CGI Group Inc Net Income increased on 9.3% in 2016 and Revenue increased on 3.9%
09.11.2016 • About CGI Group Inc (
$GIB.A) • By InTwits
CGI Group Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CGI Group Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's in pair with industry average of 1.7%.
- CAPEX is quite volatile: 235 in 2016, 235 in 2015, 292 in 2014, 115 in 2013, 108 in 2012
- The company has highly profitable business model: ROIC is at 18.2%
- It operates with high leverage: Net Debt/EBITDA is 0.7x while industry average is -4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CGI Group Inc ($GIB.A) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,772 | 10,085 | 10,500 | 10,287 | 10,683 | 3.9% |
| Gross Profit | 546 | 1,072 | 1,370 | 1,468 | 1,562 | 6.4% |
| EBITDA | 522 | 1,170 | 1,687 | 1,856 | 1,933 | 4.2% |
| Net Income | 132 | 456 | 859 | 978 | 1,069 | 9.3% |
Balance Sheet
|
|---|
| Cash | 113 | 106 | 536 | 305 | 597 | 95.4% |
| Short Term Debt | 52 | 534 | 80 | 231 | 192 | -16.8% |
| Long Term Debt | 3,196 | 2,332 | 2,599 | 1,896 | 1,719 | -9.3% |
Cash flow
|
|---|
| Capex | 65 | 142 | 181 | 122 | 166 | 35.1% |
Ratios
|
|---|
| Revenue growth | 13.0% | 111.3% | 4.1% | -2.0% | 3.9% | |
| EBITDA growth | -30.6% | 124.1% | 44.2% | 10.0% | 4.2% | |
| Gross Margin | 11.4% | 10.6% | 13.0% | 14.3% | 14.6% | 0.4% |
| EBITDA Margin | 10.9% | 11.6% | 16.1% | 18.0% | 18.1% | 0.1% |
| Net Income Margin | 2.8% | 4.5% | 8.2% | 9.5% | 10.0% | 0.5% |
| CAPEX, % of revenue | 1.4% | 1.4% | 1.7% | 1.2% | 1.5% | 0.4% |
| ROIC | 5.7% | 10.9% | 17.1% | 18.0% | 18.2% | 0.3% |
| ROE | 4.6% | 12.2% | 19.0% | 17.7% | 17.0% | -0.6% |
| Net Debt/EBITDA | 6.0x | 2.4x | 1.3x | 1.0x | 0.7x | -0.3x |
CGI Group Inc ($GIB.A) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,684 | 2,750 | 2,667 | 2,582 | 5.6% | 5.7% | 4.2% | -0.1% |
| EBITDA | 458 | 493 | 488 | 494 | 1.5% | 3.2% | 3.3% | 8.7% |
| Net Income | 238 | 283 | 274 | 274 | 0.6% | 12.6% | 6.5% | 17.8% |
Balance Sheet
|
|---|
| Cash | 552 | 169 | 284 | 597 | 12.8% | -24.4% | 7.2% | 95.4% |
| Short Term Debt | 357 | 194 | 194 | 192 | 290.4% | 118.8% | -42.3% | -16.8% |
| Long Term Debt | 1,820 | 1,873 | 1,716 | 1,719 | -22.8% | -8.3% | -2.4% | -9.3% |
Ratios
|
|---|
| Gross Margin | 14.4% | 14.3% | 14.6% | 15.3% | 0.8% | 0.0% | 0.1% | 0.5% |
| EBITDA Margin | 17.1% | 17.9% | 18.3% | 19.1% | -0.7% | -0.4% | -0.2% | 1.6% |
| Net Income Margin | 8.9% | 10.3% | 10.3% | 10.6% | -0.4% | 0.6% | 0.2% | 1.6% |
Revenue and profitability
The company's Revenue increased on 3.9%. Revenue growth showed slow down in FY16Q4 - it was -0.1% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 16.0 pp from 39.8% to 23.8% in 2016.
Gross Margin showed almost no change in FY2016.
Net Income marign increased slightly on 0.50 pp from 9.5% to 10.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.5% in FY2016. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 1.5%.
Return on investment
The company operates at good ROIC (18.22%) and ROE (17.04%). ROIC showed almost no change in FY2016. ROE decreased slightly on 0.62 pp from 17.7% to 17.0% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is 1.0x. Net Debt / EBITDA dropped on 0.3x from 1.0x to 0.7x in FY2016. Debt dropped on 10.2% while cash surged on 95.4%.
Management team
The company's CEO George D Schindler is a founder and has spent 2 years at the company. The company's CFO Francois Boulanger has spent 4 years at the company.
Appendix 1: Peers in Technology
Below we provide CGI Group Inc benchmarking against other companies in Technology industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intrinsyc Technologies Corp ($ITC) | | -21.7% | 70.8% | 24.5% | 39.2% |
| ProntoForms Corp ($PFM) | | 75.4% | 43.9% | 46.4% | 28.2% |
| Kinaxis Inc ($KXS) | | 30.3% | 15.2% | 30.3% | 27.0% |
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
| |
|---|
| Median (12 companies) | | 0.3% | 13.3% | 11.5% | 12.7% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
| |
|---|
| Median (12 companies) | 71.8% | 55.6% | 61.9% | 61.9% | 71.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
| Kinaxis Inc ($KXS) | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% |
| Constellation Software Inc/Canada ($CSU) | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% |
| Intrinsyc Technologies Corp ($ITC) | -10.5% | -38.8% | 2.2% | 10.8% | |
| Mitel Networks Corp ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| |
|---|
| Median (14 companies) | 0.9% | 3.9% | 4.4% | 0.1% | 7.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| |
|---|
| Median (14 companies) | 1.1% | 1.1% | 1.2% | 1.2% | 1.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% |
| Kinaxis Inc ($KXS) | | 61.8% | 63.6% | 44.0% | 22.6% |
| Halogen Software Inc ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| |
|---|
| Median (14 companies) | -7.5% | -17.5% | 0.5% | -1.2% | 8.4% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($MNW) | 3.7x | 3.8x | 2.6x | 6.2x | |
| Pivot Technology Solutions Inc ($PTG) | | -0.4x | 1.1x | 4.8x | |
| Constellation Software Inc/Canada ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
| |
|---|
| Median (7 companies) | 0.9x | 1.5x | -0.8x | -1.7x | -6.3x |
|---|
