CGI expands Q3 2008 Net earnings from continuing operations by 28% fueled by growth in revenue and bookings



    Stock Market Symbols
    GIB.A (TSX)
    GIB (NYSE)

    Q3 2008 year-over-year highlights from continuing operations:

    
    - Revenue of $950.5 million, up 6.5% on a constant currency basis;
    - Earnings before taxes of $106.0 million, up 10.1%;
    - Net earnings of $81.7 million, up 27.7%;
    - Net earnings margin of 8.6%, up from 7.0%;
    - Diluted EPS of 25 cents, up 31.6%;
    - Cash generated from operating activities in Q3 2008 of $106.3 million;
    - Investments of $109.3 million in share repurchases and net debt
      reduction;
    - Bookings of $1.01 billion, up 25%.
    

    Note to Reader: Q3 F2008 MD&A, financial statements and accompanying
    notes may each be found at www.cgi.com and have been filed with both
    Sedar in Canada and Edgar in the U.S.

    MONTREAL, July 29 /CNW Telbec/ - CGI Group Inc. (TSX: GIB.A; NYSE:   GIB)
reported fiscal 2008 third quarter revenue today of $950.5 million which
excludes $19.8 million of revenue from discontinued operations. Year-over-year
revenue growth on a constant currency basis was 6.5%. Relative to the same
year ago period, foreign exchange fluctuations negatively impacted the
Company's revenue by $23.3 million, or 2.5% of revenue.
    Earnings before taxes from continuing operations were $106.0 million or
11.2% of revenue representing an improvement of 10.1% compared with
$96.3 million in the third quarter of 2007.
    Net earnings from continuing operations in Q3 2008 were $81.7 million or
8.6% of revenue compared with $64.0 million or 7.0% of revenue in the same
quarter last year. This represents a 27.7% year-over-year increase.
    Diluted earnings per share from continuing operations in the third
quarter were 25 cents. This compares with 19 cents in the same period last
year.
    Net earnings from continuing operations in Q3 included $10.8 million
which was previously provisioned for income taxes and is no longer required.
Excluding this, the net earnings margin from continuing operations was 7.5%
and diluted EPS from continuing operations was 22 cents per share.
    The Company generated $106.3 million in cash from its continuing
operating activities, or 11.2% of revenue.

    
    -------------------------------------------------------------------------
    In millions of Canadian
     dollars except when noted                             Nine         Nine
    Figures presented are from                           months       months
     continuing operations                                ended        ended
                                   Q3           Q3      June 30,     June 30,
                                F2008        F2007         2008         2007
    -------------------------------------------------------------------------
    Revenue                  $  950.5      $ 914.0     $  2,777     $  2,730
    -------------------------------------------------------------------------
    Adjusted EBIT            $  111.0      $ 103.8     $  324.8     $  304.5
    Margin                       11.7%        11.4%        11.7%        11.2%
    -------------------------------------------------------------------------
    Earnings before
     taxes (EBT)             $  106.0      $  96.3     $  306.2     $  253.6
    Margin                       11.2%        10.5%        11.0%         9.3%
    -------------------------------------------------------------------------
    Net earnings             $   81.7      $  64.0     $  222.7     $  169.6
    Margin                        8.6%         7.0%         8.0%         6.8%
    -------------------------------------------------------------------------
    Earnings per share
     (diluted) - in $        $   0.25      $  0.19     $   0.68     $   0.55
    -------------------------------------------------------------------------
    Weighted average
     number of
     outstanding
     shares (diluted)     320,745,197  335,529,373  325,850,193  333,414,858
    -------------------------------------------------------------------------
    Interest on
     long-term debt          $    6.4      $   9.4     $   20.9     $   33.5
    -------------------------------------------------------------------------
    Net debt to
     capitalization
     ratio                       15.6%        17.7%        15.6%        17.7%
    -------------------------------------------------------------------------
    Days of sales
     outstanding (DSO)             48           42           48           42
    -------------------------------------------------------------------------
    Bookings                 $  1,005      $   807     $  3,216     $  2,435
    -------------------------------------------------------------------------
    

    During the quarter, the Company booked $1.01 billion in new contract
wins, extensions and renewals, resulting in a book-to-bill of 104% in the
quarter. After nine months of fiscal 2008, the Company has reached booking
levels of more than $3.2 billion, equivalent to the total bookings realized in
fiscal 2007. Backlog at the end of Q3 stood at $12.03 billion or 3.1 times
annual revenue.
    "Our focus on fundamentals and on the execution of our profitable growth
business plan continues to yield positive results for all stakeholders," said
Michael E. Roach, President and Chief Executive Officer. "We are in pursuit of
numerous opportunities in our targeted geographies and verticals which will
contribute to profitable growth and the global expansion of CGI."
    The Company continues to enhance its financial flexibility by investing
in its Build and Buy profitable growth strategy, share buy backs and debt
reduction. As part of its Normal Course Issuer Bid, the Company repurchased
for cancellation 9.0 million subordinate class A shares during the third
quarter for a total investment of $97.8 million. After nine months, more than
16.7 million shares have been repurchased and cancelled representing an
investment of $181.6 million.
    In addition, long-term debt decreased by $11.5 million during the
quarter. At the end of June 2008, net debt was reduced to $369.9 million,
improving the Company's net debt to capitalization ratio to 15.6%.

