CGI Inc. (GIBA) Earnings Call Transcript & Summary

Good morning, everyone. My name is Lorne Gorber, I'm Executive Vice President, Investor Relations and Public Relations. I welcome you to this Annual General Meeting of CGI shareholders. Please note that today's presentations will be in English and French. Persons present in the room can take advantage of the translation devices. If you would like to use a translation device, please raise your hand and one will be brought to you. Persons who are attending the webcast through the website can follow along in the language of their choice, either in French or in English. Copies of our Insights to Action Report are available in the room or online at cgi.com. This report presents the insights shared during in person meetings by more than 1,550 executives across 10 industries and the actions we are taking to help clients achieve business outcomes. We would like to draw your attention to the information on the screen. Our presentations contain certain forward-looking statements that are subject to risks and uncertainties. Therefore, we recommend that you review and consider all relevant risk factors identified in our continuous disclosure documents and not place undue reliance on such statements. All dollar amounts shown in our presentations are in Canadian dollars, unless otherwise indicated. We would like to point out that only shareholders of record or proxy holders present in this hall may vote at the meeting. A proxy form has already been sent to shareholders, who are unable to attend the annual meeting or who are attending via our website. I would like to ask all those of you who take the floor and speak during this meeting to please go to one of the microphones in the room to state their names clearly for the benefit of the shareholders and to confirm their status as shareholders of the company or as proxy holders. Members of the media are asked to wait until the end of the meeting and to communicate with myself or with my colleague, Sébastien Barangé, for any questions you would like to put to us. I now invite Serge Godin, Founder and Executive Chairman of the Board to open the meeting.

Thank you, Lorne. Ladies and gentlemen, good morning. I should like to welcome all those of you who are joining us today either in person or through our website. We are very happy to welcome you. It's my pleasure now to introduce my colleagues up at the table here. Julie Godin, Vice Chair of the Board, Executive Vice Chair and Chief Administrative Offer -- Officer in charge of Global Planning; François Boulanger, commonly called Frank Baker, Executive Vice President and Chief Financial Officer; and Benoit Dubé, Executive Vice President, Legal Affairs and Economic Affairs and Corporate Secretary. As pursuant to the notice of meeting, we will be dealing with the following points. One, receive the reports for the financial year ended 30th of September 2019. Two, election of directors. Three, appointment of the auditor; and finally, a shareholder proposal. Julie to say a few words before George takes the podium. We will then end the meeting and invite questions from shareholders and proxy holders. Before I tackle the first item on the agenda and with your permission, I would like to act as Chairman of this meeting. Benoit Dubé will act as Secretary. In accordance with section 8 of the company's bylaws, I appoint Mark Thompson and Claire Girard of Computershare as scrutineers for this meeting, and I ask them to submit the attendance report to the Secretary of the meeting as soon as it is ready. I would ask that the Secretary place on the record of the meeting a copy of the notice of meeting of the management proxy circular as well as the other documents that have been distributed in connection with this meeting. I am told that we have quorum. Thank you. I, therefore, declare this meeting duly constituted for the transaction of business. I ask the Secretary to place on the records of the meeting the minutes of the last annual general and special meeting of shareholders held on the 30th of January 2019. The first item on the agenda is the presentation of the results of fiscal year ended 30th of September 2019, which include the financial statements, the auditor's report and the MD&A. Copies of these documents were sent to all shareholders, who so requested, and additional copies are available outside this room. They're also available on cgi.com and have been filed with the regulatory authorities -- the relevant regulatory authorities in Canada and the United States. Since you had an opportunity to read through these documents, I ask the Secretary to place them on the records of this meeting. The second item on the agenda is the election of directors. I hereby declare the nomination period open. The Board of Directors proposes that the following 16 nominees be elected as directors of the company. Our Board of Directors would, therefore, continue to be composed of a majority of independent directors. I am proud to introduce the nominees for election to our Board of Directors. I would now like to introduce the nominees for election to the Board of Directors. And I invite them to stand up when they are named. Alain Bouchard, he could not be here with us today; Sophie Brochu; George Cope; Paule Doré; Dick Evans; Julie Godin; Tim Hearn; André Imbeau; Gilles Labbé; Mike Pedersen; Alison Reed; Mike Roach; George Schindler; Kathy Waller; Joakim Westh; and myself, I'm already up. Sophie Brochu and George Cope are new nominees standing for election to our Board of Directors this year. Thank you both for your confidence. Ladies and gentlemen, these are the nominees for election to the Board of Directors of CGI. It is my pleasure to announce that all the nominees have on average received 98.93% of the votes cast by proxy. I now call for a motion for the nomination of these candidates.

