Intertek Group Regulatory News (ITRK)

2010 ANNUAL FINANCIAL REPORT ANNOUNCEMENT

7 MARCH 2011

Intertek Group plc ("Intertek"), the leading international provider of quality and safety services, announces its full year results for the year ended 31 December 2010.

Strong results - capturing recovering growth

Highlights

·; Total revenue growth of 11%

·; Organic revenue growth of 7.7% at constant currency

·; Adjusted operating profit¹ growth of 9%

·; Adjusted operating profit¹ margin 16.6%

·; EPS and Dividend increase of 10%

·; Acquisition of Moody for approximately £450m

¹ Adjusted results are stated before separately disclosed items which include amortisation of acquisition intangibles of £12.9m (2009: £12.8m), acquisition and related integration costs of £5.3m (2009: £2.5m), certain claims and settlements of £2.8m (2009: £3.8m) and no restructuring costs (2009: £3.2m). (See note 2)

Statutory:

Wolfhart Hauser, Chief Executive Officer, commented:

"Intertek has produced strong results for the year with a notable acceleration in the second half. Market conditions improved as the year progressed and we invested in both people and assets to capture this recovering growth.

We are pleased to announce today that we have agreed to acquire Moody International (Moody) for approximately US$730 million (GBP450 million) from companies controlled by Investcorp Securities Limited. Moody is a leading quality and safety services provider to the global energy industry and a global provider of systems certification services. Further information on this acquisition is provided in a separate announcement today.

As market conditions continue to improve, the enlarged Group is very well positioned to continue its record of strong organic revenue growth of high single digits.

With this acquisition, we expect the Intertek operating profit margin to be broadly similar in 2011 with that of 2010 and we are confident that, over the medium term, we will see the Group's overall margin progressively increase."

Contacts

For further information, please contact

Aston Swift, Investor Relations

Telephone: +44 (0) 20 7396 3400 aston.swift@intertek.com

Richard Mountain, Financial Dynamics

Telephone: +44 (0) 20 7269 7121 richard.mountain@fd.com 

Analysts' Meeting

There will be a meeting for analysts at 8.30am today at JPMorgan Cazenove, 20 Moorgate, London EC2R 6DA. A copy of the presentation will be available on the website later today.

The 2010 statutory audited Report and Accounts will be available to download from the website later today. If you wish to receive a hard copy of this Report and Accounts, please contact Intertek by email to investor@intertek.com or request by calling +44 (0) 20 7396 3400.

Corporate website: www.intertek.com 

About Intertek

Intertek is a leading provider of quality and safety solutions serving a wide range of industries around the world.

From auditing and inspection, to testing, quality assurance and certification, Intertek people are dedicated to adding value to customers' products and processes, supporting their success in the global marketplace.

Intertek has the expertise, resources and global reach to support its customers through its network of more than 27,000 people in over 1,000 laboratories and offices in more than 100 countries around the world.

Chairman's Statement

Results

Intertek has delivered strong full year growth in 2010, ending the year with revenue of £1,374.2m, an increase of 11% over the prior year. Excluding acquisitions, revenue growth was 10%.

Operating profit was £206.5m, up 11% over the prior year. Adjusted operating profit before separately disclosed items increased to £227.5m, up 9% and our adjusted operating margin was 16.6%. Excluding acquisitions, adjusted operating profit grew by 9%.

Earnings per share

Basic earnings per share were 80.7p, up 11% over last year, and diluted adjusted earnings per share were 89.4p, up 10%.

Dividends

An interim dividend of 9.3p per share (2009: 8.2p) was paid to shareholders on 19 November 2010. The Directors will propose a final dividend of 18.8p per share at the Annual General Meeting on 20 May 2011, to be paid on 17 June 2011 to shareholders on the register at close of business on 3 June 2011. If approved, this will make a full year dividend of 28.1p per share (2009: 25.5p), an increase of 10%.

Acquisitions

We are continuing to invest and completed seven acquisitions during the year, for consideration of £41.2m (2009: £29.7m). Details of these acquisitions are given in the Operating Review and in note 4. Our strategy of growing key industry sectors through acquisitions is unchanged and with our strong financial position we will continue to make targeted bolt-on acquisitions and to evaluate strategic acquisitions to increase shareholder value.

The Board

On 26 April 2010, Lloyd Pitchford joined the Board as Chief Financial Officer. Lloyd spent ten years with BG Group plc, one of the largest UK publicly listed companies, holding the role of Group Financial Controller for the past five years. Lloyd's extensive international and management experience with large, complex and growing organisations will assist Intertek to explore exciting opportunities across global markets. I am delighted to welcome Lloyd to the Board and am confident that he will be a strong contributor to Intertek's continued success.

On 31 December 2010, Mark Loughead stepped down from his role as Chief Operating Officer and Executive Director on the Board after a successful 22 year career with Intertek. Mark will remain with the Group to ensure a smooth handover of his responsibilities before retiring during 2011. On behalf of Intertek, I would like to thank Mark for his dedicated service and for the significant contribution he has made to the Group as Chief Operating Officer, as a Director and as Chief of the Oil, Chemical & Agri division previously. He leaves the Board with our gratitude and best wishes for his retirement from the Group.

On 14 February 2011, Intertek announced that Michael Wareing and Alan Brown will join the Board as Non-Executive Directors on 15 April 2011. Michael Wareing is currently a Non-Executive Director and Audit Committee Chairman at Wolseley plc, a Non-Executive Director and Audit Committee Chairman designate at Cobham plc and is Chairman of the Iraq Advisory Board for G4S plc. Michael has major international and board level knowledge gained during an extensive global career up to senior partner level at KPMG. His last position at KPMG was as International Chief Executive Officer, a position he occupied for four years.

Alan Brown is currently Chief Executive Officer of Rentokil Initial plc, a position he has held since April 2008 when he was brought in to lead a new executive management team. Alan spent 25 years at Unilever PLC where he rose through a variety of finance roles in the UK and Europe and then general management in Taiwan, Hong Kong and China. His last four years were as Executive Chairman of Unilever China. Following this, Alan returned to the UK as Chief Financial Officer at Imperial Chemical Industries PLC, taking a leading role in the divestment of the Company.

I am very pleased to welcome two high calibre individuals to the Intertek Board.

Environmental impact

Intertek is committed to playing an important and positive role with respect to climate change and the environmental impact of products and processes. We advise our clients, as an integral part of our business, on many issues which have an impact on the environment, such as the chemical content of their products and packaging, the energy efficiency of their equipment, CO2 emissions and the disposal of harmful substances and waste electrical products. We also provide advisory and consultancy services to help retailers and manufacturers design their products and services to comply with current and future environmental regulations around the world. Through our services we help our clients to minimise the environmental impact of their products and processes for the benefit of society as a whole. We are also mindful of our own impact on the environment and details of our energy saving initiatives are given in the Corporate Social Responsibility Report.

