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

Nov 11, 2015 • 09:00 am ET

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

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Q & A
Executive
Michael Roach

of companies looking here in terms of their own strategic plans. And with this shift in technology and where the customers are going, there's clearly some entrepreneurs and various companies looking at whether or not they want to go it alone or do they want to be part of the larger consolidated market.

So, we're kind of seeing both out there. Valuations, there's still the issue that we run into over the years especially around an entrepreneurial base firm. We can never pay an entrepreneur for the sweat equity that they put into the company over 20 or 30 years, of course, and we have to base it on solid valuation criteria. So, you get some discussions around that area.

But we are as I mentioned, as part of our process, we have met and are meeting with management teams of potential targets and having those discussions. And we're also adding to the list which I wanted to mention, it's not a static list because what happens as we start out there talking to companies and talking to customers on a daily basis, we're getting other suggestions which we're also putting in the funnel.

So I think you should look at the acquisition funnel much like we look at the sales funnel on the build side. It's fluid. It can go up. It can go down. Suffice to say that it's a healthy funnel, and it will take some time to go through it, but we're on it. And as I mentioned, we do have the financial capability, not only to continue to invest in the business, buyback our shares, but also do a series or a large transformational acquisition in '16.

Analyst
Richard Tse

That's great. Thank you, Mike.

Operator
Lorne Gorber

Thanks, Richard.

Analyst
Operator

Thank you. The following question is from Maher Yaghi from Desjardins Capital Markets. Please go ahead.

Analyst
Maher Yaghi

Yes. Thank you for taking my question and good job on the quarter, guys. I just wanted to talk a little bit about your expectations about margins from here because correct me if I'm wrong, but after correcting for some of the help that you got on some one time items in Q4 last year, this is one of your highest-margin quarter ever.

Where you see those margins heading in 2016, given the funnel of business that you have signed and the integration that's taking place? And second one, when we look at these margins, some might argue that you might not be making enough investment in the business to continue to grow on an organic basis and grab market share. What would you say about that, Mike?

Executive
Michael Roach

Well, I can take the last one first. I don't know who would say that. It might be somebody who's trying to give some context around their own margins. This is not an either/or. I often say, in life, you have to be able to run and chew gum at the same time. So when you look at our business, we are focused on EPS growth. EPS