Exhibit 99.1

Management’s Discussion and Analysis
For the three and six months ended March 31, 2021 and 2020

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

April 28, 2021

BASIS OF PRESENTATION

This Management’s Discussion and Analysis of the Financial Position and Results of Operations (MD&A) is the responsibility of management and has been reviewed and approved by the Board of Directors. This MD&A has been prepared in accordance with the requirements of the Canadian Securities Administrators. The Board of Directors is ultimately responsible for reviewing and approving the MD&A. The Board of Directors carries out this responsibility mainly through its Audit and Risk Management Committee, which is appointed by the Board of Directors and is comprised entirely of independent and financially literate directors.

Throughout this document, CGI Inc. is referred to as “CGI”, “we”, “us”, “our” or “Company”. This MD&A provides information management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. This document should be read in conjunction with the interim condensed consolidated financial statements and the notes thereto for the three and six months ended March 31, 2021 and 2020. CGI’s accounting policies are in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). All dollar amounts are in Canadian dollars unless otherwise noted.

MATERIALITY OF DISCLOSURES

This MD&A includes information we believe is material to investors. We consider something to be material if it results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares, or if it is likely that a reasonable investor would consider the information to be important in making an investment decision.

FORWARD-LOOKING STATEMENTS

This MD&A contains “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbours. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbour provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI’s intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as “believe”, “estimate”, “expect”, “intend”, “anticipate”, “foresee”, “plan”, “predict”, “project”, “aim”, “seek”, “strive”, “potential”, “continue”, “target”, “may”, “might”, “could”, “should”, and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of the Company, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic and political conditions, external risks (such as pandemics) and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to attract and retain qualified employees, to develop and expand our services, to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws, our ability to negotiate favourable contractual terms, to deliver our services and to collect receivables, and the reputational and financial risks attendant to cybersecurity breaches and other incidents; as well as other risks identified or incorporated by reference in this MD&A and in other documents that we make public, including our filings with the Canadian Securities Administrators (on SEDAR at www.sedar.com) and the U.S. Securities and Exchange Commission (on

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

EDGAR at www.sec.gov). For a discussion of risks in response to the coronavirus (COVID-19) pandemic, see Pandemic risks in section 8.1.1. of the present document. Unless otherwise stated, the forward-looking information and statements contained in this MD&A are made as of the date hereof and CGI disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this MD&A, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in section 8 - Risk Environment, which is incorporated by reference in this cautionary statement. We also caution readers that the risks described in the previously mentioned section and in other sections of this MD&A are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

NON-GAAP AND KEY PERFORMANCE MEASURES

The reader should note that the Company reports its financial results in accordance with IFRS. However, we use a combination of financial measures, ratios, and non-GAAP measures to assess the Company’s performance. The non-GAAP measures used in this MD&A do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS.

The table below summarizes our non-GAAP measures and most relevant key performance measures:

Profitability	Adjusted EBIT (non-GAAP) – is a measure of earnings excluding acquisition-related and integration costs, restructuring costs, net finance costs and income tax expense. Management believes this measure is useful to investors as it best reflects the performance of the Company’s activities and allows for better comparability from period to period as well as to trend analysis. A reconciliation of the adjusted EBIT to its closest IFRS measure can be found in section 3.7. of the present document.
	Adjusted EBIT margin (non-GAAP) – is obtained by dividing our adjusted EBIT by our revenues. Management believes this measure is useful to investors as it best reflects the performance of its activities and allows for better comparability from period to period as well as to trend analysis. A reconciliation of the adjusted EBIT to its closest IFRS measure can be found in section 3.7. of the present document.
	Net earnings – is a measure of earnings generated for shareholders.
	Net earnings margin (non-GAAP) – is obtained by dividing our net earnings by our revenues. Management believes a percentage of revenue measure is meaningful for better comparability from period to period.
	Diluted earnings per share (diluted EPS) – is a measure of earnings generated for shareholders on a per share basis, assuming all dilutive elements are exercised.
	Net earnings excluding specific items (non-GAAP) – is a measure of net earnings excluding acquisition-related and integration costs, restructuring costs and tax adjustments. Management believes this measure is useful to investors as it best reflects the Company’s performance and allows for better comparability from period to period. A reconciliation of the net earnings excluding specific items to its closest IFRS measure can be found in section 3.8.3. of the present document.
	Net earnings margin excluding specific items (non-GAAP) – is obtained by dividing our net earnings excluding specific items by our revenues. Management believes this measure is useful to investors as it best reflects the Company’s performance and allows for better comparability from period to period. A reconciliation of the net earnings excluding specific items to its closest IFRS measure can be found in section 3.8.3. of the present document.
	Diluted earnings per share excluding specific items (non-GAAP) – is defined as the net earnings excluding specific items on a per share basis. Management believes that this measure is useful to investors as it best reflects the Company’s performance on a per share basis and allows for better comparability from period to period. The diluted earnings per share reported in accordance with IFRS can be found in section 3.8. of the present document while the basic and diluted earnings per share excluding specific items can be found in section 3.8.3. of the present document.
	Effective tax rate excluding specific items (non-GAAP) - is obtained by dividing income tax expense, excluding tax deductions on acquisition-related and integration costs and restructuring costs and tax adjustments, by earnings before income taxes excluding specific items. Management believes that this measure allows for better comparability from period to period. A reconciliation of the effective tax rate excluding specific items to its closest IFRS measure can be found in section 3.8.3. of the present document.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

Liquidity	Cash provided by operating activities – is a measure of cash generated from managing our day-to-day business operations. Management believes strong operating cash flow is indicative of financial flexibility, allowing us to execute the Company’s strategy.
	Days sales outstanding (DSO) (non-GAAP) – is the average number of days needed to convert our trade receivables and work in progress into cash. DSO is obtained by subtracting deferred revenue from trade accounts receivable and work in progress; the result is divided by our most recent quarter’s revenue over 90 days. Management tracks this metric closely to ensure timely collection and healthy liquidity. Management believes this measure is useful to investors as it demonstrates the Company’s ability to timely convert its trade receivables and work in progress into cash.
Growth	Constant currency growth (non-GAAP) – is a measure of revenue growth before foreign currency translation impacts. This growth is calculated by translating current period results in local currency using the conversion rates in the equivalent period from the prior year. Management believes that it is helpful to adjust revenue to exclude the impact of currency fluctuations to facilitate period-to-period comparisons of business performance and that this measure is useful to investors for the same reason.
	Backlog (non-GAAP) – includes new contract wins, extensions and renewals (bookings (non-GAAP)), adjusted for the backlog consumed during the period as a result of client work performed and adjustments related to the volume, cancellation and the impact of foreign currencies to our existing contracts. Backlog incorporates estimates from management that are subject to change. Management tracks this measure as it is a key indicator of our best estimate of contracted revenue to be realized in the future and believes that this measure is useful to investors for the same reason.
	Book-to-bill ratio (non-GAAP) – is a measure of the proportion of the value of our bookings to our revenue in the period. This metric allows management to monitor the Company’s business development efforts to ensure we grow our backlog and our business over time and management believes that this measure is useful to investors for the same reason. Management’s objective is to maintain a target ratio greater than 100% over a trailing twelve-month period. Management believes that monitoring the Company’s bookings over a longer period is a more representative measure as the services and contract type, size and timing of bookings could cause this measurement to fluctuate significantly if taken for only a three-month period.
Capital Structure	Net debt (non-GAAP) – is obtained by subtracting from our debt and lease liabilities, our cash and cash equivalents, short-term investments, long-term investments and adjusting for fair value of foreign currency derivative financial instruments related to debt. Management uses the net debt metric to monitor the Company’s financial leverage and believes that this metric is useful to investors as it provides insight into its financial strength. A reconciliation of net debt to its closest IFRS measure can be found in section 4.5. of the present document.
	Net debt to capitalization ratio (non-GAAP) – is a measure of our level of financial leverage and is obtained by dividing the net debt by the sum of shareholder’s equity and net debt. Management uses the net debt to capitalization ratio to monitor the proportion of debt versus capital used to finance the Company’s operations and to assess its financial strength. Management believes that this metric is useful to investors for the same reasons.
	Return on equity (ROE) (non-GAAP) – is a measure of the rate of return on the ownership interest of our shareholders and is calculated as the proportion of net earnings for the last 12 months over the last four quarters’ average shareholder’s equity. Management looks at ROE to measure its efficiency at generating net earnings for the Company’s shareholders and how well the Company uses the invested funds to generate net earnings growth and believes that this measure is useful to investors for the same reasons.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

Return on invested capital (ROIC) (non-GAAP) – is a measure of the Company’s efficiency at allocating the capital under its control to profitable investments and is calculated as the proportion of the net earnings excluding net finance costs after-tax for the last 12 months, over the last four quarters’ average invested capital, which is defined as the sum of shareholder’s’ equity and net debt. Management examines this ratio to assess how well it is using its funds to generate returns and believes that this measure is useful to investors for the same reason.

