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 toits accuracy or completeness and expressly disclaim any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the contents of thisannouncement.

PRADA spa
(Stock Code: 1913)

ANNOUNCEMENT
OF THE CONSOLIDATED RESULTS FOR THE YEAR ENDEDJANUARY 31, 2014

- Net revenues were Euro 3,587.3 million, recording an increase of 8.8%
compared with the year ended January 31, 2013
- Retail net sales were Euro 2,996.6 million, up by 12.5% compared withthe year ended January 31, 2013 (+17.8% at constant exchange rates)- Retail Same Store Sales Growth was 7% compared with the year ended
January 31, 2013
- EBITDA was Euro 1,143.2 million, up by 8.6% compared with the year
ended January 31, 2013, and representing a margin of 31.9% on net
revenues- Group’s net income amounted to Euro 627.8 million, up by 0.3%
compared to Euro 625.7 million for the year ended January 31, 2013
- Positive net financial position at Euro 295.9 million as at January 31,
2014- Net operating cash flow for the year ended January 31, 2014, wasEuro 769.4 million

1Consolidated results for the year ended January 31,
2014
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company” or“PRADA spa”) is pleased to announce the audited Consolidated results of theCompany and its subsidiaries (collectively, the “Group”) for the year ended
January 31, 2014, together with the audited comparative figures for the year
ended January 31, 2013. The following financial information was prepared inaccordance with the International Financial Reporting Standards (“IFRS”) as
adopted by the European Union. The consolidated results of the Group forthe year ended January 31, 2014, and January 31, 2013, were audited by
Deloitte & Touche spa.

Scope of work of Messrs. Deloitte & Touche spa
The figures in respect of the Group’s consolidated statement of financial
position, consolidated statement of comprehensive income and the related
notes thereto for the year ended January 31, 2014, as set out in thispreliminary announcement have been agreed by the Group's auditors, Messrs.
Deloitte & Touche spa, to the amounts set out in the Group’s audited
consolidated financial statements for the year. The work performed by
Messrs. Deloitte & Touche spa in this respect did not constitute an assurance
engagement in accordance with Auditing Standards issued by the Italian
Accounting Profession (CNDCEC) and recommended by Consob, the ItalianCommission for listed Companies and the Stock Exchange and consequently
no assurance has been expressed by Messrs. Deloitte & Touche spa on the
preliminary announcement.

2Key financial information
Key information from the Income
statement(amounts in thousands of Euro)

twelvemonthsended
Jan 312014(audited)

twelvemonthsended
Jan 312013(audited)

twelvemonthsended
Jan 312012(audited)

Net revenues
EBITDAEBITDA %EBITEBIT %
Income before tax
Net income of the Group
Earnings per share (Euro)
Capital expenditure
Net operating cash flows

3,587,347
1,143,186
31.9%
939,237
26.2%
922,896627,785
0.245
611,227
769,437

3,297,219
1,052,469
31.9%
889,78127.0%
883,616
625,6810.245
351,129759,272

2,555,606
759,25229.7%
628,935
24.6%
602,908
431,9290.170
278,856
479,954

8.8%
8.6%
5.6%
4.4%
0.3%
0%
-

10,816

9,427

8,067

14.7%

Key information from the Statement offinancial position(amounts in thousands of Euro)

as at
Jan 312014(audited)

as at
Jan 312013
audited

as at
Jan 312012(audited)change vs
Jan 31
2013

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

409,774
2,405,650
295,8902,687,554

317,7142,017,844
312,648
2,320,022

357,648
1,817,327
13,6401,822,743

92,060387,806(16,758)
367,532

Average headcount (persons)%change vs
Jan 312013

Highlights for the year ended January 31, 2014
In 2013, the PRADA Group pursued with conviction its strategic plan of
expansion in the global luxury goods market, achieving one of the highest
rates of growth in the segment. The results achieved were all the moresatisfying considering the ongoing uncertainty of the economic environment,
especially in some parts of Europe, and the related exchange rate volatility.
For the fourth consecutive year, significant net revenue growth was recorded.
Commercial growth was driven by the retail network thanks to both the solid
contribution of existing stores and the impact of newly opened stores. Retail
network expansion led to the opening of 79 net new Directly Operated Stores(DOS) during the year. The total number of DOS hit 500 in August 2013 andreached 540 at January 31, 2014. The Group now covers with its own stores
40 out of the 70 countries where Prada, Miu Miu, Church’s and Car Shoefinished products are distributed and these stores generate 84.5% ofconsolidated net sales. At the same time, leather goods generate around two
thirds of consolidated net sales with the remainder coming from clothing andfootwear. This is consistent with the strategy of retail growth and the ongoingpolicy of selective reduction of the independent customer base.
The revenue growth has been accompanied by a communications strategy
focused on sustaining and developing brand identity and ranging from uniqueadvertising campaigns to sponsorship of events and initiatives with global
visibility as the participation by Luna Rossa in the XXXIV edition of theAmerica’s Cup or the cultural and artistic initiatives of the Fondazione Prada.

3

Finally, in the industrial area, in 2013 management committed to improving
further processes in order to optimize the system of procurement for theretail network and maintain high quality gross margins without affecting a
tradition of craftsmanship that has now lasted a hundred years.
The Group’s net revenue for the twelve months ended January 31, 2014,
totaled Euro 3,587.3 million, 8.8% more than in 2012 (+13.3% at constantexchange rates). An improvement in gross margin helped limit the impact of
an increase in operating expenses due to retail network expansion and EBITDA
remained in line with prior year at 31.9% of net revenue. In absolute terms,
EBITDA totaled Euro 1,143.2 million, 8.6% more than the figure of Euro
1,052.5 million achieved in 2012.
The Group’s net income totaled Euro 627.8 million, slightly higher than the
figure of Euro 625.7 million for the twelve months ended January 31, 2013. In
addition to reasons above explained, the Group’s net income, as a percentageof net revenue, decreased from 19% to 17.5% because the increase in the
direct tax burden.
The capital expenditure incurred during the twelve months ended January 31,
2014, amounted to Euro 611.2 million and was mainly focused on the retailarea. Capital expenditure was mainly used to sustain the plan to open new
stores and to acquire a prestigious building on Old Bond Street in London
which the Group has already partially deployed to open one of the moststrategic Prada stores in the world.
Free cash flows for the year enabled the Group to report a positive net
financial position of Euro 295.9 million at January 31, 2014, after distributing
dividends of Euro 230.3 million to the shareholders of PRADA spa. In terms ofduration, the debt structure is more favorable than at January 31, 2013, as it
has shifted more towards a longer term profile. During the year, the Groupmade loan repayments falling due of Euro 162.5 million, issued a five year
bond of Euro 130 million and arranged new long-term bank loans of Euro 46.8
million.

