Exclusive Interview With The Senior VP - Global Communications And Investor Relations: CGI Group Inc. (GIB) - Lorne Gorber

Wall Street Transcript

67 WALL STREET, New York - January 24, 2012 - The Wall Street Transcript has just published its Staffing & Outsourcing Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Workforce Flexibility Requirements - Stalwarts Look to Acquire Small Caps - Rich Industry Leaders to Acquire Small Cap Competitors - BPO & IT Outsourcing Reduce Labor Costs

Companies include: Accenture (ACN); Adecco (ADEN.VX); Alliance Data Systems (ADS); CGI Group (GIB); CSC (CSC); and many more.

In the following brief excerpt from the STAFFING & OUTSOURCING SERVICES Report expert analysts discuss the outlook for the sector and for investors.

Lorne Gorber joined CGI Group Inc. in 2005 as Vice President, Investor Relations, and was nominated Vice President, Global Communications and Investor Relations, in 2006. Nominated Senior Vice President in October 2010, he is responsible for the investor relations program and global communications functions including external and internal communications, as well as all brand-related activity. Before joining CGI, Mr. Gorber worked for seven years for a Montreal-based natural resources company. He began in the communications department, and then managed the investor relations program. He previously had worked in the entertainment industry and has contributed to numerous publications in Canada and the United States. Active in the investor relations community, Mr. Gorber has been involved with the Canadian Investor Relations Institute. He served as the President of the Quebec chapter from 2007 to 2009, and currently,sits on the board of the provincial and national chapters. Mr. Gorber holds a master's degree from the University of Southern California. As an undergraduate, he studied at McGill and New York universities before graduating from Concordia.

TWST: Would you begin with a brief overview of CGI Group's history, products and services?

Mr. Gorber: CGI Group (GIB) was founded in 1976 by Serge Godin, entrepreneur, and Andre Imbeau. At the time, there were two. Fast-forward 35 years later, and we are now 31,000 people across 125 offices in approximately 20 countries. We provide end-to-end IT services and business solutions, including business process services for both commercial and government clients. Over the years, our growth has been a steady balance of both organic and by acquisition. Today, our revenue stands at approximately $4.3 billion, and we generate somewhere north of $2 per share in cash. So I think, from a profitability perspective, we rank right up there at the top of the list amongst our North American and European peers. It has taken a bit of time, but I think investors are starting to notice and recognize CGI both in the U.S. and in Canada.

In Canada, we've been a blue chip for quite some time. As one of the largest employers, we have about 15,000 employees in Canada. So we would be one of the largest technology companies, behind Research In Motion, but that gap, as you can imagine, has closed quite dramatically over the last couple of years. And, an interesting fact for those who would be reading is that our stock, which is the ticker GIB on New York Stock Exchange and GIB-A in Toronto has a compounded annual growth rate of approximately 30% over the last 15 years. So a nice healthy return for investors. We like to consider our company somewhat recession resistant - a bit a like a wristwatch - you can go to a certain depth, where it still remains resistant, and for us, IT services and the ability to both generate savings and improve efficiencies for our clients has made it such that we tend to thrive and outperform most others in tougher economic times.

TWST: Please explain the trends and issues CGI's customer base faces today, as well as the need the company is fulfilling.

Mr. Gorber: I think, certainly, first and foremost in most commercial clients' minds is how can we reduce cost without sacrificing quality. That's something that the services and solutions we provide can do. Once we've managed the back office for clients, we take both the risk and the people. So there is an instant, sort of an upfront kind of initiative, if you will. And then, as we move forward, we provide service levels and we provide outcomes. Our clients pay for outcomes, and that's in contrast to other providers, where it's simply a question of replacing bodies, like saying you need 100 bodies at $15 an hour, for example. Our clients don't care how many bodies are there as long as we're meeting their service-level agreements, which would be, for example, reduce the cost by 10%, 15%, 20%, and at the same time improve efficiencies.

And once we do that, it's really what we're being paid on. And, we're paid on - when we have an outsourcing agreement - we're paid at the first of the month for the work that we'll do throughout that month. And at the end of the day, we can bring economies of scale and efficiency to a client that perhaps on their own would be tougher to achieve. It's fairly logical in the sense that a client for the most part has a front room and a back room. In that front room are things like strategy, marketing, the types of things that really set you apart from the competition. In the back room, are things like IT, where a client certainly pays attention to it, but they can't devote 100% of their time to it. CGI does devote 100% of its time to making sure that clients' back rooms are running efficiently, smoothly and cost effectively.

TWST: In the beginning of the interview, you mentioned being "recession resistant." But in a world filled with special congressional committees, eurozone troubles, the MF Global-John Corzine troubles, what impact are they having, if at all, on your business?

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