REPORTING SEGMENTS

The Company is managed through nine operating segments, namely: Western and Southern Europe (primarily France and Portugal); United States (U.S.) Commercial and State Government; Canada; U.S. Federal; United Kingdom (U.K.) and Australia; Central and Eastern Europe (primarily Germany and the Netherlands); Scandinavia; Finland, Poland and Baltics; and Asia Pacific Global Delivery Centers of Excellence (mainly India and Philippines) (Asia Pacific). Please refer to sections 3.4. and 3.6. of the present document and to note 8 of our interim condensed consolidated financial statements for additional information on our segments.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

MD&A OBJECTIVES AND CONTENTS

In this document, we:

• Provide a narrative explanation of the interim condensed consolidated financial statements through the eyes of management;

• Provide the context within which the interim condensed consolidated financial statements should be analyzed, by giving enhanced disclosure about the dynamics and trends of the Company’s business; and

• Provide information to assist the reader in ascertaining the likelihood that past performance may be indicative of future performance.

In order to achieve these objectives, this MD&A is presented in the following main sections:

Section	Contents		Pages
1.  Corporate	1.1.	About CGI	8
Overview	1.2.	Vision and Strategy	9
	1.3.	Competitive Environment	9
2.  Quarterly	2.1.	Selected Quarterly Information & Key Performance Measures	10
Overview	2.2.	Stock Performance	11
	2.3	COVID-19	12
3.  Financial Review	3.1.	Bookings and Book-to-Bill Ratio	14
	3.2.	Foreign Exchange	15
	3.3.	Revenue Distribution	16
	3.4.	Revenue by Segment	17
	3.5.	Operating Expenses	21
	3.6.	Adjusted EBIT by Segment	22
	3.7.	Earnings Before Income Taxes	25
	3.8.	Net Earnings and Earnings Per Share	26
4.  Liquidity	4.1.	Interim condensed consolidated Statements of Cash Flows	28
	4.2.	Capital Resources	30
	4.3.	Contractual Obligations	32
	4.4.	Financial Instruments and Hedging Transactions	32
	4.5.	Selected Measures of Capital Resources and Liquidity	32
	4.6.	Guarantees	33
	4.7.	Capability to Deliver Results	33

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

Section	Contents		Pages
5.  Changes in Accounting Policies	A summary of the accounting standard changes.		34
6.  Critical Accounting Estimates	A discussion of the critical accounting estimates made in the preparation of the interim condensed consolidated financial statements.		35
7.  Integrity of Disclosure	A discussion of the existence of appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable.		38
8.  Risk Environment	8.1.	Risks and Uncertainties	40
	8.2.	Legal Proceedings	50

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

1. Corporate Overview

1.1. ABOUT CGI

Founded in 1976 and headquartered in Montréal, Canada, CGI is among the largest information technology (IT) and business consulting services firms in the world. The Company delivers a full range of services, including strategic IT and business consulting and systems integration, managed IT and business process services, and intellectual property to help clients accelerate digitization, achieve immediate cost savings, and drive revenue growth. CGI employs approximately 77,000 consultants and professionals worldwide, whom are called members as they are also owners through our Share Purchase Plan.

End-to-end services and solutions

CGI delivers end-to-end services that cover the full spectrum of technology delivery; from digital strategy and architecture to solution design, development, integration, implementation, and operations. Our portfolio encompasses:

  i. Strategic IT and business consulting and systems integration: CGI helps clients define their digital strategy and roadmap, and advance their IT modernization initiatives through an agile, iterative approach that facilitates innovation, connection and optimization of mission-critical systems to deliver enterprise-wide changes.

 ii. Managed IT and business process services: Our clients entrust us with full or partial responsibility for their IT and business functions to help them become more agile and to build resilience into their technology supply chains. In return, we deliver innovation, significant efficiency gains, and cost savings. Typical services in an end-to-end engagement include: application development, integration and maintenance; technology infrastructure management; and business process services, such as collections and payroll management. Managed IT and business process services contracts are long-term in nature, with a typical duration greater than five years, allowing our clients to reinvest savings, alongside CGI, in their digital transformation.

iii. Intellectual property (IP): Designed in collaboration with clients, our IP solutions act as business accelerators for the industries we serve. These include business solutions, some of which are cross industry, encompassing commercial software embedded within our end-to-end-services, and digital enablers such as methodologies and frameworks to drive change across business and IT processes.

Deep industry expertise

CGI has long-standing and focused practices in all of its core industries, providing clients with a partner that is not only an expert in IT, but also expert in their industries. This combination of business knowledge and digital technology expertise allows us to help our clients navigate complex challenges and focus on how to create value. In the process, we evolve the services and solutions we deliver within our targeted industries.

Our targeted industries include communications and media, banking, insurance, government, health & life sciences, manufacturing, retail & consumer, transportation and logistics, energy and utilities and space. While these represent our go-to-market industry targets, we group these industries into the following for reporting purposes: government; manufacturing, retail & distribution (MRD); financial services; communications & utilities; and health.

As the move toward digitization continues across industries, CGI partners with clients to help guide them in becoming customer and citizen-centric digital organizations.

Applied innovation

At CGI, innovation happens across many interconnected fronts. It starts in our everyday work on client projects, where thousands of innovations are applied daily. Through benchmark in-person interviews we conduct each year, business and technology executives share their priorities with us, informing our own innovation investments and driving our client proximity teams’ focus on local client priorities.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

Since 1976, CGI has been a trusted partner in delivering innovative, client-inspired business services and solutions. We help develop, innovate and protect the technology that enables clients to achieve their digital transformation goals faster, with reduced risk and enduring results.

We partner with clients to enable their business agility through a range of business and digital initiatives focused on human capital and culture practices, process automation, and data analytics. Technology is a key element of the value chains of organizations today. We help clients adopt and harmonize a number of technologies and services, such as cloud, automation, and managed services - to build agility, elasticity, security and resiliency into their technology supply chains.

Digital engagement with customers and stakeholders has taken on new importance. We help clients evaluate their work culture, organizational models, and performance management, as well as adopt modern collaboration and resilient business continuity plans.

Technology will continue to be at the heart of the future value chains that serve our clients’ consumers and stakeholders.

Quality processes

CGI’s clients expect consistency of service wherever and whenever they engage us. We have an outstanding track record of on-time, within-budget delivery as a result of our commitment to excellence and our robust governance model - CGI’s Management Foundation. CGI’s Management Foundation provides a common business language, frameworks and practices for managing operations consistently across the globe, driving a focus on continuous improvement. We also invest in rigorous quality and service delivery standards (including ISO and Capability Maturity Model Integration (CMMI) certification programs), as well as a comprehensive Client Satisfaction Assessment Program, with signed client assessments, to ensure high satisfaction on an ongoing basis.

1.2. VISION AND STRATEGY

Our strategy has always been based on long-term fundamentals. For further details, please refer to section 1.2 of CGI’s MD&A for the years ended September 30, 2020 and 2019, which is available on CGI’s website at www.cgi.com and which was filed with Canadian securities regulators on SEDAR at www.sedar.com and the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov.

