CGI Group Inc. (NYSE:GIB) Q4 2015 Earnings Conference Call - Final Transcript
Nov 11, 2015 • 09:00 am ET
We will now take the questions from the telephone lines.
Our first question is from Richard Tse from Cormark Securities. Please go ahead.
Yes. Thank you. Mike, just wanted to get some perspective. In which verticals do you guys see the greatest opportunity for growth here over the next, call it, 12 months to 24 months?
Thank you for the question, Richard. And it's nearly a lay-up in the sense that the financial vertically-globally as I mentioned, are really in an investment phase. They're committed to transforming their business. They're dealing with the cost as I mentioned of an increasing run cost just to operate their businesses. This has been driven by regulatory requirements, competitive pressures for new products and new solutions.
And on the other hand, they have to free up capital to invest in this transformation. I think if you catch The Globe today in Toronto, there's a whole article on Toronto-Dominion Bank that really outlines exactly what I'm speaking about here. I think a couple of weeks ago we saw Scotia announce an investment in digitization center of excellence.
So, we see this across the globe and this is one of the reasons why not only in Toronto, but in the other big markets of London, New York, Paris, we're investing heavily in our banking financial business and we're starting to see, as I mentioned, the return in Toronto. We're growing sequentially in our banking division and we're growing year-over-year, and our funnel is very, very healthy, made up of not only longer term but some near-term opportunities that we expect to close here in the next 60 days or so.
So on that, would it be safe to say that when you're looking at M&A that would be sort of the type of transaction you'd be interested in doing, a firm that would be more focused on financials?
I think if we could find something, financials are certainly at the top of the list. But again, also trying to look for IP that crosses -- that's horizontal, so I could leverage it beyond a single vertical. But if I look at it, certainly financials, we have a good portfolio there now. So to be able to add to that or fill in any gaps would be very helpful.
On the other hand, Richard is -- as I mentioned earlier, we want to help the customers actually design their digital strategies, so again, moving up the stack in terms of more consulting capabilities, getting closer to the customer strategy piece, and making that link between their business requirements and their IT requirements is also a very sweet spot for us.
Okay. And just last question, I know you have like 85 potential deals that you're looking at. But would you say the environment for M&A today is more attractive than it's been in the past 12 months maybe from evaluation perspective or other?
Well, again, I would say our sense is, there's a lot