KPIs

Adjusted operating profit margin (%)

CAGR 2006-2010: -3.2%

Adjusted operating margins measure our ongoing performance in managing the efficiency and cost effectiveness of the business. Adjusted operating profit excludes exceptional items, acquisition costs, amortisation of intangible assets previously unrecognised by an acquired entity, and non-recurring operational items that the Directors believe will aid the readers’ understanding of the accounts.

Cash conversion (%)

CAGR 2007-2010*: -11.6%

The Group's cash flow performance is measured based on the percentage of adjusted operating profit converted to operating cash flow. Operating cash flow is calculated as cash flow from operations less net capital expenditure and dividends to non-controlling entities.

^{*Based on 4 year CAGR due to negative figure for 2006.}

Equity free cash flow (£m)

CAGR 2007-2010*: -14.4%

Equity free cash flow represents the after-tax cash less dividends to non-controlling entities to indicate cash available to shareholders of Xchanging.

^{*Based on 4 year CAGR due to negative figure for 2006.}

Return on invested capital (%)

CAGR 2006-2010: -37.2%

Return on invested capital for 2010 of 12.9% compares with the Group's weighted average cost of capital of 10%. Return on invested capital represents adjusted operating profit less a tax charge at the Group effective rate divided by average invested capital. 2010 invested capital includes the add back of goodwill and other intangible asset impairments.