4

Consolidated income statement for the year ended January 31,
2014(amounts in thousands of Euro)Net revenues
Cost of goods soldtwelvemonths
% on
ended
Net
January 31
revenues
2014(audited)

Note3

twelvemonths
% on
ended
Net
January 31
revenues
2013(audited)

3,587,347(938,698)

100.0%-26.2%

3,297,219(920,678)

100.0%-27.9%

2,648,649

73.8%

2,376,541

72.1%(1,709,412)-47.7%(1,486,760)-45.1%

939,23726.2%

889,78127.0%(17,357)-0.5%(7,131)

-0.2%

1,016

-

966

-

922,89625.7%

883,61626.8%(285,091)-7.9%(250,339)-7.6%

Net income from continuing operations

637,805

17.8%

633,277

19.2%

Net income for the period

637,805

17.8%

633,277

19.2%

Net income – Non-controlling interests

10,020

0.3%

7,596

0.2%

Net income – Group

627,78517.5%

625,681

19.0%

Depreciation, amortization andimpairment

203,949

5.7%

162,688

4.9%

1,143,186

31.9%

1,052,469

31.9%

Gross margin
Operating expenses

4

EBIT
Interest and other financial
income/(expenses), net
Dividends received from third parties

5

Income before taxes
Taxation

6

EBITDA
Basic and diluted earnings per share(in Euro per share)

7

0.245

5

0.245

Consolidated income statement for the three months ended
January 31, 2014
three
monthsended
January 31
2014(unaudited)

% on
Net
revenues

threemonthsended
January 31
2013(unaudited)

% on
Net
revenues

1,011,246(271,837)

100.0%-26.9%

957,897(265,801)

100.0%-27.7%

Gross margin

739,40973.1%

692,096

72.3%

Operating expenses(477,986)-47.3%(414,779)-43.3%

EBIT

261,42325.9%

277,31729.0%(2,933)-0.3%(2,837)

-0.3%

732

0.1%

966

0.1%

Income before taxes

259,22225.6%

275,446

28.8%

Taxation(69,957)-6.9%(56,234)-5.9%

Net income from continuing operations

189,265

18.7%

219,21222.9%

Net income for the period

189,265

18.7%

219,212

22.9%

2,360

0.2%

2,083

0.2%

Net income – Group

186,906

18.5%

217,129

22.7%

Depreciation, amortization andimpairment

60,791

6.0%

47,279

4.9%

EBITDA

322,21431.9%

324,596

33.9%(amounts in thousands of Euro)Net revenues
Cost of goods sold

Note

3

Interest and other financial
income/(expenses), net
Dividends received from third parties

Net income – Non-controlling interests

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

as at
January 31
2014(audited)

as atJanuary 31
2013(audited)

9
8

568,414
308,405449,903
13,984

571,746
304,525
343,80243,06010

5,993

19,493

12

114,897
1,461,596

104,823
1,387,449

11
11

1,230,192
901,289
21,186201,245
69,8671,430

857,299
878,750
23,024
176,057
61,569
1,018

1,487

113

2,426,696
3,888,292

1,997,830
3,385,279

61,909175,570

14

4,894

5,599

15

348,534
132,1453,803
524
154,666
706,475

330,613
97,148912
575
131,645742,062

207,950
19
63,27952,66042,671
98,982
1,469

78,830518
45,53846,91455,63684,905384

Note

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Derivative financial instruments - current
Receivables from, and advance payments to,parent company and other related parties 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,parent company and other related parties – noncurrent
Total non-current assets
Total Assets
Liabilities and Shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans
Payables to parent company and other relatedparties - current
Trade payables
Current tax liabilities
Derivative financial instruments - current
Obligations under finance leases - current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term financial payables
Obligations under finance leases non-current
Post-employment benefits
Provision for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments non-current
Payables to parent company and other relatedparties - non current
Total non-current liabilities
Total Liabilities
Share capital
Other reserves
Translation reserve
Net profit for the period
Total Shareholders’ equity – Group
Shareholders’ equity – Non-controlling interests
Total Liabilities and Shareholders’ equity

13

10

16

17

14

Net current assets
Total assets less current liabilities

7

13,247-480,277
1,186,752
255,882
1,853,325(49,438)
627,785
2,687,554
13,986
3,888,292

312,725
1,054,787
255,882
1,480,747(42,288)625,6812,320,022
10,4703,385,279

755,1213,181,817

645,387
2,643,217

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

Number of
SharesBalance at January
31, 2012 (audited)

2,558,824,000

Allocation of 2011
net profit
Dividends
Capital injection in
subsidiaries
Comprehensive
income for the year
(recycled to P&L)
Comprehensive
income for the year
(not recycled to
P&L)
Balance at January
31, 2013 (audited)
Allocation of 2012
net profit
Dividends
Capital injection in
subsidiaries
Comprehensive
income for the year
(recycled to P&L)
Comprehensive
income for the year
(not recycled to
P&L)
Balance at January
31, 2014 (audited)

Share Translati
SharepremiumonCapitalreserve reserve

Cash Actuarial
flow
gain
hedge (losses)
reserve reserve

255,882(4,173)410,047(17,239)(1,192)EquityNonAvailable
attributable
Other
controlli
for sale
Net profit to owners
reservesng
reserveof theinterests
Group
(58)

747,548

431,929

431,929 (431,929)

1,822,744

Total
Equity8,224 1,830,968

-

-

-

-

-

-

-

-

-

-

-

-

-

- (127,941)-(127,941)

-

-

-

-

-

-

-

-

-

-

1,166

1,166

-

-

-

(25,049)

24,321

-

5,544

-

625,681

630,497

6,656

637,153

-

-

-

-

-

(5,278)---(5,278)-(5,278)2,558,824,000

255,882

410,047(42,288)

20,148(6,470)5,486 1,051,536

625,6812,320,022

625,681 (625,681)

-

-

-

(5,576) (133,517)

10,470 2,330,492

-

-

-

-

-

-

-

-

-

-

-

-

-

- (230,294)-(230,294)

-

-

-

-

-

-

-

-

-

-

-

-

40

40

-

-

-

(7,150)(16,449)-(1,378)-627,785

602,808

10,110612,918

-

-

-

-

-

(4,982)---(4,982)-(4,982)

2,558,824,000

255,882

410,047(49,438)

3,699(11,452)

4,108 1,446,923

627,785

2,687,554

13,986 2,701,540

Under Italian law, the Company is required to allocate a portion of its net
profit to non-distributable reserves and to provide additional information on
the distribution of earnings for the period.

8-(6,634) (236,928)

Summarized statement of consolidated cash flows
twelve months
ended
January 31
2014(audited)

twelve months
ended
January 31
2013(audited)

Net cash flows from operating activities

769,437

759,272

Cash flows generated/(utilized) by investing activities(548,348)(331,645)

Cash flows generated/(utilized) by financing activities(219,797)(197,965)

1,292

229,662(amounts in thousands of Euro)

Change in cash and cash equivalents, net of bank overdrafts

Statement of consolidated comprehensive income
twelve months
ended
January 31
2014(audited)

twelve months
ended
January 31
2013(audited)

637,805

633,277

Change in Translation reserve
Tax impact
Change in Translation reserve less tax impact(7,057)(7,057)(25,989)(25,989)

Change in Cash Flow Hedge reserve
Tax impact
Change in Cash Flow Hedge reserve less tax impact(22,755)
6,306(16,449)

33,530(9,209)24,321

Change in Fair Value reserve
Tax impact
Change in Fair Value reserve less tax impact(1,837)459(1,378)

7,391(1,847)
5,544

Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact(6,403)
1,418(4,985)(6,369)1,091(5,278)

Consolidated comprehensive income for the period

607,936

631,875

Comprehensive income for the period – Non-controlling
Interests

10,1106,656

Comprehensive income for the period – Group

597,826

625,219(amounts in thousands of Euro)Net income for the period – ConsolidatedA) Items recycled to P&L:

B) Item not recycled to P&L

9Notes to the consolidated results for the twelve months
ended January 31, 2014
1.