Good morning. My name is Jalil El Mejjad, and I'm a shareholder of CGI. I hereby nominate the 16 persons who have just been presented by the Chairman of this meeting as nominees to the position of directors of the company.

Thank you, Mr. El Mejjad. I call for a motion to elect the 16 nominees to the Board.

And I am a CGI shareholder. I propose that the 16 nominees be elected as directors of the company.

Thank you, [ Ms. Andy ]. So I would now ask for someone to second the motion, please.

Good morning. My name is [ Gabriel Menigo ]. I'm a shareholder of CGI. I second this motion.

Thank you. [ Mr. Menigo ]. I now call for a vote by show of hands for the election of these 16 directors. All those in favor, please so indicate. [Voting]

Thank you. Those who abstain, please. [Voting]

Thank you. I hereby declare this motion carried and the 16 nominees elected to the Board of Directors of the company. We come now to the appointment of the auditor. The Board of Directors of the company on recommendation of the Audit and Risk Management Committee proposes that PricewaterhouseCoopers be once again appointed auditors of the company. I call for a proposal and motion for the appointment of the auditor.

My name is [ Carlene Nuen ]. I'm a shareholder of CGI. I move that PricewaterhouseCoopers be appointed auditors of the company until the next Annual Shareholders' Meeting and that the Audit and Risk Management Committee be authorized to set the firm's compensation.

Thank you, [ Ms. Nuen ]. As far as the compensation of Pricewaterhouse is concerned, I hope it will be as low as possible. I now ask for someone to second this motion.

[ Mr. Banerjee ], and I'm a shareholder of CGI. I second the motion.

Thank you, [ Mr. Banerjee ]. I'm told that 99.8% of votes sent in by proxy were cast in favor of this motion and that abstentions account for 0.2% of votes cast. I now call for a vote by show of hands for the appointment of auditors. Those in favor, please. [Voting]

Thank you. Those who abstain, please. [Voting]

I declare this motion carried. PricewaterhouseCoopers is thus appointed auditor of the company until the next Annual Shareholders' Meeting and the Audit and Risk Management Committee is hereby authorized to set its compensation. The last point on the agenda is a shareholder proposal put forward by MÉDAC. I call on Mr. Willie Gagnon to present this motion on the disclosure of voting results by class of shares. Mr. Gagnon have the floor.

Thank you, Mr. Chairman. My name is Willie Gagnon. I'm here on behalf of Mouvement d’éducation et de défense des actionnaires, MÉDAC, as you have just said. We had put forward 2 proposals. One was not put forward for a vote. We agreed to withdraw it on the basis of the fruitful exchanges that we were able to conduct with CGI, particularly with respect to the fact that for a number of years, the company has implemented a partnership management framework with shareholders, which is presented in Page -- on Page 46 of your management proxy circular to which you've added shareholder satisfaction evaluation program this year, and we welcome this initiative. We are aware of the fact that you have met with quite a number of shareholders, in particular, with respect to what we were asking for, which is the advisory vote on compensation of executives at each annual meeting, we put this forward and you have drawn up a detailed report of what your shareholders think about this question. And although we were giving a great deal of support for the adoption of this practice, we welcome this initiative, which, by and large, is quite similar to what we ask for from companies that hold such an advisory vote or say on pay and who don't have such a satisfactory result. So we welcome your initiative. And thank you for the work you've done, and we've agreed not to hold a vote on that question this year. Now we have also submitted a proposal asking for a disclosure of voting results by class of shares. This is a proposal for which we received close to 23% of support last year. And we have the support of the Caisse de dépôt et placement, in particular, whose voting is public. We, therefore, urge all shareholders to vote in favor of this motion, which would not require very much work on your part. It wouldn't be very expensive for you to publish the results, which you have readily to hand. In fact, you already have the results as far as I understand, and this will be extremely useful to us to obtain this information. We're not the only ones to believe this, you'll understand that we don't hold 22% of CGI's shares. So once again, we urge all shareholders to vote in favor of our motion. And Mr. Chairman, I would be very interested in hearing your comments on this, if possible.

