CGI Group Inc. (NYSE:GIB) Q4 2019 Earnings Conference Call Transcript

Nov 06, 2019 • 11:00 am ET

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CGI Group Inc. (NYSE:GIB) Q4 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, welcome to the CGI Fourth Quarter and Fiscal Year 2019 Conference Call. I would now like to turn the meeting over to Mr. Lorne Gorber, Executive Vice President, Investor and Public Relations. Please go ahead, Mr. Gorber.

Executive
Lorne Gorber

Thank you, Valerie, and good morning. With me to discuss CGIs Fourth Quarter and Fiscal Year 2019 results are George Schindler, our President and CEO; and Francois Boulanger, Executive Vice President and CFO. This call is being broadcast on cgi.com and recorded live from Montreal at 9:00 a.m. Eastern Time on November 6th, 2019. Supplemental slides as well as the press release we issued earlier this morning are available for download, along with our 2019 MD&A, financial statements and accompanying notes, all of which are filed with both SEDAR and EDGAR.

Please note that some statements made on the call may be forward looking. Actual events or results may differ materially from those expressed or implied and CGI disclaims any intent or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable laws. The complete safe harbor statement is available on both our MD&A and press release as well as on cgi.com. We encourage our investors to read it in its entirety and to refer to the risks and uncertainties section of our MD&A for a description of the risks that could affect the company.

We are reporting our financial results in accordance with the International Financial Reporting Standards or IFRS. We will also discuss non-GAAP performance measures, which should be viewed as supplemental. The MD&A contains definitions of each one used in our reporting. All of the dollar figures expressed in this call are Canadian unless otherwise noted. With that, I'll turn it over to Francois now to review and provide context to our Q4 and full year financial performance, and then George will comment on our operational highlights and update our strategic outlook. Francois?

Executive
Francois Boulanger

Thank you, Lorne and good morning everyone. I am pleased to share our fourth quarter and fiscal 2019 results. Let's begin with Q4. Revenue was CAD2.96 billion, an increase of CAD160 million or 5.7% compared with Q4 last year. On a constant currency basis, revenue grew 7.7% of which approximately 4% was organic. IP Solutions and Services grew by 14% year-over-year and now account for 22% of revenue. Q4 book -- Q4 bookings totaled CAD3.4 billion for a book-to-bill of 115%.

Our focus on bringing clients more end-to-end services in IT is driving scope expansions and new add-on work, particularly in the US. In Q4, following the pipeline shift seen in [Indecipherable] quarters, 53% of total bookings were from our managed IT services. In fact, eight of the top 10 bookings were managed IT engagements. Adjusted EBIT in Q4 increased CAD457 million for a margin of 15.5% up CAD22 million year-over-year, reflecting the quality of our revenue growth. Our effective tax rate in Q4 was 21.4%. When excluding a