Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this announcement, make no representation as to its accuracy orcompleteness and expressly disclaim any liability whatsoever for any loss howsoever arising from or inreliance upon the whole or any part of the contents of this announcement.

PRADA spa
(Stock Code: 1913)

ANNOUNCEMENT
OF THE CONSOLIDATED RESULTS
FOR THE YEAR ENDED JANUARY 31, 2017

- Net sales were Euro 3,139.3 million, -10.4% compared with the twelve months
ended January 31, 2016 (-9.6% at constant exchange rates)- Royalties were Euro 44.8 million, +3.1% compared with the twelve months
ended January 31, 2016
- EBIT was Euro 431.2 million, or 13.5% on net revenues- Group’s net income was Euro 278.3 million, or 8.7% on net revenues- Net Operating cash flow were Euro 631.9 million- Net financial position standing positive at Euro 18.4 million as at January 31,
20171Consolidated results for the twelve months ended January 31,
2017
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company”, or “PRADAspa”) announces the audited Consolidated results of the Company and its subsidiaries(collectively, the “Group”) for the year ended January 31, 2017, together with theaudited comparative figures for the year ended January 31, 2016. The following
financial information has been prepared in accordance with the International Financial
Reporting Standards (“IFRS”) as adopted by the European Union. The Consolidated
results of the Group for the year ended January 31, 2017, and January 31, 2016, wereaudited by Deloitte & Touche S.p.A.

Scope of work of Messrs. Deloitte & Touche S.p.A.
The figures in respect of the Group’s consolidated statement of financial position,
consolidated statement of comprehensive income and the related notes thereto for theyear ended January 31, 2017, as set out in this preliminary announcement have been
agreed by the Group's auditors, Messrs. Deloitte & Touche S.p.A., to the amounts set
out in the Group’s audited consolidated financial statements for the year. The work
performed by Messrs. Deloitte & Touche S.p.A. in this respect did not constitute anassurance engagement in accordance with International Standards on Auditing andconsequently no assurance has been expressed by Messrs. Deloitte & Touche S.p.A. on
the preliminary announcement.

2Key financial information
twelvemonths ended
January 31
2017(audited)

twelvemonthsended
January 31
2016(audited)

twelvemonthsended
January 31
2015(audited)

3,184,069
653,44820.5%
431,18113.5%
278,3290.109
251,507631,850

3,547,771
802,75822.6%
502,89314.2%
330,8880.129
336,895
368,465

3,551,696
954,24926.9%
701,55119.8%
450,730
0.176
449,735
483,597-10.3%-18.6%-14.3%-15.9%-15.9%
71.5%

12,326

12,414

11,962-0.7%

Key statement of financial positionindicators(amounts in thousands of Euro)

as at
January 31
2017(audited)

as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)change vsJanuary 31
2016

Net operating working capital
Net invested capital
Net financial position surplus/(deficit)
Group shareholders’ equity

556,351
3,086,089
18,4413,080,502

665,156
3,212,172(114,795)
3,080,340

563,4092,829,359
188,7883,000,737(108,805)(126,083)
133,236
162

Key economic figures(amounts in thousands of Euro)Net revenues
EBITDAEBITDA %EBITEBIT %Net income of the Group
Earnings per share (Euro)
Capital expenditure
Net operating cash flows
Average number of employees%change vsJanuary 31
2016Highlights for the year ended January 31, 20172016 was a challenging year for the Prada Group, as it made concrete plans for branddevelopment and launched an overhaul of its main operating processes.
This transition phase coincides with the completion of the long-term plan for thegeographical expansion of its retail network and the beginning of efforts to streamline
operations and achieve an innovative form of integration with the digital universe. The
business climate was mired in uncertainty, due to ongoing geopolitical tensions ofglobal impact, as well as new events that have suddenly altered economic balances
around the world. Meanwhile, the stabilization of some currency trends paved the way
for a recovery in domestic consumption, as in China and Russia, although growth inthese markets has not yet compensated for the decrease in cross-border tourism.
Against this backdrop, the Group took the initiative on several fronts, starting as
always from the development of new products that stand out for their innovative styleand outstanding quality. New items were designed for Prada and Miu Miu in every
category, particularly leather goods, with the creation of new, iconic handbag designs
as well as special editions. With the same dedication, the Group also focused on store
renovation with a view to enhancing the shopping experience. The massive restylingprogram launched during the year has begun to create more intimate, exclusive
environments, updated to meet Prada's and Miu Miu's new aesthetic guidelines.
The recent redefinition of the Group's digital strategy, with the formation of a highly
qualified team, is the foundation of a new global vision whereby brands will beempowered to express their full potential. These efforts will generate sustainablegrowth based on product quality, strong innovation, and distribution/communication3

channels that permanently evolve in line with the habits of new generations ofconsumers.
Moreover, in 2016 the Group made some industrial changes under a three-year plan
adopted in 2015, which aims to strengthen control over the production process by
insourcing some of the most delicate phases. These investments will help preserve thecraftsmanship at the heart of the Group's business model, while underscoring its ties tothe Italian community and the sustainability of its manufacturing cycle.
Finally, efforts to streamline facilities and simplify processes took the form of new,transversal projects involving every unit and department while strengthening the cost
reduction targets identified in 2015.
As for performance, cost-cutting programs managed to keep profitability from being
further diluted by the decline in retail sales. The year closed with EBIT of Euro 431.2
million, or 13.5% of net revenues, while the Group's share of net income came to Euro
278.3 million (8.7% of net revenues).
The financial objectives set by the Group helped optimize working capitalmanagement; the resulting increase in operating cash flow brought the net financial
position to positive territory by the end of the year.