Well, since you said that I usually comment, I'll try to adopt some reserve. But anyway, thank you very much for your cooperation, and thank you very much for the positive dialogue we held together on the say on pay. With respect to the disclosure of voting results by class of shares, we believe that this is already contained in the proxy. You have the number of outstanding shares. You see also the number of shares held by people with multiple voting rights. So basically, there's great transparency already in this regard in the proxy circular. So with your permission, we will continue the dialogue. And in the meantime, of course, we have asked shareholders to vote in the way you know with respect to our proposal. Now I'm informed that 75.15% of votes -- sorry, I had to ask somebody. Yes, I was wondering about that. Yes, go ahead. I think that [ Mr. Breda ] is the person who's going to be seconding your motion. Is that right?

Yes, my name is [ Alex Breda ], I'm a shareholder, and I second this motion.

Thank you, [ Mr. Breda ]. I am informed that 75.15% of votes sent in by proxy were cast against this motion, and that 24.85% were expressed in favor. For the reasons contained in the management proxy circular, I'll remind you that the Board of Directors is recommending that shareholders vote against the proposal. I now call for a vote by show of hands on this shareholder proposal. Those who support the recommendation of our Board of Directors and are therefore against the proposal, please raise your hand. [Voting]

Thank you. Those who are against the recommendation of our Board of Directors and are therefore in favor of the proposal, please raise your hand. [Voting]

Thank you very much. We're very happy with the results achieved. Thank you. I hereby declare, and I'm happy too, I should say. I hereby declare that the proposal on the disclosure of voting results by class of shares is not carried. The formal part of our business now being over, I hereby declare the shareholders' meeting adjourned. For years, we have regularly shared with you that CGI had been or has been built to grow and last. This is and continues to be our objectives. As per our succession plan, which has been carefully designed under our Board of Directors' leadership over the past several years, the Directors of CGI made the decision today, in fact, this morning, to appoint Julie, Julie Godin as Co-chair of the CGI Board. This appointment is in line with our desire to ensure the company's perenniality. In fact, one day, and hopefully, in the distant future, Julie will inherit our family's equity and voting rights in CGI. Over the years, Julie has gained a deep understanding of our business in all of its dimension. She also possesses deep knowledge of the consulting industry. Operationally, she will continue to report to George, George Schindler, our President and CEO, while taking on additional strategic and client-facing responsibilities. Does it mean that I am retiring? The answer is no. Okay. I think there is something wrong in my text. Does it mean that I am retiring? The answer is no. The reason why I repeat it twice, so just to make sure that if we have journalists in the room, so there is no possible interpretation. So I will retain the same responsibilities, the same role, the same title, and obviously, will continue to work -- working closely with George, our management team and all of our members to further develop CGI as the world leader it is today. I would now invite Julie to say a few words. Thank you. I will come back to you for the question period.

