In kicking off her tenure as new CEO of D&B, Sara Mathew made a bold move by unveiling a $110-130 million investment in IT.  The project will stretch over a two year period and is intended to create a technology platform that is scalable and agile to meet current and emerging customer demands in real time and at lower cost.  This investment is expected to accelerate revenue growth in North America to the upper single digits by 2012.

Approximately $45-55 million will be spent in 2010 with a slight ramp up in the second year of the project, and with 60% of the cost to run through P&L as a non-core item.  The remaining 40% will be in the form of capital expenditures. D&B will be migrating its data center to Acxiom. 

As to timing, there is no better time than now!  From management’s comments one can conclude that the tough economic environment in 2009 forced the company to be much closer to customers.  The lessons learned throughout 2009 seem to have cemented the new IT strategy.  In essence this should be considered as a positive development.  Source:  D&B Earnings Release

2010 Guidance:  In conjunction with its 2009 earnings release D&B provided the following financial guidance for the full year 2010:  Core revenue growth of 1 percent to 3 percent, before the effect of foreign exchange.  Operating income of down 2 percent to up 2 percent, before non-core gains and charges.  Diluted EPS growth of 1 percent to 6 percent, before non-core gains and charges; and free cash flow of $240 million to $270 million, which excludes the impact of legacy tax matters but includes the new strategic technology investment.   Source:  D&B Earnings Release

BIIA Newsletter March I – 2010 Issue