Mr Davies has guided the Sheffield-based company through one of the most difficult periods in its history as the European downturn hit sales of new housing.
“I’ll be 59 by the time I step down next March,” he said.
“I’ve put in a big shift as CEO and before that I was living out of a suitcase for 12 years as MD of Europe.
“I think it’s time to slow down a bit. When I took the chief executive’s job in 2007 I was asked to commit to a five-year term. It’s been an eventful five years, but we’re now on a sound footing.”
He will be replaced by Stuart Mitchell, who joins from Wilkinson Hardware Stores where he was chief executive.
SIG said that Mr Mitchell has delivered significant growth in sales and profitability at Wilkinson and he will bring “proven leadership and strategic skills”.
Mr Mitchell was previously managing director at Hutchison Whampoa and Sainsbury’s.
He will join SIG as chief executive designate on December 1 and will take over in March following a three month handover period.
SIG chairman Leslie Van de Walle said: “Chris leaves SIG in good shape and in good hands. As CEO, he has further strengthened our European business, integrated and focused our UK operations, rejuvenated our senior management team and ensured that we have a robust balance sheet and a solid platform for future growth.”
Mr Davies said he has received a few approaches from other companies, but has not pursued anything as he was “too wrapped up in the day to day job”.
He will be looking at non-executive director roles in the north, in particular those with European connections as he speaks fluent French and German and can get by in Italian and Spanish. “I want to find something where I can make a contribution and can enjoy myself and help improve their business,” he said.
In an update yesterday, SIG said trading has been in line with expectations, with sales per day from continuing operations for the ten months to the end of October flat on a constant currency basis.
Sterling sales per day fell by four per cent due to exchange rate movements.
Year to date sales per day in Mainland Europe increased by two per cent in constant currency, but fell by six per cent in sterling.
SIG said the Benelux countries and France showed the strongest progress, while Germany was marginally down.
In the UK & Ireland sales per day from continuing operations fell by two per cent in constant currency, with the UK down by one per cent.
The group said October was slightly negative, which means that July to October was flat compared with the previous year.
SIG said it is on track to meet expectations, subject to any exceptional adverse weather conditions in the remainder of the year.
The cold and wet weather had a negative impact on the outside building trade in the group’s first half.
The group said it is keeping a tight control on operating costs and it is on track to deliver another £7m in savings in 2013.
It plans to make cuts across its branch network, but aims to reduce costs through efficiencies rather than job losses.
It completed three bolt-on acquisitions in the second half of the year including a specialist insulation distribution business in Toulouse, France, a heating, ventilation and air conditioning distribution business in Charleroi, Belgium, and a roofing branch in Kings Lynn, UK, which was bought out of administration.
The group said it plans to pursue a pipeline of small infill acquisitions within its core markets.
SIG expects total acquisition expenditure in 2012 to be around £8m.
It opened six new branches in the second half.
From small beginnings...
SIG was founded in 1957 in Sheffield.
It has grown from a single site into a multi-national specialist distribution business.
The company listed on the London Stock Exchange in May 1989.
In the UK, SIG installs loft and cavity wall insulation in residential properties through its energy management business.
In recent years, the global construction sector has struggled to recover from the financial crisis, weighed down by Government spending cuts and recession. Activity has slowed in the UK and Ireland.