4Consolidated statement of Profit or Loss for the year ended January
31, 2017
twelve months
ended
January 31
2017(audited)% onNetrevenues

twelve months
ended
January 31
2016(audited)% onNetrevenues

3,184,069(894,957)

100.0%-28.1%

3,547,771(980,206)

100.0%-27.6%

2,289,112

71.9%

2,567,565

72.4%(1,857,931)-58.4%(2,064,672)-58.2%

431,18113.5%

502,89314.2%(18,003)-0.6%(29,872)

-0.9%

2,252

0.1%

2,311

0.1%

415,430

13.0%

475,332

13.4%(131,240)-4.1%(141,994)-4.0%

284,190

8.9%

333,338

9.4%

5,861

0.2%

2,450

0.1%

Net income – Group

278,3298.7%

330,888

9.3%

Depreciation, amortization and impairment

222,267

7.0%

299,865

8.5%

EBITDA

653,44820.5%

802,758

22.6%(amounts in thousands of Euro)Net revenues
Cost of goods sold

Note

3

Gross margin
Operating expenses

4

EBIT
Interest and other financial
income/(expenses), net
Dividends from investments

5

Income before taxes
Taxation

6

Net income for the year
Net income – Non-controlling interests

Basic and diluted earnings per share (inEuro per share)

7

0.109

5

0.129

Consolidated statement of financial position(amounts in thousands of Euro)

Note

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories
Derivative financial instruments – current
Receivables from, and advance payments to, relatedparties - current
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Associated undertakings
Deferred tax assets
Other non-current assets
Derivative financial instruments - non current
Receivables from, and advance payments to, relatedparties – non-current
Total non-current assets
Total Assets

8
9

as at
January 31
2017(audited)

as atJanuary 31
2016(audited)

722,214285,504
526,941
7,045

680,601
254,183
692,672
11,682

10

14,964

19,62912

253,375
1,810,043

229,671
1,888,438

11
11

1,542,684
921,800
11,775247,266
123,361-

1,517,779
932,238
17,354
280,572
113,954
721

-

5,499

2,846,886
4,656,929

2,868,117
4,756,555

151,211
5,542
256,094
65,467
13,634
144,827
636,775

270,1125,244
281,699
80,744
11,095142,271
791,819547,628
67,211
82,32331,140179,072
8,250
915,624
1,552,399

520,475
69,405
69,23336,882
161,317
10,047867,359
1,659,178

Share capital
Total other reserves
Translation reserve
Net income for the year
Equity attributable to owners of Group
Equity attributable to Non-controlling interests
Total Equity

255,8822,401,500
144,791
278,3293,080,502
24,0283,104,530

255,882
2,355,023
138,547
330,888
3,080,340
17,037
3,097,377

Total Liabilities and Total Equity

4,656,929

4,756,555

Net current assets
Total assets less current liabilities

1,173,268
4,020,154

1,096,619
3,964,736

13
10

Liabilities and Shareholders’ Equity
Current liabilities
Bank overdrafts and short-term loans
Payables to related parties - current
Trade payables
Tax payables
Derivative financial instruments - current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term financial payables
Post-employment benefits
Provision for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments non-current
Total non-current liabilities
Total Liabilities

14
15
16

17

6

Statement of changes in consolidated shareholders’(amounts in thousands of Euro, except for number of shares)

equityEquityEquityattributable to
NonControll.
Interests(amounts in thousandsof Euro)Number of
SharesShare
CapitalTranslation
ReserveSharepremium
reserve

Cash flow
hedge
reserve

Actuarial
Reserve

Fair Value
Available forsale Reserve

Other
reserves

Total
Other
Reserves

Net
incomefor year

Equityattributable toowners ofGroup

Balance at January 31,
2015

2,558,824,000

255,882

130,996410,047(35,323)(13,481)

11,115

1,790,771

2,163,129

450,730

3,000,737

Allocation of 2014 net
income

-

-

-

-

-

-

-

450,730

450,730(450,730)---

Dividends

-

-

-

-

-

-

-

(281,471)(281,471)-(281,471)(3,228)(284,699)

Share capital increase
Transactions with
Non-controllingshareholders
Comprehensive
income for the year
(recycled to P&L)
Comprehensive
income for the year
(not recycled to P&L)

-

-

-

-

-

-

-

-

-

-

-

409

409

-

-

-

-

-

-

-

(726)

(726)

-

(726)

(39)

(765)

-

-

7,551

-

28,223-(10,182)-

18,041

330,888356,480

2,479

358,959

-

-

-

-

-

5,320

-

-

5,320

-

5,320

6

5,326

Balance at January 31,
2016

2,558,824,000

255,882

138,547410,047(7,100)(8,161)933

1,959,304

2,355,023

330,888

3,080,340

17,037

3,097,377

Allocation of 2015 net
income

-

-

-

-

-

-

-

330,888

330,888(330,888)---

Dividends

-

-

-

-

-

-

-

(281,471)(281,471)-(281,471)(706)(282,177)

Share capital increase
Transactions with
Non-controllingshareholders
Comprehensive
income for the year
(recycled to P&L)
Comprehensive
income for the year
(not recycled to P&L)

-

-

-

-

-

-

-

-

-

-

-

1,014

1,014

-

-

-

-

-

-

-

(2,008)(2,008)-(2,008)280(1,728)

-

-

6,244

-

(797)

-

(2,589)-(3,386)278,329

281,187

6,401

287,588

-

-

-

-

-

2,454

-

-

2,454

-

2,454

2

2,456

2,558,824,000

255,882

144,791

410,047(7,897)(5,707)(1,656)

2,006,713

2,401,500

278,3293,080,502

24,0283,104,530

Balance at January 31,
2017

7

Total
Equity17,4103,018,147

Summarized statement of consolidated cash flows
twelvemonthsended
January 31
2017(audited)

twelvemonthsended
January 31
2016(audited)

Net cash flows from operating activities

631,850

368,465

Cash flows generated/(utilized) by investing activities(226,327)(392,125)

