PARIS (Reuters) – Fnac Darty climbs on the stock market on Friday after the publication of its results for 2023, marked by a decline in operating profit but strong cash generation.

At 10:35 a.m., Fnac Darty shares gained 9.6% to 26.94 euros after an initial opening in the red. The value, at the top of the SBF 120, signs its strongest daily increase in three years.

The French specialized distribution group recorded a current operating profit of 171 million euros for the 2023 financial year, down 60 million euros year-on-year in a context of weak consumer demand.

“Half of this development comes from the particularly strong drop in activity in Spain and at Nature & Découvertes in the fourth quarter,” explained the group in a press release.

Fnac Darty, however, managed last year to improve its free operating cash flow, which was positive at 180 million euros, compared to -30 million a year earlier, thanks to the normalization of working capital requirements ( WCR) and investments in line with expectations.

In a note, Midcap analysts welcome “good news” on free operating cash flow which, according to them, is above expectations.

Fnac Darty reaffirmed its objective of achieving cumulative free operating cash flow of around 500 million euros over the period 2021-2024, i.e. a level of 180 million euros in 2024.

“We remain confident that free cash flow generation will remain strong thanks to further improvement in WCR, lower capital expenditures and a higher share of profitable services,” Barclays analysts point out in a note.

(Written by Blandine Hénault, with contributions from Stéphane Hamel)

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