1.3. COMPETITIVE ENVIRONMENT

There have been no significant changes to our competitive environment since the end of Fiscal 2020. For further details, please refer to section 1.3 of CGI’s MD&A for the years ended September 30, 2020 and 2019 which is available on CGI’s website at www.cgi.com and which was filed with Canadian securities regulators on SEDAR at www.sedar.com and the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

2. Quarterly Overview

2.1. SELECTED QUARTERLY INFORMATION & KEY PERFORMANCE MEASURES¹

As at and for the three months ended	Mar. 31, 2021		Dec. 31, 2020		Sep. 30, 2020		Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sep. 30, 2019		Jun. 30, 2019
In millions of CAD unless otherwise noted
Growth
Revenue		3,078.5		3,019.4		2,925.6		3,052.7		3,131.1		3,054.7		2,959.2		3,119.8
Year-over-year revenue growth		(1.7%)		(1.2%)		(1.1%)		(2.2%)		2.0%		3.1%		5.7%		6.1%
Constant currency year-over-year revenue growth		(1.7%)		(3.6%)		(4.5%)		(3.5%)		3.0%		4.8%		7.7%		6.6%
Backlog		23,094		22,769		22,673		22,295		22,994		22,292		22,611		22,418
Bookings		3,892		3,397		3,474		2,841		2,783		2,749		3,409		2,951
Book-to-bill ratio		126.4%		112.5%		118.8%		93.1%		88.9%		90.0%		115.2%		94.6%
Book-to-bill ratio trailing twelve months		112.6%		103.0%		97.4%		96.6%		97.0%		101.3%		104.4%		106.9%
Profitability1
Adjusted EBIT2		486.3		495.7		457.6		448.0		483.2		474.1		457.5		474.2
Adjusted EBIT margin		15.8%		16.4%		15.6%		14.7%		15.4%		15.5%		15.5%		15.2%
Net earnings		341.2		343.5		251.9		260.9		314.8		290.2		324.1		309.4
Net earnings margin		11.1%		11.4%		8.6%		8.5%		10.1%		9.5%		11.0%		9.9%
Diluted EPS (in dollars)		1.34		1.32		0.96		1.00		1.18		1.06		1.19		1.12
Net earnings excluding specific items2		341.9		347.2		318.4		308.4		338.4		334.9		329.5		337.2
Net earnings margin excluding specific items		11.1%		11.5%		10.9%		10.1%		10.8%		11.0%		11.1%		10.8%
Diluted EPS excluding specific items (in dollars)2		1.35		1.33		1.22		1.18		1.26		1.23		1.21		1.22
Liquidity1
Cash provided by operating activities		572.6		597.5		492.0		584.8		396.5		465.3		405.2		375.2
As a % of revenue		18.6%		19.8%		16.8%		19.2%		12.7%		15.2%		13.7%		12.0%
Days sales outstanding		39		44		47		48		51		49		50		52
Capital structure1
Net debt		2,938.7		2,672.5		2,777.9		3,243.5		3,792.3		2,810.6		2,117.2		2,336.1
Net debt to capitalization ratio		30.9%		27.1%		27.7%		31.8%		35.9%		28.4%		23.5%		25.9%
Return on equity		17.2%		16.6%		16.0%		17.3%		18.0%		18.0%		18.5%		18.1%
Return on invested capital		12.8%		12.4%		12.1%		13.0%		13.9%		14.4%		15.1%		15.0%
Balance sheet1
Cash and cash equivalents, and short-term investments		1,339.8		1,675.1		1,709.5		1,371.1		314.0		223.2		223.7		225.2
Total assets		14,719.9		15,271.0		15,550.4		15,343.3		14,597.2		13,863.6		12,621.7		12,813.9
Long-term financial liabilities3		3,508.1		3,598.1		4,030.6		4,363.5		3,889.1		2,766.3		2,236.0		2,421.3

¹  As of the periods ending December 31, 2019, figures include the impact of the adoption of IFRS 16, while previous quarters are not restated.

²  Please refer to sections 3.7. and 3.8.3. of each quarter’s respective MD&A for the reconciliation of non-GAAP financial measures for the quarterly periods of 2019 and 2020. For Fiscal 2019 and 2020 year ending periods, please refer to sections 5.6. and 5.6.1. of each fiscal year’s MD&A.

³  Long-term financial liabilities include the long-term portion of the debt, long-term lease liabilities and the long-term derivative financial instruments.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

2.2. STOCK PERFORMANCE

2.2.1. Q2 F2021 Trading Summary

CGI’s shares are listed on the Toronto Stock Exchange (TSX) (stock quote – GIB.A) and the New York Stock Exchange (NYSE) (stock quote – GIB) and are included in key indices such as the S&P/TSX 60 Index.

TSX	(CAD)	NYSE	(USD)
Open:	100.87	Open:	79.20
High:	105.64	High:	83.98
Low:	93.88	Low:	74.58
Close:	104.68	Close:	83.22
CDN average daily trading volumes1:	809,117	NYSE average daily trading volumes:	146,601

¹  Includes the average daily volumes of both the TSX and alternative trading systems.    

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

2.2.2. Normal Course Issuer Bid (NCIB)

On January 26, 2021, the Company’s Board of Directors authorized and subsequently received regulatory approval from the TSX for the renewal of CGI’s NCIB which allows for the purchase for cancellation of up to 19,184,831 Class A subordinate voting shares (Class A Shares) representing 10% of the Company’s public float as of the close of business on January 22, 2021. Class A Shares may be purchased for cancellation under the NCIB commencing on February 6, 2021 until no later than February 5, 2022, or on such earlier date when the Company has either acquired the maximum number of Class A Shares allowable under the NCIB or elects to terminate the bid.

During the three months ended March 31, 2021, the Company purchased for cancellation 7,705,965 Class A Shares for $746.8 million at a weighted average price of $96.92 under the previous and current NCIB. The purchased shares included 4,204,865 Class A Shares purchased for cancellation from Caisse de dépôt et de placement du Québec for cash consideration of $400.0 million. The purchase was made pursuant to an exemption order issued by the Autorité des marchés financiers and is considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB.

During six months ended March 31, 2021, the Company purchased for cancellation 12,360,665 Class A Shares for $1,183.1 million at a weighted average price of $95.72 under the previous and current NCIB.

As at March 31, 2021, the Company could purchase up to 13,077,066 Class A Shares for cancellation under the current NCIB.

2.2.3. Capital Stock and Options Outstanding

The following table provides a summary of the Capital Stock and Options Outstanding as at April 23, 2021:

Capital Stock and Options Outstanding	As at April 23, 2021
Class A subordinate voting shares	221,482,411
Class B multiple voting shares	26,445,706
Options to purchase Class A subordinate voting shares	8,693,463

2.3. COVID-19

While we are unable to predict the extent to which the COVID-19 pandemic may adversely impact our operations and financial performance in future quarters, our executive crisis management team and our network of local crisis management teams continue to closely monitor the evolving COVID-19 pandemic, executing on our business continuity plan and working collaboratively with our clients. We have established key guidelines and procedures related to security and access controls, member health screening, member isolation and quarantine, and facility infrastructure, maintenance and cleaning, to ensure that our workplace practices are in line with local government recommendations and requirements, as well as compliant with the appropriate standards of safety, health, wellness and required workplace readiness certifications. We continue to monitor key suppliers to prevent service disruptions or significant impacts in the delivery of services or goods from our suppliers.

To address issues associated with a significant number of our members working remotely, we bolstered perimeter defense with advanced cyber threat monitoring, data encryption, remote access technologies and timely system patching. Additionally, we are providing training and education so that members understand our “Securely working from home guidance”, and are taking precautionary measures to protect CGI and our client’s assets.

During the last two quarters of Fiscal 2020 and first two of Fiscal 2021, our revenues declined across our segments when compared to the prior year periods. We experienced reduced demand for our services during the COVID-19 pandemic due to the slowdown of activities in some of our markets, particularly in the MRD vertical market.

© CGI Inc. Page    12

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

To mitigate the impacts of COVID-19 on our business, we have proactively implemented various cost reduction efforts to adjust our costs based on our revenue level, such as implementing our restructuring plan and reducing travel related expenses following government restrictions. Please refer to sections 3.4., 3.5.1., 3.6. and 3.7.2. for additional information.

