CGI Group Inc. (NYSE:GIB) Q4 2015 Earnings Conference Call - Final Transcript

Nov 11, 2015 • 09:00 am ET


CGI Group Inc. (NYSE:GIB) Q4 2015 Earnings Conference Call - Final Transcript


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Francois Boulanger

26% to 28%, excluded from this range is a CAD6 million one-time expense to be taken this quarter related to a UK corporate tax rate change for which details are outlined in the MD&A.

This is an additional headwind of approximately CAD0.02 to Q1 EPS. Turning to cash, our operations generated a record CAD451 million, or 17.5% of revenue. For the year, the operations generated CAD1.3 billion in cash or 12.5% of revenue. We ended fiscal 2015 with a DSO of 44 days within our 45-day target.

In the quarter, we repaid CAD121 million of the long-term debt and repurchased 5.1 million shares at an average price or CAD47.23 for a total investment of CAD239 million. Under the current program, we can still buy back approximately 12.1 million shares before mid-February. We continue to see our shares as a strategic investment based on a compelling valuation relative to the peer group.

Net debt at the end of September was CAD1.8 billion or CAD334 million lower than last year, improving the net debt to capitalization ratio from 28% to under 22%. With a fully available revolving credit facility and CAD305 million in cash, we have CAD1.8 billion in readily available liquidity and access to more as needed to continue executing our profitable growth strategy.

Before concluding, I would like to point out the most prominent change we have made to our reporting structure. To better reflect our proximity model, the Nordics is now a standalone SBU and consist of Denmark, Finland, Norway and Sweden, each of which is led by a local leader. In order to compare year-over-year performance, we have published the historic revenue and adjusted EBIT of each new segment for all four quarters of fiscal 2015.

I'll turn the call over to Mike.

Michael Roach

Thank you, Francois, and good morning, everyone.

As Francois provided the details of quarter four, I will focus my comments on the full-year results and then wrap up with an update with respect to our profitable growth strategy and outlook. Our team delivered very solid performance in fiscal 2015.

Revenue of CAD10.3 billion; bookings up 14% to CAD11.6 billion for a book-to-bill of 113%; adjusted EBITDA, up CAD100 million to CAD1.5 billion; EBIT margin, up 130 basis points to 14.2%; net earnings, up 12% to CAD1 billion; earnings per share expanded by 13% to CAD3.04 per share; and finally, cash generated by operations was up CAD115 million to CAD1.3 billion or over CAD4 in cash per share.

We reinvested our cash in the most strategic and accretive opportunities. We invested over CAD250 million back into our operations. Specifically, we invested, and we'll continue to invest, in account management to support our proximity model, industry expertise to drive high-end consulting growth, solution development in line with our goal of IP 30, and finally, delivery automation in our global delivery centers to enable more efficient outsourcing options for our clients.

CAD900 million against the long-term debt, which will not be a priority in fiscal 2016 as the