Good morning, everyone. Thank you, sir. Thank you, George. And thank you to all the members of our Board of Directors for your trust. I am very grateful to you. I look forward to working closely with Serge and all of you on the Board. On the operational front, I will, of course, continue to work with George and the entire management team, with a greater focus on business intelligence and strategic development activities for the company globally. As you well know, CGI has been an integral part of my life since I was very young. When I started my professional life at CGI, I felt -- I quickly felt like I was on familiar ground. The same values, the same ethics, the same culture and very often the same words. Over the past 15 years, working with many CGI colleagues around the world, I have seen, and I see this every day, that this company is made up of remarkably talented people, who are very committed to their company. I also see that even though these people live and work in countries on 5 different continents, they share the same values, they use the same language, they use the same words, they measure their results in the same way. The corporate culture is very strong. CGI basically is one big family after all. CGI's foundation is very solid. We firmly believe that our company will continue to be successful to the extent that we collectively strive for excellence, while balancing the interest of our 3 stakeholders, our clients, our consultants, and professionals, whom we call members, since 85% of them own CGI shares and you, of course, our shareholders. And since our proximity model brings our members and clients together locally, it has been natural from the beginning to act as a caring and responsible corporate citizen towards communities. CGI has always been managed by ensuring that it measures its results by balancing the interest of all its stakeholders. We also believe that our model of proximity to our customers wherever they are is another factor that adds to the long-term resilience of our business. This business model was designed from the outset so that CGI could adapt quickly and successfully to any business cycle or technological trends. And the results over the years clearly show that the system works. Member satisfaction results show continuous improvement across all dimensions, as you will hear from George. In fact, after we doubled the size of CGI 7 years ago, we have increasingly earned record high scores from both client and members. For you, our shareholders, I am pleased to report that the return on investment since our IPO in 1986 is now 19% annually on average. This means if you had invested $1,000 at that time, it would now be valued at over $275,000. Finally, yes, CGI has been built to grow and last. I firmly believe that its perenniality is perfectly possible if we continue to apply its current model with the same discipline. Let's now turn it the -- let's now turn the podium over to our President and CEO, George Schindler, for a review of 2019 and the results of our first quarter fiscal 2020. George? Thank you.