Quality and integrity

Quality and integrity are central to our proposition to customers, and therefore form the heart of Intertek's culture and processes. We have embedded our values across the organisation and are continually reviewing and reinforcing our internal processes to ensure compliance. The Intertek Compliance Code and Code of Ethics provide practical guidance and instruction for employees and there are email and telephone hotlines so that staff may report anonymously any inaccurate or unethical working practices. Our strong focus on compliance provides assurance to our customers that our reports and certificates are valid and accurate.

Our people

Our mission to support and add value for our customers is delivered through over 27,000 people across Intertek worldwide. The dedication of our employees to customer service and going the extra mile has helped us to retain business in the face of increased competition. We constantly strive to improve our capacity to attract, develop and retain the best people who share in the mission, values and success of the Group.

On behalf of the Board, I would like to welcome all new employees to Intertek and to thank all our employees around the world for their commitment to making 2010 another successful year.

Summary

Intertek produced strong results for the year with a notable acceleration in the second half. As the year progressed and market conditions improved, we invested in both people and assets to capture this recovering growth.

The group is well positioned to continue to grow and we now expect to return to our historical average organic revenue growth rate of high single digits going forward.

Chief Executive Officer's Review

Our strategy

Our mission is to add value to our customers' processes, products and brands through providing quality and safety services.

We concentrate on industry sectors in which we have the critical size to provide our customers with global world-class services which are based on a deep understanding of their current and evolving future needs and challenges.

Our organisation

Our divisions are organised to focus on specific industry sectors and continuously strive to improve their capabilities and procedures in delivering customer centric services. In addition, our Intertek as One programme is strengthening the operational and sales synergies between all Intertek business units on a country by country basis. We continued this programme throughout 2010 and also increased our cross-selling. We also gave our Executive Vice Presidents new regional responsibilities for Intertek business and operational development. This will focus our efforts and success in terms of transnational networking, sales and operational improvements across all countries in that region. 

Our customers' industries do not stand still; therefore we continually adapt and develop our organisational structure to best meet their evolving needs. Thus from 1 January 2011, we reorganised our operational structure to improve the alignment of our business lines with those of our customers and renamed certain divisions to better describe their core activities. The key changes are:

·; Oil, Chemical & Agri (OCA) is renamed Commodities and incorporates Minerals;

·; Analytical Services (AS) is renamed Chemicals & Pharma and incorporates Health & Environmental (formerly in IS);

·; Industrial Services (IS) is renamed Industry & Assurance and incorporates Food (formerly in Consumer Goods), Agri (formerly in OCA) and Upstream (formerly in AS).

Our Half Year Results for 2011 will be reported in the new structure and all prior period comparative figures will be restated to show a like-for-like comparison.

Our highly motivated people are chosen for their understanding of local culture as well as their industry expertise. We appreciate that our people are our core assets and invest continuously in them. Our excellent staff, industry leading response times and high value solutions differentiate us in the marketplace.

Global reach

As supply chains and sales patterns continue to change we have established a network of laboratories and offices located where our customers need them. By providing a central Intertek relationship for all our clients' testing, inspection and certification needs globally, we help remove the need to engage multiple vendors in different markets. Our close relationship with our customers and our reputation for quality enables us to develop partnerships with many globally renowned companies where we take over and operate our customers' in-house testing facilities or quality processes along their supply chain. Companies can outsource their laboratory activities to Intertek and be confident that the service they receive will be both high quality and more cost effective.

Customer-first strategy

Our strategy is to be the premier high value service provider in our industry sectors and we will continue to build a full service portfolio to offer our customers one-stop shopping solutions and give us the opportunity to leverage excellent customer relationships across a broad portfolio. Our reputation as an international support partner with integrity and consistent standards of service gives clients peace of mind that Intertek can test to the quality, safety or environmental levels demanded by the markets they operate in.

Besides focusing on delivering strong organic growth rates we will continue our well defined acquisition strategy to strengthen our position in evolving market segments and the important regional markets of the future. We will do this with small to medium sized bolt-on acquisitions but, we are also well prepared to be an active consolidator in the industry.

Market drivers

The drivers of growth in our business remained robust in 2010. Global trade volumes improved in 2010 over 2009, meaning that the 30% of our business which relies on this also performed better. The constant creation of new products and technologies drives demand for our services. Increasing concern by consumers and governments about the quality, safety and environmental impact of products also drives demand for our work. We continue to develop complementary new services that will support our clients' present and future needs and increase our market share in certain regions and geographies to drive growth in the business.

Intertek enables companies to concentrate on their core business and reduce their fixed costs by outsourcing more of their quality and safety needs to us. The majority of the quality and safety services performed in the world today are still performed by companies in-house. Our ability to provide more outsourced laboratory services to our clients also feeds our growth. We continue to acquire businesses that complement and enhance our service portfolio and these supplement our organic growth. We acquired seven excellent companies in 2010 which brought us new skills, sales and business development opportunities in growing markets.

Environmental focus

Our commitment to sustainability is reflected not only in our operations but also through investing in services that enable our customers to become more sustainable. By helping our clients develop more "green" and sustainable products through socially responsible supply chains we make the greatest impact on sustainability.

In addition, as green and renewable technology development continues to expand, higher volumes of testing and new bespoke laboratory technologies are needed to evaluate and support ongoing innovation and products in this area. Over the last 18 months, Intertek has opened several new, energy efficient laboratories and innovated new testing methodologies and certification systems for clients in industries from alternative fuels and energy storage to bio-textiles and medical products. In November 2010, we strengthened our expertise in renewable energy services with the acquisition of Metoc, a global provider of engineering and environmental consultancy services.

We also recognise our responsibility for improving our own operational sustainability. In May 2010 we moved a number of our Mexico operations to a new "green" centralised facility, helping unite previously dispersed facilities to a building designed to help reduce energy, water usage, carbon emissions and waste but also to provide clients with one convenient location offering unified services.

Looking forward

In addition to our global presence in over 100 countries, Intertek has an established presence in many of the world's fast growing, emerging markets. We test, inspect and certify the flow of goods and commodities from these markets into global trade. As these emerging markets evolve into more sophisticated consumer markets, the opportunity for our business there is also evolving and growing. We will provide more services to emerging local brands in the domestic market as rising middle class populations demand higher quality, safety and environmental standards from their local businesses.

As our customers are increasingly looking for a strong and reliable partner to help them meet their quality, safety, environmental and regulatory challenges, Intertek will continue to expand its services and outsourcing options, helping clients to better manage the impact of ongoing changing legislations on their products, operations and supply chains.

Through these value-adding services we will strengthen our client relationships as we become more integral in their business and on hand for future support services, actively working together to help prevent health, safety, environmental damage and operational risks.

Operating Review

Consumer Goods

Our performance in 2010

What we do

The Consumer Goods division is a market leading provider of services to the textiles, toys, footwear, hardlines, food and retail industries. Services include testing, inspection, auditing, advisory services, quality assurance and hazardous substance testing. Customers are often retailers but also include manufacturers and suppliers within a global supply chain.

