CGI Inc.

Good morning, ladies and gentlemen, and welcome to the CGI first quarter fiscal 2020 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.

Thank you, Maud, and good morning. With me to discuss CGI's first quarter fiscal 2020 results are George Schindler, our President and CEO, and François Boulanger, Executive Vice President and CFO. This call is being broadcast on CGI.com and recorded live at 9 a.m. Eastern Time on Wednesday, January 29, 2020. Supplemental slides, as well as the press release we issued earlier this morning, are available for download, along with our Q1MDNA financial statements and accompanying notes, all of which are filed with both CEDAR and EDGAR and are available for download on our website, along with supplemental slides. 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. This complete safe harbor statement is available in 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 uncertainty 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 International Financial Reporting Standards, or IFRS. As before, we'll 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 on this call are Canadian and less otherwise noted. We are also hosting our AGM this morning, so we hope you will join us live or via the broadcast at 11 a.m. I'll turn it over to Francois now to review our Q1 financials, and then George will comment on our operational highlights and strategic outlook. Francois? Thank you, Loren, and good morning, everyone.

I'm pleased to share our results for Q1 fiscal 2020. Revenue was $3.05 billion, an increase of $90.8 million, or 3.1% compared with last year. On a constant currency basis, revenue grew 4.8%, of which approximately 1.2% was organic. Year-over-year IP-related revenue grew by $38 million and was 21% of total revenue. Bookings were $2.7 billion for a book-to-bill of 90%, impacted by the general election in the UK and seasonality in U.S. federal. Bookings across continental Europe were up sequentially, driven by managed services demand, including IP. Also, our pipeline across North America continues to grow, notably due to managed services opportunities. On a trailing 12-month basis, booking remained above 100% of revenue, totaling $12.4 billion. The backlog at the end of December stood at $22.3 billion, or 1.8 times annual revenue, despite the negative currency impact of approximately $900 million year over year. Beginning in Q1, we adopted IFRS 16, This accounting standard relates to the recognition of lease agreements onto the balance sheet. This change lowers our cost of sales and increases our net finance costs, resulting in a non-material impact to net earnings. I will comment on these variations, including the impact on the cash flow statement and our capital structure. Further details are included in the MD&A. Adjusted EBIT increased to $474.1 million, up $35 million, or 8% from last year. EBIT margin was up 70 basis points to 15.5%, driven by revenue growth across several geographies, efficiency gains in our global delivery centers, the initial benefits of optimizing our infrastructure operation, and a favorable $9.7 million impact from IFRS 16. our effective tax rate for a quarter was 26.7% compared to 25.9% last year. When excluding the impact on non-deductible restructuring expenses, our effective tax rate was 25.1% within the expected range of 24.5% to 26.5%. As announced last November, we are investing up to $40 million to optimize and restructure our Swedish infrastructure operations, to exit Brazil, and to refocus Portugal as a near-shore delivery center. During the quarter, we incurred $28.2 million of related expenses, net of tax. We also expensed $16.5 million in Q1 related to the acquisitions and integrations of Acando and FISIS. When including these specific items, net earnings were $290 million in Q1, or a margin of 9.5%. Earnings per share on a GAAP basis were $1.06 per diluted share, compared with $1.11 last year. However, when excluding these specific items, net earnings in Q1 improved year-over-year to $335 million, or 11% of revenue up 40 basis points. Earnings per share on the same basis were $1.23 compared with $1.12 last year. This represents an improvement of 9.8% despite a currency headwind of over $0.02. We generated $465 million in cash during the quarter, or 15.2% of revenue. This represents an improvement of $74 million compared with $392 million generated in Q1 last year. The year-over-year increase in cash includes $39 million related to the adoption of IFRS 16. Over the last 12 months, we have generated $1.7 billion or $6.20 in cash per share, a significant increase compared with $1.5 billion or $5.15 from a year ago. We ended the quarter with a DSO of 49 days, down from 50 days last quarter, and 54 days last year, largely due to the evolving business mix. During the quarter, we allocated cash across several strategic priorities, $67 million back into our business, $156 million in acquisition, mainly sizes, which goes on December 18th. $17 million repurchasing CGI shares, and we repaid $182 million of long-term debt. Buying back CGI stock has been an accretive and flexible way to return capital to shareholders. Under the current program, we have invested $675 million repurchasing 7 million shares at a weighted average price of $97.13. This represents a return of over 16% based on yesterday's closing share price. As such, our Board of Directors approved the extension of the program until February 2021, allowing us to purchase up to 20.1 million shares over the next 12 months. At the end of December, net debt stood at $2.8 billion, representing a net debt-to-capitalization ratio of 27.7%, up from 19.1% last year, largely due to IFRS 16. Excluding this impact, the net debt-to-capitalization ratio was 20.9%, slightly higher than last year, due to increased investments in metro market mergers. With our revolving credit facility and cash on hand, we have $1.6 billion in readily available liquidity and access to more as needed to continue pursuing our build and buy strategy. Now I'll turn the call over to George.