Cash flows generated/(utilized) by financing activities(376,218)(9,777)29,305(33,437)

twelvemonthsended
January 31
2017(audited)

twelvemonthsended
January 31
2016(audited)

284,190

333,338

Change in Translation reserve
Tax impact
Change in Translation reserve less tax impact

6,784
6,784

7,580
7,580

Change in Cash Flow Hedge reserve
Tax impact
Change in Cash Flow Hedge reserve less tax impact

(914)
117
(797)

38,907(10,684)
28,223(3,452)863(2,589)(13,576)
3,394(10,182)

3,277
(821)
2,456

6,526
(1,200)5,326

290,044364,285

6,403

2,485

283,641

361,800(amounts in thousands of Euro)

Change in cash and cash equivalents, net of bank overdrafts

Statement of consolidated comprehensive income(amounts in thousands of Euro)Net income for the period – ConsolidatedA) Items recyclable to P&L:

Change in Fair Value reserve
Tax impact
Change in Fair Value reserve less tax impactB) Item not recyclable to P&L:
Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact
Consolidated comprehensive income for the period
Comprehensive income for the period – Non-controlling Interests
Comprehensive income for the period – Group8

Notes to the consolidated results for the year ended January
31, 2017
1.

Presentation of PRADA GroupPRADA spa (the “Company”), together with its subsidiaries (jointly the “Group”), islisted on the Hong Kong Stock Exchange (HKSE code: 1913). It is one of the world
leaders in the luxury goods sector where it operates with the Prada, Miu Miu, Church’s
and Car Shoe brands in the design, production and distribution of luxury handbags,
leather goods, footwear, apparel and accessories. The Group also operates in theeyewear and fragrance industries under specific licensing agreements stipulated withindustry leaders, and with the recent acquisition (2014) of Pasticceria Marchesi 1824, it
has made its entry into the food industry, where it is positioned at the highest levels of
quality. Its products are sold in 70 countries worldwide through a network that
included 620 Directly Operated Stores (DOS) at January 31, 2017, and a selectnetwork of luxury department stores, independent retailers and franchise stores.
The Company is a joint-stock company, registered and domiciled in Italy. Its registeredoffice is in via Fogazzaro 28, Milan, Italy.

2.

Basis of preparation

The Consolidated financial statements of the PRADA Group as at January 31, 2017,
including the “Consolidated statement of Profit or Loss”, the “Consolidated statementof financial position”, the “Statement of changes in consolidated shareholders’ equity”,
the “Summarized statement of consolidated cash flows”, the “Statement ofconsolidated comprehensive income” and the “Notes to the consolidated financial
statements” have been prepared in accordance with the International Financial
Reporting Standards (“IFRSs”) issued by the International Accounting Standards
Board (“IASB”) as endorsed by the European Union.
At the date of presentation of these Consolidated financial statements, there were nodifferences between IFRS as endorsed by the European Union and applicable to the
PRADA Group and those issued by the IASB.
IFRS also refers to all International Accounting Standards (“IASs”) and allinterpretations of the International Financial Reporting Interpretations Committee(“IFRIC”), previously called the Standing Interpretations Committee (“SIC”).
The contents of this Announcement on the consolidated results for the year ended
January 31, 2017, are included in the 2016 Annual Report of PRADA spa.

9New standards and amendments issued by the IASB, endorsed by the European Union
and applicable to the PRADA Group from February 1, 2016
Amendments to existing standards
IAS 16 and IAS 38 Clarification of
Acceptable Methods of Depreciation andAmortization
IFRS 11 Accounting for Acquisitions ofInterests in Joint Operations
Disclosure Initiative: Amendments to“IAS 1 Presentation of Financial
Statements”
2012–2014 Cycle that impacted IFRS 5,
IFRS 7, IAS 19, IAS 34

Effective date for the
Prada GroupEU endorsement status

February 1, 2016

Endorsed on December 2015

February 1, 2016

Endorsed on November 2016

February 1, 2016

Endorsed on December 2015

February 1, 2016

Endorsed on December 2015

These changes above did not have significant impacts on these Consolidated Financial
Statements.

10

3.

Net revenues analysis

Net revenues for the year ended January 31, 2017

(amounts in thousands of Euro)

twelve months
ended
January 31
2017(audited)

twelve months
ended
January 31
2016(audited)

Net Sales
Royalties
Net revenues

3,139,290
44,7793,184,069

3,504,344
43,4273,547,771

98.6%
1.4%
100%

%
change98.8% -10.4%
1.2%
3.1%
100% -10.3%

Net sales analysis
twelve months
ended
January 31
2017(audited)

twelve months
ended
January 31
2016(audited)%changeNet sales by geographical area
EuropeAmericas
Asia PacificJapan
Middle East
Other countries
Total

1,190,149 37.9%
458,925 14.6%
993,214 31.6%
388,892 12.4%
103,417
3.3%
4,693
0.1%
3,139,290 100.0%

1,292,121 36.9%
525,424 15.0%
1,158,174 33.0%
407,398 11.6%
115,444
3.3%
5,783
0.2%
3,504,344 100.0%-7.9%-12.7%-14.2%-4.5%-10.4%-18.8%-10.4%Net sales by brand
Prada
Miu Miu
Church's
Other
Total

2,528,129 80.5%
515,176 16.4%
80,3782.6%
15,6070.5%
3,139,290 100.0%

2,841,056 81.1% -11.0%
564,315 16.1% -8.7%
82,456
2.4% -2.5%
16,517
0.4% -5.5%
3,504,344 100.0% -10.4%

Net sales by product line
Leather goods
Footwear
Clothing
Other
Total

1,803,762 57.5%
678,797 21.6%
599,563 19.1%
57,1681.8%
3,139,290 100.0%

2,103,241 60.0% -14.2%
725,987 20.7% -6.5%
612,249 17.5% -2.1%
62,867
1.8% -9.1%
3,504,344 100.0% -10.4%

Net Sales of direct operated stores (DOS)Sales to Independent customers and franchisees
Total

2,634,923 83.9%
504,367 16.1%
3,139,290 100.0%

3,059,732 87.3% -13.9%
444,612 12.7% 13.4%
3,504,344 100.0% -10.4%(amounts in thousands of Euro)

11

Number of stores
January 31, 2017
Owned
franchises

January 31, 2016
Owned
franchises

Prada
Miu Miu
Church's
Car Shoe
Marchesi

387
171
54
5
3

25
9
-

386
173
52
5
2

26
10
-

Total

620

34

618

36

January 31, 2017
Owned
franchises

January 31, 2016
Owned
franchises

EuropeAmericas
Asia PacificJapan
Middle East
Africa

220
113
187
78
20
2

4
25
5
-

221
117
183
74
21
2

5
26
5
-

Total

620

34

618

36

4.