The market for the services of the Consumer Goods division is diverse. Demand is driven by retailers who require the goods they sell to be produced to a quality set by either their own internal standards or by standards applicable in a particular country or region. Increasingly, materials are sourced and goods are manufactured in locations that are remote from the consumer, causing supply chains to be longer and more complex. The market is also being driven by regulations issued to address safety and environmental concerns over such issues as carcinogenic dyes in textiles and chemicals in children's products, toys and cosmetics.

Our performance in 2010

Growth in the Consumer Goods division continued to recover through 2010 ending the year with total revenue of £341.5m up 6.4% (5.2% at constant exchange rates). The growth was wholly organic. Adjusted operating profit was £109.2m, up 3.5% (1.8% at constant exchange rates). The total adjusted operating margin declined 90 basis points to 32.0% from 32.9% in 2009. The margin was particularly high in toy testing in 2009 as a result of the CPSIA legislation explained below.

Textiles, Apparel & Footwear which is the largest sector in the division grew well, with excellent results in China supported by notable growth in Bangladesh, Vietnam, Turkey and Guatemala. Revenue growth from toy testing continued to improve through 2010 as the impact of the exceptionally high prior year comparables dissipated, and the volume of toy testing normalised after the surge caused by the enactment of the CPSIA (Consumer Product Safety Improvement Act) legislation in the US. We continued to invest in new facilities, particularly in the food sector where strong revenue growth was reported in Europe and Asia. Revenue from Inspection services in Asia also grew steadily.

On 31 December 2010, we acquired American Analytical Chemistry Laboratories Corp (AAC Labs), a business that provides laboratory based food testing in the United States. This acquisition expands our network of food services and adds North American chemical testing to our existing chemical testing, microbiological, inspection, auditing and certification services. No revenue or operating profit for this acquisition was included in the Group results for 2010.

The key growth drivers in Consumer Goods remain strong, principally the sourcing of products from lower cost manufacturers in countries such as China, the increasingly wide range of products being sold by retailers and shorter product lifecycles. Concern over the safety of consumer products has increased demand from consumers and regulatory bodies for independent assurance of quality and safety.

Although two-thirds of revenue is derived from toys and textiles testing, the remainder is from our developing service lines such as food, consultancy, inspection, supply chain services and corporate social responsibility, where margins are not always as high as those earned by the established services. As many economies are currently entering a recessionary phase, consumer spending is declining. Whilst our business is dependent on the variety of goods produced and new product development rather than the volume sold, a prolonged decline in consumer spending could result in a reduction in product development. We aim to grow our revenue by developing new services, integrating our services and providing innovative supply chain solutions to our customers.

Commercial & Electrical

Our performance in 2010

What we do

The Commercial & Electrical division provides services including testing and certification, electromagnetic compatibility testing (EMC), outsourcing, benchmark and performance testing and environmental testing. These are provided to a wide range of industries including the home appliance, lighting, medical, building, industrial and HVAC/R (heating, ventilation, air conditioning and refrigeration), IT, telecom, renewable energy and automotive industries. Our customers are mostly manufacturers but also retailers, industry organisations and government departments. Intertek has the widest range of owned marks and accreditations, including the ETL listed mark, the Warnock Hersey mark for North America and the S mark, Asta mark and BEAB mark for Europe, as well as being a leader in providing CB certification and the CE mark and GS mark for Europe.

The market for our Commercial & Electrical services is driven primarily by increasing regulations over the safety of products, new technology, product variety and growing environmental concerns. This includes current concerns over climate change and the impact on the environment of electrical products.

Total revenue increased to £269.2m, up 10.0% (7.8% at constant exchange rates). Growth was wholly organic. Total adjusted operating profit was £38.2m, up 10.1% (up 7.0% at constant exchange rates). The total adjusted operating margin was14.2%.

After a slow start to the year, most business lines in the Commercial & Electrical division performed well and the margin recovered after dipping in the first half of the year due to the continued decline in the building products sector, as new construction projects failed to materialise in North America. The core electrical testing business reported good results worldwide, particularly in lighting, medical, HVAC and life safety. There was good growth in the renewable energy sector where we guided clients through the complex regulatory issues affecting renewable energies including photovoltaic and wind power equipment. Wireless testing also improved with several new programmes starting in the second half.

Customer demand for safe, reliable and energy efficient products continues to increase and the market for the Commercial & Electrical division continues to evolve, presenting opportunities for growth. Market drivers in the medical and renewable energy sectors remain strong. Concerns over climate change are driving new directives regarding the energy usage of products, particularly in the HVAC industry and this is expected to extend to other industries. We will continue to strive for operational excellence and aim to strengthen our market share by offering superior service.

Oil, Chemical & Agri

Our performance in 2010

What we do

The Oil, Chemical & Agri division provides independent cargo inspection as well as non-inspection related laboratory testing, calibration and related technical services. Our customers include the world's energy, petroleum, chemical and agricultural industries. Cargo inspection and testing is a well established global market in which Intertek is one of the leading service providers. High barriers to entry are principally due to the fixed costs of establishing a global network of operations and laboratories and our excellent reputation and experience earned through decades of service in the industry. The division also provides cargo scanning, fiscal support services and conformity assessment programmes to governments, national standards organisations and customs authorities.

Total revenue increased to £452.7m, up 11.3% (8.7% at constant exchange rates). Excluding acquisitions, organic revenue growth was 10.6% (8.0% at constant exchange rates). Total adjusted operating profit increased to £51.0m, up 16.7% (12.3% at constant exchange rates).

Excluding acquisitions, organic adjusted operating profit growth was 15.3% (11.0% at constant exchange rates). The adjusted operating margin increased by 60 basis points to 11.3%.

There was strong revenue growth in the EMEA and APAC regions and recovering growth in North America, where market conditions improved towards the end of the year. The demand for biofuels is also starting to recover. Our well-established conformity assessment programmes in Nigeria and Saudi Arabia performed very well, as did a smaller programme in Algeria which started in May 2009.

On 1 July 2010, we acquired Expertises Technologies & Services SA (ETSA) from Air Liquide SA. ETSA provides cargo inspection and analysis services for the oil and gas industry through five operational sites in France. This acquisition was integrated with our existing business to France to increase our ability to support more outsourcing of new fuels research and development, and provide refinery support to our local and global clients. The national strikes in France disrupted activity in October but had no lasting impact on our operations.

On 10 November 2010, we acquired Pacifica Marine which is a small business based in Papua New Guinea. This business provides petroleum inspections, agricultural inspections and marine consultancy services.

The core inspection business is steady and we expect the demand for higher margin complex testing services to increase once the global recession recedes and investment resumes. We also expect the demand for biofuels to grow, leading to the development of new technologies and production methods. Whilst the US market remains variable, we are seeing growth opportunities in the rest of the world, particularly in emerging markets.