Presentation of PRADA GroupPRADA spa (the “Company”), together with its subsidiaries (jointly the“Group”), is listed on the Hong Kong Stock Exchange (stock 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 andaccessories. The Group also operates, under licensing agreements, in theeyewear, fragrances and mobile telephone sectors. Its products are sold in 70
countries worldwide through a network that included 540 Directly Operated
Stores (DOS) at January 31, 2014, and a selected network of luxury
department stores, independent retailers and franchise stores.
The Company is a joint-stock company, registered and domiciled in Italy. Its
registered office is in Via Antonio Fogazzaro 28, Milan, Italy.

2.

Basis of preparation

The Consolidated financial statements of the PRADA Group as at January 31,
2014, including the “Consolidated statement of financial position”, the“Consolidated income statement”, the “Statement of Consolidated
comprehensive income”, the “Summarized statement of consolidated cash
flows “, the “Statement of changes in consolidated shareholders’ equity” andthe “Notes to the consolidated financial statements” have been prepared inaccordance with the International Financial Reporting Standards (“IFRSs”)
issued by the International Accounting Standards Board (“IASB”) as endorsedby the European Union.
At the date of presentation of these Consolidated financial statements, there
were no differences between IFRS as endorsed by the European Union andapplicable 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, 2014, are included in the 2013 Annual Report of PRADAspa.

New standards and amendments issued by the IASB, endorsed by
the European Union and applicable to the PRADA Group fromFebruary 1, 2013
The following amendments to IFRS have been endorsed by the European
Union and are applicable to the PRADA Group effective from February 1,
2013. These changes do not have any significant impact to the Group as ofthe date of these Consolidated financial statements:10

- Amendments to “IAS 1 Presentation of financial statements”;- Amendments to “IAS 19 Employee benefits”;- “IFRS 13 Fair Value Measurement”;- Amendments to “IAS 12 Income Taxes”;- Amendments to “IFRS 7 Financial Instruments: Disclosures”;- Amendments to “IFRS 1 First-time Adoption of IFRS – Governments Loans”;- Annual improvements to IFRS (2009-2011 Cycle).
On December 29, 2012, the European Union endorsed the “IFRS 10
Consolidated Financial Statements”, the “IFRS 11 Joint Arrangements”, the“IFRS 12 Disclosure of Interests in Other Entities”, the Amendments to “IAS
28 Investment in Associates and Joint Ventures” and the Amendments to “IAS
27 Separate Financial Statements” that, according to IASB, are effectivefrom January 1, 2013, but, because of the timing of the endorsement process
in the European Union, are applicable to the PRADA Group effective fromFebruary 1, 2014. The early adoption of these new IFRS and amendments
would not have had any significant impact on the Consolidated financial
statements of the PRADA Group for the twelve months ended January 31,
2014.

11

3.

Net revenues analysis

Net revenues for the year ended January 31, 2014
twelve months
ended
January 31
2014(audited)

twelve months
ended%
January 31
2013 change(audited)

Net sales by geographical area
Italy
EuropeAmericas
Asia PacificJapan (including Hawaii)
Middle East
Other countries
Total

552,897 15.6%
776,494 21.9%
487,990 13.8%
1,292,753 36.4%
340,784
9.6%
91,114
2.6%
6,175
0.1%
3,548,207 100.0%

528,302 16.2%
4.7%
739,634 22.7%
5.0%
440,035 13.5% 10.9%
1,160,166 35.6% 11.4%
337,313 10.4%
1.0%
44,803
1.4% 103.4%
6,175
0.2%
0.0%
3,256,428 100.0%
9.0%

Net sales by brand
Prada
Miu Miu
Church's
Car Shoe
Other
Total

2,943,633 83.0%
519,142 14.6%
68,6091.9%
13,427
0.4%
3,396
0.1%
3,548,207 100.0%

2,649,559 81.4% 11.1%
512,762 15.7%
1.2%
68,4472.1%
0.2%
19,6600.6% -31.7%
6,000
0.2% -43.4%
3,256,428 100.0%
9.0%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

581,594 16.4%
2,332,518 65.7%
594,586 16.8%
39,5091.1%
3,548,207 100.0%

563,322 17.3%
2,038,043 62.6%
625,390 19.2%
29,6730.9%
3,256,428 100.0%

3.2%
14.4%
-4.9%
33.1%
9.0%

Net sales by distribution channelDOS
Independent customers and franchises
Total

2,996,637 84.5%
551,570 15.5%
3,548,207 100.0%

2,664,238 81.8%
592,190 18.2%
3,256,428 100.0%

12.5%
-6.9%
9.0%

Net sales
Royalties

3,548,207
39,1403,256,428
40,791

98.8%
1.2%

9.0%
-4.0%

Total net revenues

3,587,347 100.0%

3,297,219 100.0%

8.8%(amounts in thousands of Euro)

12

98.9%
1.1%

Net revenues for the three months ended January 31, 2014
three months
ended
January 31
2014(unaudited)(amounts in thousands of Euro)

three months
ended%
January 31
2013 change(unaudited)

Net sales by geographical area
Italy
EuropeAmericas
Asia PacificJapan (including Hawaii)
Middle East
Other countries
Total

154,334 15.4%
204,482 20.5%
152,311 15.2%
360,775 36.0%
101,029 10.1%
26,078
2.6%
1,992
0.2%
1,001,001 100.0%

143,237 15.1%
202,337 21.3%
144,260 15.2%
345,472 36.5%
90,4339.5%
20,759
2.2%
1,927
0.2%
948,425 100.0%

Net sales by brand
Prada
Miu Miu
Church's
Car Shoe
Other
Total

829,223 82.9%
151,144 15.1%
17,348
1.7%
2,474
0.2%
812
0.1%
1,001,001 100.0%

772,956 81.5%
7.3%
152,098 16.0% -0.6%
18,3101.9% -5.3%
4,525
0.5% -45.3%
536
0.1% 51.5%
948,425 100.0%
5.5%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

191,252 19.1%
621,735 62.1%
179,228 17.9%
8,786
0.9%
1,001,001 100.0%

175,393 18.5%
9.0%
593,826 62.6%
4.7%
175,046 18.5%
2.4%
4,160
0.4% 111.2%
948,425 100.0%
5.5%

Net sales by distribution channelDOS
Independent customers and franchises
Total

814,597 81.4%
186,404 18.6%
1,001,001 100.0%

746,686 78.7%
201,739 21.3%
948,425 100.0%

9.1%
-7.6%
5.5%

Net sales
Royalties

1,001,001
10,245

948,425
9,472

99.0%
1.0%

5.5%
8.2%

Total net revenues

1,011,246 100.0%

957,897 100.0%

5.6%

13

99.0%
1.0%

7.7%
1.1%
5.6%
4.4%
11.7%
25.6%
3.4%
5.5%

Number of storesas at January 31, 2014
Owned
Franchises

as at January 31, 2013
Owned
Franchises

Prada
Miu Miu
Church’s
Car Shoe

330
150
52
8

24
8
-

283
126
45
7

19
6
-

Total

540

32

461

25

as at January 31, 2014
Owned
Franchises

as at January 31, 2013
Owned
Franchises

ItalyEuropeAmericas
Asia PacificJapan
Middle East
Africa

51
150
91
157
72
16
3

6
6
20
-

48
137
66
130
66
11
3

5
6
14
-

Total

540

32

461

25

4.

