Italy's Ducati to try win over investors with plan

MILAN Jan 15 (Reuters) - Italian motorcycle maker Ducati DMH.MI wants to show investors that success on and off the racetrack is just the beginning of a revival in its fortunes.

But Wednesday's presentation of its 2008-2010 strategy at an exclusive hotel in Milan will be far from a ride in the park.

Investors such as RMJ fund manager Alessandro Frigerio said he would wait to see if Ducati, once a by-word for sleek power among image-conscious Italians, would deliver on its promises before buying into the Bologna-based company.

"They have to make the market understand that their difficult years are behind them," he said. "(They have to prove that) the good times are not just a cyclical occurrence."

Ducati, whose racing bikes are driven by Australian world champion Casey Stoner, was not up to speed when the Bonomi family agreed to buy into it in 2005.

Although its motorcycles sold at a premium to other brands, it was losing money. In 2005 sales were 34,600 machines - the lowest for the whole of the 2002-2006 period - and losses sank to 41.5 million euros.

Its models were ageing and being overtaken by competitors. One of its best-selling bikes, the Monster, growled on to the market more than 10 years earlier.

It also failed to make the most of its activities in the sporting world to boost its image in the retail market, according to Citigroup analyst Marianna Primiceri.

"The company was not able to leverage on its strength," she said in a Jan. 4 report.

Primiceri expected Ducati's plan to focus on cutting costs, launching new bikes and licensing the brand to merchandisers.

SUCCESS STORY

Since buying 30 percent less one share of it, the Bonomi family has been busy restructuring Ducati.

It made one of its most important moves last spring when it hired Gabriele Del Torchio as chief executive. Del Torchio is known as a turnaround expert after successfully restructuring yacht builder Ferretti and Carraro (CARRA.MI), a small farming equipment manufacturer.

Ducati's results had been improving before Del Torchio got in the saddle. In the first nine months of 2007, its core profit doubled to 49.9 million euros as revenues went up 43.8 percent.

In September, its brand got a boost when Stoner seized his first world title in Japan's Grand Prix. The victory was Ducati's first MotoGP title.

RMJ's Frigerio drew parallels between Ducati and Piaggio (PIA.MI), another Italian motorcycle maker.

Both companies had strong brands that were in the doldrums before getting a reference shareholder, undergoing a restructuring and experiencing a revival, he said.

The comparisons stop there, however. Piaggio serves a segment of the market that is less exclusive than Ducati.

One source who closely follows the company expressed relief that he would have a better idea of where Ducati wanted to go.

"Finally, there's a plan," he said. "It's not something that had been done at Ducati."

A second fund manager was interested in knowing how Ducati expected to perform this year if the United States -- one of its biggest markets -- went into a recession.

Ducati's stock was off 1.26 percent at 1.175 euros in Milan at 1557 GMT after experiencing a run-up days ahead of the presentation.

It hit at a seven-year high in July when investors speculated it could enter a partnership or agree to be taken over by U.S. motorcycle maker Harley Davidson (HOG.N). (Editing by David Cowell)