Analytical Services

Our performance in 2010

What we do

Analytical Services provides expert laboratory measurement and consultancy services to a broad range of industries including chemical, pharmaceutical, oil and gas, and automotive and aerospace. We have an established track record of success in laboratory outsourcing with many large internationally recognised companies.

Total revenue in 2010 was £151.5m, up 10.2% (10.3% at constant exchange rates) over the prior year. Organic revenue increased 6.2% (6.3% at constant exchange rates). Total adjusted operating profit for 2010 was £14.5m, which was flat on 2010. Organic adjusted operating profit increased by 0.7% (up 1.4% at constant exchange rates). The adjusted operating profit margin was 9.6%.

There was good revenue growth from chemicals and advanced materials services with strong organic growth from our laboratories in the Netherlands and France, augmented by revenue from the acquired safety testing business which is described below. Growth in the upstream energy sector was slower than expected during the year although market conditions improved due to the increasing oil price stimulating demand. The Pharmaceutical sector remained challenging with good growth in the analysis of biologics and large molecules benefiting our laboratories in San Diego, USA and Manchester, UK, reduced by sales erosion in our small molecule bio-analysis businesses in Ireland and El Dorado Hills, USA with our product quality and cGMP (Good Manufacturing Practice) testing business remaining flat.

Capitalizing on our strong track record in corporate laboratory outsourcing, we continue to expand the technical depth and geographic reach of our Analytical Services by acquiring new skills and services and cementing new relationships with strategically important clients.

On 31 March 2010, the Group acquired the Regulatory and Safety Testing businesses of CIBA Expert Services from BASF. The Safety Testing business conducts a range of expert pharmaceutical & chemical and safety services. The main laboratory for this business is located in Basel, Switzerland, with smaller facilities in India, the UK and the USA. These operations, including 92 employees are being integrated into Intertek's global network to maximize opportunities and synergies and optimize costs. Once the integration has been fully achieved, the margin of the acquired business is expected to improve.

On 20 July 2010, we entered a long-term outsourcing agreement with Air Products, a leading industrial gases company, in the USA. Air Products has outsourced its high-end laboratory in Allentown, Pennsylvania and transferred 31 scientists and materials engineers to Intertek. This contract provides the Group with a world class technology centre for advanced materials analysis in North America.

On 1 October 2010, we acquired Profitech, a small refinery and chemical manufacturing data modelling company in the UK. Profitech's modelling techniques complement our oil and gas services business in areas including, process optimization and yield improvement as well as in metering, measurement and allocation.

The pharmaceutical market continues to be volatile, particularly in the USA, however good performance in other sectors is expected to result in sustainable growth.

Industrial Services

Our performance in 2010

What we do

Industrial Services is a global provider of inspection, testing and auditing services. This includes technical verification, conformity assessment, asset integrity management, 3D laser scanning and dimensional control management, management systems certification, second-party auditing, supplier evaluation, training, health and safety consulting and greenhouse gas services. We serve a wide variety of industries including oil, gas, petrochemical, power, renewable energy, civil and infrastructure, aerospace and medical.

Total revenue in 2010 was £93.8m, up 16.2% (14.1% at constant exchange rates) over the prior year. Organic revenue increased 9.7% (7.4% at constant exchange rates). Total adjusted operating profit increased to £7.3m, up 12.3% (9.0% at constant exchange rates). Organic adjusted operating profit increased by £0.2m or 6.7% and was flat at constant exchange rates. The adjusted operating margin was 7.8%.

Market conditions for Industrial Services remained challenging, particularly in the oil and gas sector. There has been little improvement in the availability of funding for major infrastructure projects. In systems certification, good results in the USA and Sweden were reduced by underperformance in Asia, where the business is under review. We continue to expand the geographical footprint and service offering in this division by acquiring new businesses. The regulatory business which we acquired from BASF on 31 March 2010, performed in line with our expectations. This business provides testing and consulting for the purpose of regulatory approvals, and is mainly based in Canada and the USA, with smaller operations in Switzerland, UK, Italy, China, India, Brazil and Japan. Clients are split across the food industry and other mixed industry client bases. The performance of this acquisition together with the impact of the REACH activities in meeting the registration deadline on 1 December 2010 have enhanced our health and environmental sector significantly.

On 4 May 2010, the Group acquired 100% of the share capital of Norca Ingenieria de Calidad, SL. Norca, which employs 70 inspectors and consultants in Spain, offers services such as inspection, expediting, non-destructive testing, consultancy, quality assurance, engineering services, program implementation, safety consultancy and training largely to Spain's nuclear industry. On 27 October 2010, the Group acquired Metoc plc a company that provides engineering and environmental consultancy services to various fast growing renewable energy segments, worldwide. Metoc employs 80 consultants in the UK providing consultancy and advisory services at the concept, construction and operational stages of projects using all forms of renewable energy. These acquisitions bring us an excellent set of new advisory capabilities which we can offer to our clients in the energy sector.

We will continue to expand our service portfolio and regional footprint through organic investment and further acquisitions, focusing on the high-end of the market for each of our sectors, providing special attention to the innovative and young industries with long-term potential such as the renewable sector. Increasing project activities especially in Oil & Gas, together with continued regulatory pressures and the forthcoming REACH deadline in 2013, will support our continued growth.

Minerals

Our performance in 2010

What we do

The Minerals division offers analytical testing, inspection and mine-site laboratory services to the world's minerals, exploration, ore and mining industries. We provide a wide range of analytical services for materials including precious metals, base metals and their raw content, such as iron ore, bauxite, coal and coke, as well as bulk commodities. We also provide marine and inspection services of minerals shipments.

In 2010, total revenue was £65.5m, up 40.3% (25.0% at constant exchange rates) over the prior year. Total adjusted operating profit was £7.3m, up 82.5% (65.9% at constant exchange rates). The adjusted operating margin was 11.1%. Growth was wholly organic.

The improvement in market conditions which started in the first half of 2010 continued through the rest of the year. The demand for commodities increased, particularly for iron ore and non-ferrous metals in China, and there was a resumption of exploration activity which benefitted our facilities in Australia, South Africa and Indonesia. Sample volumes increased in our key sites and productivity improved as capacity was utilised efficiently.

The exploration market continues to recover on the back of strong minerals commodity prices so we anticipate continued growth in our Minerals division. Skills shortage may be an issue as competition for labour becomes more intense.

Business Review

Financial Review

Presentation of results

To provide readers with a clear and consistent presentation of the underlying operating performance of the Group's business, the figures discussed in this review are presented before separately disclosed items. A reconciliation is set out in note 3 to the 2010 Annual Report. Organic growth excludes the results of acquisitions made in 2010 and 2009.

