C Si Ni Cr V Ti Ta Sc Li Sr Zr Fe Cu Zn Sn B Al Ce U Mn Mo Nb Sb

4 Letter to Shareholders
Dear Shareholder,
AMG’s 2010 performance can be understood as a bridge
to its intrinsic profitability levels following a challenging
2009. Operating profit more than doubled to $43.3 million
and EBITDA increased 23% to $84.9 million with the fourth
quarter up 62% over the same period in 2009. For 2011, it
is our objective to surpass the EBITDA level of 2010. That
depends on whether the fallout of the recent events in Japan,
northern Africa and the Middle East lead to disruptions in
global economic activity.
“Built-In Stabilizers”
As seen in 2009, the Advanced Material Division (AMD), in a severe economic downturn, loses
earnings power quickly. In line with this, AMD’s EBITDA in 2009 dropped to a break-even level.
Having been “first in”, it was also “first out” in 2010 generating EBITDA of $39.8 million. In contrast,
the Engineering Systems Division (ESD), was shielded against the crisis somewhat in 2009
by its relatively large order backlog. In line with this, ESD still produced $62.9 million in EBITDA
during 2009. The order backlog reached its low point in April 2010 at $121 million. It rebounded
by year end 2010 to $183 million. Despite this EBITDA declined 40% to $37.5 million from 2009.
The reaction time lag of ESD appears to be about one year vis-à-vis AMD and the volatility of
AMG consolidated is significantly lower than the individual volatility of AMD and ESD.
Revenue $M EBITDA $M
1300
1040
780
520
260
0
0
07 08 09 10 07 08 09 10
Advanced Materials Engineering Systems Graphit Kropfmühl
180
135
90
45