Operating expenses
twelve months
ended
January 31
2017(audited)

Product design and development costs
Advertising and communications costs
Selling costs
General and administrative costs
Total(amounts in thousands of Euro)5.

% on netrevenues

twelve months
ended
January 31
2016(audited)% on netrevenues

125,258
172,549
1,383,337
176,787

3.9%
5.4%
43.4%
5.6%

134,272
191,695
1,517,443
221,262

3.8%
5.4%
42.8%
6.2%

1,857,931

58.4%

2,064,672

58.2%

Interest and other financial income/(expenses), net
twelve months
ended
January 31
2017(audited)

twelve months
ended
January 31
2016(audited)

Interest expenses on borrowings
Interest expenses IAS 19
Interest income
Exchange gains / (losses) – realized
Exchange gains/ (losses) – unrealized
Other financial income / (expenses)(14,282)
48
4,575
9,783
(15,068)(3,059)(14,779)
(44)
3,816
3,221
(17,489)(4,597)

Total(18,003)(29,872)(amounts in thousands of Euro)

12

6.

Taxation
twelve months
ended
January 31
2017(audited)

twelve months
ended
January 31
2016(audited)

Current taxation
Deferred taxation

95,64735,593

158,157(16,163)

Income taxes

131,240

141,994(amounts in thousands of Euro)

7.

Earnings and dividends per share, basic and diluted

Earnings per share
Earnings per share are calculated by dividing the net income of the period attributable
to Group’s shareholders by the weighted average number of ordinary shares in issue.

Group net income in Euro
Weighted average number of ordinary shares in issue
Basic and Diluted earnings per share in Euro, calculated onweighted average number of shares

twelve months
ended
January 31
2017(audited)

twelve months
ended
January 31
2016(audited)

278,328,814
2,558,824,000

330,888,425
2,558,824,000

0.109

0.129

Dividend per share
The Board of Directors of PRADA spa has proposed a final dividend of Euro
307,058,880 (or Euro 0.12 per share) for the twelve months ended January 31, 2017.
During the year ended January 31, 2017, the Company distributed dividends of Euro
281,470,640, as approved by Shareholders at the General Meeting held on May 24,
2016 to approve the financial statements for the year ended January 31, 2016.
The dividends and the related Italian withholding tax (Euro 14.6 million), determinedby applying the ordinary Italian tax rate to the entire amount of the dividends
distributed to the beneficial owners of the Company's shares held through the Hong
Kong Central Clearing and Settlement System, were paid by January 31, 2017.

13

8.

Trade receivables, net
as atJanuary 31
2017(audited)

as atJanuary 31
2016(audited)

Trade receivables – third parties
Allowance for bad and doubtful debts
Trade receivables – related parties

268,223(6,654)23,935

235,718(6,546)25,011

Total

285,504

254,183(amounts in thousands of Euro)

Trade receivables increased by Euro 31.3 million, in line with the growth of thewholesale channel.
Trade receivables from related parties refer primarily to sales of finished products to
Fratelli Prada spa, an affiliate and franchisee of the Prada Group.
Movements of the allowance for doubtful debts during the period were as follows:as atJanuary 31
2017(audited)

as atJanuary 31
2016(audited)

Opening balance

6,546

7,784

Exchange differences
Increases
Reversals
Utilization

(78)
578
(202)
(190)

(47)
418
(1,321)(288)

Closing balance

6,654

6,546

(amounts in thousands of Euro)The following table contains a summary of total receivables by due date before theallowance for doubtful debts:(amounts inthousands of Euro)

as at
January 31
2017(audited)

Trade receivables

292,158

Total

292,158(amounts inthousands of Euro)

as at
January 31
2016(audited)

Trade receivables

260,729

Total

260,729

Overdue (days)
Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

226,210

22,631

16,259

5,766

3,193

18,099226,210

22,631

16,259

5,766

3,193

18,099Overdue (days)
Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

217,808

17,077

6,848

5,257

3,400

10,339217,808

17,077

6,848

5,257

3,400

10,33914

The following table contains a summary of trade receivables by due date after theallowance for doubtful debts:(amounts inthousands of Euro)

as at
January 31
2017(audited)

Trade receivables
less allowance for
doubtful accounts

285,504

Total

285,504(amounts in thousandsof Euro)as atJanuary 31
2016(audited)

Trade receivables lessallowance for doubtful
accounts

254,183

Total

254,183

9.