2010 Financial performance

Intertek has delivered a strong financial performance in 2010, capitalising on an improving recovery across many of our global markets. Revenue increased by 11.1% to £1,374m, including a 10% growth in organic revenue (7.7% organic growth at constant exchange rates). The Group's adjusted operating margin was 16.6%, down 30 basis points on the prior year, reflecting the one-off contribution during 2009 of US toy testing regulations.

The Group achieved good cash conversion during 2010 with cash generated from operations of £271.4m. The year saw further progress on the Group's growth agenda with £65.9m invested in organic capital investment and £41.9m invested in a total of seven acquisitions. In addition, the Group paid £9.3m in respect of acquisitions made in prior years and ended the year in a strong financial position with net debt of £169.7m and a net debt to EBITDA ratio of 0.6. The Group has now completed the activities to refinance its existing borrowing facilities.

Financial Results - adjusted

Results for the year

Adjusted profit before income tax increased by 11% to £211.9m. The Group's adjusted effective tax rate was unchanged at 26.7%. Adjusted earnings and diluted adjusted earnings per share were £144.9m and 89.4p respectively (2009: £131.4m and 81.5p). Including the effects of separately disclosed items, the Group's reported profit before tax was £189.9m (2009: £169.2m), earnings and basic earnings per share were £128.6m and 80.7p (2009: £114.7m and 72.4p).

Dividends

The Board recommends a full year dividend of 28.1p per share, an increase of 10%. This recommendation reflects the strong financial performance and position of the Group and the Board's confidence in the Group's outlook. If approved, the full year dividend of 28.1p represents a total cost of £45m being 31% of earnings for 2010 (2009: £41m and 31%). The dividend is covered 3.2 times by earnings (2009: 3.2 times), based on diluted adjusted earnings per share.

Key financial performance indicators

The Group uses a variety of key performance indicators (KPIs) to monitor the financial performance of the Group. Similar indicators are used to review the performance of the operating divisions and business units. These KPIs are regularly reviewed by the Board and management and are used to assess past performance and set targets for the future. A number of the KPIs also form part of the management incentive scheme whereby managers may receive annual bonus payments on achieving or exceeding a range of targets set for the year. Further information on management incentives is given in the Remuneration Report which starts on page 54 of the 2010 Annual Report.

A critical performance indicator for the Group is the continuing expansion of the revenue base. Whilst the Group continues to seek opportunities for expansion through acquisitions, the Board places great emphasis on the achievement of sustainable organic revenue growth. During the year under review, total revenue increased by 11%, of which 10% came from organic revenue growth (8% at constant exchange rates). This resulted in growth in both adjusted operating profit and organic adjusted operating profit of 9% (6% at constant exchange rates).

As a people intensive business, it is critical that costs are closely controlled and that the cost base of individual operating entities remain relevant to underlying revenue generation. Accordingly, the operating margin of individual operating entities is the subject of critical review. During 2010, the adjusted operating margin was 16.6% (2009: 16.9%).

Strong cash conversion is crucial for the Group to fund its growth programme. Working capital is kept to a minimum and each division has a range of targets on cash conversion. Operating cash flow is routinely monitored to ensure that it is comparable with past performance and is consistent with budgeted activity.

The Board seeks to achieve robust and consistently growing earnings per share performance. Earnings per share performance also forms an important part of the bonus criteria for management incentives. Basic earnings per share measures actual earnings attributed to shareholders in the financial year over the weighted average number of ordinary shares in issue during the year. Diluted earnings per share measures actual earnings attributable to shareholders in the financial year over the weighted average number of ordinary shares in issue but adjusted for the impact of potentially dilutive share awards. These metrics are also adjusted to exclude certain costs to enable shareholders to gain a better understanding of the underlying trading performance of the Group.

The rate of return on invested capital measures the efficiency of Group investments; the higher the rate achieved means that investment gains compare more favourably with the cost of investment. This is an important measure to assess the year on year efficiency of investment decisions. It is also an important criteria in the decision making process when projects are competing for limited funds.

Capital investment

The Group continued to invest in its growth strategy during 2010, investing in both organic and acquisition led growth. Organic capital investment of £65.9m (2009: £52.8m) during the year represented 4.8% of revenue (2009: 4.3%). Over the medium-term, the Group plans to invest between five and seven per cent of revenue in organic investment.

During the year the Group completed seven acquisitions for a cash investment of £41.9m (2009: three acquisitions for £23.9m), and there was £9.3m (2009: £10.2m) paid in respect of prior period acquisitions.

On 31 March 2010, the Group acquired the Regulatory and Safety Testing businesses of Expert Services (ES) from BASF for a cash consideration of £21.4m. ES provides services in two segments: regulatory testing and consulting services and environmental and safety testing, to companies in industries including pharmaceutical, chemical, food, healthcare, consumer product and agriculture. The business employs around 200 people across Switzerland, Canada, UK, USA, China, India, Brazil, Italy and Japan and offers a range of services and expertise complementary to Intertek Group's services and clients. The businesses are being integrated into our Industrial Services and Analytical Services divisions.

The Group made six smaller infill acquisitions in 2010, details of which are given in note 4 and in the Operating Review. We expect to complete further acquisitions in 2011.

Net financing costs

Details of the Group's net financing costs are given in note 7 to the 2010 Annual Report. The Group reported net financing costs of £16.6m in 2010 (2009: £17.5m).

Total finance income in 2010 was £7.2m (2009: £7.7m), and primarily comprised the return on pension assets and interest on bank balances.

Total finance expense for 2010 was £23.8m (2009: £25.2m) comprising interest on borrowings, pension interest cost, foreign exchange losses on the revaluation of net monetary assets and liabilities and other financing fees. Included within the finance expense was a charge of £1.0m (2009: nil) relating to an interest rate swap which was recycled from equity as it was ineffective for hedge accounting. This was reported as a separately disclosed item in the income statement (see note 2).

Cash flow

The primary source of the Group's cash liquidity continues to be cash generated from operations and the drawdown of debt. A portion of these funds has been used to fund acquisitions and capital expenditure and to pay interest, dividends and taxes.

The Group continued to generate good cash flow in 2010. Cash flow generation during 2009 was at an exceptional level as the Group prioritised cash flow during the economic downturn. Cash generated from operations was £271.4m for 2010, compared to £278.4m for 2009. One of the key performance indicators we use to measure the efficiency of our cash generation is the percentage of operating profit that is converted into cash. As shown in the table above, in 2010, 100% of operating profit was converted into cash compared to the exceptional 121% in 2009.

In order to support our growth strategy we invest continually in our operations. In 2010, net cash flows used in investing activities were £115.4m (2009: £79.6m). We paid £41.9m net of cash acquired (2009: £23.9m), for seven new businesses, £9.3m (2009: £10.2m) for deferred consideration on prior year acquisitions, and £65.1m (2009: £52.5m) for the acquisition of property, plant and equipment and computer software, net of disposals. In 2009, we sold for £5.7m shares in a listed investment acquired in 2008 for £4.4m and also divested our 40% interest in the associate Allium for £0.9m. No such transactions took place in 2010.

