Good morning, ladies and gentlemen. Welcome to the CGI Fourth Quarter and Fiscal 2020 Conference Call. I will now like to turn the meeting over to Mr. Maher Yaghi, Vice President, Investor Relations. Please go ahead, Mr. Yaghi.

Thank you, Julie. And good morning. With me to discuss CGI's fourth 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 9:00 AM Eastern Time on Wednesday, November 11, 2020. Supplemental slides as well as the press release we issued earlier this morning, are available for download along with our 2020 MD&A, financial statements and accompanying notes, all of which have been filed with both SEDAR 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 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. The 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. 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. So with that, I'll turn it over to François. François Boulanger: Thank you, Maher. And good morning, everyone. Let me start by acknowledging that that is Remembrance Day in Canada and in many countries across Europe as well as Veterans Day in the U.S. I want to recognize all those who have served or are serving in the defense of their nations. Thank you. So let us now go to the Q4 results. Despite the widespread disruptions that…

Thank you, François. And good morning, everyone. I would also like to begin my remarks today by recognizing the men and women serving in the military around the world. Thank you for your service and sacrifice. Now, I'll turn to CGI's performance for the fourth quarter. Our agile operating model locally empowered leaders and global alignment on key priorities has enabled us to protect and preserve shareholder value, despite the continued disruptions created by the pandemic. In the quarter, we delivered on key short-term priorities for sustaining value, including expanding our margin, generating superior cash, maintaining income at work and growing share with enterprise clients. We now see increased client demand materializing in most geographies. The actions we have taken over the last few quarters will enable us to rapidly meet this demand and achieve our plans to return to revenue growth by the second half of this fiscal year. In the quarter, margin expansion was delivered through a combination of operational excellence and business mix. We further reduced discretionary SG&A costs and generated savings from the permanent restructuring actions taken over the last two quarters. As François mentioned, these actions are now completed and behind us. Therefore, we expect net earnings to increase on a go-forward basis. The continued shift in the business mix towards longer term, higher margin recurring revenue also contributed to the strong bottom line. Managed services now accounts for 56% of total revenue, expanding steadily throughout the year and in line with their projections of renewed client demand for these services. Intellectual property including SaaS based solution also increased year-over-year. We generated strong cash from operations, in large part due to lower DSO. As lower DSO as a result of the shift in mix to more managed services and also reflects the value of the…

Just a reminder that the replay of the call will be available either via our website or dialing 1-855-859-2056 and using the passcode 5631496 until December 11, as well as podcast of this call will be available for download within a few hours. Follow-up questions can be directed to me at 514-415-3651 and the operator, we're ready to take the questions.

Thank you. [Operator Instructions] And your first question comes from the line of Thanos Moschopoulos with BMO Capital Markets. Please go ahead.

Good morning. George with Europe entering new lockdowns, how should we think about the near-term trajectory in there? Could that lead to some near-term revenue pressure or have people adjusted to not working to the extent that shouldn't necessarily be a headwind short term?

Yes, more the ladder, Thanos. Clients are reacting very differently now, seven to eight months into the pandemic, they're more prepared. They also recognize the need for technology. And as a result, even with some of those rolling shutdowns that are occurring, we're seeing very few delays, many new initiatives actually continuing. And specifically, it's interesting and the European clients, the domestic business does take a bit of a hit due to shutdowns, but our enterprise clients, many are seeing increasing demand in Asia, which they didn't see the first step down because Asia was still in lockdown. So for example, the auto manufacturers in Sweden and Germany, luxury retailers in France, defense manufacturers across the Europe, are all seeing increasing earnings. And that's good, because that drives some investments. So we're seeing a very different reaction and same thing we're seeing in Canada, manufacturing financial services, I said in my opening remarks, what we're seeing those actually new starts coming up. So despite the obvious health crisis, we are seeing a different reaction this time around. And I don't think it changes anything, which is why you heard some of the confidence in my remarks.

And then I think you very often get this question heading into a new fiscal year. So I will ask it, just given what you're seeing in the pipeline, and some of the puts and takes would you see a path to double digit organic EPS growth this year or might there be some issues would be that challenging?

Yes, our plans are always to create shareholder value. And so our plan is always to generate that double-digit earnings per share growth in the new fiscal year.

And then, one for François. Would you be able to quantify the level of government stimulus or wage subsidy contribution in the quarter? François Boulanger: Sorry, I missed the start of the question Thanos.

Yes. Would you be able to quantify the level of government subsidies or stimulus contribution in the quarter? François Boulanger: Well, not more than the month or quarter before, not on the P&L, at least. Where in some places, we have some brakes on some of the payments on some of the taxes, especially in Europe, on the payroll taxes, but outside that, in the P&L nothing out of the ordinary versus the other years.