Operating expenses
twelve months
ended
January 31
2014(audited)% on netrevenues

twelve months
ended
January 31
2013(audited)% on netrevenues

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

129,807
171,966
1,212,065
195,574

3.6%
4.8%
33.8%
5.5%

111,370
150,574
1,040,133
184,683

3.4%
4.6%
31.5%
5.6%

Total

1,709,412

47.7%

1,486,760

45.1%(amounts in thousands of Euro)

14

5.

Interest and other financial income/(expenses), net
twelve months twelve months
ended
ended
January 31
January 31
2014
2013
(audited)(audited)(amounts in thousands of Euro)Interests expenses on borrowings
Interest expenses IAS 19
Interest income
Exchange gains /(losses) – realized
Exchange gains/(losses) – unrealized
Other financial income/(expenses)(9,548)(12)
3,576(9,128)
1,448(3,693)(12,956)
(144)
4,804
4,314
1,551
(4,700)

Total(17,357)(7,131)

6.

Taxation
twelve months twelve months
ended
ended
January 31
January 31
2014
2013
(audited)(audited)(amounts in thousands of Euro)

Current taxation
Deferred taxation

320,176(35,085)258,613(8,274)

Income taxes

285,091

250,339

7.

Earnings and dividends per share

Earnings per share
Earnings per share are calculated by dividing the net income attributable toGroup’s shareholders by the weighted average number of ordinary shares inissue.
twelve months
ended
January 31
2014(audited)Group net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average
number of shares

twelvemonthsended
January 31
2013(audited)

627,784,659 625,681,459
2,558,824,000 2,558,824,000
0.245

0.245

Dividends per share
The Board of Directors of PRADA spa has proposed a final dividend of Euro
281,470,640 (or Euro 11 cents per share) for the twelve months ended
January 31, 2014.
During the year ended January 31, 2014, the Company distributed dividendsof Euro 230,294,160, as approved by the Shareholders’ Meeting held on May
15

23, 2013, to approve the financial statements for the year ended January 31,
2013. The payment of the dividends and the related Italian withholding tax
payable (Euro 9.2 million), arising from the application of the Italian ordinary
withholding tax rate to the whole amount of dividends paid to beneficial
owners of the Company shares held through the Hong Kong Central Clearing
and Settlement System, was completed by January 31, 2014.
During the previous year ended, the Company distributed dividends of Euro
127,941,200, as approved by the Annual General Meeting held on May 22,
2012, to approve the financial statements for the year ended January 31,
2012.

8.

Inventories, net
as atJanuary 31
2014(audited)

as atJanuary 31
2013(audited)

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

85,33328,424403,473(67,327)

79,55924,620314,244(74,621)

Total

449,903343,802(amounts in thousands of Euro)

The increase in finished products is due to the greater value of retail stock as
a result of the number of stores opened during 2013 and the higher unit
value of the Spring/Summer 2014 collection in inventory at the reporting
date.
Materials being worked upon by third parties are included in raw materials.
Work in progress includes materials at the production stage with PRADA spa,
subsidiaries Artisans Shoes srl and Church & Co ltd and third party subcontractors.
Movements on the allowance for obsolete and slow moving inventories areanalyzed as follows:(amounts in thousands of Euro)
Balance at January 31, 2013 (audited)
Exchange differences
Increases
Reversals
Decrease for use
Balance at January 31, 2013 (audited)Rawmaterials

Finished
Products

Total

29,75444,86774,621

2
24
-

14
83
(7,000)
(417)

16
107
(7,000)(417)

29,78037,54767,327

The allowance for obsolete and slow moving inventories has been adjusted tobring the value of inventories into line with their realizable amount.

16

9.

Trade receivables, net
as atJanuary 31
2014(audited)

as atJanuary 31
2013(audited)

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

288,504(10,432)
30,333286,390(11,547)
29,682

Total

308,405

304,525(amounts in thousands of Euro)

Trade receivables from third parties did not vary significantly compared to
January 31, 2013, as the value of shipments to independent retail customers
for Spring/Summer collections remained almost unchanged between 2012
and 2013.
Trade receivables from related parties includes an amount of Euro 25.5
million (Euro 28.4 million at January 31, 2013) essentially arising from salesof finished products and royalties, as provided by the franchising agreementwith Fratelli Prada spa, a retail company owned by the majority shareholdersof parent company PRADA Holding bv. Trade receivables from related parties
also includes a total of Euro 2.2 million due from Fratelli Prada spa andProgetto Prada Arte srl in respect of their utilization of premises in Galleria
Vittoria Emanuele II which PRADA spa holds under a concession agreementwith the Municipality of Milan.
The allowance for doubtful debts was determined on a specific basis
considering all information available at the date the financial statements
were prepared. It is revised periodically to bring receivables as close as
possible to the fair value.
Movements during the period may be analyzed as follows:as atJanuary 31
2014(audited)

as atJanuary 31
2013(audited)

Opening balance

11,547

11,681

Exchange differences
Increases
Uses
Reversals

55
830(1,922)
(78)

(67)
805
(754)
(118)

Closing balance

10,432

11,547(amounts in thousands of Euro)

17

The following table contains a summary, by due date, of total receivables
before the allowance for doubtful debts at the reporting date:(amounts inthousands of Euro)

as at
January
31, 2014(audited)

Current

Overdue (days)

Trade receivables

318,837

Total

1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

262,213

20,331

9,817

6,446

3,633

16,397

318,837

262,213

20,331

9,817

6,446

3,633

16,397(amounts inthousands of Euro)

as at
January
31, 2013(audited)

Current

Trade receivables

316,072

Total

316,072

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

263,079

27,328

7,708

5,852

1,607

10,498263,079

27,328

7,708

5,852

1,607

10,498The following table contains a summary, by due date, of trade receivables
less the allowance for doubtful accounts at the reporting date:(amounts inthousands of Euro)

as at
January 31
2014(audited)

Current

Overdue (days)

Trade receivables
less allowance for
doubtful accounts

308,405

261,862

20,331

9,817

Total

308,405

261,862

20,331

9,817(amounts inthousands of Euro)

as at
January 31
2013(audited)

Current

Trade receivables
less allowance for
doubtful accounts

304,525

Total

304,525

1 ≤ 3031 ≤ 60 61 ≤ 90

91 < 120

≥ 120

6,213

3,633

6,549

6,213

3,633

6,549

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

262,799

27,141

7,708

5,804

634

439

262,799

27,141

7,708

5,804

634

439

18

10. Receivables from, and advance payments to, parent
company and other related parties – current and non current(amounts in thousands of Euro)