Thank you. Thank you, Julie. Good morning, everyone. Clients across every industry continue to accelerate enterprise digitization to meet the expectation of the customers and citizens. And increasingly, those other shareholders. Following several years of investment in their digital customer touch points, however, clients are now seeking returns from their digital investments in a faster and more holistic way. While clients recognize that digitization is a journey that takes some time, many are realizing that a more comprehensive approach is now required to achieve tangible benefits. As evidenced by our strong performance again this year, CGI remains one of the few firms with the scale, footprint, end-to-end capabilities and commitment to be our clients' local and global partner of choice. Our local experts, who work in proximity to clients and have a deep understanding of their business and industry, are fundamental to our strength as a partner. As consultants, we work with our clients to help them achieve business agility, meaningful innovation and financial results aligned to their business goals. For every engagement, our consultants draw upon CGI's global insights, capabilities and experiences to identify and develop the most relevant solutions needed to help our clients succeed. Every year, our consultants and clients benefit from the comprehensive insights gained from in-person conversations our leaders conduct with business and IT executives across 10 industry verticals and in each geography where we operate. This year, we conducted over 1,550 such meetings. These insights form the basis of our own perspectives, which serve as a fact-based global antenna for the benefit of both our clients and consultants. They also serve as a benchmark and industry best practices helping CGI and our clients drive the actions necessary for continuous and relevant innovation. This year, these client insights tell us that overall, clients continue to invest in enterprise digital initiatives as 90% of executives we interviewed report that they are not complete with their own digitization efforts. In fact, more than 60% indicated that they are increasing the size of their operational and digital investments in the next year. Clients like OP Financial Group, one of the largest financial services companies in Finland, has partnered with CGI for over 6 years on initiatives focused on modernization and digital innovation. Together, we have reduced application management and development costs by more than 30%, allowing OP to reinvest those savings in data analytics, automation and software robotics, to better serve their over 1 million customers. The value proposition we offer resonated this past year. A wide range of clients across every industry selected CGI for new projects or expanded engagements to achieve their business objectives. Harnessing data is also a key insight as nearly 70% of client executives reported increased investment in analytics and business intelligence this year, with further increases planned over the next 3 years in order to generate business value. Advanced data analytics is an area we have invested in through our talent development programs and in our Build and Buy strategy. Today, we have over 5,500 data analytic specialists and data scientists providing their expertise to our clients in all geographies where we operate. All of these findings point to a continued shift in the buying behaviors of our clients with increasingly favor partners, which can deliver on their IT modernization efforts, while achieving returns on digital investments. At the same time, a slowing growth economy is causing many of our clients to also place a growing premium on using technology to generate cost savings and efficiencies. Fundamentally, we have positioned ourselves in a way that allows clients to combine our full range of services to best fit their needs. We consistently create value through the delivery of these services by applying CGI's Management Foundation. The Management Foundation includes key elements that define and guide our actions related to each stakeholder. This includes proven best practices and frameworks to ensure high-quality and secure project delivery that safeguards our clients and CGI. Importantly, it also contains our values, policies, measures and practices, all to ensure excellence in service everywhere CGI operates. CGI's code of ethics is also part of the Management Foundation, and it applies to all members, officers and directors of the company. It governs all conduct and behavior to ensure we consistently operate at the highest standards. In all of our actions, we consistently seek the best equilibrium between our 3 stakeholders. This balanced approach contributed again to our strong results in 2019. I will summarize the performance for each stakeholder, beginning with you, our shareholders. I'm pleased with our team's collective financial performance in fiscal 2019. We successfully executed on our Build and Buy strategy globally. Revenue was $12.1 billion, up 5.3% or 5.9% on a constant currency basis. Net earnings were $1.26 billion, up 10.7%. Earnings per share were $4.55, representing a year-over-year improvement of 15.2%. We generated $1.6 billion in cash from operations, a year-over-year improvement of $141 million, and we ended the year with a backlog of $22.6 billion, up $34 million year-over-year. Over the course of the year, we made just over $2 billion in accretive investments, $331 million reinvested in our business, in talent, contracts and intellectual property. $1.1 billion to repurchase 12.5 million shares at an average price of $90.37, representing a return of 25% based on yesterday's closing share price. And we invested $620 million in acquiring and integrating 3 IT and business consulting services firms into our metro market operations. This enables us to broaden our global reach and serves as a catalyst for future organic growth. Our fiscal 2019 results demonstrate our ongoing commitment to continuously create value. In fact, your company's stock price has increased by 31% from the stock price of the same time last year on both the Toronto and New York Stock Exchanges. I would like to thank all of you as shareholders for your confidence in CGI. Turning now to our clients. Being close to our clients through our metro market-based proximity model builds trust and allows for real-time feedback on every aspect of our performance. This allows us to continuously improve and reinforces the value of operational excellence, innovation and client satisfaction. Throughout 2019, we conducted more than 9,000 signed client satisfaction assessments for engagements across our operations. This is up 9% over last year. These quality assessments are conducted in person by the local CGI leaders with clients rating our performance on the scale of 1 to 10 across 13 satisfaction measures. Once again, we increased our overall client satisfaction score, ending the year at 9.2 out of 10. In fact, clients rated us higher across every one of the 13 satisfaction measures on a year-over-year basis. Our loyalty score increased to 9.4 out of 10, the highest it has been for several years. Building strong loyal client relationships is a leading indicator of future business opportunity. An equally important indicator is the degree to which clients also recognize us for the innovation we deliver. I'm pleased to share that for the second year in a row, innovation was our most improved client satisfaction score rising to 8.8 out of 10. I would like to thank all of our clients for their confidence in working with us. We recommit to re-earning our clients' trust every day. Turning now to our members. Just as we do with clients, we have a constant dialogue with our members to solicit and receive regular and measurable feedback. This ensures daily life at CGI is a true reflection of our culture. This year, we raised our overall member satisfaction score to 8.2 on a scale of 1 to 10, with year-over-year improvement across all 14 satisfaction measures. And again, this year, the degree to which client satisfaction provides member satisfaction remained our single highest member satisfaction score at 8.9 out of 10. In our meetings with client executives, they continually recognize the passion, expertise and commitment of CGI members. Our members show up differently as owners. And this is a major differentiator for CGI in the marketplace. In 2019, we increased our total number of members to 77,500 talented consultants and professionals around the world, all aligned by our dream at CGI to create an environment in which we enjoy working together, and as owners, contribute to building the company we can be proud of. I would like to take this opportunity to thank all CGI members for their commitment to creating value for all 3 of our stakeholders as well as their commitment to benefit the communities in which we live and work. Our corporate social responsibility goal is to be a caring and responsible corporate citizen. And we accomplished this goal through the close collaboration between our members and clients. One of our community priorities is to encourage careers in IT in partnership with our clients, inspiring and educating more people to improve their technical and business literacy. In 2019, we led initiatives intended to promote diversity and IT careers across each of our metro markets, which in turn contributes to building CGI's future talent. Another priority is to use technology to promote environmental and economic sustainability through operating practices, community service activities and projects delivered in collaboration with our clients. CGI actively tracks and reduces the environmental impact of energy consumption from our offices, data centers, business trips and e-waste generation. Since 2014, we've reduced our global CO2 emissions by 20%. Now let's turn to our first quarter 2020 results, which we reported earlier today. In the quarter, revenue was $3.1 billion, up 3.1% year-over-year or 4.8% on a constant currency basis. Net earnings when excluding specific items were $335 million, up 6.4% year-over-year, and EPS improved by 9.8% to $1.23. We generated $465 million in cash from operations. This is up 18.8% year-over-year, of which approximately half of that growth is related to the adoption of the new accounting standard, IFRS 16. And as of December 31, backlog stood at $22.3 billion despite the negative currency impact of approximately $900 million year-over-year. In the first quarter, we allocated cash across several strategic priorities, including announcing 3 acquisitions. These bring high-end business consulting expertise and intellectual property solutions to operations in Canada, U.K., Germany and France. And this morning, the Board of Directors approved the renewal of our share buyback program until February 5, 2021. This provides us with the additional flexibility to purchase for cancellation up to 20.1 million shares over the next 12 months. As we look ahead, our proximity model, range of services, client trust and ownership culture, along with our financial strength, makes CGI resilient during times of economic uncertainty. Our end-to-end services provide clients with the innovation, agility and financial benefits they need; members to career development opportunities they seek; and CGI shareholders with recurring revenue streams at higher margins. Our capital allocation approach is prioritized to strengthen our market position and drive revenue growth and earnings per share accretion. As such, we will continue to invest back into our business to drive profitable growth, funding active metro market merger strategy, to accelerate our growth in concert with the needs of our global clients, and also buy back our stock to increase returns to our shareholders. Going forward, we remain committed to being the partner and expert of choice for our clients, the best environment in which to build a career for our members, a caring and responsible corporate citizen for our communities and the best investment for you, our shareholders. We continue to see a market climate conducive to achieving our strategic aspiration of doubling CGI over the next 5 to 7 years. Thank you. Now I'll turn it back over to our Founder and Executive Chairman, Serge.