Great. Thanks.

And your next question comes from on Richard Tse with National Bank. Please go ahead.

Yes, thank you. So as we look at to next year, trying to be an optimist here, if we see kind of a rapid snap back in terms of activity, let's say, as soon as the vaccine is out earlier, could you guys sort of handle that increase in volume under the current sort of operating structure or we can use a sort of bring on more people, I'm just trying to figure out how much operating leverage is in the model, if that were to happen?

Yes, I think I understand the question. Right now we are planning and expect for continued positive trends as we move through the quarters here next fiscal year, and we even saw that as we move through the last few months with positive trends and utilization and other key metrics. But it's been a more steady increase. I think your question is, what if there's a more immediate snapback. We already are having some very, very strong pipeline of new hiring that's going on. And I think that's a good positive, I think we'd be able to accommodate because remember, a lot of our larger managed services deals, we actually bring people on board from our clients. And so that's an automatic, where we can meet the demand and so I would see more of that occurring as well.

Okay. And with respect to your comments on second half, pick up next year, I'm assuming that's organic growth. And maybe sort of give us some color in terms of the type of projects that are going to be scaling that back half, are those the ones that really you don't need to be on site as much or the nature of those type of deals?

Yes, well as you're aware, the whole world has kind of navigated this and pivoted to be able to work some remotely, we've always done some of that through our global delivery model where we have on site offshore, and then, of course, the near shore in between. So I would expect the projects actually to be to run the gamut. And we're seeing that now, we're seeing systems integration and consulting projects kick off with that have cloud migration and enablement. RPA automation, as I mentioned one of the new wins with the automotive manufacturer. Rationalization and monetization even DevOps and agile methodology. So, we have about 12% of our people on site now, it actually had reached 20% before some of the shutdown. So, I think it's all the above simplification of IT supply chain, some of that those larger deals. Yes, some of that's done more remotely through global delivery anyway. And then our IP platform, we kind of call them business platforms as a service. Those are driving some of that growth as well. So again, lot of positive signs, but it's really the end to end services. I would say that is what we're seeing right now, Richard.

Okay. And just one last quick question for me, you seem to be a bit more focused on the acquisition side relative to previous quarters. Is that because the valuations are starting to come in? Or maybe you can give us a bit of color on that? That's it for me. Thanks.

Yes, well, I mean our initial response to the pandemic; there were a lot of economic stimulus payments going out to some of the smaller and medium sized private companies. So they kind of-- they didn't want to move until they understood that landscape, of course, we wanted to be cautious as well. Yes, we see that now playing out. Those companies now actually are more motivated, given what's happening in the marketplace. And I would say that those midsize Metro market private companies, there valuations are starting to settle and the expectations are starting to settle. Of course, in the public, the public companies, it's still more volatile, up and down. And so we'll have to see there, but our financial capacity, and I think the other element there, which is our operational readiness, we really focused on the fundamentals got the restructuring behind us. So we're well positioned both financially and operationally.

That's great. Thank you.

And our next question comes from Jason Kupferberg with Bank of America. Please go ahead.

Good morning guys. I just wanted to start with a question on the bookings in the quarter, obviously, very strong look like it was tilted a little bit more towards renewals vis-à-vis new work than what we've seen historically, but was hoping maybe you can pass the bookings numbers for us a bit and highlight some of the particular areas of strength that you saw. And I'd love to just hear your general thoughts about translating backlog to revenue feels like some of the trends there in the industry are a little choppy right now. So our bookings are a great leading indicator for sure. But just wanted to get your take on conversion to revenue and what that's looking like in your portfolio?

Yes. So you're right in your assessment that a lot of this is with our existing customers. Not all renewals, though, right. Some of it's added on work on top of those renewals. And that actually to your last part of your question, bodes well, because translating backlog to revenue on a booking where you're already working with existing clients, just add on, some of that work can happen very quickly. And we're already starting to see some of that and some are trending. As I mentioned, our utilization has increased throughout the quarter and some of its related to some of those bookings that occurred throughout the quarter. Nice to see that we are seeing some additional new starts on the financial services side and specifically there sometimes being driven by our intellectual property. Again, if I just use financial services as an example, wealth IP coming in North America, payments IP in Europe, our trade IP and collections IP globally. So our retail 360 IP, particularly with our new [indiscernible] merger with some of their IP is driving some nice bookings. And again, a lot of that is with their existing customers, existing clients. And so that will translate, I think a little bit faster than the completely new starts. But our pipeline is full of new clients as well; those tend to move a little slower. But again, we see positive traction in every geography around the world.