Financial receivables - other related parties
Other receivables - PRADA Holding bv
Other receivables - other companies controlled by PRADA Holding
bv
Other receivables - other related parties
Advance payments - other related parties
Receivables from, and advance payments to, parent company andother related parties - current

as atJanuary 31
2014(audited)

as atJanuary 31
2013(audited)

2,008
356

1,413
249

36

3

2,159
1,434

2,652
15,176

5,993

19,493

The financial receivables from other related parties reported at January 31,
2013, were collected during the year and were due from PAC srl (inliquidation). The new receivables reported at January 31, 2014, are due from
Luna Rossa Challenge 2013 srl and regard a loan made during the year whichis repayable not later than July 30, 2014. At January 31, 2013, advancepayments to other related companies included Euro 12.3 million paid to Luna
Rossa Challenge NZ ltd and Luna Rossa Challenge srl in accordance with thecontracts signed with subsidiary PRADA sa for sponsorship of the Luna Rossa
yacht in relation to its participation on the XXXIV edition of the America’s
Cup. The competition was held in San Francisco in 2013 and the full amountof the advance was released to the income statement for the year. Advances
to other related companies at January 31, 2014, amount to Euro 1.4 million(Euro 2.9 million at January 31, 2013) and mainly regard advances paid toProgetto Prada Arte srl for cultural initiatives to be held during the following
year.
as at
January 31
2014(audited)

as atJanuary 31
2013(audited)Deferred rental income – long term
Other

1,487
-

113

Receivables from, and advance payments to, parent
company and other related parties – non current

1,487

113

(amounts in thousands of Euro)Deferred rental income – long term - has been recorded in relation to Fratelli
Prada spa and Progetto Prada Arte srl in application of “IAS 17 Leases” which
requires rental income to be recognized on a constant basis.

1911. Capital expenditure
Changes in the net book value of Property, plant and equipment in the period
ended January 31, 2014, are as follows:(amounts inthousands ofEuro)

Land andbuildings

Balance atJanuary 31,
2013 (audited)

211,580

17,448373,043

110,310

39,413

105,505

857,299

175,197(7,931)(5)

10,710(7,926)(35)

215,784(112,932)(83)

70,427(31,900)(558)

32,179(8,064)(82)

55,499(130)559,796(168,753)
(893)

4,474

34

(13,118)(1,884)(240)(1,759)(12,493)

7,362

48

26,797

8,425

6,077

(49,113)

(404)

-

-

(2,264)(1,392)

(60)

(644)

(4,360)390,677

20,279487,227

153,428

69,223

109,358

1,230,192

Additions
Depreciation
Disposals
Exchangedifferences
Other
movements
Impairment
Balance atJanuary 31,
2014 (audited)

Production Leasehold Furniture
AssetsOther
plant and improve&under
tangiblemachineryments
fittings
construction

Total net
book
value

Changes in the net book value of Intangible assets in the period ended
January 31, 2014, are as follows:
Trademarks

Balance atJanuary 31,
2013 (audited)291,105

503,987

65,763

7,988

1,677

8,230

878,750616(11,060)--

21,816(12,614)
(89)

3,927
(3,505)-

20,129(2,925)
-

4,943
(14)

51,431(30,104)
(103)

2,270

386

(173)

(43)

-

(113)

2,327

(18)
-

-

4,290
1

2,650
(380)

185
(37)

(7,386)
(317)

(279)
(733)

282,913504,373

78,994

10,63719,0295,343

901,289

Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance atJanuary 31,
2014 (audited)

Store
Goodwill
Lease
SoftwareAcquisitions

Development
costs and
Assets Total net
other
in
book
intangible progress value
assets(amounts inthousands of
Euro)

20

12. Other current assets
as atJanuary 31
2014(audited)

as atJanuary 31
2013(audited)

VAT
Income tax and other tax receivables
Other assets
Prepayments and accrued income
Deposits

39,25014,062
13,47042,375
5,740

25,072
20,54016,731
41,266
1,214

Total

114,897

104,823

as at
January 31
2014(audited)

as atJanuary 31
2013(audited)

Guarantee deposits
Deferred rental income
Other receivables

57,158
6,923
5,786

50,785
2,410
8,374

Total

69,86761,569(amounts in thousands of Euro)

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

14. Payables to parent company and other related parties –current and non current(amounts in thousands of Euro)

as at
January 31
2014(audited)

as atJanuary 31
2013(audited)

Other payables - PRADA Holding bv and other companies
controlled by PRADA Holding bv
Financial payables - other related parties
Other payables - other related parties

136

123

4,130
628

5,018
458

Payables to parent company and other related parties – current

4,894

5,599

Financial payables towards other related parties, totaling Euro 4.1 million at
January 31, 2014, include an interest-free loan contributed by Al Tayer, thenon-controlling shareholder of PRADA Middle East fzco, according to its sharein the said company. The loan was partially repaid during the year.
The non current portion of payables to parent company and other relatedparties may be detailed as follows:as atJanuary 31
2014(audited)

as atJanuary 31
2013(audited)

Other payables – other related companies

13,247-

Payables to parent company and other related parties –non current

13.247-(amounts in thousands of Euro)

21

Other payables to other related companies includes the amount due to FinReta srl in relation to the establishment of a ten year right of usufruct to areal estate property in Tuscany, Italy, and to a business party to the rental
agreement for said property which the Group is using as part of its retail
network expansion. The payable reported at January 31, 2014, represents
the present value of future payments due after January 31, 2015.

15. Trade payables(amounts in thousands of Euro)

as at
January 31
2014(audited)

as atJanuary 31
2013(audited)

Trade payables – third parties
Trade payables – related parties

337,807
10,727

323,894
6,719

Total

348,534

330,613

The increase in Trade payables is due to the growth of the business ingeneral.
The following table summarizes trade payables by maturity date.
as atJanuary 31
2014(audited)

Current

Trade payables

348,534

Total

348,534(amounts inthousands of Euro)

Overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

314,375

17,261

8,524

2,099

1,086

5,189

314,375

17,261

8,524

2,099

1,086

5,189

as at
January 31
2013(audited)

Current

Trade payables

330,613

Total

330,613(amounts inthousands of Euro)

Overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

301,940

14,991

3,859

3,119

1,180

5,524

301,940

14,991

3,859

3,119

1,180

5,524

16. Other current liabilities
as atJanuary 31
2014(audited)

as atJanuary 31
2013(audited)

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

70,848
10,842
72,97657,9699,810
63,866

Total

154,666

131,645(amounts in thousands of Euro)22

17. Provisions for risks and charges
Movements in provisions for risks and charges are summarized as follows:
Provision
for litigation

Provision fortax disputes

Other
provisions

Total

Balance at January 31, 2013
(audited)

1,775

27,467

17,672

46,914

Exchange differences
Reclassifications
Reversals
Uses
Increases

(1)
(373)
(39)
38

(580)
(3,642)
(386)
(365)
230

(873)
11
(74)
(544)
12,344(1,454)(3,631)(833)(948)
12,612

Balance at January 31, 2014
(audited)

1,400

22,72428,536

52,660(amounts in thousands of Euro)

Provisions represent the Directors’ best estimate of maximum contingent
liabilities. In the Directors’ opinion and based on the information available tothem as supported by the opinions of independent experts at the reporting
date, the total amount provided for risks and charges is reasonableconsidering the contingent liabilities that might arise.