The Company maintains a strong balance sheet and liquidity position (refer to section 4.2. of the present document for further detail).

Our highest priority remains the health and safety of our members and providing service continuity for our clients. CGI’s proximity-based business model and robust internal infrastructure limited the impact of confinement measures imposed in several countries and allowed the majority of our members to work remotely, ensuring service continuity to our clients.

© CGI Inc. Page    13

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3. Financial Review

3.1. BOOKINGS AND BOOK-TO-BILL RATIO

Bookings for the quarter were $3.9 billion representing a book-to-bill ratio of 126.4%. The breakdown of the new bookings signed during the quarter is as follows:

Contract Type			Service Type			Segment			Vertical Market
A.	Extensions, renewals and add-ons	62%	A.	Managed IT and Business Process Services	60  %	A.	Western and Southern Europe	18%	A.	Government	31%
B.	New business	38%	B.	System integration and consulting	40  %	B.	Canada	18%	B.	MRD	27%
						C.	Central and Eastern Europe	15%	C.	Financial services	19%
						D.	U.S. Commercial and State Government	13%	D.	Communications & utilities	18%
						E.	U.K. and Australia	13%	E.	Health	5%
						F.	Finland, Poland and Baltics	10%
						G.	Scandinavia	8%
						H.	U.S. Federal	5%

Information regarding our bookings is a key indicator of the volume of our business over time. However, due to the timing and transition period associated with managed IT and business process services contracts, the realization of revenue related to these bookings may fluctuate from period to period. The values initially booked may change over time due to their variable attributes, including demand-driven usage, modifications in the scope of work to be performed caused by changes in client requirements as well as termination clauses at the option of the client. As such, information regarding our bookings is not comparable to, nor should it be substituted for, an analysis of our revenue. Management however believes that it is a key indicator of potential future revenue.

The following table provides a summary of the bookings and book-to-bill ratio by segment:

In thousands of CAD except for percentages	Bookings for the three months ended March 31, 2021		Bookings for the trailing twelve months ended March 31, 2021		Book-to-bill ratio for the trailing twelve months ended March 31, 2021
Total CGI		3,892,066		13,603,822		112.6%
Western and Southern Europe		713,856		2,144,923		114.0%
U.S. Commercial and State Government		514,262		2,003,957		107.0%
Canada		680,266		1,923,713		104.6%
U.S. Federal		210,258		1,921,124		112.9%
U.K. and Australia		488,636		1,690,331		107.3%
Central and Eastern Europe		595,002		1,614,514		124.4%
Scandinavia		289,332		1,222,953		110.8%
Finland, Poland and Baltics		400,454		1,082,307		134.5%

© CGI Inc. Page    14

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.2. FOREIGN EXCHANGE

The Company operates globally and is exposed to changes in foreign currency rates. Accordingly, as prescribed by IFRS, we value assets, liabilities and transactions that are measured in foreign currencies using various exchange rates. We report all dollar amounts in Canadian dollars.

Closing foreign exchange rates

As at March 31,	2021		2020		Change
U.S. dollar		1.2573		1.4127		(11.0%)
Euro		1.4768		1.5563		(5.1%)
Indian rupee		0.0172		0.0187		(8.0%)
British pound		1.7348		1.7596		(1.4%)
Swedish krona		0.1442		0.1425		1.2%

Average foreign exchange rates

	For the three months ended March 31,						For the six months ended March 31,
	2021		2020		Change		2021		2020		Change
U.S. dollar		1.2659		1.3458		(5.9%)		1.2845		1.3330		(3.6%)
Euro		1.5253		1.4827		2.9%		1.5395		1.4723		4.6%
Indian rupee		0.0174		0.0186		(6.5%)		0.0175		0.0185		(5.4%)
British pound		1.7461		1.7195		1.5%		1.7337		1.7098		1.4%
Swedish krona		0.1507		0.1389		8.5%		0.1510		0.1381		9.3%

© CGI Inc. Page    15

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.3. REVENUE DISTRIBUTION

The following charts provide additional information regarding our revenue mix for the quarter:

Service Type		Client Geography		Vertical Market
A.     Managed IT and Business Process Services	55 %	A.     U.S.	28 %	A.     Government	34 %
B.     System integration and consulting	45 %	B.     Canada	15 %	B.     MRD	24 %
		C.     France	15 %	C.     Financial services	22 %
		D.     U.K.	12 %	D.     Communications & utilities	14 %
		E.     Sweden	7 %	E.     Health	6 %
		F.     Germany	7 %
		G.     Finland	6 %
		H.     Rest of the world	10 %

3.3.1. Client Concentration

IFRS guidance on segment disclosures defines a single customer as a group of entities that are known to the reporting entity to be under common control. As a consequence, our work for the U.S. federal government including its various agencies represented 12.6% of our revenue for three months ended March 31, 2021 as compared to 12.8% for three months ended March 31, 2020.

For both the six months ended March 31, 2021 and 2020, we generated 12.8% of our revenue from the U.S federal government including its various agencies.

© CGI Inc. Page    16

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.4. REVENUE BY SEGMENT

Our segments are reported based on where the client’s work is delivered from within our geographic delivery model.

The table below provides a summary of the year-over-year changes in our revenue, in total and by segment before eliminations, separately showing the impacts of foreign currency exchange rate variations between Q2 2021 and Q2 2020. The three and six months ended March 31, 2021 revenue by segment was recorded reflecting the actual foreign exchange rates for that period. The foreign exchange impact is the difference between the current period’s actual results and the same period’s results converted with the prior year’s foreign exchange rates.

In thousands of CAD except for  percentages	For the three months ended March 31,						For the six months ended March 31,
	2021		2020		%		2021		2020		%
Total CGI revenue		3,078,540		3,131,141		(1.7%)		6,097,981		6,185,888		(1.4%)
Variation prior to foreign currency impact		(1.7%)						(2.6%)
Foreign currency impact		—%						1.2%
Variation over previous period		(1.7%)						(1.4%)
Western and Southern Europe
Revenue prior to foreign currency impact		499,980		528,472		(5.4%)		951,758		1,022,005		(6.9%)
Foreign currency impact		13,608						42,150
Western and Southern Europe revenue		513,588		528,472		(2.8%)		993,908		1,022,005		(2.7%)
U.S. Commercial and State Government
Revenue prior to foreign currency impact		457,201		468,109		(2.3%)		898,628		916,083		(1.9%)
Foreign currency impact		(26,376)						(31,379)
U.S. Commercial and State Government revenue		430,825		468,109		(8.0%)		867,249		916,083		(5.3%)
Canada
Revenue prior to foreign currency impact		443,578		435,462		1.9%		873,017		871,431		0.2%
Foreign currency impact		178						503
Canada revenue		443,756		435,462		1.9%		873,520		871,431		0.2%
U.S. Federal
Revenue prior to foreign currency impact		424,850		416,884		1.9%		840,842		838,829		0.2%
Foreign currency impact		(25,211)						(30,217)
U.S. Federal revenue		399,639		416,884		(4.1%)		810,625		838,829		(3.4%)
U.K. and Australia
Revenue prior to foreign currency impact		338,855		344,436		(1.6%)		662,090		670,273		(1.2%)
Foreign currency impact		6,218						10,778
U.K. and Australia revenue		345,073		344,436		0.2%		672,868		670,273		0.4%
Central and Eastern Europe
Revenue prior to foreign currency impact		327,726		309,547		5.9%		628,099		607,326		3.4%
Foreign currency impact		9,214						27,227
Central and Eastern Europe revenue		336,940		309,547		8.8%		655,326		607,326		7.9%
Scandinavia
Revenue prior to foreign currency impact		254,588		294,279		(13.5%)		508,378		597,481		(14.9%)
Foreign currency impact		19,219						39,968
Scandinavia revenue		273,807		294,279		(7.0%)		548,346		597,481		(8.2%)