And then, just a revenue question. So here in the quarter, you were down 4.5% in constant currency. Wanted to get a sense of just how that compared versus your expectations? And do you think that this ends up being the trough quarter and we start to see some reacceleration in the first quarter of 21, as you proceed towards the goal of getting to positive growth in the second half of fiscal 21?

Yes, no, it is what we what we expected. So because there's a lag and getting some of those projects start back up, as I mentioned, we see some positive signs, particularly in some of the weaker areas, like I mentioned, in the manufacturing, specifically, as well as retail, if you take out the MRD just as an industry, from those Q4 numbers, we're approaching flat for the quarter over quarter. So that gives you some ideas. So that's why I highlighted some of those, as manufacturers do better. And few some of those new starts some of the luxury retailers, like I mentioned, given the strength now of the Asian economy, that bodes well for us to continue to move through there. But the bookings in the translation as you asked, and then those utilization and we're increasing our open position in our hiring in a lot of places. So, all that is going to drive as we move through the months and quarters. So that's a long way of saying, I think we've reached the trough. And I just wanted to give you some color on why we think that, what are some of those positive signs.

Helpful. Thank you.

And your next question comes from line of Deepak Kaushal with Stifel. Please go ahead.

Hi, good morning, guys. Thanks for taking my question. Just a couple of follow ups, George. You talked about strengthen in the Asian markets. I'm just trying to understand, I can understand how it's translating into improve business for European and North American companies that export into those markets. What are the activities for you guys, in terms of local business there and local delivery in that theater? And what's the strategy for that area?

Yes. So, no, the way we're approaching those markets are not domestically, we're approaching them through those enterprise clients that you just mentioned. So if that market is stronger for, like I said, an auto manufacturer in Sweden, in Germany, and they're selling more cars in that market, they're making more investments in their operations in Germany, and in Sweden, same thing for the luxury retailers, etcetera. So we're applying to the domestic markets in Europe and North America but helping those enterprise clients drives growth in the Asian market. So that's why I mentioned that as an important difference from the first wave of the pandemic.

Got it. And so when we think of your five-year plan to double the business, is there a piece in there that involves increasing local Asia-Pacific business or even a return to local Latin American business? I just want to understand what the global strategy is outside of the traditional markets?

Well, if you look at the, the global strategy and really the strategy of CGI, as we built the company has always been to merge with likeminded companies that have a presence and an understanding of a local market, it's hard to break into a market on your own. And so would be through that merger and acquisition process. So -- and it would probably be in a more transformation, we wouldn't look to necessarily buy a metro tuck in one of those domestic markets because that would be the counter to the strategy, it would be more of buying a transformational way into one of those markets and there it's always looking for the right company at the right time at the right price. But again, a lot of the enterprise clients will come with some of that work and that will then we'll follow our clients and their clients into those markets.

Got it. And then the last follow up just on that, on that basis when François mentioned the 23 companies in the pipeline for M&A. Is this kind of global merger type of idea, included in that pipeline or is it tie to that automated pipeline?

That pipeline right now is mostly on the metro market tuck-ins. And so those active ones are mostly in the metro market tuck in. That does not mean that we're always having discussions and looking at transformational, but that's not really included in the 23.

Okay, got it. Well, thank you for taking my questions. I’ll pass the mic.

And your next question comes from the line of Stephanie Price with CIBC. Please go ahead.

Good morning. Just wanted to chat a bit on the SAP outlook a few weeks ago, the company noted an accelerating shift to the cloud with ERP clients. Just wondering in terms of CGI, if you could comment on the cloud vendors you're working with the most and how you kind of think about that cloud opportunity over the next couple years?

Yes, well, as always, we like to stay partner agnostic. And really make sure that we're providing the best advice to our clients. So the reality is, we're working with each of the major cloud providers, helping our clients in their efforts in cloud enablement and cloud migration. So there's not any one, we do have a renewed interest in working with the platform providers, whether it's a SAP, Salesforce, or any of the others, in helping our clients best use those platforms and then, like I said, using our own IP as kind of business platforms as a service as a complimentary element to that. So we're very active in that market. But Stephanie, true to our values and our client first approach. We were working across all those partners.

Okay, that makes sense. And just switching over to the US government's just in terms of the government transition that's going on, can you talk a bit about what you usually see in the near term as these transitions kind of go through?