Thank you, George. We'll now be happy to take your questions. Are there any questions? I see that there are no questions.

Good morning. I'm a shareholder. I'd like to know whether you plan to pay dividends in the coming year.

Very, very good question. No. You know, every year, we do a very disciplined, rigorous analysis of each of the issues that lead to an improvement in earnings per share. The first such topic is organic growth. The second area is acting as consolidators. In other words, merging with or acquiring other companies. And the third is buying back stock. And the fourth is paying down debt, our long-term debt. And the fifth is dividend. And in the order that I have just given you, that's how we conduct the analysis. So for each investment of $500,000, we do the analysis and the highest accretion rate is from organic growth. The second is from acquisitions. The third is the payback -- no, rather the buyback, in other words, reducing the denominator. And then dividends don't add anything to our earnings per share. So that's the first reason. The second reason -- and by the way, if you look at the history of CGI over the years, you will see that the increase in earnings per share perfectly mirrors the price of the share. So if you look at this over a number of years, you'll see that there may be some variations when markets are a little bit less favorable or more active. But these are not fundamental. They don't have an impact on CGI. So this has been very, very consistent throughout the history of the company. Secondly, we've always wanted to position CGI also in such a way as to be always ready to take advantage of transformational acquisition opportunities, as we did, for example, with Bell Sygma in 1998, and with AMS 2003, and Logica in 2012. So we want to ensure that our balance sheet is very, very sound and solid. Does that answer your question? Thank you.

