French company Suez will aim to boost its earnings by cutting costs by a billion euros, or $1.1 billion. This will come per year, and the company will try to gather more growth from industrial customers.
Starting in 2021, the company will try to boost profitability in a span of four years. The company will try to have earnings per share of 0.8 euros from 0.47 in 2018.
The dividend, however, will remain the same.
CEO Bertrand Camus said that the company wants annual cost savings of 1 billion euros by 2023. Nearly 50% of these savings are already in place by 2021.
In early trade, shares of the company were underperforming France’s CAC 40 index. The stock was trading 2.3% lower, while the index itself is 0.7% weaker from last close.
One broker said that the company’s plan lacked details. It downgraded the stock to a neutral rating from buy.
Suez’ new strategic plan comes amid the new CEO’s view to addressing activist investor, Amber Capital.
Last July, activist hedge fund Amber Capital accused the company of underperformance. It then demanded the business to shake up its strategy.
Amber Capital holds 1.9% of the French utility’s share capital. It previously called for the company to decrease the size of its board of directors. At present, it has 19 members. The hedge fund wants that number to be between 12 and 14.
Elsewhere in European stock exchanges, global economic fears are dominant. The STOXX 600 lost 0.84% to 384.73.
Germany’s DAX lost 0.92% to 12151.08, while the UK’s FTSE 100 tumbled 1.12% to 7277.92.
Economists from Germany lowered their economic estimates. Growth in Europe’s top economy is now at 0.5%, down from the previous forecast of a 0.8% growth.
They have also slashed growth forecasts for next year from 1.8% to 1.1%.
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