© CGI Inc. Page    17

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

In thousands of CAD except for percentages	For the three months ended March 31,						For the six months ended March 31,
	2021		2020		%		2021		2020		%
Finland, Poland and Baltics
Revenue prior to foreign currency impact		192,760		201,496		(4.3%)		388,625		400,519		(3.0%)
Foreign currency impact		5,453						17,589
Finland, Poland & Baltics revenue		198,213		201,496		(1.6%)		406,214		400,519		1.4%
Asia Pacific
Revenue prior to foreign currency impact		176,700		168,814		4.7%		345,109		329,631		4.7%
Foreign currency impact		(10,157)						(16,685)
Asia Pacific revenue		166,543		168,814		(1.3%)		328,424		329,631		(0.4%)
Eliminations		(29,844)		(36,358)		(17.9%)		(58,499)		(67,690)		(13.6%)

For the three months ended March 31, 2021, revenue was $3,078.5 million, a decrease of $52.6 million, or 1.7% over the same period last year. On a constant currency basis, revenue decreased by $52.4 million or 1.7%. The decrease was mainly due to the slowdown of activities, primarily in the MRD vertical market, mostly as a result of COVID-19, and an adjustment due to a reevaluation of cost to complete on a project. This was in part offset by growth within the government vertical market and recent business acquisitions.

For the six months ended March 31, 2021, revenue was $6,098.0 million, a decrease of $87.9 million, or 1.4% over the same period last year. On a constant currency basis, revenue decreased by $161.6 million or 2.6%. The decrease was mainly due to the same factors identified for the quarter.

3.4.1. Western and Southern Europe

For the three months ended March 31, 2021, revenue in our Western and Southern Europe segment was $513.6 million, a decrease of $14.9 million or 2.8% over the same period last year. On a constant currency basis, revenue decreased by $28.5 million or 5.4%. The change in revenue was due to the slowdown of activities, mainly within the MRD and communications & utilities vertical markets, primarily as a result of COVID-19, and one less billable day.

For the six months ended March 31, 2021, revenue in our Western and Southern Europe segment was $993.9 million, a decrease of $28.1 million or 2.7% over the same period last year. On a constant currency basis, revenue decreased by $70.2 million or 6.9%. The change in revenue was due to the slowdown of activities mainly within the MRD and communications & utilities vertical markets, primarily as a result of COVID-19, the closure of our Brazil operations and one less billable day. This was partially offset by the prior year’s acquisition.

On a client geographic basis, the top two Western and Southern Europe vertical markets were MRD and financial services, generating combined revenues of approximately $316 million and $610 million for the three and six months ended March 31, 2021, respectively.

3.4.2. U.S. Commercial and State Government

For the three months ended March 31, 2021, revenue in our U.S. Commercial and State Government segment was $430.8 million, a decrease of $37.3 million or 8.0% over the same period last year. On a constant currency basis, revenue decreased by $10.9 million or 2.3%. The decrease was mainly attributable to the state and local government market, primarily from an adjustment due to a reevaluation of cost to complete on a project, and the impact of two less billable days. This was in part offset by the acquisition of the assets of Harris, Mackessy & Brennan, Inc.’s Professional Services Division and higher work volumes within the financial services vertical market.

For the six months ended March 31, 2021, revenue in our U.S. Commercial and State Government segment was $867.2 million, a decrease of $48.8 million or 5.3% over the same period last year. On a constant currency basis, revenue decreased by $17.5 million or 1.9%. The decrease was mainly due to the same factors identified for the quarter.

© CGI Inc. Page    18

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

On a client geographic basis, the top two U.S. Commercial and State Government vertical markets were financial services and government, generating combined revenues of approximately $269 million and $544 million for the three and six months ended March 31, 2021, respectively.

3.4.3. Canada

For the three months ended March 31, 2021, revenue in our Canada segment was $443.8 million, an increase of $8.3 million or 1.9% compared to the same period last year. On a constant currency basis, revenue increased by $8.1 million or 1.9%.The increase was mainly due to growth within the communications & utilities, financial services and government vertical markets. This was in part offset by a higher proportion of client projects delivered by our global delivery centers of excellence in Asia-Pacific (see section 3.4.9. of the present document) and by lower business within our MRD vertical market and in payroll processing services volumes, both primarily due to COVID-19.

For the six months ended March 31, 2021, revenue in our Canada segment was $873.5 million, an increase of $2.1 million or 0.2% compared to the same period last year. On a constant currency basis, revenue increased by $1.6 million or 0.2%. The increase in revenue was mainly due to the same factors identified for the quarter.

On a client geographic basis, the top two Canada vertical markets were financial services and communications & utilities, generating combined revenues of approximately $297 million and $591 million for the three and six months ended March 31, 2021, respectively.

3.4.4. U.S. Federal

For the three months ended March 31, 2021, revenue in our U.S. Federal segment was $399.6 million, a decrease of $17.2 million or 4.1% over the same period last year. On a constant currency basis, revenue increased by $8.0 million or 1.9%. The increase was driven by the prior year’s acquisition, as well as new and existing business for application support and cybersecurity services. This was partially offset by lower transaction volumes related to our IP business process services, mainly due to the impact of COVID-19.

For the six months ended March 31, 2021, revenue in our U.S. Federal segment was $810.6 million, a decrease of $28.2 million or 3.4% over the same period last year. On a constant currency basis, revenue increased by $2.0 million or 0.2%. The change was driven by the net increase identified in the quarter, in part offset by the decrease in project related equipment sales.

For the three and six months ended March 31, 2021, 86% and 85% of revenues within the U.S. Federal segment were federal civilian based, respectively.

3.4.5. U.K. and Australia

For the three months ended March 31, 2021, revenue in our U.K. and Australia segment was $345.1 million, an increase of $0.6 million or 0.2% over the same period last year. On a constant currency basis, revenue decreased by $5.6 million or 1.6%. The change was mainly due to the successful completion of build phase projects within the communications & utilities and financial services vertical markets. This was partly offset by growth within the financial services vertical market.

For the six months ended March 31, 2021, revenue in our U.K. and Australia segment was $672.9 million, an increase of $2.6 million or 0.4% over the same period last year. On a constant currency basis, revenue decreased by $8.2 million or 1.2%. The change was mainly due to the successful completion of build phase projects within the communications & utilities and financial services vertical markets and the non-renewal of certain infrastructure contracts. This was partly offset by growth within the financial services vertical market and the prior year’s acquisition.

On a client geographic basis, the top two U.K. and Australia vertical markets were government and communications & utilities, generating combined revenues of approximately $280 million and $550 million for the three and six months ended March 31, 2021, respectively.

© CGI Inc. Page    19

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.4.6. Central and Eastern Europe

For the three months ended March 31, 2021, revenue in our Central and Eastern Europe segment was $336.9 million, an increase of $27.4 million or 8.8% over the same period last year. On a constant currency basis, revenue increased by $18.2 million or 5.9%. The increase in revenue was primarily due to higher work volume in the government vertical market and additional IP license sales. This was partially offset by the impact of COVID-19, mainly affecting the MRD vertical market.

For the six months ended March 31, 2021, revenue in our Central and Eastern Europe segment was $655.3 million, an increase of $48.0 million or 7.9% over the same period last year. On a constant currency basis, revenue increased by $20.8 million or 3.4%. The increase in revenue was mainly due to the same factors identified for the quarter, as well as the prior year’s acquisition.

On a client geographic basis, the top two Central and Eastern Europe vertical markets were MRD and government, generating combined revenues of approximately $224 million and $430 million for the three and six months ended March 31, 2021, respectively.

3.4.7. Scandinavia

For the three months ended March 31, 2021, revenue in our Scandinavia segment was $273.8 million, a decrease of $20.5 million or 7.0% over the same period last year. On a constant currency basis, revenue decreased by $39.7 million or 13.5%. The decrease was mainly driven by a slowdown of activities related to the impact of COVID-19 and projects completed, both primarily within the MRD vertical market. Additionally, the sale of a non-profitable business related to a past acquisition contributed to the reduction of revenue.

