UPDATE 2-Bertelsmann cuts 2026 outlook as it slims down business

(Adds detail from interview and call, paragraphs 5&6)

By Chiara Holzhaeuser and Paolo Laudani

March 26 (Reuters) -

German media group Bertelsmann on Tuesday lowered its outlook for 2026 and now targets revenue of around 21 billion euros ($22.8 billion) and operating EBITDA of around 3.4 billion euros by that point.

This time last year, the privately-owned German group, whose brands include music business BMG and trade publisher Penguin Random House, said it aimed to increase revenues to 24 billion euros and earnings before interest, taxes, depreciation, and amortization (EBITDA) to 4 billion euros by 2026.

In a press release, CEO Thomas Rabe attributed the updated forecast to the sale of staff outsourcing company Majorel and the planned sales of RTL Nederland and regional newspaper publisher DDV Mediengruppe.

The parent company of German broadcaster RTL posted a 26% increase in group profit last year, supported by proceeds from the sale of Majorel.

When it comes to 2024, Rabe said in an interview that the company had a good start in the first quarter. He added that "inflation is also falling and purchasing power is rising again - in Germany as well."

In a conference call on Tuesday, Rabe added that Bertelsmann's strategy does not focus on big M&A projects in the billion euro range but rather on small and medium acquisitions to support existing businesses.

Bertelsmann reported flat revenues year-on-year as the growth in its book publishing, music and education businesses was offset by a weak TV ad market.

Revenues of the German media company stood at 20.2 billion euros in 2023, down 0.4% from the previous year's figure and broadly in line with the company's expectations.

Media companies had to deal with fewer ad sales in the past years, as inflation and higher energy prices led to firms cutting back on ad spending.

U.S. peer Paramount reported a quarterly profit above expectations at the end of February as streaming gains helped overshadow the weak advertising market. (Reporting by Chiara Holzhaeuser and Paolo Laudani, additional reporting by Klaus Lauer Editing by Miranda Murray and Keith Weir)