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French group Saint Gobain launches strategy to improve results, shares rise

French group Saint Gobain launches strategy to improve results, shares rise
FILE PHOTO: The logo of Saint-Gobain is seen on a banner on a building construction site in the financial and business district of La Defense in Courbevoie, outside Paris, France, February 19, 2018. REUTERS/Gonzalo Fuentes   -   Copyright  GONZALO FUENTES(Reuters)
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PARIS (Reuters) – French construction materials group Saint Gobain <SGOB.PA> launched a new business strategy and management structure which it said would improve margins and result in more cost savings.

St Gobain shares rose around 3 percent in early session trading, as analysts welcomed the new business plan.

St Gobain said it would speed up plans to restructure its portfolio of businesses, in line with a previously-announced target to sell off non-core businesses representing sales of at least 3 billion euros (2.6 billion pounds).

It also named Benoit Bazin as new chief operating officer and said it would have five new reporting units aimed at aligning its business more closely to its markets.

St Gobain said the new structure was expected to deliver further cost savings of 250 million euros and improve its operating margin by around 40 basis points.

“‘Transform and Grow’ will allow us to unlock substantial additional growth and profitability potential,” said Bazin.

Earlier this year, St Gobain dropped a plan to wrest control of Swiss rival Sika <SIKA.S> via a minority stake that carried extra voting rights.

(Reporting by Gilles Guillaume; Editing by Sudip Kar-Gupta)

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