Cash flows from financing activities comprised proceeds from the issue of share capital following the exercise of employee share options of £2.8m (2009: £3.6m), purchase of own shares to satisfy the requirements of the Employee Share Ownership Trust of £0.5m (2009: £nil), the net drawdown of debt of £44.4m (2009: repayment of £58.7m) following the completion of the 2010 refinancing programme, cash outflows of dividends paid to non-controlling interests of £6.6m (2009: £6.3m) and dividends paid to Group shareholders of £42.5m (2009: £34.7m) which resulted in net cash from financing activities breaking even compared to cash outflow of £96.1m in 2009.

Interest bearing loans and borrowings were £386.7m at 31 December 2010, an increase of 15% over 2009. The Group's borrowings are normally made in currencies which, as far as possible match its asset base. Borrowings at 31 December 2010 are primarily denominated in US dollars. The increase in borrowings was mainly due to the Group issuing a further US$250m of senior notes in December 2010 as part of the Group's refinancing programme, which in turn facilitated repayment of part of the multi-currency, multi-tranche syndicated facility.

Cash and cash equivalents at 31 December 2010, were £217.0m, an increase of £82.8m (61.7%) over 2009. As shown in the 2010 Annual Report, net debt at 31 December 2010 was reduced to £169.7m from £201.4m in 2009 and £308.3m in 2008.

Separately disclosed items

A number of items are separately disclosed in the financial statements as exclusion of these items provides readers with a clear and consistent presentation of the underlying operating performance of the Group's business.

When applicable, these separately disclosed items include amortisation of acquisition intangibles, impairment of goodwill and other assets, the profit or loss on disposals of businesses or other significant fixed assets, costs of acquiring and integrating acquisitions, the cost of any fundamental restructuring of a business, material claims and settlements, significant recycling of amounts from equity to the income statement and unrealised market gains/losses on financial assets/liabilities.

Separately disclosed items before tax were £22.0m (2009: £22.3m). The charge for 2010 comprised £12.9m for the amortisation of acquisition intangibles (2009: £12.8m), acquisition and related integration costs £5.3m (2009: £2.5m), restructuring £nil (2009: £3.2m), claims and settlements £2.8m (2009: £3.8m), and recycling £1.0m fair value of the interest swaps from the hedging reserve to the income statement (2009:£nil). Further information on separately disclosed items is given in note 2 to the financial statements.

Comparison of Adjusted results and Total results

Financing

The Group's net borrowings as at 31 December 2010 were £169.7m compared with £201.4m at the beginning of the year.

As at 31 December 2010, Intertek Group had aggregate committed borrowing facilities of £722.9m, of which £386.7m were drawn. The Group's financing is structured through bank facilities and private placement bonds. The bank facilities comprise a syndicated principal bank facility and two bilateral facilities. As part of the planned refinancing of the Group's principal bank facility, the Group concluded further bond placements during 2010 and completed the refinancing on its principal bank facility in early 2011. Details of the Group's financings as at 31 December 2010 are outlined below.

The composition of the Group's gross borrowings by currency is as follows:

The Group's policy is to ensure that a liquidity buffer is available in the short-term, to absorb the net effects of transactions made and expected changes in liquidity both under normal and stressed conditions without incurring unacceptable losses or risking damage to the Group's reputation. Where appropriate, cash is managed in currency based cash pools and is placed on short-term deposit, bearing interest at market rates.

Capital management

Financial capital is considered by the Group to include senior term loans, notes and other borrowings in addition to equity held by shareholders. The Group's policy is to monitor and maintain a robust capital base to ensure that market and key stakeholders retain confidence in the capital profile. Debt capital is monitored by Group Treasury assessing the liquidity buffer on a short and longer term basis as discussed in the Principal Risks and Uncertainties section. Interest bearing loans, notes and borrowings are discussed in note 15 of the 2010 Annual Report. The capital structure is reviewed by the Board, using amongst other methods, return on invested capital and diluted adjusted earnings per share as key performance indicators.

Principal bank facility

In February 2011, the Group successfully completed the refinancing of the principal bank facility. The new syndicated facility comprises a US$600m multi-currency revolving facility available to 31 March 2016. Advances under the new facility bear interest at a rate equal to LIBOR, or their local currency equivalent, plus a margin, depending upon the Group's leverage. On execution of the new facility, the Group's original principal bank facility was cancelled. The original facility was raised in 2004 and had a final maturity date of 15 December 2011.

Private placement bonds

In June 2008, the Group raised US$100m by way of a senior note issue. The notes are repayable on 26 June 2015 and pay a fixed annual interest rate of 5.54%.

In December 2008, the Group issued a further US$100m of senior notes. These notes were issued in two tranches with US$25m repayable on 21 January 2014 at a fixed annual interest rate of 7.5% and US$75m repayable on 10 June 2010 at a fixed annual interest rate of 8.0%.

In December 2010, the Group issued a further US$250m of senior notes. These notes were issued in two tranches with US$100m repayable on 15 December 2017 at a fixed annual interest rate of 3.2% and US$150m repayable on 15 December 2020 at a fixed annual interest rate of 3.91%.

Other facilities

In January 2010, the Group signed a US$60m bilateral, multi-currency facility available to 25 January 2013. Drawings under this facility at 31 December 2010 were nil.

In December 2010, the Group signed a further bilateral multi-currency facility available to 31 March 2016. The facility comprises a £20m multi-currency revolving facility and a €12m multi-currency term loan facility. Drawings under these facilities at 31 December 2010 were nil.

Return on invested capital

The Group is committed to enhancing shareholder value, both by investing in the business to improve the return on investment in the longer term and by managing our capital structure. The Group's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. Return on capital in 2010 was 25.2% compared to 26.5% in 2009.

Return on invested capital

There were no changes to the Group's approach to capital management during the year and neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

Impact of currency movements

The Group operates in 75 different currencies. The majority of the Group's earnings are denominated in US dollars or currencies linked to the US dollar or which historically have moved in line with the dollar. Other currencies such as the Euro and the Chinese renminbi are also important constituents of our overseas earnings. Therefore the Group's results, when translated into sterling, are exposed to changes in the value of the US dollar and other currencies.

We show below the main currencies that make up the Group's earnings and the cumulative average exchange rates that we have used when translating results into sterling in 2010 and 2009.

Exchange rates in 2010 were more stable than those in 2009 and consequently there was less of an impact on our revenue and operating profit than in 2009. Our revenue growth was 11.1% (2009: 23.3%) at actual rates, and 8.8% (2009: 7.0%) at constant exchange rates. Growth in adjusted operating profit was 8.9% (2009: 26.9%) at actual rates, and 6.3% (2009: 6.1%) at constant exchange rates.

Critical accounting policies

The consolidated financial statements are prepared in accordance with IFRS as adopted by the EU. Details of new standards adopted during the year and standards which are not yet effective are set out in note 2 to the 2010 Annual Report, along with a description of the Group's significant accounting policies.