Yes. So as you might expect, our US team is well prepared, and always is looking at the elections as an opportunity to help in the transition. And that transition, we're preparing for this regardless, because there's always a transition that occurs, even if the administration stays, there's always a transition. And I might also add, it goes on at all levels of government. So it extends to the state and local government space. So what we typically see is there's a little slow down in the bookings, why it was so important for us to increase and bring a lot of those bookings into Q4 ahead of the elections. But usually the transition happens fairly quickly and as you're probably aware most administrations have here's our priorities for the first hundred days. That always requires technology changes, as we continue to become more and more dependent on technology for implementing any of those programs. So we're very close to it and working at like I said, at every level of government.

Great, thanks so much.

And your next question comes from line of Steven Li with Raymond James. Please go ahead.

Hey, George. Just wanted to revisit your remarks about revenue growth in the second half. This is positive organic growth you're referring to or just overall revenue growth?

Well, it's both. I'm talking about organic revenue growth and M&A growth. So it would be both.

Okay. And what happens in the first half if we get a vaccine early? Can you also see organic growth in the first half?

Yes, that's why I said by the second half, we can't predict the exact pace of this. The vaccine, from everything I read, it's going to be a process. So I don't think it's going to be you just turn it on and things happen quickly, but we can't always predict sentiment and if certainly, if our clients and their growing pipeline that I mentioned, materializes faster then there's certainly growth will follow. So we will be very close to that and certainly will accelerate if our clients accelerate.

Okay. Thank you.

And your next question comes from the line of Ramsey El-Assal with Barclays. Please go ahead.

Thank you for taking my question this morning, I wanted to ask you a question about the impact of the pandemic and kind of the virtualization of the workforce. And how that might in turn impact the sort of Metro market strategy, which if I understand correctly, is sort of based around proximity. Is there been any rethinking of that strategy? Or have you seen any impact on the efficacy of that strategy just based on folks working from sort of wherever relative to being embedded potentially, like on site in those Metro locations?

Yes, it's a good question. And as you might imagine, we're focused and very close to that. But, the reality is that, although we're very focused in it's one of the three fundamental shifts that I mentioned in the remarks is really the future of work, what we're actually seeing is that as that future work goes to maybe a slightly more permanently remote workforce, it also is providing opportunities for technology to automate more, quite frankly, and make it easier for that workforce to work remotely. Having said that, what we see around the world that the key decision makers are, in fact, back at the office and most of the CEOs that I speak to, from my office are actually at their office, they recognize the importance of having people working together. And so I think what you're going to see is a hybrid model. And so there's opportunities for technology to help remote workforce, but the proximity model, being close to the decision makers, were so especially given some of the importance and complexity of the work that we do for clients that technology enables, we don't see a change in that at this point in time.

Okay. And then follow-up for me is, could you give us an update on the recent acquisitions, both in terms of the performance and also just any color around cross selling or cost synergies or anything that may be still benefiting the company as we head into fiscal 21?

Yes, it's a good question. Definitely, if you start with the most recent, the TeraThink merger and the US Federal business has been instrumental in some of their growth. And as you saw there, they're continuing to grow and had very strong bookings. And that gives us a new channel. So we're seeing opportunities to expand on the work that they're doing. Likewise, we're seeing that with the [indiscernible] intellectual properties; I mentioned that got folded into our Retail 360. That's been very fundamental for some of the work in the rebound where we see on the retail side of the house in France and across Europe, where we now can go full and the end from the front office to the inventory in the back office. Especially with the remote work that's going on now, that's been fundamental to some of the strengths as we go forward. The media work with SCISYS and quite frankly, all of the work we're doing in the space sector, which has been part of the driver for not just the revenue, but the margin growth that we're seeing in across Europe and in the UK. So SCISYS is going well, Sunflower has been fully integrated into our government ERP Momentum. And we had - I think I highlighted this a couple quarters ago, we saw some wins that wouldn't have happened, they couldn't have done it on their own. But being part of Momentum, we have the vehicle to allow that to happen. So that's just a nutshell of some of the more recent mergers. I think I have told you and we track this for our own Board of Directors, that the performance has been pretty strong, both top line and bottom line, keeping clients, but then expanding on those clients as we move forward. Probably the one that's been a little bit more difficult is the Acando merger, just given the nature of the work they did, coupled with the pandemic, given some of that consulting and advisory services. That was - a lot of those projects were delayed. Having said that, we re-pivoted those individuals into some of the larger managed services opportunities, given their deep industry knowledge and actually has positioned us very well. And then, we did one in Canada, Trey Moore [ph]. And that's been very successful as well, and in helping us navigate some of the new project starts that we have in in Canada. So pretty - it's been pretty impactful and that's why we're very interested now with evaluations, maybe looking a little more attractive and given our operational readiness and financial capacity to continue to accelerate them.

