CGI Inc.

Good morning, ladies and gentlemen. Welcome to CGI's first quarter fiscal 2023 conference call. I would now like to turn the meeting over to Mr. Kevin Lender, SVP of Investor Relations. Please go ahead, Mr. Lender.

Thank you, Julie, and good morning. With me to discuss CGI's first quarter fiscal 2023 results are George Schindler, our president and CEO, and Steve Perron, executive vice president and CFO. This call is being broadcast on CGI.com and recorded live at 9 a.m. Eastern Time on Wednesday, February 1st, 2023. Supplemental slides, as well as a press release we issued earlier this morning, are available for download, along with our Q1 MD&A, financial statements, and accompanying notes, all of which have been filed with both CEDAR and ICR. 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 and less otherwise noted. We are also hosting our annual general meeting this morning, so we hope you will join us live via the broadcast at 11 a.m. I'll now turn it over to Steve to review our Q1 financials, and then George will comment on our business and market outlook. Steve. Thank you.

Thank you, Kevin, and good morning, everyone. I'm pleased to share with you the results of our first quarter of fiscal 2023. In Q1, we delivered $3.45 billion of revenue, up 11.6% year over year, or up 12.3% when excluding the impact of foreign exchange. Importantly, We delivered positive constant currency growth in all segments, all industry sectors, and all service offerings. The following segments generated double-digit constant currency growth. Western and Southern Europe up 30%, Asia-Pacific up 23%, and UK and Australia up 18%. Total bookings were $4 billion, generating a strong book-to-bill ratio of 117% for the quarter and 109% on a trailing 12-month basis. In the quarter, each of our client proximity segments had a book-to-bill ratio above 100%. Our bookings were particularly strong in Europe this quarter, led by UK and Australia with a book-to-bill ratio of 159%, Finland, Poland, and Baltics with a book-to-bill ratio of 143%, and Western and Southern Europe with a book-to-bill ratio of 123%. With respect to IP, we see ongoing demand for our business solutions and an increase in IP revenue across every geographic segment. IP as a percentage of total revenue improved to 21.7% in Q1. Our Q1 IP book-to-bill ratio was 128%, reflecting CGI's sustained investment in forging new relationships with clients as well as enhancing our solutions. The strength of our overall bookings contributed to growing our global backlog, which now stands at $25 billion, reaching an all-time high again this quarter. This represents 1.9 times revenue. On the profitability front, adjusted EBIT in Q1 was $554.1 million, up 6.3% year over year. This represents an EBIT margin of 16.1%, stable sequentially and down 80 basis points year over year. The decrease on a year-over-year basis was mainly due to the dilutive impact of prior year acquisitions, which are in the process of being integrated to achieve their planned synergies, as well as the expected increase in travel to support growing our business. Net earnings improved to $382.4 million when compared to $367.4 million in the first quarter last year. diluted ETS was $1.60, representing an increase of 7.4% year over year. When excluding integration and acquisition costs, net earnings improved to $398.2 million for a margin of 11.5%. This compared to $369.4 million in the same quarter last year. On the same basis, Diluted EPS was $1.66, an accretion of 10.7% when compared to $1.50 in the same quarter last year. This improvement was mainly driven by the successful execution of our build-and-buy profitable growth strategy by our operations. Our effective tax rate in Q1 was 26% compared to 25.5% in the prior year. When excluding integration and acquisition costs, our effective tax rate was 25.7% compared to 25.5% last year. We continue to expect our tax rate for future quarters to be in the range of 24.5% to 26.5%. In the quarter, cash provided by operating activities was $605 million compared to $484 million in the prior year. This is mainly due to the five-day sequential improvement in our DSO, which now stands at 44 days, an improvement of one day on a year-over-year basis. Our target remains at 45 days. For the last 12 months, cash provided by operating activities was $2 billion or 15% of revenue. In Q1, we invested $93 million into our business and $10 million to buy back our stock. We delivered a return on invested capital of 15.5% in the quarter, an increase of 20 basis points when compared to 15.3% in the year-ago period, demonstrating our efficient deployment of capital. Consistent with previous years, we reviewed our capital allocation plan to maximize shareholder returns. Our focus continues to be on delivering value for our shareholders by investing back in our business, pursuing accretive acquisitions, and repurchasing our stock and or paying down our debt. As such, in line with our capital allocation strategy, Yesterday, our Board of Directors approved the extension of the NCIB program until February 2024, authorizing us to repurchase for cancellation up to 18.8 million shares over the next 12 months. Under the current program, we have invested $657 million, repurchasing 6.4 million shares at a weighted average price of $101.84. With a net debt to capitalization ratio of 24.1% at the end of December, as well as $2.8 billion of cash readily available and access to more if needed, CGI has the strength and the capital resources to support our build and buy profitable growth strategy. Now, I will turn the call to George to further discuss the insights on the quarter and outlook for our business and markets.