CGI reports second quarter Fiscal 2024 results
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Continuing to deliver shareholder value with strong net earnings and cash generation
Q2-F2024 performance highlights
- Revenue of
$3.74 billion , up 0.7% year-over-year and stable year-over-year in constant currency1; - Earnings before income taxes of
$577.4 million , up 2.3% year-over-year, for a margin1 of 15.4%; - Adjusted EBIT1 of
$628.5 million , up 4.6% year-over-year, for a margin1 of 16.8%; - Net earnings of
$426.9 million , up 1.8% year-over-year, for a margin1 of 11.4%; - Net earnings excluding specific items1,2 of
$459.4 million , up 5.6% year-over-year, for a margin1 of 12.3%; - Diluted EPS of
$1.83 , up 4.0% year-over-year; - Diluted EPS excluding specific items1,2 of
$1.97 , up 8.2% year-over-year; - Cash from operating activities of
$502.0 million , representing 13.4% of revenue1; - Bookings1 of
$3.75 billion , for a book-to-bill ratio1 of 100.4% or 112.8% on a trailing twelve month basis; and - Backlog1 of
$26.82 billion or 1.9x annual revenue.
Note: All figures in Canadian dollars. Q2-F2024 MD&A, interim condensed consolidated financial statements and accompanying notes can be found at cgi.com/investors and have been filed with the Canadian Securities Administrators on SEDAR+ at www.sedarplus.ca and the
Q2-F2024 results
"In the quarter, our team continued to deliver shareholder value with strong net earnings and cash generation, even as some client industries continued to face uncertain economic conditions," said
For the second quarter of Fiscal 2024, the Company reported revenue of
____________________________ |
1 Constant currency revenue growth, adjusted EBIT, adjusted EBIT margin, net earnings excluding specific items, net earnings margin excluding specific items and diluted EPS excluding specific items are non-GAAP financial measures or ratios. Earnings before income taxes margin, net earnings margin, cash from operating activities as a percentage of revenue, bookings, book-to-bill ratio, and backlog are key performance measures. See "Non-GAAP and other key performance measures" section of this press release for more information, including quantitative reconciliations to the closest International Financial Reporting Standards (IFRS) measure, as applicable. These are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. |
2
Specific items in Q2-F2024 include: |
Earnings before income taxes were
Net earnings were
Net earnings excluding specific items1 were
Cash provided by operating activities was
Bookings were
As of
During the second quarter of Fiscal 2024, the Company invested
Return on invested capital was 15.9%, an increase of 30 basis points on a year-over-year basis.
As at
At the end of
___________________________ |
1
Specific items in Q2-F2024 include: |
Financial highlights |
Q2-F2024 |
Q2-F2023 |
Change |
In millions of Canadian dollars except earnings per share and where noted |
|
|
|
Revenue |
3,740.8 |
3,715.3 |
25.5 |
Year-over-year revenue growth |
0.7 % |
13.7 % |
(1,300 bps) |
Constant currency revenue growth |
0.0 % |
11.4 % |
(1,140 bps) |
Earnings before income taxes |
577.4 |
564.5 |
12.9 |
Margin % |
15.4 % |
15.2 % |
20 bps |
Adjusted EBIT |
628.5 |
600.8 |
27.7 |
Margin % |
16.8 % |
16.2 % |
60 bps |
Net earnings |
426.9 |
419.4 |
7.5 |
Margin % |
11.4 % |
11.3 % |
10 bps |
Net earnings excluding specific items1 |
459.4 |
435.0 |
24.4 |
Margin % |
12.3 % |
11.7 % |
60 bps |
Diluted EPS |
1.83 |
1.76 |
0.07 |
Diluted EPS excluding specific items1 |
1.97 |
1.82 |
0.15 |
Weighted average number of outstanding shares (diluted) In millions of shares |
233.3 |
238.5 |
(5.2) |
Net finance costs |
7.5 |
15.4 |
(7.9) |
Long-term debt and lease liabilities2 |
3,028.9 |
3,852.7 |
(823.8) |
Net debt3 |
1,730.5 |
2,529.0 |
(798.5) |
Net debt to capitalization ratio3 |
16.4 % |
24.0 % |
(760 bps) |