For the six months ended March 31, 2021, revenue in our Scandinavia segment was $548.3 million, a decrease of $49.1 million or 8.2% over the same period last year. On a constant currency basis, revenue decreased by $89.1 million or 14.9%. The decrease in revenue was mainly due to the same factors identified for the quarter.

On a client geographic basis, the top two Scandinavia vertical markets were MRD and government, generating combined revenues of approximately $202 million and $411 million for the three and six months ended March 31, 2021, respectively.

3.4.8. Finland, Poland and Baltics

For the three months ended March 31, 2021, revenue in our Finland, Poland and Baltics segment was $198.2 million, a decrease of $3.3 million or 1.6% over the same period last year. On a constant currency basis, revenue decreased by $8.7 million or 4.3% due to lower work volumes in both government and MRD vertical markets, in part impacted by COVID-19.

For the six months ended March 31, 2021, revenue in our Finland, Poland and Baltics segment was $406.2 million, an increase of $5.7 million or 1.4% over the same period last year. On a constant currency basis, revenue decreased by $11.9 million or 3.0% due to the same factors identified for the quarter.

On a client geographic basis, the top two Finland, Poland and Baltics vertical markets were government and financial services, generating combined revenues of approximately $122 million and $248 million for the three and six months ended March 31, 2021, respectively.

3.4.9. Asia Pacific

For the three months ended March 31, 2021, revenue in our Asia Pacific segment was $166.5 million, a decrease of $2.3 million or 1.3% over the same period last year. On a constant currency basis, revenue increased by $7.9 million or 4.7%. The increase was mainly driven by the continued demand for our offshore delivery centers, predominantly within the financial services and communications & utilities vertical markets, primarily from our North-American operations.

© CGI Inc. Page    20

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

For the six months ended March 31, 2021, revenue in our Asia Pacific segment was $328.4 million, a decrease of $1.2 million or 0.4% over the same period last year. On a constant currency basis, revenue increased by $15.5 million or 4.7%. The increase in revenue was mainly due to the same factors identified for the quarter.

3.5. OPERATING EXPENSES

In thousands of CAD except for   percentages	For the three months ended March 31,								For the six months ended March 31,
	2021		% of Revenue		2020		% of Revenue		2021		% of Revenue		2020		% of Revenue
Costs of services, selling and administrative		2,593,743		84.3%		2,645,600		84.5%		5,120,217		84.0%		5,225,374		84.5%
Foreign exchange (gain) loss		(1,529)		— %		2,295		0.1%		(4,288)		(0.1%)		3,162		0.1%

3.5.1. Costs of Services, Selling and Administrative

For the three months ended March 31, 2021, costs of services, selling and administrative expenses amounted to $2,593.7 million, a decrease of $51.9 million over the same period last year. As a percentage of revenue, costs of services, selling and administrative expenses decreased to 84.3% from 84.5%. As a percentage of revenue, costs of services improved compared to the same period last year due to actions taken to lower expenses in response to COVID-19 and a more profitable revenue mix, in part offset by higher performance based compensation. As a percentage of revenue, selling and administrative expenses increased compared to the same period last year due to the prior year impact on performance based compensation, in part offset by actions taken to lower expenses in response to COVID-19.

For the six months ended March 31, 2021, costs of services, selling and administrative expenses amounted to $5,120.2 million, a decrease of $105.2 million over the same period last year. As a percentage of revenue, costs of services, selling and administrative expenses decreased to 84.0% from 84.5%. As a percentage of revenue, costs of services improved and selling and administrative expenses increased compared to the same period last year, both due to the same factors identified for the quarter.

During the three months ended March 31, 2021, the translation of the results of our foreign operations from their local currencies to the Canadian dollar unfavourably impacted costs and revenues by $5.5 million and $0.2 million, respectively.

3.5.2. Foreign Exchange (Gain) Loss

During the three and six months ended March 31, 2021, CGI recognized $1.5 million and $4.3 million of foreign exchange gains, respectively, mainly driven by the timing of payments combined with the volatility of foreign exchange rates. The Company, in addition to its natural hedges, uses derivatives as a strategy to manage its exposure, to the extent possible.

© CGI Inc. Page    21

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.6. ADJUSTED EBIT BY SEGMENT

In thousands of CAD except for percentages	For the three months ended March 31,						For the six months ended March 31,
	2021		2020		Change		2021		2020		Change
Western and Southern Europe		74,305		84,936		(12.5%)		140,543		158,580		(11.4%)
As a percentage of segment revenue		14.5 %		16.1 %				14.1 %		15.5 %
U.S. Commercial and State Government		61,436		69,601		(11.7%)		128,563		137,035		(6.2%)
As a percentage of segment revenue		14.3 %		14.9 %				14.8 %		15.0 %
Canada		98,007		91,552		7.1%		197,051		191,008		3.2%
As a percentage of segment revenue		22.1 %		21.0 %				22.6 %		21.9 %
U.S. Federal		55,919		49,325		13.4%		110,820		105,490		5.1%
As a percentage of segment revenue		14.0 %		11.8 %				13.7 %		12.6 %
U.K. and Australia		62,016		53,376		16.2%		120,829		101,129		19.5%
As a percentage of segment revenue		18.0 %		15.5 %				18.0 %		15.1 %
Central and Eastern Europe		36,155		30,549		18.4%		78,114		61,895		26.2%
As a percentage of segment revenue		10.7 %		9.9 %				11.9 %		10.2 %
Scandinavia		17,454		24,349		(28.3%)		41,612		47,875		(13.1%)
As a percentage of segment revenue		6.4 %		8.3 %				7.6 %		8.0 %
Finland, Poland and Baltics		28,169		31,896		(11.7%)		59,200		61,601		(3.9%)
As a percentage of segment revenue		14.2 %		15.8 %				14.6 %		15.4 %
Asia Pacific		52,865		47,662		10.9%		105,320		92,739		13.6%
As a percentage of segment revenue		31.7 %		28.2 %				32.1 %		28.1 %
Adjusted EBIT		486,326		483,246		0.6%		982,052		957,352		2.6%
Adjusted EBIT margin		15.8 %		15.4 %				16.1 %		15.5 %

For the three months ended March 31, 2021, adjusted EBIT margin increased to 15.8% from 15.4% for the same period last year. The increase was mainly due to lower discretionary expenses and cost reduction efforts in response to COVID-19 (see section 3.7.2. of the present document) and a more profitable revenue mix. This was in part offset by the impact of lower performance based compensation in the prior year.

For the six months ended March 31, 2021, adjusted EBIT margin increased to 16.1% from 15.5% for the same period last year. The increase was mainly due to the same factors identified for the quarter.

3.6.1. Western and Southern Europe

For the three months ended March 31, 2021, adjusted EBIT in the Western and Southern Europe segment was $74.3 million, a decrease of $10.6 million when compared to the same period last year. Adjusted EBIT margin decreased to 14.5% from 16.1%, mainly due to lower performance based compensation in the prior year, the slowdown of activities identified in the revenue section and one less billable day. This was partly offset by lower discretionary expenses and cost reduction efforts in response to COVID-19 (see section 3.7.2. of the present document).

For the six months ended March 31, 2021, adjusted EBIT in the Western and Southern Europe segment was $140.5 million, a decrease of $18.0 million when compared to the same period last year. Adjusted EBIT margin decreased to 14.1% from 15.5%, mainly due higher performance based compensation, the slowdown of activities identified in the revenue section and an impairment taken on a business solution. This was partly offset by lower discretionary expenses and cost reduction efforts in response to COVID-19 (see section 3.7.2. of the present document).

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.6.2. U.S. Commercial and State Government

For the three months ended March 31, 2021, adjusted EBIT in the U.S. Commercial and State Government segment was $61.4 million, a decrease of $8.2 million when compared to the same period last year. Adjusted EBIT margin decreased to 14.3% from 14.9%. The change in adjusted EBIT margin was mainly due to an adjustment due to a reevaluation of cost to complete on a project, in part offset by lower discretionary expenses in response to COVID-19.