Overdue (days)
Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

225,905

22,613

16,259

5,766

3,193

11,768225,905

22,613

16,259

5,766

3,193

11,768

Overdue (days)
Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

217,327

17,077

6,848

5,257

3,400

4,274

217,327

17,077

6,848

5,257

3,400

4,274

Inventories, net
as atJanuary 31
2017(audited)

as atJanuary 31
2016(audited)

Raw materials
Work in progress
Finished products
Allowance for obsolete and slow moving inventories

103,679
26,368444,049(47,155)

107,782
20,925
614,423(50,458)

Total

526,941

692,672(amounts in thousands of Euro)The reduction in finished products was achieved by improving the timing of
manufacturing activities and revising the strategies for replenishing the stores.
Movements on the allowance for obsolete and slow moving inventories are analyzed asfollows:
Rawmaterials

Finishedproducts

Total

Balance at January 31, 2016

26,757

23,70150,458Exchange differences
Increases
Reversals
Utilization
Other movements(4)(1,000)(77)-

43
1, 659(4,488)
564

39
1,659
(1,000)(4,565)564

Balance at January 31, 2017

25,676

21,47947,155(amounts in thousands of Euro)15

10. Receivables from, and advance payments to, related parties –current and non-current
Receivables from, and advance payments to, related parties current are detailed asfollows:(amounts in thousands of Euro)

as at
January 31
2017(audited)

as atJanuary 31
2016(audited)

Prepaid sponsorship
Other receivables and advances

8,741
6,223

13,626
6,003

Receivables from and advances to related parties - current

14,964

19,629Receivables from, and advance payments to, related parties non-current are detailed asfollows:
as atJanuary 31
2017(audited)

as atJanuary 31
2016(audited)

Prepaid sponsorship
Deferred rental income – long-term
Loans

-

3,164
1,632
703

Receivables from and advances to related parties –non-current

-

5,499

(amounts in thousands of Euro)

The prepaid sponsorships refer to the amount paid to Luna Rossa Challenge srl underagreements in effect as of January 31, 2017.

16

11.

Capital expenditure

Changes in the net book value of Property, plant and equipment in the period ended
January 31, 2017, are as follows:(amounts inthousands ofEuro)
Balance atJanuary 31, 2016
(audited)
Change inconsolidation
area
Additions
Depreciation
Disposals
Exchangedifferences
Other
movements
Impairment
Balance atJanuary 31, 2017
(audited)

Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Assets underconstruction

Total net
carrying
amount639,831

28,691

478,717

187,687

86,10996,744

1,517,779

3,819

1,279

256

110

12

-

5,476

30,155(15,637)(1,562)

12,720(7,559)(110)

107,451(111,997)(133)

29,251(33,548)(656)

10,969(14,643)(114)

31,313(34)

221,859(183,384)(2,609)(18,412)(117)

10,129

618

266

(89)

(7,605)

18,3302,096

28,4763,963

241(51,734)

1,372

-

(13)

(5,028)(4,581)

(172)

(410)

(10,204)

656,524

36,987

507,871

182,844

82,66875,7901,542,684

FurnitureOther& fittings tangibles

Changes in the net book value of Intangible assets in the period ended January 31,
2017, are as follows:
Development
Assets inSoftware costs and otherprogress
intangibles

Total net
carrying
amount(amounts inthousands of Euro)

Trademarks

Goodwill

Store Lease
Acquisitions

Balance at January
31, 2016 (audited)

265,238

513,218

97,51015,037

14,987

26,248932,238

-

6,239

-

11

53

-

6,303

305
(11,141)-262-(10,624)-

9,010(5,728)(3)

83(1,177)-

8,209-

17,869(28,670)(3)(5,958)(1,123)

1,787

33

-

55

(5,206)

-

1

314
(1)

6,740
(1)

(1,038)(1)(6,738)
(7)

(722)
(9)

248,444518,597

88,98625,09912,907

27,767

921,800

Change inconsolidation area
Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance at January
31, 2017 (audited)1712. Other current assets
as atJanuary 31
2017(audited)

as atJanuary 31
2016(audited)

VAT
Income tax and other tax receivables
Other assets
Prepayments
Deposits

48,582
117,244
27,21855,676
4,655

59,917
100,838
12,242
51,863
4,811

Total

253,375

229,671

as at
January 31
2017(audited)

as atJanuary 31
2016(audited)

Guarantee deposits
Deferred rental income
Pension fund surplus
Other long-term assets

77,007
16,807
10,233
19,31473,974
13,716
7,778
18,486

Total

123,361

113,954

as at
January 31
2017(audited)

as atJanuary 31
2016(audited)

Financial payables
Other payables

4,934
608

4,858
386

Payables to related parties - current

5,542

5,244

(amounts in thousands of Euro)

13. Other non-current assets(amounts in thousands of Euro)

14. Payables to related parties - current(amounts in thousands of Euro)The financial payables due to related parties regard two interest-free loans granted by
the non-controlling shareholders of the Group’s subsidiaries in the Middle East.

15.

Trade payables(amounts in thousands of Euro)

as at
January 31
2017(audited)

as atJanuary 31
2016(audited)

Trade payables – third parties
Trade payables – related parties

241,901
14,193

266,701
14,998

Total

256,094

281,699

18

The following table contains a summary of trade payables by due date:as atJanuary 31
2017(audited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade payables

256,094

221,125

15,884

4,670

2,955

582

10,878

Total

256,094

221,125

15,884

4,670

2,955

582

10,878

as at
January 31
2016(audited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade payables

281,699

246,525

16,418

10,190

1,912

670

5,984

Total

281,699

246,525

16,418

10,190

1,912

670

5,984

(amounts in thousandsof Euro)(amounts in thousandsof Euro)16.

Overdue (days)

Overdue (days)

Other current liabilities
as atJanuary 31
2017(audited)

as atJanuary 31
2016(audited)

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

56,63918,63669,552

54,132
16,37971,760Total

144,827

142,271(amounts in thousands of Euro)

17. Provisions for risks and charges
Movements in provisions for risks and charges are summarized as follows:(amounts in thousands of Euro)

Provision Provision for tax
for litigation
disputes

Other
Provisions

Total

Balance at January 31, 2016 (audited)

2,041

22,84644,346

69,233

Exchange differences
Reclassifications
Reversals
Utilized
Increases

(10)
(145)
(231)
133

(1)
(289)
(80)
2,429

522
(41)
(1,761)
12,564511(475)(2,072)
15,126

Balance at January 31, 2017 (audited)

1,788

24,90555,63082,323The provisions for risks and charges represent management’s best estimate of the
maximum amount of potential liabilities. According to management based on theinformation available, and in the opinion of independent experts, the total amountallocated for risks and charges at the reporting date is adequate in respect of theliabilities that could arise from them.