23

Management Discussion and Analysis for the threemonths period ended January 31, 2014
Net revenues
In the three months ended January 31, 2014, the consolidated net revenues
amounted to Euro 1,011.2 million, advancing 5.6% compared to Euro 957.9
million recorded in the three months ended January 31, 2013.
The expansion was delivered by the retail channel that, contributing 81.4% to
the total net sales of the three months period ending January 31, 2014,
posted an increase of 9.1% over the results achieved in the same period oflast year. On a Same Store Sales Growth (SSSG) basis, the increase was 6%.
During the last quarter of 2013 a net of 24 new stores (27 openings and 3
closures) was opened, including the first store in Kazakhstan for the Group.
In the three months ended January 31, 2014, all geographical areas recorded
positive growth rates with Japan and Middle East delivering double-digit
increases.
In terms of brands, Prada contributed 82.8% to consolidated net sales and,with Euro 829.2 million, delivered an increase of 7.3% compared to Euro 773
million posted in the same quarter of 2012.
All product categories delivered positive rates of growth in the three months
ended January 31, 2014. Recording total sales for Euro 621.7 million, thecontribution of the leather goods division slightly declined to 62.1% from
62.6% achieved in the three months ended January 31, 2013.

Operating results
In the three months ended January 31, 2014, the Gross margin totaled Euro739.4 million, up by 6.8% compared to Euro 692.1 million posted in the same
period of last year. As a percentage of net revenues, the profitability
increased up to 73.1% from 72.3%. The higher incidence of the retail channel
contributed to raise the margin.
The EBITDA amounted to Euro 322.2 million and recorded a decrease of 0.7%
over Euro 324.6 million achieved in the three months ended January 31,
2013. The profitability declined from 33.9% to 31.9%. The decrease wassignificantly affected by the higher incidence of the operative expenses
which included higher costs strictly related to the retail expansion and a oneoff charge recognized as a consequence of the decision not to go ahead withthe planned opening of a large new Prada store in Ginza, Tokyo. Terminationof the lease agreement was agreed subject to payment of an all-inclusive
penalty of Japanese Yen 1.7 billion (Euro 13.1 million) which was recorded
under operating costs for the period.
The Group’s net result amounted to Euro 186.9 million, down 13.9%
compared to Euro 217.1 million recorded in the three months ended January
31, 2013, due to a higher tax burden. The same quarter of last year reported
a lower taxation because of some fiscal benefits and positive adjustments to
tax assessments recognized at year end.
24

Management Discussion and Analysis for the year ended
January 31, 2014
Net revenues
In the twelve months ended January 31, 2014, the consolidated net revenuesof the Group totaled Euro 3,587.3 million and recorded an increase of 8.8%
over Euro 3,297.2 million posted in the same period of last year.

Distribution channels
The retail channel delivered net sales of Euro 2,996.6 million for the twelve
months ended January 31, 2014, an increase of 12.5% compared to Euro2,664.2 million in 2012 (+17.8% at constant exchange rates).
On a Same Store Sales Growth (SSSG) basis, retail sales increased by 7%,
performing steady throughout 2013 and benefiting from the geographicaldistribution of stores all over the world. Sales growth was further boosted by
the strategy of retail expansion resulting in the opening of 79 net new stores
during the year (93 openings and 14 closures). At January 31, 2014, thenetwork included a total of 540 DOS. The results achieved meant that thecontribution of the retail channel to the Group’s consolidated net sales
increased from 81.8% in the twelve months ended January 31, 2013, to84.5%.
The wholesale channel contributed the remaining 15.5%, generating net salesof Euro 551.6 million and recording a 6.9% decrease (-5.8% at constantexchange rates) on the Euro 592.2 million reported in the twelve months
ended January 31, 2013. The decrease due to rationalization of the
independent customer base, the conversion of retail corners in North
America into DOS and the ongoing stagnation of the European market – Italy
included – was partially offset by the development of franchising contracts in
the Far East and Italy where, in July 2013, related company Fratelli Prada
spa launched a prestigious retail project in Galleria Vittorio Emanuele II in
Milan.

Markets
In the twelve months ended January 31, 2014, net sales grew in all
geographical areas with even higher paces of growth at constant exchange
rates.
The Asia Pacific market reported net sales of Euro 1,292.8 million, an
increase of 11.4% (+14.4% at constant exchange rates) compared to the Euro
1,160.2 million posted in 2012. The increase in net sales in this area wasachieved thanks to the performance of existing stores, the 27 net new
openings (31 openings and 4 closures) and the important new duty freefranchise contracts in Korea, Taiwan and Singapore. Net sales in the Greater
China area totaled Euro 826 million, 12.3% more than in 2012.
Net sales on the European market totaled Euro 776.5 million, a 5% increase
compared to the Euro 739.6 million reported in 2012 (+7% at constantexchange rates). This performance was achieved thanks to double-digit
25

growth in the retail channel in relation to both existing stores and the 13
new openings, net, during the year (14 openings and 1 closure). The
continuing selective policy applied to independent customers, also
considering the credit policy of the Group and tough market conditions,especially in smaller cities, have led to a significant downturn in thewholesale channel.
The Italian market generated net sales of Euro 552.9 million in the twelve
months ended January 31, 2014, 4.7% more than the Euro 528.3 million
reported for 2012. The growth was essentially driven by the retail channel as
the wholesale channel, similar to the already highlighted European trends,
remained almost unchanged compared to 2012.
The American market, meant as North, Centre and South America, recorded
net sales of Euro 488 million, a 10.9% increase compared to the Euro 440
million reported for the twelve months ended January 31, 2013 (+15.3% atconstant exchange rates). It is worth noting that, at the reporting date,there was an important ongoing strategic program to convert a number ofpoints of sale in the best department stores from wholesale to direct
operation. During the period, 21 retail corners were converted in the UnitedStates and Canada (16 Prada and 5 Miu Miu corners).
The Japanese market recorded the highest rates of organic growth with a
23.6% increase at constant exchange rates. However, the extreme weaknessof the Japanese Yen hit the Euro equivalent figure and net sales totaled Euro
340.8 million, 1% more than the Euro 337.3 million recorded in the twelve
months ended January 31, 2013. The strategy of repositioning the productmix implemented since the start of the year was highly successful and led toconstant, double-digit sales growth throughout 2013 on an SSSG basis.
At January 31, 2014, the Middle East area included a total of 16 DOS (11 at
January 31, 2013). It achieved net sales of Euro 91.1 million, almost double
the Euro 44.8 million reported for 2012, and is now an important area of
business for the Group.

