CGI Group Reports Continuing Strong Growth In Fiscal 1999
Montreal, Quebec-- October 27, 1999
* Twenty-third consecutive year of revenue growth
* Fiscal 1999 revenue ahead 90%, earnings ahead 141%
* Web-enabling technologies represent 20% of annual revenues
* Increased presence in the U.S. market and internationally
CGI Group Inc. (ME, TSE: GIB.A; NYSE: GIB) today announced
unaudited results for the fourth quarter and fiscal year ended
September 30, 1999, the 23rd consecutive year of revenue growth.
All dollar amounts are in Canadian dollars. The company's
financial statements for the fourth quarter ended September 30,
1999 will be released on November 10, 1999.
Financial Results
-----------------
Fiscal 1999 revenue increased by 90% to $1,409.5 million, from
$741.0 million the year before. Net earnings increased 141% to
$83.8 million from $34.8 million a year ago. Earnings per share
increased 110% to $0.63 per share (basic and fully diluted) from
$0.30 per share in fiscal 1998, based on a 14% increase in the
weighted average number of shares in fiscal 1999. The net profit
margin increased to 5.9% from 4.7% the year before.
The higher revenue results from new outsourcing and systems
integration contracts, primarily in Canada but increasingly in
the U.S. and internationally, and from acquisitions in Canada and
the U.S. The increasing profitability reflects operating
efficiencies resulting from application of ISO 9001 quality
standards, synergies from the integration of acquisitions, and
increasing economies of scale.
"We continue to build our order backlog, most of which is
long-term outsourcing contracts focused on higher value added IT
services business," said Serge Godin, Chairman and Chief
Executive Officer. "Higher value added business allows us to
partner with our clients and provides for embedded growth as we
meet their evolving IT needs. An important growth driver is
Web-enabling technology, which we refer to as e-space business,
which currently represents 20% of our revenue on a run-rate
basis."
"During the quarter, we significantly strengthened the company's
position in the U.S. market through the acquisition of DRT
Systems International," Mr. Godin continued. "We are committed to
establishing a strong presence in the U.S. through further
acquisitions, major contracts and organic growth."
In the fourth quarter ended September 30, 1999, revenue increased
21% to $394.0 million from $324.5 million in the same period last
year. Net earnings increased 40% to $22.6 million, or $0.17 per
share, from $16.1 million, or $0.13 per share, in the fourth
quarter of fiscal 1998. At September 30, 1999 the order backlog
was $7.5 billion compared with $6.5 billion a year earlier.
Fourth Quarter 1999 Highlights
------------------------------
During the fourth quarter, CGI continued to gain complementary
strengths, new markets and critical mass. Notably, the company:
* On July 1, acquired DRT Systems International from Deloitte
Consulting, doubling CGI's revenue in the U.S. and tripling its
staff and office network in the U.S. With this acquisition, CGI
gained the critical mass and strong team required to win large
systems integration and outsourcing contracts in the U.S.
* On July 15, entered into a 12-month, $57 million IT systems
integration agreement with Brazilian-based local and
long-distance telephone services provider Mirror S.A.
* On September 10, announced a three-year, enterprise alliance
with Microsoft Corporation, enabling CGI to develop and deploy
leading solutions for the telecommunications, government and
financial services markets across the United States and Canada.
Subsequent to quarter end, CGI announced the following:
* A non-exclusive Direct Commercial Systems Integrator Agreement
with Sun Microsystems of Canada Inc. to conduct joint marketing
and technical implementation activities to respond to the growing
demand for e-commerce expertise, solutions and service throughout
North America.
* The signing of several Internet-related contracts with clients,
further consolidating CGI's strong presence in all segments of
the North American e-commerce market.
In its November 1, 1999 issue, U.S.-based Forbes magazine ranks
CGI 7th - and the top Canadian company - on its Global 100 list
of high-growth non-U.S. companies from around the world. The list
was developed from a database of 12,000 companies operating in 34
countries, with the best selected according to revenue size and
based on at least 15% net income growth and 15% revenue growth in
the latest fiscal year, on top of a 10% five-year annual average
growth in net income and sales. To make the list, companies also
needed current return-on-equity of at least 10% and a five-year
return-on-equity of at least 10%.
Y2K Compliance
For CGI, the Year 2000 ("Y2K") issue encompasses the costs
required to make its internal systems and those it uses to
provide services to its clients, Y2K compliant, as well as
providing a revenue opportunity which the company has managed to
keep within 5% of its annual revenue. CGI has completed all five
stages of its Year 2000 compliance methodology (assessment,
analysis, remediation, testing and implementation) for most of
its business units. Exceptions concern essentially recent
acquisitions, which have been audited and integrated in the
overall project, and testing project extensions demanded by
clients. No impact is expected on services that CGI provides.
The company has contingency plans for all mission critical
systems, and for all of its business units' significant
suppliers, tested and in place. Command and Communication
Centres are also being activated in all business units.
CGI is the largest independent information technology consulting
firm in Canada and the fifth largest in North America, based on
its revenue run rate of $1.6 billion. Its order backlog totals
more than $7.5 billion and the company currently has proposals
outstanding for an additional $4 billion in potential large
contracts. CGI has 10,000 professionals and provides end-to-end
IT services and business solutions to 2,500 clients in Canada,
the United States and more than 20 countries around the world.
CGI's shares are listed on the New York Stock Exchange (GIB), as
well as on the Toronto and Montreal exchanges (GIB.A). They are
included in the Toronto Stock Exchange's TSE 300 Composite and
TSE 100 indexes. Web site: www.cgi.ca.
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For information:
CGI
Andre Imbeau
Executive Vice-President and CFO
(514) 841-3200
Paule Dore
Executive Vice-President, Corporate Affairs
(514) 841-3200
All statements contained in this or any other press release of
CGI Group Inc., or in any document filed by the Company with the
U.S. Securities and Exchange Commission, or in any other written
or oral communication by or on behalf of the company, that do not
directly and exclusively relate to historical facts, constitute
"forward looking statements" within the meaning of the U.S.
Private Securities Litigation Report Act of 1995. These
statements represent the Company's expectations and beliefs, and
no assurance can be given that the results described in such
statements will be achieved.
This press release may contain forward looking statements that
involve a number of risks and uncertainties, including statements
regarding the outlook for the company's business and results of
operations. There are a number of factors that could cause actual
results to differ materially from those indicated. Such factors
include, without limitation, the various factors set forth in the
Company's annual report. |
