CGI Inc.

Good morning, ladies and gentlemen. Welcome to CGI's second quarter fiscal 2022 conference call. I would now like to turn the meeting over to Mr. Kevin Linder, SVP, Finance and Treasury, and Head of Investor Relations. Please go ahead, Mr. Linder.

Thank you, Julie, and good morning. With me to discuss CGI's second quarter fiscal 2022 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 at 9 a.m. Eastern time on Wednesday, April 27th, 2022. Supplemental slides as well as the press release we issued earlier this morning are available for download along with our Q2 MD&A financial statements and accompanying notes, all of which have been filed with both Cedar 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 NCGI disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The complete safe harbor statement is available in both our MD&A and press release, as well as on cgi.com. We recommend our investors read it in its entirety. We are reporting our financial results in accordance with international financial reporting standards, or IFRS. As always, 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 on this call are Canadian, unless otherwise noted. I'll now turn it over to Francois to review our Q2 financials, and then George will comment on our business and market outlook. Francois.

Thank you, Kevin, and good morning, everyone. I am pleased to share with you the results of our second quarter of fiscal 2022. In Q2, we delivered double-digit constant currency revenue growth as demand for our services continues to accelerate and bookings remain strong. We also generated 14% EPS accretion despite a strong Canadian dollar, causing headwinds in our reporting currency, mainly by the euro. We recorded revenue of $3.3 billion, up 10% year-over-year on a constant currency basis, driven by strong growth in the following segments asia pacific up 20 percent u.s commercial and state government up 17.6 percent western and southern europe up 16.7 percent canada up 11.6 percent u.s federal up 9.7 percent and central and eastern europe up 8.5 percent in fact Eight of our nine segments delivered positive constant currency growth in the quarter. Headcount increased year-over-year by more than 7,000 for a total of 84,000 consultants and professionals across the globe. Total bookings were $3.3 billion, representing a book-to-bill of 101% for the quarter and 109% on a trailing 12-month basis compared to 113% for the prior year. On a trailing 12-month basis, seven of our eight proximity segments have a book-to-bill above 100%, led by Finland, Poland, and Baltics at 153%, and UK and Australia at 125%. IP bookings were very strong in the quarter, up 89% over a year on a constant currency basis. I would like to highlight certain segments with significant IP bookings in the quarter. U.S. Federal, with IP bookings of approximately $400 million, leveraging our Momentum ERP and CAATS, our global case management solution. Canada, with IP bookings over $130 million, driven by solutions primarily in the financial services sector. And U.S. commercial and central government, with IP bookings of about $150 million, driven by our advantage state and local government ERP solution. Our global backlog remains strong at $23.1 billion, representing 1.9 times revenue, the vast majority of which is comprised of long-term managed services and digital transformation engagements. With respect to profitability, Adjusted EBIT in Q2 was $523.6 million, while EBIT margins increased to 16%, up 20 basis points compared to Q2 last year. The year-over-year increase was largely due to a more profitable revenue mix, particularly within U.S. Federal, as well as additional tax credits in Western and Southern Europe. This was in part offset by reorganizational costs to improve our Scandinavian operations. We delivered strong EBIT margins in the following segments, Asia Pacific at 29.7%, Canada at 21.9%, UK and Australia at 16.7%, US Federal at 16.2%, and Western and Southern Europe at 15.4%. Our effective tax rate in Q2 was 25.4% compared to 25.7% in the prior year. We continue to expect our tax rate for future quarters to be in the range of 24.5% to 26.5%. Net earnings were $372 million, and diluted earnings per share were $1.53, representing an increase of 14.2% year-over-year. This improvement was mainly due to revenue growth and EBIT margin improvements as outlined earlier. Excluding integration costs, net earnings were $374 million, reflecting a margin of 11.4%, and diluted earnings per share were $1.53, an accretion of 13.3% when compared to $1.35 in the same quarter last year. In the quarter, cash provided by operating activities was $473 million, compared to $573 million in the prior year, which benefited from reduced variable compensation payments related to the impact of the pandemic. As a percentage of revenue, our cash generations continue to be strong at 14.5%. DSO was 42 days compared to 39 days last year, well within our target. For the last 12 months, cash provided by operating activities was $1.9 billion, or 15.4% of revenue. This represents $7.70 in cash per share. In the quarter, we deployed $125 million in our build and buy profitable growth strategy, mainly in our IP, and for the closing of the Unico acquisition, a technology consultancy and systems integrator headquartered in Australia. In Q2, we invested $400 million in buying back approximately 4 million shares at a weighted average price of $100.80. As of the end of March, we had the authorization to buy back up to an additional 14.8 million shares under our current NCIB program. In addition, on March 11, we announced entering into an agreement for the acquisition of all the shares of Humanis a France-based company specializing in data, digital, and business solutions. This merger will further our presence and positioning across Western and Southern Europe. We expect to acquire approximately 70% of shares through a block purchase by the end of Q3. Following this, we intend to launch a mandatory tender offer to acquire the remaining shares of Humanis. Subject to legal and regulatory conditions being met, Our plan is to implement a squeeze-out transaction to acquire all remaining shares not already tendered as part of the offer by the end of Q4. In Q2, we delivered a return on invested capital of 15.7% compared to 12.8% in the year-ago period, representing a return to pre-pandemic levels. Looking ahead, our focus continues to be on delivering optimal returns to our shareholders to investing in our business, pursuing accretive acquisitions, and buying back our stock. The cornerstone of CGI's build and buy profitable growth strategy is our strong balance sheet position. At the end of March, our net debt to capitalization ratio was 28.7%, and we have $2.6 billion of cash readily available with access to more if needed. Before turning the call over to George, I would like to highlight a few adjustments we made effective in Q3 to strengthen our operation and, as a result, created two new reporting segments. The former Scandinavia and Central and Eastern Europe segments are now Scandinavia and Central Europe, comprised of Germany, Sweden, and Norway, and Northwest and Central East Europe, comprised of the Netherlands, Belgium, Denmark, Czech Republic, and Slovakia. Starting next quarter, we will begin reporting on this new structure, and we will provide restated historical data at that time. Now, I'll turn the call over to George.