Principal Risks and Uncertainties

This section sets out a description of the principal risks and uncertainties that could have a material adverse effect on the Intertek Group's strategy, performance, results, financial condition and reputation.

Risk framework

The Board has overall responsibility for the establishment and oversight of the Group's risk management framework. There is an established, structured approach to risk management, which is described in the Corporate Governance Report which starts on page 46 of the 2010 Annual Report. All levels of management are responsible for managing and controlling risk throughout the Group. The Vice President of Risk Management and Internal Audit, who reports to the Chief Financial Officer and the Audit and Risk Committee, has accountability for reporting the key risks, controls and mitigating actions. Risks are formally identified and recorded in a risk matrix for each operating division and support function. The risk register is updated at least annually and is used to plan the Group's internal audit and risk strategy. In addition to the risk matrix, all senior executives and their direct reports are required to complete an annual return to confirm that management controls have been effectively applied during the year. The return covers operations, compliance, risk management and finance. The Vice President of Risk Management and Internal Audit attends the meetings of the Audit and Risk Committee, and meets with the members of that committee alone at least once a year.

The Group Risk Controls and Assurance Committee complements the work of the Audit and Risk Committee. The Committee oversees the development and improvement of the Group's internal control and assurance and the related procedures and systems arising therefrom and also oversees the operation and implementation of the procedures and systems identified. The Committee makes recommendations to the Intertek Operations Committee where Group-wide policies are identified and develops the Group's integrated responses to changes in the regulatory environment.

In common with all businesses, the Group is affected by a number of risk factors, some of which are outside our control. Although many of the risk factors influencing the Group's performance are macroeconomic and likely to affect the performance of business enterprises generally, others are particular to Intertek's operations. Specific risks of which we are aware are detailed below, however there may be other risks that are currently unknown or regarded as immaterial which could turn out to be material. Any of these risks could have the potential to impact the performance of the Group, its assets, liquidity and capital resources.

The principal risks and uncertainties of the Group are listed on the following tables together with commentary on mitigating actions that the Group has identified to manage these risks. These risks and uncertainties do not appear in any particular order of potential materiality or probability of occurrence.

Consolidated Income Statement

For the year ended 31 December 2010

* See note 2.

**Earnings per share on the adjusted results is disclosed in note 3.

Consolidated Statement of Comprehensive Income 

For the year ended 31 December 2010

Consolidated Statement of Financial Position

As at 31 December 2010

Consolidated Statement of Changes in Equity

For the year ended 31 December 2010

* After £244.1m for goodwill written off to retained earnings as at 1 January 2004 in relation to subsidiaries acquired prior to 31 December 1997. This figure has not been restated as permitted by IFRS 1.

Consolidated Statement of Cash Flows

For the year ended 31 December 2010

1 OPERATING SEGMENTS AND PRESENTATION OF RESULTS

The Group is organised into six operating divisions each of which offer services to different industries and are managed separately: Consumer Goods; Commercial & Electrical; Oil, Chemical & Agri; Analytical Services; Industrial Services; and Minerals. The costs of the corporate head office and other costs which are not controlled by the operating divisions are allocated to these divisions.

These divisions are the operating segments that are reported to the chief operating decision maker and are the Group's reportable segments. Inter-segment pricing is determined on an arm's length basis. There is no significant seasonality in the Group's operations.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly borrowings, pension fund liabilities, corporate expenses and assets and tax.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and computer software.

Principal activities are as follows:

Consumer Goods provides services to the textiles, toys, footwear, hardlines, food, and retail industries. Services include testing, inspection, auditing, advisory services, quality assurance, and hazardous substance testing.

Commercial & Electrical provides services including testing and certification, electromagnetic compatibility testing (EMC), outsourcing, benchmark and performance testing and environmental testing. These are provided to a wide range of industries including the home appliance, lighting, medical, building, industrial and HVAC/R (heating, ventilation, air conditioning and refrigeration), IT, telecom, renewable energy and automotive industries.

Oil, Chemical & Agri provides independent cargo inspection as well as non-inspection related laboratory testing, calibration and related technical services to the world's energy, petroleum, chemical and agricultural industries. It also provides cargo scanning, fiscal support services and standards programmes to governments, national standards organisations and customs authorities.

Analytical Services provides expert laboratory services and consultancy to a broad range of industries including chemical, pharmaceutical, oil and gas, and automotive and aerospace. We have an established track record of success in laboratory outsourcing with many large internationally recognised companies.

Industrial Services provides inspection, testing and auditing services, including management systems certification, second-party auditing, supplier evaluation, technical verification, conformity assessment, asset integrity management, dimensional control management, training, health and safety and risk consulting, and greenhouse gas services.

Minerals provides complete analytical solutions to the world's minerals, ore and mining industries.

Year ended 31 December 2010

Year ended 31 December 2010

Year ended 31 December 2009

Year ended 31 December 2009

Geographic segments

All the business segments are managed on a worldwide basis but the main countries, which represent greater than 10% of either the Group's external revenues or non-current assets, are Australia, China (including Hong Kong), the United Kingdom and the United States.

In presenting information on the basis of geographic segments, segment revenue is based on the location of the entity generating that revenue. Segment assets are based on the geographical location of the assets.

Major customers

No revenue from any individual customer exceeded 10% of total Group revenue in 2009 or 2010.

2 SEPARATELY DISCLOSED ITEMS

In line with IAS 38, acquisition intangibles are amortised over their useful economic life. This amortisation is excluded from adjusted results and is separately disclosed as this is consistent with the way in which results are reviewed by Intertek management and provides a consistent view of performance across the Group's operations.

Acquisition and integration costs include £2.7m (2009: £1.9m) for costs in relation to discussions with Det Norske Veritas, £2.1m (2009: £0.6m) for costs associated with the acquisitions described in note 4 and ongoing acquisitions, and £0.5m (2009: £nil) in respect of integration costs.

Claims of £2.8m (2009: £3.8m) relate principally to the settlement of a claim from a group of employees in the USA in the Oil, Chemical & Agri division.

The fair value of interest rate swaps of £1.0m (2009: £nil) was recycled from equity when the hedging instruments became ineffective on the repayment of senior term loans.

The income tax associated with the separately disclosed items is a credit of £5.7m (2009: credit of £5.6m).

3 EARNINGS PER ORDINARY SHARE

The calculation of earnings per ordinary share is based on profit attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares in issue during the year. In addition to the earnings per share required by IAS 33: Earnings Per Share, an adjusted earnings per share has also been calculated and is based on earnings excluding the effect of amortisation of acquisition intangibles, goodwill impairment and other separately disclosed items. It has been calculated to allow shareholders to have a better understanding of the trading performance of the Group. Details of the adjusted earnings per share are set out below:

4 ACQUISITIONS

The Group made seven acquisitions during the year, all of which were paid for in cash.

