Just because a CEO doesn’t speak French doesn’t mean the company he runs doesn’t care about Molière’s language, says George D. Schindler, CGI’s president and CEO. , which finds itself in this situation.
“We always conduct our business in the local language and we are very proud to be able to do so,” replied the manager during an interview on Wednesday on the sidelines of the shareholders’ meeting. As a company based in Quebec, it is important to have managers who speak French and who conduct operations in this language and that is what we do.”
At the helm of the Montreal-based multinational technology consulting firm since 2016, Mr. Schindler does not speak French and does not plan to take any courses to learn it, he said. “It’s not in the company’s plans at this time.”
The mastery of French by the big bosses of Quebec flagships resurfaced in the news last fall. The presentation of a speech entirely in English by the CEO of Air Canada, Michael Rousseau, who said he did not see the point of learning the language, had raised a wave of indignation at the beginning of November.
Concerns about French are “valid”, judge Mr. Schindler. On the other hand, we should not limit ourselves to targeting the linguistic knowledge of a single person, according to him. “I’m not going to speak 30 languages [le nombre de langues parlées dans les 40 pays où CGI est présente] and I’m not going to ask our people to do it,” he said.
He points out that a majority of clients from multinationals with whom CGI does business choose to communicate in English and that Quebec represents only 5% of the multinational’s activities.
Francophones retain a strong presence in the senior ranks of the company, adds the CEO. He gives the example of Serge Godin, the founder and executive chairman of the board, his daughter Julie Godin, co-chairman of the board, as well as the key positions of chief financial officer, chief operating officer and president of Canadian operations.
CGI in hiring mode
CGI is also in hiring mode to ensure the growth of its activities. Nearly 1,600 positions are open in Canada, including 700 in Quebec. The company wants to double in size over a period of five to seven years. Half by acquisition, the other half by growing existing businesses.
Despite the context of labor scarcity, Mr. Schindler believes that CGI is doing well, as demonstrated by the addition of 6,000 employees over the past 12 months. It says its employee retention rate and ability to attract them is above the industry average, but would not elaborate by how much for competitive reasons.
To top its workforce, CGI finds nearly a third of its recruits through employee referrals, which are strongly encouraged because they generally yield better results for attracting and retaining workers.
Nearly 20% of recruits are recent graduates or workers from other backgrounds. The company offers them “intensive training” lasting “from one to three months, or even more”. The employer is also making efforts to promote diversity, in particular by reaching out to women who are underrepresented in the technology sector.
Despite the inflationary pressure on wages, the margin before interest and taxes, which stood at 16.9% in the first quarter (ended December 31), continues to improve compared to the 16.4% recorded in the same period last year.
In an interview, François Boulanger, the chief financial officer, explains that CGI manages to pass on “the major part” of the increase to its clients. “Most of our contracts contain an indexation clause,” he explains. I would add that it is not easy to find talent. Our clients are therefore open to the idea of paying our services at fair value to have the right people.”
Results above expectations
CGI reported better-than-expected financial results earlier on Wednesday, as demand for technology consulting services remains strong.
In the first quarter of fiscal 2022, the Montreal company announced adjusted earnings per share of $1.50, compared to $1.33 for the same period last year. Prior to the earnings release, analysts on average had expected earnings per share of $1.45, according to data released by Refinitiv.
CGI’s revenue rose 2.4% to $3.09 billion. Excluding the effect of foreign currency fluctuations, revenues grew by 6.8% in constant dollars.
Daniel Chan, of TD Securities, notes that this growth rate of 6.8% is higher than that of the previous quarter which was 6.4%. “The acceleration in growth reinforces our view that the strong demand environment and good order backlog we have seen over the past 12 months continues to translate into revenue growth.”
Net profit, for its part, amounted to 367.4 million, which represents an increase of 7% compared to the same period last year.
Mr. Schindler reiterated that the company wants to deliver revenue growth and earnings per share growth of more than 10% for 2022. The company also plans to deploy nearly $1 billion to fund acquisitions, while nearly 20% of these sums are committed for transactions already announced.