All right, terrific. Thanks so much. Yep.

And your next question comes from the line of Daniel Chen with Citi Securities. Please go ahead.

If we look at your mix of managed services, like you mentioned, the bookings and the revenue mix from there continues to improve. Just want to confirm that this is a result of a lot of deals that you had, you said these can take a little bit longer, just want to make sure that these are some deals that you saw over the last year or two just starting to materialize? And then, as we expect that mix to improve, should we expect margins for fiscal 2021 to continue to improve from the current levels? Thanks.

So a lot of that - I think I mentioned before, those larger deals don't happen overnight, a slightly longer period of time to close those deals. And so, the good news is, we're working on these, preparing for this market 12, 18 months ago, and some of those are those kind of deals, but they all work at different paces. And so, sometimes the deal comes to us and moves through the process more quickly. The good news is we have double digit opportunities of these types of larger managed services deals in every single geography which we operate right now. And so, that's the positive. So we continue to follow the - build the pipeline, so that we have a consistent opportunity set that we can close in any one quarter. The margin part of your question, I forgot about the margin part of your question. So yes, as I've always mentioned, the reason we have a 70% managed services, 30% SI&C, and 30%, which you saw we also increased by 1%, our intellectual property as a percentage of revenue, that gives us the ultimate revenue mix. As we approach that, we should continue to see margins increase as we move through that process.

Thank you. Your next question comes from Rob Young with Canaccord Genuity. Please go ahead.

Hi, good morning, maybe just a follow up on question, the last one there. The growth that you're expecting to see return in the second half, it seems to me that it might be shorter term consultative type of business. And so, could you find yourself in a situation where you've got strong shift toward managed services, but then the buoyancy of return of the shorter term?

The pipeline is up in both managed services, which are very instrumental, but it's also up in systems integration and consulting, so that will help buoy, because we're coming from a market where it was a lot more on the SI&C side. I think we're going to see now we're moving into that managed services side. But the goal is to have both fire in, and I think we're moving into that type of a market, which should be good from a growth perspective.

And one of the things I think that a democratic government, if that happens in the US, would be potentially an expansion of H1-B visa and maybe some change in immigration rules. And maybe, are there any thoughts there on how that might change your view on the local delivery model?

No, not really. Less than 10% of our workforce right now works in a visa, so we're close, given the various policies that are going around there. I think in any case, our onshore delivery centers expect to be in demand across the US. I don't think our proximity model changes much. And of course, we always have that global delivery model, which is in higher demand, and that's why you see the double digit increases in our India operations on revenue, even as we're going through the pandemics. We think we have a very strong offering in the U.S. regardless.

Okay, last one for me. Maybe a little higher level. In the prepared remarks, you mentioned retail just as one of the areas where you'd seen some strengthen. So one of the areas that seems to be very strong, investment-wise technology, is the shift towards e-commerce. And so I just wonder if you could give some highlights on where CGI plays there, and whether that is a driver for you?

Well, the short answer is yes, it is. It is a driver. And that's why I highlighted one of the new wins was absolutely to help a global retailer get their U.S. e-commerce platform right, and it extends beyond though just the ordering, it goes straight through to the delivery, which is where the Mesi [ph] software is helping us significantly. So we play across the entire spectrum from the front end, straight through to the fulfillment end.

[Operator Instructions] And your next question comes from [indiscernible]. Please go ahead.

Good morning. Thanks for taking my question. Maybe one for François. In terms of working capital, I don't think we should expect a similar boost in fiscal 2021, expect maybe more and more stable working cap. And related to that, would the $1.9 billion cash generated from operating activities be a good run rate estimates for next year? François Boulanger: Thanks for the question. As for the working cap, you're right, we had a boost on the working cap by $200 million if you're looking at the financial statement. And again, that was helped by the fact that we were pretty good this year to reduce a DSO from 50 days to 47 days. So that was a great achievement by the team, to be capable to continue to collect and even reduce it year-over-year. That said, we're still expecting next year to be in the high, at least $1.6 billion, $1.7 billion, and perhaps even more cash from ops, before working cap and after that, depending on the working cap, it can even be higher than that. So we're still very bullish on the fact that we will be capable to generate a lot of cash next year.

Thanks. So could that prompt you to resume NCIB activity? François Boulanger: Yes, we are looking at it. If you saw, we did some share buyback even in the October timeframe. And we will look to see how we can come back on the NCIB pretty soon; you'll see that.

Thank you François Boulanger: Thank you, everyone for joining us this morning. We'll see you for our first quarter results of 2021 in the next year. Thank you all again.

This concludes today's conference call. You may now disconnect.