DÜSSELDORF (dpa-AFX) - Electronics retailer Ceconomy wants to become more profitable by the middle of the decade. To achieve this, the Düsseldorf-based company plans above all to generate significantly more sales in online retailing. In addition, the retail stores of MediaMarkt and Saturn are to be comprehensively modernized and the profitable business with services such as appliance repairs is to be expanded.

Adjusted earnings before interest and taxes (Ebit) will reach over 500 million euros by fiscal year 2025/26, the company announced on Friday at a capital markets day in Koln. By comparison, the figure for 2021/22 was 197 million euros. Gross margin and free cash flow are also expected to improve by the middle of the decade.

The plans were well received on the stock market. The SDax-listed stock rose nine percent at times. Most recently, the share price rose by a good two percent, putting Ceconomy among the top performers in the index for small stocks. Since the beginning of the year, investors have been able to record an increase in value of around one fifth in the portfolio. The price level reached on Friday described the highest level in two weeks. Stock traders praised the newly issued medium-term targets, which were above analysts' expectations.

Ceconomy is betting heavily on online retailing in the coming years and also plans to expand its app. While Internet-generated sales contributed just under a quarter of group profits in the last fiscal year, the share is set to rise to 30 percent by 2025/26.

At the same time, however, Group CEO Karsten Wildberger does not want to neglect the presence in shopping streets and department stores. Costs are to be reduced, thus increasing the productivity per unit area. In addition to the planned modernization, Wildberger intends to respond to changing customer requirements with new store formats, according to a statement on Friday. For example, in addition to the classic stores, there are to be significantly smaller express stores, as well as much larger store worlds in which products are to be displayed and customers are to be inspired.

Another important building block for higher profitability for Ceconomy is the service business. This includes warranties and software licenses that customers can purchase. The company also sees "an attractive recurring source of revenue" in subscription services, which are intended to build long-term customer relationships.

Ceconomy is determined to grow the business profitably, CFO Kai-Ulrich Deissner said, according to the statement. At the same time, cost discipline and strengthening liquidity "remain at the top of our agenda," he added. Gross margin is expected to rise to 20 percent by 2025/26, up from just over 17 percent in recent years. Cash flow adjusted for lease payments is expected to reach around 200 million euros./lew/men/jha/