19

Management Discussion and Analysis for the year ended
January 31, 2017
Distribution channels
Retail sales for the twelve months ended January 31, 2017 were lower by 13.9% atcurrent exchange rates and by 13.1% at constant exchange rates. The trend for theperiod shows a less marked decline during the second half of the fiscal year, especiallyin the final months. The number of directly operated stores, with 28 openings and 26
closures, rose from 618 at January 31, 2016 to 620 at the reporting date.
Sales in the wholesale channel were up by 13.4% at current exchange rates and by
14.6% at constant rates. Growth in this channel was due primarily to the newpartnerships with leading online "e-tailers" around the world.

Markets
Net sales in the Asia Pacific market were down by 14.2% at current exchange rates
and by 12.1% at constant exchange rates. Mainland China had a substantial impact on
the region's performance, suffering a double-digit decline in the first six months, thengradually recovering and resuming growth late in the year. In the second half of theperiod South Korea reported recovery for sales to franchisees.
Net sales in Europe decreased by 7.9% at current exchange rates and by 5.2% atconstant exchange rates. The decline in tourism, as a result of the terrorist attacks, had
an especially significant impact on sales in France although the trend showedsignificant signs of improvement during the final quarter. Performance wasparticularly valuable in Russia, which enjoyed double-digit growth, and in the UK,
where a first-half decline was successfully reversed and the year ended with a solid
growth rate. The wholesale channel in Europe benefited from the new partnerships
forged with on-line distributors during the year.
Net sales in the Americas fell by 12.7% at current exchange rates and by 12% atconstant rates. Net sales in the United States were down in both channels, while Brazil
and Mexico reported growth, as did Canada during the second half of the year.
Net sales in the Japanese region decreased by 4.5% at current exchange rates and by
12.8% at constant exchange rates. The stronger yen discouraged tourism from China.
In the Middle East, sales decreased by approximately 10.4% at both current andconstant exchange rates.

Products
Leather goods showed a decrease of 14.2% at current exchange rates and 14% atconstant rates, although the trend was more moderate in the second half. In absoluteterms, the declines were most severe in Hong Kong, France and the United States.
The downturn for footwear was less steep (-6.5% at current exchange rates and -4.5%
at constant exchange rates), though the trends in terms of region and timing weresimilar to those of leather goods.
Net sales of the clothing were in line with the previous year (-2.1% at current
exchange rates and -0.8% at constant exchange rates), with a decline in the first six
months followed by growth in the second half of the fiscal year.
20Brands
Sales of Prada brand products decreased by 11% at current exchange rates and by
10.3% at constant rates, with a greater decline for leather goods and footwear, which
however lessened during the year.
Miu Miu sales were down by 8.7% at current exchange rates and by 8.3% at constantexchange rates. The improvement in the second half of the fiscal year was especiallyvisible for footwear and clothing, both of which increased.
Sales of Church's brand products decreased by 2.5% at current exchange rates, butgrew by 5.8% at constant exchange rates, reporting real growth in Italy and the UK.
The heading "other brands" mainly includes Car Shoe sales, which decreased due toclosures in 2015 in Singapore, London and Hong Kong, and sales of patisserie goods
by Marchesi 1824, which showed both organic growth and growth through expansion.

Royalties
In 2016, licensing agreements generated royalties of Euro 44.8 million, an increase of
3.1% with respect to 2015. The royalty growth was attributable primarily to the launchof Miu Miu's first fragrance.

Operating results
The gross margin came to 71.9% of net revenues, down slightly from the previous
fiscal year due mainly to a less favorable sales mix in terms of distribution channel andproduct category.
The operating expenses of 2016 were lower than those of 2015 by Euro 206.7 million,or 10%. This reflects measures to optimize key processes, a decline in variable costs,
and lower depreciation and amortization as explained in greater detail below. In
particular, advertising and communication costs fell, although they remained 5.4% of
net revenues, as a result of less spending in the traditional media, as well as lower
sponsorship costs.

21

twelvemonthsended
January 31
2017%
on netrevenues

twelvemonthsended
January 31
2016%
on netrevenues

Product design and development costs
Advertising and communications costs
Selling costs
General and administrative costs

125,258
172,549
1,383,337
176,787

3.9%
5.4%
43.4%
5.6%

134,272
191,695
1,517,443
221,262

3.8%
5.4%
42.8%
6.2%

Total Operating expenses

1,857,931

58.4%

2,064,672

58.2%(amounts in thousands of Euro)For the twelve months ended January 31, 2017, EBITDA was Euro 653.5 million or
20.5% of net sales, falling by 210 basis points in comparison with 2015, when it
amounted to 22.6% of revenues.
During the fiscal year, management reviewed the estimated useful life of certain
tangible and intangible fixed assets in order to better represent their use in businessprocesses, principally within the retail area. This change in estimates reduced
depreciation and amortization by Euro 64 million in the consolidated statement of
profit or loss.
EBIT came to Euro 431.2 million, a reduction of Euro 71.7 million with respect to2015. As a percentage of net revenues, EBIT fell from 14.2% to 13.5%.
Finance charges decreased from Euro 27.6 million in 2015 to Euro 15.8 million. The
decrease was influenced by lower exchange losses on financial items and, to a minor
degree, the combination of higher interest income thanks to the more efficient use of
cash and lower interest expense due to lower average debt and interest rates.
The effective tax rate was 31.6%, up slightly from the 29.9% of 2015, essentiallyfollowing to a less favorable geographical distribution of the taxable income in 2016.
The Group's net income of the 2016 was Euro 278.3 million, or 8.7% of net revenues,
compared with the Euro 330.9 million or 9.3% achieved in 2015.