Products
In the twelve months ended January 31, 2014, net sales of leather goods
totaled Euro 2,332.5 million and increased by 14.4% compared to Euro 2,038
million in the previous year (+19.6% at constant exchange rates). This
product category increased from 62.6% of consolidated net sales in 2012 to
65.7% in 2013.
Clothing generated net sales of Euro 581.6 million, 3.2% more than the Euro
563.3 million recorded in 2012 (+7.2% at constant exchange rates).
Compared to prior year, growth was achieved in the retail channel while thewholesale channel decreased. Miu Miu achieved a double-digit growth (atconstant exchange rates), a sign of the brand’s strong identity. The total
contribution by clothing to consolidated net sales decreased from 17.3% to16.4%.
Footwear generated net sales of Euro 594.6 million, a 4.9% decrease
compared to 2012 (-1.8% at constant exchange rates). This segment has
suffered more than others from the contraction of the wholesale channel
26though, like the clothing segment, it has enjoyed strong growth from the Miu
Miu brand.

BrandsIn 2013, the Prada brand contributed net sales of Euro 2,943.6 million or 83%
of consolidated net sales, recording 11.1% growth compared to the Euro2,649.6 million reported for the twelve months ended January 31, 2013(+15.6% at constant exchange rates). Sales growth was driven by both SSSG
and new openings and was strong in all geographical areas, except for Italy
where sales only recorded a single-digit increase.
The net sales of the Miu Miu brand totaled Euro 519.1 million, a moderate
1.2% increase on the Euro 512.8 million reported for the previous year (+6.5%
at constant exchange rates). The increase was achieved thanks to the retailchannel which, essentially thanks to new openings during the year, grew by
3.9% compared to the previous year (+10.1% at constant exchange rates).
In 2013, the Church’s brand recorded net sales of Euro 68.6 million,
remaining almost in line with the results achieved in 2012 (+3.2% at constantexchange rates). In Europe, where the brand realized 59.5% of its net sales,
performance was still affected by generally disappointing domestic
consumption levels due to the ongoing negative economic situation. Specificretail and wholesale dynamics did not differ greatly from the overall growth
figures of the brand.
The Car Shoe brand generated net sales of Euro 13.4 million. The decrease
compared to 2012 when sales totaled Euro 19.7 million was influenced by theprevailing dependence from the European wholesale. A new store was
opened in Italy in 2013.

Royalties
In the twelve months ended January 31, 2014, licensing agreements
generated royalties income of Euro 39.1 million, 4% less than the Euro 40.8
million recorded in 2012. In the previous year, the launch of the Prada phone
LG 3.0 cellphone generated royalties of Euro 5.4 million, essentiallyconcentrated in the first half of the year. Excluding this component, licensed
products, essentially eyewear and cosmetics, generated a 9.3% increase inroyalties compared to the twelve months ended January 31, 2013.

Operating results
Gross margin – net revenue less cost of goods sold – was Euro 2,648.6 million
for the twelve months ended January 31, 2014, up by 11.4% compared to theEuro 2,376.5 million reported for 2012. As a percentage of net sales, grossmargin improved from 72.1% in 2012 to 73.8%, thanks to a better
contribution – almost evenly distributed – from the usual drivers: product,
distribution and market.
EBITDA for the year totaled Euro 1,143.2 million, 8.6% more than the Euro
1,052.5 million reported for 2012. EBITDA for 2013 represented 31.9% of net
revenues, in line with the 2012 results. The improvement achieved at grossmargin level was absorbed by the greater burden of operating expenses,
27

especially labor costs and lease costs in relation to retail network expansion
and greater investment on promotional and communications activities. The
operating expenses for the year were affected by an extraordinary expensethat is the decision not to go ahead with the planned opening of a large new
Prada store in Ginza, Tokyo, as it was no longer considered compatible withproper positioning on the market. Termination of the lease agreement wasagreed subject to payment of an all-inclusive penalty of Japanese Yen 1.7
billion (Euro 13.1 million) which was recorded under operating costs for theperiod. Without this penalty, EBITDA for the year would have totaled Euro
1,156.3 million or 32.2% of net revenues.
EBIT for the year totaled Euro 939.2 million, increasing by 5.6% compared to2012 and representing 26.2% of net revenues. EBIT as well was affected by
the above mentioned extraordinary expense: without such penalty it would
have been equal to Euro 952.3 million, or 26.5% on net revenues. Writedowns
adjustments for the year totaled Euro 5.1 million (Euro 7.8 million in 2012)
and, as in prior year, were recognized solely in relation to projects no longer
considered strategic. In both years, impairment test results did not identify
any impairment of value.
The Group’s net income totaled Euro 627.8 million, slightly more in absoluteterms than the net income of Euro 625.7 million achieved in 2012. As apercentage of net revenues, net income decreased from 19% to 17.5%. The
reduction in profitability below EBIT level was generated by the heavier tax
burden because of tax charges of Euro 22 million relating to prior tax years
and a general geographical mix of taxable incomes and, to a lesser extent, tothe impact of foreign exchange differences.

28

EBITDA by Brand
twelve months ended
January 31, 2014
(amounts in thousands ofEuro)(audited)

Group

Prada

Miu Miu

Church's

Car Shoe

Other

Net sales
Royalties

3,548,207
39,1402,943,633
37,127519,142
1,997

68,60916

13,427-

3,396-

Net revenues

3,587,347

2,980,760

521,139

68,625

13,427

3,396

EBITDA

1,143,186

1,054,126

89,322

4,368(4,795)165

EBITDA %

31.9%

35.4%

17.1%

6.4%

-

-

twelve months ended
January 31, 2013
(amounts in thousands ofEuro)(audited)

Group

Prada

Miu Miu

Church's

Car Shoe

Other

Net sales
Royalties

3,256,428
40,7912,649,559
39,453

512,762
1,248

68,44790

19,660-6,000-

Net revenues

3,297,219

2,689,012

514,010

68,537

19,6606,000

EBITDA

1,052,469

948,729

100,270

7,099(2,707)

(922)

31.9%

35.3%

19.5%

10.4%

-

-

Change in Net revenues
Change in Net revenues inpercentage

290,128

291,7487,129

88(6,233)(2,604)

8.8%

10.8%

1.4%

0.1%

-31.7%-43.4%

Change in EBITDA
Change in EBITDA inpercentage

90,717

105,397(10,948)(2,731)(2,088)

1,087

8.6%

11.1%

-10.9%-38.5%-77.1%-EBITDA %The PRADA brand generated EBITDA of Euro 1,054.1 million (35.4% of net
revenues) for the twelve months ended January 31, 2014, 11.1% more thanthe Euro 948.7 million recorded in 2012 (35.3% of net revenues). Excluding
the aforementioned penalty for termination of the property lease in Ginza,
Tokyo, the brand’s EBITDA margin would have been 35.8%, confirming a
positive operating trend. The additional expenses resulting from retail
network expansion only partially absorbed the additional profits createdthrough sales growth. Sales growth was achieved thanks to the 59 net new
stores opened in 2013, the full year contribution of DOS opened in 2012 and,above all, the SSSG performance which was the main driver of sales growth
for the year. In line with Group strategy, the retail expansion was
accompanied by increased communications activity to strengthen the global
brand image.
Miu Miu generated EBITDA of Euro 89.3 million, 10.9% less than the Euro
100.3 million reported for 2012. Meanwhile, EBITDA margin decreased from
19.5% to 17.1% essentially because of the increase in operating expenses
29triggered by rapid expansion of the DOS network (up from 71 at January 31,
2011, a few months before the listing, to 150 at January 31, 2014, with a netof 24 new openings in the last year alone). Another factor was investment in
DOS restyling and in communications, also in order to strengtheninternational brand awareness. Beyond the short-term impact, the GroupManagement believes that these measures are necessary with a view toachieving long-term sustainable growth for the brand.
Church’s recorded EBITDA of Euro 4.4 million, 38.5% down on the Euro 7.1
million reported in 2012. The lower profitability is partly due to a lessimpressive performance by several traditional markets and partly to thegreater burden of selling costs, again as a result of retail network expansion
in new countries. During the year, Church’s opened 7 new DOS including its
first ever stores in China, Japan, Sweden and the Netherlands.
The Car Shoe brand reported negative EBITDA of Euro 4.8 million, adeterioration on prior year because of the decline in wholesale sales.