Mr. Chairman and not very many people have asked for the floor. So I'm going to make an effort. Willie Gagnon from the Mouvement d’éducation et de défense des actionnaires. My English isn't perfect. Do I understand that you're not leaving? You did say it twice, but my English is a bit wonky. And then in detail, what will be the new responsibilities of Ms. Godin, if you could take us through them?

Julie, would you like to take this? Okay, Julie is going to answer.

Yes. Thank you for that question, Mr. Gagnon.

You're welcome.

Yes. Thank you for that question, Mr. Gagnon. Earlier, I was mentioning that I was going to be focusing more on business intelligence and strategic development of the company. Business intelligence means looking at our strategic planning program, and we consult each of our 3 stakeholders to make sure that we have the right information and then be able to develop the company according to the right strategy. Now we have the voice of our client. That's one program, Serge and George mentioned it. And this is really a client CGI insight. We get a great deal of information from our clients by asking them, what are their IT challenges, how they expect technologies to evolve over the years, what are their business priorities, and we collect all this information on the basis of which we're then able to go forward to develop the company and also to be certain that we have the right information from clients and about clients, so we can also guide them through their digital transformation. So we want to take greater advantage of these data to develop the company.

Could I ask an ancillary question? Am I right in believing that you're going to be focusing mostly on the clients, stakeholders? Are you going to have any new responsibilities with respect to the other stakeholders of the company?

Currently, I'm very, very heavily involved in everything involving mergers and acquisitions. I'm also very much involved in strategic meeting with clients, which we call our VIP program, where we meet with our clients, with the information that I was explaining earlier, so that we can guide them. I'm going to be doing more and more of this sort of work. Last week, for example, I went to Finland where we are setting up the largest conference for our clients, 1,300 clients are going to be invited to attend. I was the keynote speaker at this event. And I wanted to make sure that I was going to be much more involved externally than internally.

Those clarifications are very useful.

Thank you, Mr. Gagnon. Are there any further questions? Yes. Go ahead.

My name is [ Jack ]. I'd like to ask you something about the share buyback. You said you wanted to repurchase shares in the course of the coming year. Do you have any medium-term objective in mind with respect to this buyback? You want to reduce the number of shares outstanding by 10%, 15%?

That's a very, very good question. Here's what we do every year. Our aim is always to deliver a price per share between 10% and 20% increase, let's say, between 10% and 20% of our earnings per share. As I was explaining earlier, the stock price keeps pace with the performance of the earning per share. So if we adopt a bottom-up approach at the start of the year, it starts with the business units and the business units say to us, okay, we can improve so much percent in organic growth, so much in earnings. And let's say that, that contributes 75% to 80% of what we would be giving to shareholders. So then the share buyback program complements that objective. It enhances it, always with the goal to give you the best possible return.

So this is evaluated on an annual basis. Have I understand you correctly?

Yes, that's precisely so. It's what we call the normal course issuer bid.

So there's no interest in considering this over the longer term?

Well, yes, of course, after some 30 years now, 35 years only managing a public company, we've concluded that we really have to focus on delivering performance expressed in earnings per share. Thank you. This is true, by the way, for any company that is publicly listed. If you invest $100, you're going to be expecting between $115 and $120. So we have taken onboard this objective that you have as shareholders every day. Thank you very much. And next question.

[ Natomo ]. I have a -- there's been a number of question about the repurchases. And I understand why you repurchase, but how do you make sure that you're not repurchasing at high valuation? And what are your guidelines for, like, what prices you would pay?

That's a great question. That's a great question. Thank you.

Sorry, I don't speak French. So sorry, an English question.

