D&B’s revenue growth during the credit crunch of 2007/08 were remarkably resilient.  Nevertheless demand for legacy transactional services (credit reporting) began to soften in Q4/08 and started to decline more than what management had anticipated.

D&B reported first quarter revenues of US$407.4 million, down 2% (after foreign exchange effect [AFX]).  North American revenues were down 3% [AFX], international revenues were up 5% [AFX].   In local currency (BFX) D&B’s product lines performed as follows:  North American (NA) Risk Management Solutions (RMS) was flat (51% of total revenue).   Within the RMS: traditional products grew by 3%, Value Added products (VAPs) declined by 10%, Supply Management Solutions grew by 8%.  Sales & Marketing Solutions (S&MS) declined 10% (21% of total revenues).  Within the S&MS segment traditional product lines declined by 19%, VAPs declined by 4%.  Internet Solutions (Hoover’s) were up 1% (7% of total revenues). 

International performance: RMS grew by 18% (16% of total revenue); within the RMS segment traditional products grew by 20%, VAPs by 5% and Supply Management Solutions grew by 2%.  S&MS grew by 26% (5% of total revenue); within this segment traditional products grew by 12%, VAPs grew by 42%.  International Internet Solutions declined by 26%. D&B’s international strategy appears to be working with a surprising 19% revenue growth (BFX).  Several key factors drive this positive development:  It is benefiting from the international alliance strategy (revenue growth and database development) as Asia’s exporters depend on data consistency for cross border transactions.  D&B’s China and India acquisitions perform well and it has a talented management team in place to sustain revenue growth.   D&B’s guidance for the full year 2009 is for core revenue to grow in the range of 2-5%, with an operating income growth range of 5-8%, diluted EPS growth of 9-10% and it forecasts free cash flow of US$360-US$375 million.  Source: D&B Earnings Release

BIIA Notation:  An IMF study indicates that in previous recessions in the USA credit conditions did not return to normal for two years.

BIIA Newsletter May 2009 Issue