For the six months ended March 31, 2021, adjusted EBIT in the U.S. Commercial and State Government segment was $128.6 million, a decrease of $8.5 million when compared to the same period last year. Adjusted EBIT margin decreased to 14.8% from 15.0%. The change in adjusted EBIT margin was mainly due to the same factors identified for the quarter.

3.6.3. Canada

For the three months ended March 31, 2021, adjusted EBIT in the Canada segment was $98.0 million, an increase of $6.5 million when compared to the same period last year. Adjusted EBIT margin increased to 22.1% from 21.0%. The increase was mainly due to lower discretionary expenses and cost reduction efforts (see section 3.7.2. of the present document), as well as profitable revenue growth. This was partly offset by higher performance based compensation.

For the six months ended March 31, 2021, adjusted EBIT in the Canada segment was $197.1 million, an increase of $6.0 million when compared to the same period last year. Adjusted EBIT margin increased to 22.6% from 21.9%. The increase in adjusted EBIT was mainly due to the same factors identified for the quarter.

3.6.4. U.S. Federal

For the three months ended March 31, 2021, adjusted EBIT in the U.S. Federal segment was $55.9 million, an increase of $6.6 million when compared to the same period last year. Adjusted EBIT margin increased to 14.0% from 11.8%. Adjusted EBIT margin increased primarily due to a more profitable business mix, the impact of lower profitability on isolated defense contracts in the prior year and lower discretionary expenses in response to COVID-19.

For the six months ended March 31, 2021, adjusted EBIT in the U.S. Federal segment was $110.8 million, an increase of $5.3 million when compared to the same period last year. Adjusted EBIT margin increased to 13.7% from 12.6%. Adjusted EBIT margin increased primarily due to the same factors identified for the quarter.

3.6.5. U.K. and Australia

For the three months ended March 31, 2021, adjusted EBIT in the U.K. and Australia segment was $62.0 million, an increase of $8.6 million when compared to the same period last year. Adjusted EBIT margin increased to 18.0% from 15.5%, mainly driven by a more profitable business mix, lower discretionary expenses in response to COVID-19 and a decrease in amortization of client relationships.

For the six months ended March 31, 2021, adjusted EBIT in the U.K. and Australia segment was $120.8 million, an increase of $19.7 million when compared to the same period last year. Adjusted EBIT margin increased to 18.0% from 15.1%. The increase in adjusted EBIT was mainly due to the same factors identified for the quarter.

3.6.6. Central and Eastern Europe

For the three months ended March 31, 2021, adjusted EBIT in the Central and Eastern Europe segment was $36.2 million, an increase of $5.6 million when compared to the same period last year. Adjusted EBIT margin increased to 10.7% from 9.9%. The increase in adjusted EBIT was driven by profitable revenue growth, a decrease in amortization of client relationships, lower discretionary expenses in response to COVID-19, cost reduction efforts (see section 3.7.2. of the present document) and higher IP license sales. This was in part offset by higher performance based compensation.

For the six months ended March 31, 2021, adjusted EBIT in the Central and Eastern Europe segment was $78.1 million, an increase of $16.2 million when compared to the same period last year. Adjusted EBIT margin increased to 11.9% from 10.2%. The increase in adjusted EBIT was mainly due to the same factors identified for the quarter.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.6.7. Scandinavia

For the three months ended March 31, 2021, adjusted EBIT in the Scandinavia segment was $17.5 million, a decrease of $6.9 million when compared to the same period last year. Adjusted EBIT margin decreased to 6.4% from 8.3%. The change in adjusted EBIT margin was mainly driven by the decrease in revenues identified in the revenue section, contributing to a temporarily lower utilization. This was partially mitigated by lower discretionary expenses in response to COVID-19.

For the six months ended March 31, 2021, adjusted EBIT in the Scandinavia segment was $41.6 million, a decrease of $6.3 million when compared to the same period last year. Adjusted EBIT margin decreased to 7.6% from 8.0%. The change in adjusted EBIT was mainly due to the same factors identified for the quarter, partly offset by savings generated from the Restructuring Plan (see section 3.7.2. of the present document).

3.6.8. Finland, Poland and Baltics

For the three months ended March 31, 2021, adjusted EBIT in our Finland, Poland and Baltics segment was $28.2 million, a decrease of $3.7 million, when compared to the same period last year. Adjusted EBIT margin decreased to 14.2% from 15.8% mainly due to lower performance based compensation in the prior year and the impact of the project mix within the financial services vertical market, partially offset by lower discretionary expenses in response to COVID-19.

For the six months ended March 31, 2021 adjusted EBIT in our Finland, Poland and Baltics segment was $59.2 million, a decrease of $2.4 million, when compared to the same period last year. Adjusted EBIT margin decreased to 14.6% from 15.4% mainly due to the same factors identified for the quarter, as well as an asset impairment, in part offset by the temporary payroll tax relief in response to COVID-19, both from Q1 2021.

3.6.9. Asia Pacific

For the three months ended March 31, 2021, adjusted EBIT in the Asia Pacific segment was $52.9 million, an increase of $5.2 million when compared to the same period last year. Adjusted EBIT margin increased to 31.7% from 28.2%. The increase in adjusted EBIT margin was mostly due to automation and other productivity improvements. In addition, the segment benefited from cost reductions in response to COVID-19 and the favourable impact of our currency forward contracts. This was partially offset by higher performance based compensation.

For the six months ended March 31, 2021, adjusted EBIT in the Asia Pacific segment was $105.3 million, an increase of $12.6 million when compared to the same period last year. Adjusted EBIT margin increased to 32.1% from 28.1%. The increase in adjusted EBIT margin was mainly due to the same factor identified for the quarter.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.7. EARNINGS BEFORE INCOME TAXES

The following table provides a reconciliation between our adjusted EBIT and earnings before income taxes, which is reported in accordance with IFRS:

	For the three months ended March 31,							For the six months ended March 31,
In thousands of CAD except for percentage			% of			% of				% of			% of
		2021	Revenue		2020	Revenue			2021	Revenue		2020	Revenue
Adjusted EBIT		486,326	15.8	%	483,246	15.4	%		982,052	16.1	%	957,352	15.5	%
Minus the following items:
Acquisition-related and integration costs		848	0.0	%	31,097	1.0	%		5,587	0.1	%	51,331	0.8	%
Restructuring costs		—	—	%	443	—	%		—	—	%	31,621	0.5	%
Net finance costs		26,231	0.9	%	26,628	0.9	%		53,409	0.9	%	53,350	0.9	%
Earnings before income taxes		459,247	14.9	%	425,078	13.6	%		923,056	15.1	%	821,050	13.3	%

3.7.1. Acquisition-Related and Integration Costs

For the three and six months ended March 31, 2021, the Company incurred $0.8 million and $5.6 million, respectively, of acquisition-related and integration costs for the integration towards the CGI operating model. These costs were mainly related to terminations of employment and other integration costs.

3.7.2. Restructuring Costs

In Q4 2020, the Company completed the previously announced restructuring plan (the Restructuring plan), mainly for the closure of our Brazil operations, the refocusing of the Portugal infrastructure business towards nearshore delivery and the optimization of the Sweden infrastructure business. It also incurred, as part of its cost reduction efforts in response to COVID-19, restructuring costs related to terminations of employment, primarily in France, Canada and Germany. As a result, a total of $155.4 million was expensed during the year ended September 30, 2020.

3.7.3. Net Finance Costs

Net finance costs mainly include interest on our long-term debt and lease liabilities. For the three and six months ended March 31, 2021, the net finance costs remained relatively stable as the interest on incremental debt was partially offset by cash investments.