Yes. That's a great question. So when we look at our valuation, we always look at that. So obviously, so are we paying too much for CGI shares? And over the years, we -- the proof has been made that it has been really, really a good investment every year in buying our stock. And obviously, so it means that we have to have a -- we have to make sure that we are going to deliver. And then for us, for CGI as a whole, it becomes a good investment, obviously. And then we always analyze and in comparing with the same, the other players in competition, with us around the world. So the same group of companies. And then this is -- we always look at that, too, okay? So is it a good deal for the CGI shareholders as a whole.

Okay. Thank you. And one more question is about…

By the way, we are still under evaluated, so.

Sorry?

We are still undervalued.

Undervalued. Okay. Okay.

Because when you compare with companies in our exact same domain with the same metrics, so we are still -- there is still some room for improvement in there.

Okay. Thank you. Next question is, you've highlighted your surveys to your clients and to your employees. And I was wondering if these are comparable like year-over-year. Are they the same questions that you're asking? Or are they the same samples? For example, even across geographies, I think culturally, some companies would answer differently. I am from Japan, and I think Japanese people would not -- if you give 1 to 10, not many people would give a 10. It's a culture that gives like 6, 7 or 8 on a very good day. And you're rating like 9. So I think these are -- depends on the culture of the -- your -- where your clients are based, too.

Okay. I promise you something. The moment, the day we're going to have business in Japan, we're going to get at least 9 out of 10.

Nine, okay.

That's a great question. So obviously, we have business in 40 countries. And so as Julie said, working in different continents. And so obviously, in due respect to the culture in each of the country, we realized so the corporate culture is ours, enterprise cultures is ours. And everybody is, no matter where they are measuring the same way with the same KPI, the same measures. And for instance, we got the same question for France, they tend to evaluate themself much harder, and it is very interesting. When we merged with Logica, George and Julie. So after 3 years with us, they were at the same level, 9 out of 10 coming from their clients. That system we have in having those constant relationship with our clients, which is very, very, very disciplined. For instance, if you have an outsourcing contract with a client, 4 times a year, you're going to ask all your -- we're going to ask our clients to give us another score on a scale of 10. It is the same question for -- it has been the same question, with the exception, George, of the innovation, which has been added some 3 years ago. But all the other question are exactly the same question. The idea why it's the same question, it is important that it would be the same question. It is to make sure that over the years, we'll look at it with the continuous improvement manner to make sure that we are going to increase our -- so to make sure that we are going to do better and better. We went, Julie and I, we went to India, all the way at the beginning of the year in the -- first trip in 2020. And then on the scale of 10 signed by each client, it was -- the average was 9.45 out of 10. I told the people, this is very good. There is still room for improvement. It's a good system.

Okay. Great. Just last question on your growth. What could be the bottleneck for your growth? Like in Japan, they're lacking a lot of the IT professionals, which is limiting growth in some of the companies. And if you had more human resources, can you grow faster?

George?

Is this -- is a bottleneck currently?

No. As far as growth goes, we have a portfolio of services. We call them our end-to-end services. And those services apply to different markets. And so different markets grow at different paces around the world. And so our services are built to be, as I mentioned in my remarks, resilient for different economic time periods. We're in economic slowdown, and therefore, it's not really people, it's more intellectual property, which I highlighted and then also our managed services contracts where we take on more of the IT work from our clients. And then through global delivery and through efficiencies and tools, we can bring the cost down for our clients and then grow the business for everybody here. So it's really about -- growth is really depending on having the right portfolio. And then, as Julie had mentioned, it's making sure that we bring that to our clients. And that's part of our M&A strategy. It's really about going deeper and broader to get more relationships so we can bring the full suite of services, end-to-end services of CGI to our clients. That's really what the formula is.

So your growth is not dependent on the number of employees?

It's not entirely dependent on the number of employees. No.

Thank you. Any other question? Thank you, George. No more questions? I wish to thank the members of our Board of Directors for their thoughtful advice and wise counsel throughout the year. I should also like to thank our clients, our members as well as our shareholders for their support and for the trust, they continue to place in us. Now I'd like to invite you all to join us in the West ballroom for lunch. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]