Cash provided by operating activities |
502.0 |
469.1 |
32.9 |
As a percentage of revenue |
13.4 % |
12.6 % |
80 bps |
Days sales outstanding (DSO)3 |
40 |
41 |
(1) |
Purchase for cancellation of Class A subordinate voting shares |
(260.0) |
(400.0) |
140.0 |
Return on invested capital (ROIC)3 |
15.9 % |
15.6 % |
30 bps |
Bookings |
3,754 |
3,839 |
(85) |
Backlog |
26,823 |
25,241 |
1,582 |
To access the financial statements – click here
To access the MD&A – click here
________________________________ |
1
Specific items in Q2-F2024 include: $0.1 million in acquisition-related and integration costs and |
2 Long-term debt and lease liabilities include both the current and long-term portions of the long-term debt and lease liabilities. |
3 Net debt, net debt to capitalization ratio and ROIC are non-GAAP financial measures or ratios. DSO is a key performance measure. See "Non-GAAP and other key performance measures" section of this press release for more information, including quantitative reconciliations to the closest International Financial Reporting Standards (IFRS) measure, as applicable. These are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. |
Retirement of
After nearly 18 years serving on CGI's Board of Directors,
Q2-F2024 results conference call
Management will host a conference call this morning at
About CGI
Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 90,000 consultants and professionals across the globe, CGI delivers an end-to-end portfolio of capabilities, from strategic IT and business consulting to systems integration, managed IT and business process services and intellectual property solutions. CGI works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. CGI Fiscal 2023 reported revenue is
Forward-looking information and statements
This press release contains "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable
Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in the section titled Risk Environment of CGI's annual and quarterly MD&A, which is incorporated by reference in this cautionary statement. We also caution readers that the above-mentioned risks and the risks disclosed in CGI's annual and quarterly MD&A and other documents and filings are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.
Non-GAAP and other key performance measures
Non-GAAP financial measures and ratios used in this press release: Constant currency revenue growth, adjusted EBIT, adjusted EBIT margin, net earnings excluding specific items, net earnings margin excluding specific items, diluted EPS excluding specific items, net debt, net debt to capitalization ratio, and return on invested capital (ROIC). CGI reports its financial results in accordance with IFRS. However, management believes that these non-GAAP measures provide useful information to investors regarding the company's financial condition and results of operations as they provide additional measures of its performance. These measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers and should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS. Key performance measures used in this press release: cash from operating activities as a percentage of revenue, bookings, book-to-bill ratio, backlog, days sales outstanding (DSO), earnings before income taxes margin, and net earnings margin.
Below are reconciliations to the most comparable IFRS financial measures and ratios, as applicable.
The descriptions of these non-GAAP measures and ratios and other key performance measures can be found on pages 3, 4 and 5 of our Q2-F2024 MD&A which is posted on CGI's website, and filed with the Canadian Securities Administrators on SEDAR+ at www.sedarplus.ca and the
Reconciliation between constant currency revenue growth and growth
|
For the three months ended |
For the six months ended |
||||
|
2024 |
2023 |
% |
2024 |
2023 |
% |
In thousands of CAD except for percentages |
