 30, 2006 and 2005, are unaudited and includ
Slide 25: Risks and Uncertainties
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Risks and Uncertainties While we are confident about our long-term prospects, the following risks and uncertainties could affect our ability to achieve our strategic vision
Slide 26: Risks and Uncertainties (continued)
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 patent, copyright, trademark or trade secret infringement. In some instances, the amount of these indemnity claims could be greater than the revenue we receive from the clie
Slide 27: Risks and Uncertainties (continued)
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 of acquired companies and the IT operations of outsourcing clients. As at June 30, 2006, the majority of our operations had received ISO 9001 certification. Material develop
Slide 28: Risks and Uncertainties (continued)
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 Government tax credits risk – An acquisition of control of CGI could translate into a loss of provincial tax credits related to E-Commerce Place and the Cité Multimédia in M
Slide 29: Risks and Integrity of Disclosure
Management’s Discussion and Analysis of Financial Position and Results of Operations For the third quarter ended June 30, 2006 have on our future revenue, nor predict when economic conditions will show meaningful improvement. During an economic downturn, our clients and potential clients often cance
Slide 30: Consolidated Financial Statements
Consolidated Financial Statements of CGI GROUP INC. For the three and nine months ended June 30, 2006 and 2005
Slide 31: Consolidated Statements of Earnings
CGI GROUP INC. Consolidated Statements of Earnings For the three and nine months ended June 30 (in thousands of Canadian dollars, except share data) (unaudited) Three months ended Nine months ended June 30 June 30 2006 2005 2006 2005 Restated Restated $ $ $ $ Revenue 866,504 936,394 2,631,803 2,781,
Slide 32: Consolidated Balance Sheets
CGI GROUP INC. Consolidated Balance Sheets (in thousands of Canadian dollars) As at June 30, 2006 As at September 30, 2005 (unaudited) (audited) $ $ Assets Current assets Cash and cash equivalents 154,494 240,459 Accounts receivable 496,475 487,731 Work in progress 201,392 214,470 Prepaid expenses a
Slide 33: Consolidated Statements of Cash Flows
CGI GROUP INC. Consolidated Statements of Cash Flows For the three and nine months ended June 30 (in thousands of Canadian dollars) (unaudited)) Three months ended June 30 Nine months ended June 30 2006 2005 2006 2005 $ $ $ $ Operating activities Net earnings from continuing operations 35,944 56,621
Slide 34: Notes: Summary of Significant Accounting Policies
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 1. Summary of significant accounting policies The interim consolidated financial statemen
Slide 35: Notes: Change in Accounting Policies
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 1. Summary of significant accounting policies (continued) Change in accounting policies (
Slide 36: Notes: Finite-life Intangibles and Credit Facilities
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 2. Finite-life intangibles and other long-term assets As at June 30, 2006 As at September
Slide 37: Notes: Capital Stock, Stock Options and EPS
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 4. Capital stock, stock options and earnings per share a) Capital stock Changes in Class
Slide 38: Notes: Capital Stock (continued)
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 4. Capital stock, stock options and earnings per share (continued) a) Capital stock (cont
Slide 39: Notes: Earnings per Share
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 4. Capital stock, stock options and earnings per share (continued) c) Earnings per share
Slide 40: Notes: Investments in Subsidiaries and Joint Ventures
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 5. Investments in subsidiaries and joint ventures a) Acquisitions For all business acquis
Slide 41: Notes: Balance of Integration Charges
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 5. Investments in subsidiaries and joint ventures (continued) d) Balance of integration c
Slide 42: Notes: Restructuring Costs Related to Specific Items
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 7. Restructuring costs related to specific items On March 29, 2006, the Company announced
Slide 43: Notes: Restructuring Provision Components
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 7. Restructuring costs related to specific items (continued) The following table shows th
Slide 44: Notes: Segmented Information
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 9. Segmented information The Company has two lines of business (“LOB”): IT services (“IT”
Slide 45: Notes: Segmented Information (continued)
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 9. Segmented information (continued) As at and for the nine months ended June 30, 2006 IT
Slide 46: Notes: Sale of Right
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 10. Sale of right On June 15, 2005, the Company entered into an alliance (“arrangement”)
Slide 47: Notes: Guarantees
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 11. Guarantees (continued) Other transactions In the normal course of business, the Compa
Slide 48: Notes: Reconciliation of Canadian GAAP to US GAAP
CGI GROUP INC. Notes to the Consolidated Financial Statements For the three and nine months ended June 30, 2006 and 2005 (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) 12. Reconciliation of results reported in accordance with Canadian GAAP to US GAAP The ma