Saint-Gobain Steps Up Cost-Cutting After 3Q Revenue Fall

By Inti Landauro

PARIS--French construction material maker Saint-Gobain SA (SGO.FR) Thursday said it will step up its cost-cutting plan in the second half of this year and in 2015, after it reported falling revenue in the third quarter.

The company said sales in the third quarter fell to 10.37 billion euros ($13.2 billion) from EUR10.80 billion reported a year earlier. Saint-Gobain attributed most of the decline to the sale of Verallia North America, its bottle and jar business in the U.S. and Canada, and to adverse currency swings.

Faced with an economic slowdown in Western Europe, Asia and many emerging markets, Saint-Gobain's chief executive, Pierre-Andre de Chalendar, said the company would speed up cost-cutting efforts in the second half and in 2015.

Saint-Gobain will make an additional EUR210 million in cost cuts during the second half and plans to reduce its capital expenditure in 2015 to below the EUR1.5 billion previously planned, he said.

As a result of such cost-cutting efforts, Saint-Gobain expects its operating income, excluding the effect of currency fluctuations, asset sales and acquisitions, to rise between 5% and 10%.

Write to Inti Landauro at [e-mail]

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