22

Net invested capital
The following table contains the statement of financial position, as reclassified in orderto provide a better picture of the composition of Net Invested Capital.
(amounts in thousands of Euro)

as at
January 31
2017(audited)

as atJanuary 31
2016(audited)

Non-current assets (excluding deferred tax assets)
Trade receivables, net
Inventories, net
Trade payables
Net operating working capital
Other current assets (excluding items of financial position)
Other current liabilities (excluding items of financial position)
Other current assets/(liabilities), net
Provision for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation, net
Other non-current assets/(liabilities)
Net invested capital
Shareholder's equity – Group
Shareholder's equity – Non-controlling interests
Total Consolidated shareholders' equity
Long-term financial payables
Short-term financial, net surplus/(deficit)
Net financial position surplus/(deficit)
Shareholders’ equity and net financial position
Net Debt to Consolidated equity ratio

2,599,620
285,504
526,941(256,094)
556,351
275,384(224,536)
50,848(82,323)(67,211)(187,322)
216,126(120,730)
3,086,089(3,080,502)(24,028)(3,104,530)(547,628)
566,069
18,441(3,086,089)
n/a

2,586,841
254,183
692,672(281,699)
665,156
260,983(234,496)
26,487(69,233)(69,405)(171,364)
243,690(66,312)3,212,172(3,080,340)(17,037)(3,097,377)(519,772)
404,977(114,795)(3,212,172)
3.6%

As of January 31, 2017, the Group has net invested capital of Euro 3,086.1 million, a
positive net financial position of Euro 18.4 million and equity attributable to the Groupof Euro 3,080.5 million.
Non-current assets, consisting essentially of property, plant, equipment and intangible
assets, increased from Euro 2,586.8 million to Euro 2,599.6 million, mainly due tocapital expenditure (Euro 251.5 million) less depreciation, amortization andimpairment (Euro 222.3 million).
Capital expenditure was allocated for Euro 151.2 million to many projects in the retailarea to expand, relocate and renovate stores. Investments in the retail network also
included the initial projects of the restyling plan intended to bring Prada and Miu Miu
stores into line with the Group's new aesthetic guidelines. The remaining capital
expenditure of Euro 100.3 million concerned the corporate and manufacturing
divisions. Indeed, several manufacturing projects in Italy finalized at strengthening
control over the production cycle were completed in the fiscal year: the inaugurationof a new leather goods manufacturing facility, the upgrading of various factories, andthe purchase of two former contract manufacturers (one in Italy and one in Romania).
In addition, the Group opened the first of three tranches to serve as its new logisticalhub for finished products.

23

The decrease in net working capital was due essentially to a reduction in finishedproduct inventories that was achieved by improving the timing of manufacturing
activities and revising the strategies for replenishing the stores.
Other current assets, net, increased by Euro 24.4 million due chiefly to lower tax
payables, the termination of derivative contracts and other receivables.
Other non-current liabilities, net, increased by Euro 54.4 million essentially as a resultof lower deferred tax assets on retail inventories and greater deferred rent liabilities.
During the fiscal year the Group paid dividends to PRADA spa shareholders in theamount of Euro 281.5 million.

Net financial position surplus/(deficit)
as atJanuary 31
2017(audited)

as atJanuary 31
2016(audited)

Bonds
Bank borrowing – non-current
Total financial payables – non-current(130,000)(417,628)(547,628)(130,000)(390,475)(520,475)

Financial payables and bank overdrafts - current(151,211)(270,766)

Payables to parent company and related parties
Total financial payables – current(4,934)(156,145)(4,858)(275,624)

Total financial payables(703,773)(796,099)-

703

Cash and cash equivalents
Total financial receivables and cash and cash equivalents - current

722,214722,214680,601
680,601

Total financial receivables and cash and cash equivalents

722,214681,304

Net financial surplus/(deficit), total

18,441(114,795)

Net financial surplus/(deficit) excluding related party balances

23,375(110,640)n/a-14.3%(amounts in thousands of Euro)

Financial receivables from related parties – non-current

NFP/EBITDA ratio

As of January 31, 2017, the net financial position is positive and amounting to Euro
18.4 million, compared with the net indebtedness of Euro 114.8 million as of January
31, 2016. Working capital management made a significant contribution to operating
cash flow, which enabled the Group to pay dividends to shareholders, self-finance its
capital expenditure and reduce indebtedness.
In 2016, thanks in part to favorable credit market conditions, the Group took out Euro
120 million in new medium/long-term loans that further reduced the averageborrowing rate while extending maturities. Together with the cash surplus generated
during the year, the new loans made it possible to repay some Euro 80 million of longterm loans at their natural maturity and to settle short-term credit lines totaling someEuro 138 million.
24

The total amount of undrawn lines of credit at January 31, 2017 is Euro 662 million.

Events after the reporting date
Nothing to mention.

Outlook
The Group will leverage on its unique heritage and creativity to continue to deliver
unparalleled innovation and quality. The omni-channel experience will be intensified
with enhanced online presence and in-store digital environment. This action plan,
coupled with a streamlined cost structure, puts the Group in a strong position toconvert future revenue into profitability.

25

Corporate Governance practices
The Company is committed to maintaining a high standard of corporate governancepractices as part of its commitment to effective corporate governance. The corporate
governance model adopted by the Company consists of a set of rules and standards
aimed toward establishing efficient and transparent operations within the Company andits subsidiaries (the “Group”), to protect the rights of the Company’s shareholders andto enhance shareholder value. The corporate governance model adopted by theCompany is in compliance with the applicable regulations in Italy, as well as theprinciples of the Corporate Governance Code (the “Code”) contained in Appendix 14of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the “Listing Rules”). Full details on the Company’s corporate governancepractices are set out in the Company’s 2016 Annual Report.