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.8. NET EARNINGS AND EARNINGS PER SHARE

The following table sets out the information supporting the earnings per share calculations:

In thousands of CAD except for percentage and shares data	For the three  months ended March 31,									For the six months  ended March 31,
	2021			2020			Change			2021			2020			Change
Earnings before income taxes		459,247			425,078			8.0	%		923,056			821,050			12.4	%
Income tax expense		118,034			110,230			7.1	%		238,392			216,009			10.4	%
Effective tax rate		25.7	%		25.9	%					25.8	%		26.3	%
Net earnings		341,213			314,848			8.4	%		684,664			605,041			13.2	%
Net earnings margin		11.1	%		10.1	%					11.2	%		9.8	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)		250,199,106			263,638,028			(5.1	%)		253,592,671			265,933,573			(4.6	%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)		253,965,697			267,776,875			(5.2	%)		257,274,704			270,510,573			(4.9	%)
Earnings per share (in dollars)
Basic		1.36			1.19			14.3	%		2.70			2.28			18.4	%
Diluted		1.34			1.18			13.6	%		2.66			2.24			18.8	%

3.8.1. Income Tax Expense

For the three months ended March 31, 2021, income tax expense was $118.0 million compared to $110.2 million over the same period last year, while our effective tax rate decreased to 25.7% from 25.9%. The decrease in the income tax rate is mainly attributable to a different profitability mix in certain geographies.

For the six months ended March 31, 2021, income tax expense was $238.4 million compared to $216.0 million over the same period last year, while our effective tax rate decreased to 25.8% from 26.3%. The decrease in the income tax rate is mainly attributable to lower acquisition-related and integration costs as well as restructuring costs. These were partly offset by higher tax rates and a different profitability mix in certain geographies.

When excluding tax effects from acquisition-related and integration costs and restructuring costs, the effective tax rate would have been 25.8% in Q2 2021, compared to 25.5% in Q2 2020 for the same reasons listed above.

The table in section 3.8.3. shows the year-over-year comparison of the tax rate with the impact of specific items removed.

Based on the enacted rates at the end of Fiscal 2020 and our current business mix, we expect our effective tax rate before any significant adjustments to be in the range of 25.0% to 27.0% in subsequent periods.

3.8.2. Weighted Average Number of Shares

For Q2 2021, CGI’s basic and diluted weighted average number of shares decreased compared to Q2 2020 due to the impact of purchase for cancellation of Class A Shares, partly offset by the grant and the exercise of stock options. Please refer to note 5 of our interim condensed consolidated financial statements for additional information.

© CGI Inc. Page    26

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

3.8.3. Net Earnings and Earnings per Share Excluding Specific Items

Below is a table showing the year-over-year comparison excluding specific items namely, acquisition-related and integration costs and restructuring costs.

In thousands of CAD except for percentages and shares data	For the three months ended March  31,							For the six months ended March 31,
		2021		2020		Change			2021		2020		Change
Earnings before income taxes		459,247		425,078		8.0	%		923,056		821,050		12.4	%
Add back:
Acquisition-related and integration costs		848		31,097		(97.3	%)		5,587		51,331		(89.1	%)
Restructuring costs		—		443		(100.0	%)		—		31,621		(100.0	%)
Earnings before income taxes excluding specific items		460,095		456,618		0.8	%		928,643		904,002		2.7	%
Margin		14.9	%	14.6	%				15.2	%	14.6	%
Income tax expense		118,034		110,230		7.1	%		238,392		216,009		10.4	%
Effective tax rate		25.7	%	25.9	%				25.8	%	26.3	%
Add back:
Tax deduction on acquisition-related and integration costs		210		7,809		(97.3	%)		1,206		11,562		(89.6	%)
Impact on effective tax rate		—	%	—	%				—	%	(0.2	%)
Tax deduction on restructuring costs		—		225		(100.0	%)		—		3,157		(100.0	%)
Impact on effective tax rate		—	%	—	%				—	%	(0.6	%)
Income tax expense excluding specific items		118,244		118,264		—	%		239,598		230,728		3.8	%
Effective tax rate excluding specific items		25.7	%	25.9	%				25.8	%	25.5	%
Net earnings excluding specific items		341,851		338,354		1.0	%		689,045		673,274		2.3	%
Net earnings margin excluding specific items		11.1	%	10.8	%				11.3	%	10.9	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)		250,199,106		263,638,028		(5.1	%)		253,592,671		265,933,573		(4.6	%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)		253,965,697		267,776,875		(5.2	%)		257,274,704		270,510,573		(4.9	%)
Earnings per share excluding specific items (in dollars)
Basic		1.37		1.28		7.0	%		2.72		2.53		7.5	%
Diluted		1.35		1.26		7.1	%		2.68		2.49		7.6	%

© CGI Inc. Page    27

Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

4. Liquidity

4.1. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

CGI’s growth is financed through a combination of cash flow from operations, drawing on our unsecured committed revolving credit facility, the issuance of long-term debt, and the issuance of equity. One of our financial priorities is to maintain an optimal level of liquidity through the active management of our assets and liabilities as well as our cash flows.

As at March 31, 2021, cash and cash equivalents were $1,339.8 million. The following table provides a summary of the generation and use of cash for the three and six months ended March 31, 2021 and 2020.

In thousands of CAD	For the three months ended March  31,									For the six months ended March  31,
	2021			2020			Change			2021			2020			Change
Cash provided by operating activities		572,617			396,492			176,125			1,170,090			861,758			308,332
Cash used in investing activities		(85,614	)		(229,675	)		144,061			(166,735	)		(429,757	)		263,022
Cash used in financing activities		(762,536	)		(102,206	)		(660,330	)		(1,289,961	)		(367,881	)		(922,080	)
Effect of foreign exchange rate changes on cash and cash equivalents		(59,772	)		24,798			(84,570	)		(81,585	)		24,536			(106,121	)
Net (decrease) increase in cash and cash equivalents		(335,305	)		89,409			(424,714	)		(368,191	)		88,656			(456,847	)

4.1.1. Cash Provided by Operating Activities

For the three months ended March 31, 2021, cash provided by operating activities was $572.6 million or 18.6% of revenue compared to $396.5 million or 12.7% for the same period last year. For the six months ended March 31, 2021, cash provided by operating activities was $1,170.1 million or 19.2% of revenue compared to $861.8 million or 13.9% for the same period last year.

The following table provides a summary of the generation and use of cash from operating activities:

In thousands of CAD	For the three months ended March  31,						For the six months ended March 31,
	2021		2020		Change		2021		2020		Change
In thousands of CAD
Net earnings		341,213		314,848		26,365		684,664		605,041		79,623
Amortization, depreciation and impairment		124,747		130,694		(5,947)		257,164		263,075		(5,911)
Other adjustments1		(21,129)		(3,925)		(17,204)		(22,226)		10,261		(32,487)
Cash flow from operating activities before net change in non-cash working capital items		444,831		441,617		3,214		919,602		878,377		41,225
Net change in non-cash working capital items:
Accounts receivable, work in progress and deferred revenue		161,620		91,267		70,353		221,062		40,340		180,722
Accounts payable and accrued liabilities, accrued compensation, provisions and long-term liabilities		868		(113,951)		114,819		15,765		(84,269)		100,034
Other2		(34,702)		(22,441)		(12,261)		13,661		27,310		(13,649)
Net change in non-cash working capital items		127,786		(45,125)		172,911		250,488		(16,619)		267,107
Cash provided by operating activities		572,617		396,492		176,125		1,170,090		861,758		308,332

¹  Comprised of deferred income taxes recovery, foreign exchange loss (gain), and share-based payment costs.

²  Comprised of prepaid expenses and other assets, long-term financial assets, income taxes, derivative financial instruments and retirement benefits obligations.

For the three and six months ended March 31, 2021, the increases of $176.1 million and $308.3 million respectively from our cash provided by operating activities was mostly due to higher net earnings, the timing of accrued compensation and

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Management’s Discussion and Analysis  |  For the three and six months ended March 31, 2021 and 2020

higher collections, partially offset by the repayment of government tax remittances previously deferred under COVID-19 relief measures.

The timing of our working capital inflows and outflows will always have an impact on the cash flow from operations.

4.1.2. Cash Used in Investing Activities

For the three and six months ended March 31, 2021, $85.6 million and $166.7 million were used in investing activities while $229.7 million and $429.8 million were used over the same periods last year.

The following table provides a summary of the use of cash from investing activities:

In thousands of CAD	For the three months ended March  31,								For the six months ended March  31,
	2021			2020			Change		2021			2020	Change
Business acquisitions		(1,332	)		(139,451	)		138,119		(28,600	)