||||||
Total CGI revenue |
3,740,814 |
3,715,324 |
0.7 % |
7,343,784 |
7,165,596 |
2.5 % |
Constant currency revenue growth |
0.0 % |
|
|
0.7 % |
|
|
Foreign currency impact |
0.7 % |
|
|
1.8 % |
|
|
Variation over previous period |
0.7 % |
|
2.5 % |
|
|
Reconciliation between earnings before income taxes and adjusted EBIT
|
For the three months ended |
For the six months ended |
||||||
|
2024 |
% of |
2023 |
% of |
2024 |
% of |
2023 |
% of |
In thousands of CAD except for percentage |
|
|
|
|
|
|
|
|
Earnings before income taxes |
577,437 |
15.4 % |
564,457 |
15.2 % |
1,104,572 |
15.0 % |
1,081,005 |
15.1 % |
Plus the following items: |
|
|
|
|
|
|
|
|
Acquisition-related and integration costs |
145 |
— % |
20,945 |
0.6 % |
2,323 |
— % |
40,369 |
0.6 % |
Cost optimization program |
43,401 |
1.2 % |
— |
— % |
91,063 |
1.2 % |
— |
— % |
Net finance costs |
7,472 |
0.2 % |
15,366 |
0.4 % |
14,730 |
0.2 % |
33,507 |
0.5 % |
Adjusted EBIT |
628,455 |
16.8 % |
600,768 |
16.2 % |
1,212,688 |
16.5 % |
1,154,881 |
16.1 % |
Net earnings and Diluted EPS, excluding specific items
|
For the three months ended |
For the six months ended |
||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
In thousands of CAD except for percentages and shares data |
|
|
|
|
|
|
Earnings before income taxes |
577,437 |
564,457 |
2.3 % |
1,104,572 |
1,081,005 |
2.2 % |
Add back: |
|
|
|
|
|
|
Acquisition-related and integration costs |
145 |
20,945 |
(99.3 %) |
2,323 |
40,369 |
(94.2 %) |
Cost optimization program |
43,401 |
— |
— % |
91,063 |
— |
— % |
Earnings before income taxes excluding specific items |
620,983 |
585,402 |
6.1 % |
1,197,958 |
1,121,374 |
6.8 % |
Income tax expense |
150,565 |
145,042 |
3.8 % |
287,904 |
279,211 |
3.1 % |
Effective tax rate |
26.1 % |
25.7 % |
|
26.1 % |
25.8 % |
|
Add back: |
|
|
|
|
|
|
Tax deduction on acquisition-related and integration costs |
31 |
5,406 |
(99.4 %) |
464 |
8,982 |
(94.8 %) |
Impact on effective tax rate |
— % |
— % |
|
— % |
(0.1 %) |
|
Tax deduction on cost optimization program |
10,986 |
— |
— % |
22,956 |
— |
— % |
Impact on effective tax rate |
(0.1 %) |
— % |
|
(0.1 %) |
— % |
|
Income tax expense excluding specific items |
161,582 |
150,448 |
7.4 % |
311,324 |
288,193 |
8.0 % |
Effective tax rate excluding specific items |
26.0 % |
25.7 % |
|
26.0 % |
25.7 % |
|
Net earnings excluding specific items |
459,401 |
434,954 |
5.6 % |
886,634 |
833,181 |
6.4 % |
Net earnings margin excluding specific items |
12.3 % |
11.7 % |
|
12.1 % |
11.6 % |
|
Weighted average number of shares outstanding |
|
|
|
|
|
|
Class A subordinate voting shares and Class B shares (multiple voting) (basic) |
229,602,790 |
235,042,445 |
(2.3 %) |
229,952,633 |
235,590,459 |
(2.4 %) |
Class A subordinate voting shares and Class B shares (multiple voting) (diluted) |
233,264,256 |
238,504,523 |
(2.2 %) |
233,612,683 |
238,998,951 |
(2.3 %) |
Earnings per share excluding specific items (in dollars) |
|
|
|
|
|
|
Basic |
2.00 |
1.85 |
8.1 % |
3.86 |
3.54 |
9.0 % |
Diluted |
1.97 |
1.82 |
8.2 % |
3.80 |
3.49 |
8.9 % |
Reconciliation between long-term debt and lease liabilities and net debt
As at |
2024 |
2023 |
In thousands of CAD except for percentages |
|
|
Reconciliation between long-term debt and lease liabilities1 and net debt: |
|
|
Long-term debt and lease liabilities 1 |
3,028,869 |
3,852,717 |
Minus the following items: |
|
|
Cash and cash equivalents |
1,266,854 |
1,280,800 |
Short-term investments |
6,143 |
4,737 |
Long-term investments |
19,390 |
18,114 |
Fair value of foreign currency derivative financial instruments related to debt |
5,946 |
20,110 |
Net debt |
1,730,536 |
2,528,956 |
Net debt to capitalization ratio |
16.4 % |
24.0 % |
Return on invested capital |
15.9 % |
15.6 % |
Days sales outstanding |
40 |
41 |
1 |
As at |
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