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UPDATE 3-Piaggio cuts 2010 sales outlook, shares fall

Published 07/03/2009, 12:45 PM

* Cuts revenue outlook for 2010

* Shares end 4.7 percent lower

* Hoping for Asia growth

(Recasts lead, adds management comments, share price)

By Stefano Rebaudo

MILAN, July 3 (Reuters) - Italian scooter maker Piaggio SpA revised 2010 targets downwards in a new three-year plan on Friday, sending its shares down nearly 5 percent.

The maker of Vespa scooters said it expected turnover next year to be 1.605 billion euros compared with 1.95 billion euros forecast in its previous plan, before the financial crisis exploded and hit consumer demand.

Shares ended down 4.7 percent as the overall Milan market was broadly flat.

Revenues will be around 1.51 billion euros ($2.12 billion) this year, Finance Director Michele Pallottini told analysts in laying out the company's 2009-12 business plan. The 2008 figure was 1.57 billion euros.

The 2009 forecasts should be considered "positive in light of the economic situation", Chairman and Chief Executive Roberto Colaninno said.

Pallottini later told a news conference the company "definitely" would show a net profit in the second half and was targeting a net profit for the year.

Hit by the global market downturn, Piaggio posted a loss of 4.7 million euros in the first quarter.

Under the business plan, Piaggio is targeting 2012 revenues of 1.88 billion euros. The goal for earnings before interest, tax, depreciation and amortisation (EBITDA) is 248 million euros. Pallottini said net debt at the end of 2009 should be 383 million euros from 360 million euros last year. The new business plan targets a debt to equity ratio of well below one by 2012.

Pallottini said he expected the Moody's credit rating agency to revise its rating because of the business plan. Moody's cut its outlook on the Ba2 credit rating to negative in May because of worsening operating performance.

Piaggio said Asian growth would be achieved by a stronger "direct industrial presence" and boosting the amount of two-wheel and commercial vehicle products for sale.

Colaninno said the company was developing "relationships with important Chinese or Japanese groups. I wouldn't call them alliances but collaborations."

Piaggio expects to distribute about 90 million euros in dividends over 2009-2012.

Piaggio has begun production at its first plant in Vietnam, making inroads in one of the world's biggest scooter markets.

(Reporting by Stephen Jewkes and Danilo Masoni; editing by John Stonestreet and David Cowell)

($1=.7133 Euro)

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