Provisional details of net assets acquired and fair value adjustments are set out below. The analysis is provisional and amendments may be made to these figures in the 12 months following the date of each acquisition, with a corresponding adjustment to goodwill.

* Total goodwill additions of £33.5m is made up of £34.5m in respect of 2010 acquisitions above and £(1.0)m in respect of the 2009 acquisitions.

** Trade receivables comprise gross contractual amounts due of £7.2m at acquisition date.

(a) Expert Services

The largest acquisition, which was a combined share and asset deal, was that of the regulatory and safety testing businesses of Expert Services headquartered in Switzerland and operating in several countries, from BASF SE on 31 March 2010, for a cash consideration of £21.4m. A receivable of £2.5m, outstanding at 31 December 2010, will be paid in 2011. Cash acquired within the business was £0.2m. The acquisition related costs amounted to £0.5m and have been charged to operating costs.

ES Regulatory Services help clients to gain health, safety and environmental approvals for their products and to address hazardous substances and chemicals notifications and regulations worldwide. ES Safety Testing Services are used by a range of global companies primarily in the pharmaceutical and chemicals sectors to ensure their products meet relevant safety requirements. The acquisition is being integrated into the Analytical and Industrial Services divisions. Initial integration costs of £0.5m have been charged to operating costs (note 2).

Provisional details of net assets acquired and fair value adjustments are set out below:

Deferred consideration relates to sums due from the vendor.

The goodwill of £17.3m represents the benefits that the Group expects to gain from strengthening its competitive position in mainland Europe, adding new niche services to the Group's portfolio of services, gaining access to a sales force in strategically important countries and strengthening the relationship with BASF globally. The other intangible assets of £3.0m represent value placed on customer relationships and the deferred tax thereon was £0.3m.

The revenue for the period 1 January 2010 to 31 March 2010 was £5.4m. The revenue attributable to the Group from the date of acquisition to 31 December 2010 was £16.9m. The profit after tax for the period 1 January 2010 to 31 March 2010 was £0.4m. The profit attributable to the Group from the date of acquisition to 31 December 2010 was £1.1m.

(b) Other acquisitions

There were six other acquisitions.

Norca Ingenieria de Calidad, S.L

The Group acquired 100% of the share capital of Norca Ingenieria de Calidad, S.L (Norca), a company based in Spain, on 4 May 2010, for a cash consideration of £4.3m. Cash acquired in the business was £0.5m. This represents the opportunity for the Group to increase its portfolio of services in the engineering and inspection of nuclear plants. The other intangible assets of £0.8m arising on the acquisition represent value placed on customer relationships and the deferred tax thereon was £0.2m. The profit after tax for the period 1 January 2010 to 4 May 2010 was £0.2m. The profit attributable to the Group from 5 May 2010 to 31 December 2010 was £0.2m

 Expertises Technologies & Services Analyses S.A

On 1 July 2010, the Group acquired 100% of the share capital of Expertises Technologies & Services Analyses S.A (ETSA), a company based in France, for a cash consideration of £7.5m. An adjustment of £0.2m was outstanding at 31 December 2010. Cash acquired in the business was £1.4m. ETSA provides cargo inspection and testing services for the oil and gas industry. The acquisition represents the opportunity for Intertek to reinforce its laboratory testing capabilities in France and brings niche expertise in lubricant testing to complement Intertek's current services in this area. The other intangible assets of £0.9m arising on the acquisition represent value placed on customer relationships and the deferred tax thereon was £0.3m. The profit after tax for the period 1 January 2010 to 1 July 2010 was £0.4m. The profit attributable to the Group from 2 July 2010 to 31 December 2010 was £0.3m.

Metoc Limited

The Group acquired 100% of the share capital of Metoc Limited, a company based in the United Kingdom, on 27 October 2010, for a cash consideration of £7.5m and additional estimated deferred consideration of £0.9m. Metoc originally provided oceanographic and meteorological services to the oil and gas industry and has expanded its customer base to renewable energy providers (offshore wind, wave, tidal), water utilities and power connection and distribution companies. Cash acquired within the business was £2.1m. This acquisition will strengthen the Industrial Services division and represents the opportunity for Intertek to increase its portfolio of services in renewable energy. The other intangible assets provisionally of £0.7m arising on the acquisition represent value placed on customer relationships and an existing order book and the deferred tax thereon was £0.2m. The profit after tax for the period 1 January 2010 to 27 October 2010 was £0.5m. The profit attributable to the Group from 28 October 2010 to 31 December 2010 was £0.1m.

Profitech Limited

The Group acquired, on 1 October 2010, 100% of the share capital of Profitech Limited, a company based in the United Kingdom, that provides mathematical modelling services to the Energy industry and will form part of the Analytical Services division. The initial cash consideration was £0.5m with additional consideration of up to £0.6m payable contingent on the achievement of specified targets. Cash acquired in the business was £0.2m. The other intangible assets of £0.6m arising on the acquisition represent value placed on licenses and patents and the deferred tax thereon was £0.2m. The profit after tax for the period 1 January 2010 to 30 September 2010 was £nil. The profit attributable to the Group from 1 October 2010 to 31 December 2010 was £0.1m.

Pacifica Limited

The Group acquired, on 10 November 2010, the business and assets of Pacifica Limited, a company based in Papua New Guinea that provides petroleum and agricultural inspections and marine consultancy services and will form part of the Minerals division. The cash consideration was £0.9m. The other intangible assets of £0.4m relate to the value placed on customer relationships. The profit after tax for the period 1 January 2010 to 9 November 2010 was £0.2m. The profit attributable to the Group from 10 November 2010 to 31 December 2010 was £nil.

American Analytical Chemistry Laboratories Corporation

The Group acquired 100% of the share capital of American Analytical Chemistry Laboratories Corporation, a company based in Illinois, USA, on 31 December 2010, for an initial cash consideration of £4.5m; and additional deferred consideration of between £0.1m and £0.5m. Cash acquired in the business was £0.4m. This represents the opportunity for the Consumer Goods division to build on its strategy of developing a network of laboratories of centralised chemical and localised microbiological food testing in North America. The other intangible assets provisionally of £0.7m arising on the acquisition represent value placed on customer relationships. The profit after tax for the period 1 January 2010 to 31 December 2010 was £0.4m. No profit was attributed to the Group in 2010.

(c) Contribution of acquisitions to revenue and profits

In total the acquisitions made during the year contributed revenues of £24.1m and attributable profits of £1.8m to the Group from their respective dates of acquisition to 31 December 2010.

The Group revenue and profit after tax for the year ended 31 December 2010 would have been £1,395.4m and £145.0m respectively if all the acquisitions were assumed to have been made on 1 January 2010.

(d) Details of 2009 acquisitions

Refer to note 22 in the 2010 Annual Report for details of 2009 acquisitions.

5 ANALYSIS OF NET DEBT