Annual Report 2012 EUROPE BELGIUM BULGARIA ... - Duferco

Strategy
positive performance achieved during the
2012 financial year. In particular:
❚ Year on year, consolidated revenue
slightly increased by about 5%;
❚ The Group’s net financial indebtedness
was unchanged with respect to the
previous year, while liquidity remains
healthy with increased levels of cash
reserves (553 Million USD as of
September 30, 2012 versus 505 Million
USD as of September 30, 2011).
❚ Bank facility financial covenants are
in full compliance and well exceed
the test thresholds. Trade credit line
utilisation on aggregate averages
about 60%. Bank support for Duferco
remains strong with no formal reduction
in our credit line availability due to the
sovereign Eurozone debt crisis which
has indirectly spilled over into trade
finance.
From the strategic point of view, the
evolution in Duferco’s strategy and
business model is linked to the dramatic
environmental evolution and, within this
context, to the great transformation of
fundamentals and principles of the steel
business.
As we said in our previous Annual
Report,Duferco is adapting to the
new configuration of the market and
to new situations in the steel industry;
its traditional model of unconventional
“hybrid” (production, trading, distribution,
transformation, logistics) had to be
changed, specifically for the production
activity. Having missed in the 90’s, the
opportunity to invest in cheap mining
assets, operating blast furnaces became
too risky; our future was no longer under
our control.
We had no mines, no size, and no
tradition of “niche” products.
Our “updated strategy” can be outlined as
follows:
❚ Focus on trading activities;
❚ Industrial disinvestments on blast
furnace and focus and defend on
the production of electric arc furnace
products;
❚ The development and improvement
of diversification activities (energy in
particular).
12 | Duferco Annual Report 2012