(Wraps in Bertelsmann results)
FRANKFURT, May 17 (Reuters) - German publisher Bertelsmann and its listed TV unit RTL Group reported modest growth in the first quarter on Thursday in the face of currency headwinds, underscoring the challenge they face to streamline and modernise.
Bertelsmann - whose interests span broadcasting, books and music - said top-line revenues grew by 1.3 percent to 3.99 billion euros ($4.7 billion), the highest in 10 years. After factoring out currencies, the gain would have been 2.7 percent.
Profits declined, however, highlighting the importance of CEO Thomas Rabe’s decision to sell Bertelsmann’s Arvato CRM call centre unit to raise capital to invest in growth areas that now account for 30 percent of total revenues.
Still, Bertelsmann, and RTL, both reaffirmed their guidance for the full year, foreseeing modest revenue growth and steady profitability.
“We are increasingly focusing on organic growth and investing heavily in our businesses,” Rabe said in a statement, adding that he wanted to create “a faster-growing, more digital, more international and more diversified company”.
Arvato is attracting interest from peers, mostly backed by private equity, sources close to the matter have said, and Bertelsmann hopes to finalise a sale this autumn.
Bertelsmann’s operating earnings before interest, taxation, depreciation and amortization (EBITDA) declined to 473 million euros in the first quarter, from 482 million in the same period a year earlier.
European broadcaster RTL, meanwhile, said its TV operations in Germany, France and the Netherlands grew in the first quarter, but core profits shrank slightly as losses at French soccer club Girondins weighed.
RTL’s revenues rose by 0.8 percent to 1.42 billion euros, just shy of the average in a Reuters poll of seven analysts of 1.44 billion euros. Underlying revenue, after adjusting for the strong euro, was up 2.6 percent.
RTL said earnings before interest, taxation, depreciation and amortization (EBITA) fell 1.9 percent to 259 million euros, below analyst expectations of 268 million. ($1 = 0.8472 euros) (Reporting by Douglas Busvine Editing by Maria Sheahan and Susan Fenton)