Audit Committee
The Company has established an Audit Committee in compliance with Rule 3.21 of the
Listing Rules where at least one member possesses appropriate professional
qualifications in accounting or possesses related financial management expertise todischarge the responsibility of the Audit Committee. The membership of the Audit
Committee consists of three Independent Non-Executive Directors, namely, Mr. Gian
Franco Oliviero Mattei (Chairman), Mr. Giancarlo Forestieri and Mr. Sing Cheong
Liu.
During the year ended January 31, 2017 (the “Reviewed Period”), the Audit
Committee held four meetings (with an attendance rate of 100%) mainly to review
with senior management, the Group’s internal and external auditor and the board of
statutory auditors, significant internal and external audit findings and financial mattersas required under the Committee’s terms of reference and make relevant
recommendations to the Board. The Audit Committee’s review covers the audit plans
as well as the findings of both the internal and external auditors, internal controls, risk
assessment, annual review of the continuing connected transaction of the Group, tax
updates and financial reporting matters (including the annual results for the year ended
January 31, 2016 and the interim financial results as of July 31, 2016) before
recommending them to the Board for approval.
The Audit Committee also held two meetings on April 6 and 12, 2017, to review theannual results for the year ended January 31, 2017, before recommending it to theBoard for approval.

Compliance with the Code
The Board has reviewed the Company’s corporate governance practices and is satisfied
that such practices have complied with the code provisions set out in the Code, for theentire Reviewed Period (i.e. the year ended January 31, 2017).

Directors’ Securities Transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the required standard set out in the Model
Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”).
Specific written acknowledgments have been obtained from each Director to confirm
his/her compliance with required standard set out in the Model Code and the26Company’s relevant procedures regarding directors’ securities transactions for theduration of the Reviewed Period. There were no incidents of non-compliance during
the Reviewed Period.
The Company has also adopted written procedures governing securities transactions
carried out by the relevant employees who are likely to possess inside information in
relation to the Company and its securities. The terms of these procedures are no lessexacting than the standard set out in the Model Code.
The Company has adopted policies to ensure that inside information are handled anddisseminated in accordance with the requirements of the Securities and Futures
Ordinance and the Listing Rules.

Purchase, Sale or Redemption of the Company’s Listed Securities
Neither the Company nor any of its subsidiaries has purchased, sold or redeemed anyof the Company’s listed securities during the Reviewed Period.

Shareholders’ general meeting
The Shareholders’ general meeting of the Company will be held on Wednesday, May
31, 2017 (the “AGM”).
Notice of the AGM will be published on the Company’s website atwww.pradagroup.com and on the Hong Kong Exchanges and Clearing Limited’s
website at www.hkexnews.hk and dispatched to the shareholders of the Company in due
course.

Final Dividend
The Board recommends, for the twelve month period ended January 31, 2017, a final
dividend of Euro 307,058,880 (or 12 Euro/cents per share).The payments shall be
made:
(i)
in Euro to the shareholders recorded in the section of the Company’s
shareholders register kept by the Company at its registered office in Milan(Italy), and(ii)
in Hong Kong dollars to the shareholders recorded in the section of theCompany’s shareholders register kept in Hong Kong. The relevant
exchange rate will be the opening buying T/T rate of Hong Kong dollars to
Euros as announced by the Hong Kong Association of Banks(www.hkab.org.hk) on the day the final dividend is approved by theshareholders.
Subject to the shareholders’ approval of the payment of the final dividend at theforthcoming shareholders’ general meeting of the Company to be held on Wednesday,
May 31, 2017, such dividend will be paid on Tuesday, June 20, 2017.

Book Closure and Record Dates
For determining shareholders’ right to attend and vote at the AGM:
Latest time to lodge transfer documents with theCompany’s Hong Kong Share Registrar or theCompany in Milan (Note 1)

27

May 25, 2017 - 4:30 pm
HK time/10:30 am CET
time

From May 26 to 31, 2017
(both days inclusive)

Book closure (both sections) (Note 2)
Record date

May 26, 2017

For determining shareholders’ entitlement to the payment of the proposed final
dividend:
Latest time to lodge transfer documents with theCompany’s Hong Kong Share Registrar or theCompany in Milan (Note 1)

June 6, 2017 - 4:30 pm HK
time/10:30 am CET timeBook closure (both sections) (Note 2)

June 7, 2017

Record Date

June 7, 2017

Dispatch date of dividend warrants

June 20, 2017

Notes:
1. All transfers accompanied by the relevant share certificate(s) must be lodged
with:
(i)
the Company’s Hong Kong share registrar, Computershare Hong Kong
Investor Services Limited whose address is at Shops 1712-16, 17th
Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong,
if the transfer concerns shares registered in the section of theCompany’s shareholders register kept by the Company’s Hong Kongshare registrar itself; or(ii)
the Company’s registered office at Via Antonio Fogazzaro no. 28,
Milan 20135, Italy, if the transfer concerns shares registered in thesection of the Company’s shareholders register kept by the Company
itself.
2. No transfer of shares will be registered on the book closure date.

28

Publication of Annual Results Announcement and Annual Report
This Annual Results Announcement is published on the Company’s website atwww.pradagroup.com and on the Hong Kong Exchanges and Clearing Limited’s
website at www.hkexnews.hk. The Company’s 2016 Annual Report will be publishedon the same websites and dispatched to shareholders of the Company in due course.

By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Chairman

Milan (Italy), April 12, 2017

As at the date of this announcement, the Company’s executive directors are Mr. Carlo MAZZI,
Ms. Miuccia PRADA BIANCHI, Mr. Patrizio BERTELLI and Ms. Alessandra COZZANI; theCompany’s non-executive directors are Stefano SIMONTACCHI and Mr. Maurizio CEREDA
and the Company’s independent non-executive directors are Mr. Gian Franco Oliviero
MATTEI, Mr. Giancarlo FORESTIERI and Mr. Sing Cheong LIU.

29