    Subsequent Event

    On July 21, 2008, the Company announced the divestiture of a Canadian
business process unit providing claims adjustment and risk management services
to the Canadian property and casualty (P&C) insurance industry. With
approximately $70 million in annual revenue, the transaction is expected to
close in early August 2008.
    This business unit had been reclassified as discontinued operations, and
the Company's results include a net impairment of $3.0 million taken during
the quarter, bringing diluted EPS on a GAAP-basis to 24 cents. The results of
this operation have been removed from both the Q3-2008 results as well as
CGI's historical figures in order to accurately reflect the comparative
performance of our continuing operations.

    Third Quarter F2008 Results Conference Call

    Management will host a conference call to discuss results at 8:00 a.m.
Eastern time this morning. Participants may access the call by dialing
1-866-225-0198 or on the Web at www.cgi.com. Supporting slides for the call
will also be available. For those unable to participate on the live call, a
podcast and copy of the slides will be archived for download at www.cgi.com.

    About CGI

    Founded in 1976, CGI Group Inc. is one of the largest independent
information technology and business process services firms in the world. CGI
and its affiliated companies employ approximately 27,000 professionals in over
100 offices across 16 countries. CGI provides end-to-end IT and business
process services to clients worldwide from offices in Canada, the United
States, Europe, Asia Pacific as well as from centers of excellence in North
America, Europe and India. CGI's annual revenue run rate stands at
$3.8 billion and at June 30th, 2008, CGI's order backlog was $12.03 billion.
CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB) and are included
in the S&P/TSX Composite Index as well as the S&P/TSX Capped Information
Technology and MidCap Indices. Website: www.cgi.com.

    Use of Non-GAAP Financial Information

    CGI reports its financial results in accordance with GAAP. However,
management believes that certain non-GAAP measures provide useful information
to investors regarding the Company's financial condition and results of
operations as they provide additional measures of its performance.
Explanations as well as a reconciliation of these non-GAAP measures with GAAP
financial statements are provided in the MD&A which is posted on CGI's
website, and filed with SEDAR and EDGAR.

    Forward-Looking Statements

    All statements in this press release that do not directly and exclusively
relate to historical facts constitute "forward-looking statements" within the
meaning of that term in Section 27A of the United States Securities Act of
1933, as amended, and Section 21E of the United States Securities Exchange Act
of 1934, as amended, and are "forward-looking information" within the meaning
of sections 138.3 and following of the Ontario Securities Act. These
statements and this information represent CGI's intentions, plans,
expectations and beliefs, and are subject to risks, uncertainties and other
factors, of which many are beyond the control of the Company. These factors
could cause actual results to differ materially from such forward-looking
statements or forward-looking information. These factors include and are not
restricted to the timing and size of new contracts, acquisitions and other
corporate developments; the ability to attract and retain qualified members;
market competition in the rapidly-evolving IT industry; general economic and
business conditions, foreign exchange and other risks identified in the MD&A,
in CGI's Annual Report on Form 40-F filed with the U.S. Securities and
Exchange Commission (filed on EDGAR at www.sec.gov), the Company's Annual
Information Form filed with the Canadian securities authorities (filed on
SEDAR at www.sedar.com), as well as assumptions regarding the foregoing. The
words "believe," "estimate," "expect," "intend," "anticipate," "foresee,"
"plan," and similar expressions and variations thereof, identify certain of
such forward-looking statements or forward-looking information, which speak
only as of the date on which they are made. In particular, statements relating
to future performance are forward-looking statements and forward-looking
information. CGI disclaims any intention or obligation to publicly update or
revise any forward-looking statements or forward-looking information, whether
as a result of new information, future events or otherwise, except as required
by applicable law. Readers are cautioned not to place undue reliance on these
forward-looking statements or on this forward-looking information. You will
find more information about the risks that could cause our actual results to
significantly differ from our current expectations in the Risks and
Uncertainties section.




For further information:

For further information: Lorne Gorber, Vice-President, Global
Communications and Investor Relations, (514) 841-3355


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