Net invested capital
The following table contains the Statement of financial position reclassified
in order to provide a better picture of the composition of the Net invested
capital.
(amounts in thousands of Euro)

as at
January 31
2014(audited)

as atJanuary 31
2013(audited)

Non-current assets (excluding deferred tax assets)
Trade receivables, net
Inventories, net
Trade payables
Net operating working capital
Other current assets (excluding financial position items)
Other current liabilities (excluding financial position items)
Other current assets/(liabilities), net
Provisions for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation, net
Other non-current assets/(liabilities), net
Net invested capital
Shareholders’ equity – Group
Shareholders’ 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

2,225,451
308,405449,903(348,534)
409,774
132,866(291,378)(158,512)(52,660)(63,279)(113,698)
158,574(71,063)
2,405,650(2,687,554)(13,986)(2,701,540)(207,969)
503,858
295,890(2,405,650)

1,821,773
304,525
343,802(330,613)
317,714
165,962(230,285)(64,323)(46,914)(45,538)(85,289)
120,421(57,320)2,017,844(2,320,022)(10,470)(2,330,492)(79,348)
391,996
312,648(2,017,844)

At January 31, 2014, Net invested capital stood at Euro 2,405.7 million, Euro
387.8 million more than the Euro 2,017.8 million reported at January 31,
2013. The increase mainly regarded non-current assets, especiallyinvestments.
30

Indeed, during 2013, capital expenditure totaled Euro 611.2 million,
including Euro 521.5 million in the retail area and comprising the purchasecost of prestigious retail premises in London and St Petersburg for some Euro
182 million. Intangible assets at January 31, 2014, include assets with anindefinite useful life i.e. goodwill totaling Euro 504.4 million. As required by“IAS 36 Impairment of assets”, these assets were subjected to an impairment
test at the reporting date. The value in use of the goodwill, essentiallydetermined using methods based on discounted future cash flows, did notreveal any impairment of value. The results of the impairment tests were
further supported by sensitivity tests.
Net operating working capital increased by Euro 92.1 million from Euro 317.7
million at January 31, 2013, to Euro 409.8 million at January 31, 2014. The
increase is due to the higher value of retail inventories mainly because of
the number of stores opened during the 2013.
Total other current liabilities, net, increased from Euro 64.3 million at
January 31, 2013, to Euro 158.5 million mainly because of the higher tax
burden and a reduction in the reporting date fair value of derivative
instruments used to hedge the exchange risk (forward contracts andoptions).
Other non-current liabilities, net, totaled Euro 71.1 million and increased byEuro 13.7 million compared to January 31, 2013, as a result of higher
liabilities for long-term employee benefits and deferred lease income, net of
an increase in deferred tax assets mainly because of higher temporary
differences between the tax value and consolidated reported value of thestock of finished products.
Group shareholders’ equity rose from Euro 2,320 million at January 31, 2013,
to Euro 2,687.6 million at January 31, 2014. The increase generated by theGroup’s net income for the twelve months ended January 31, 2013, Euro
627.8 million, was partially offset by the dividends of Euro 230.3 million
distributed to the PRADA spa shareholders (as approved by the Annual
General Meeting on May 22, 2013, on the financial statements for the year
ended January 31, 2013) and negative changes totaling Euro 30 million in thetranslation reserve and other IFRS reserves.

31Net financial position surplus/(deficit)(amounts in thousands of Euro)

as at
January 31
2014(audited)

as atJanuary 31
2013(audited)Long-term debt
Obligations under finance leases(207,950)(19)(78,830)(518)

Long-term financial payables(207,969)(79,348)

Bank overdraft and short term loans
Payables to related parties
Receivables from related parties
Obligations under finance leases
Cash and cash equivalents(61,909)(4,130)2,008(524)
568,414(175,570)(5,018)1,413(575)
571,746

Short-term net financial surplus/(deficit)

503,859

391,996

Net financial position surplus/(deficit)

295,890

312,648

Cash flows from operating activities totaled Euro 769.4 million for the twelve
months ended January 31, 2014 (Euro 759.3 million in 2012) after cash
absorbed by investing activities of Euro 548.3 million (Euro 331.6 million in2012). After the distribution of dividends of Euro 230.3 million (Euro 127.9
million in 2012), this enabled the Group to achieve a positive net financial
position of Euro 295.9 million. At January 31, 2013, the net financial position
was slightly higher and stood at Euro 312.6 million.
As far as liquidity concerns, the composition of bank borrowings at January
31, 2014, was more favorable than at January 31, 2013, because of a shift
towards longer term borrowings: indeed, long-term financial payables haveincreased from Euro 78.8 million at January 31, 2013, to Euro 208 million,
while short-term financial payables have decreased from Euro 175.6 million toEuro 61.9 million. In 2013, PRADA spa issued a five year bond listed on the
Irish Stock Exchange with a nominal amount of Euro 130 million. During 2013,
the Group also repaid the Euro 100 million installment due on a syndicatedloan by PRADA spa while debt due for repayment by PRADA Japan co ltd wasrefinanced with a new line of credit totaling Japanese Yen 9 billion, used partin part to finance the investment plan in Japan; at January 31, 2014, theoutstanding amount on this line of credit was Japanese Yen 8.8 billion. At
January 31, 2014, the Group had a short-term net financial surplus of Euro
503.9 million (Euro 392 million at January 31, 2013), as well as otheravailable lines of credit of Euro 454.3 million (Euro 473.1 million at January
31, 2013).

Events after the reporting date
On February 27, 2014, PRADA spa signed with Luna Rossa Challenge srl, a
related company in terms of IAS 24, a sponsorship agreement for theparticipation of the Luna Rossa sailing team in the XXXV edition of theAmerica’s Cup. The contract, effective from February 27, 2014, until October
31, 2017, provides for total sponsorship payments of Euro 50 million, payable32

in variable monthly installments depending on the needs of the sailing team.
In return, the Group will have the right to be the main sponsor of team Luna
Rossa as well as to promote the Prada brand in association with the Luna
Rossa trademark, for advertising purposes, during the contract andthroughout the duration of the contract.
On February 27, 2014, PRADA spa signed a sponsorship agreement with
Progetto Prada Arte srl (PPA), a related company in terms of IAS 24. The
agreement regards the organization and promotion of cultural and artistic
activities, including the “Art of Sound” exhibition by Germano Celant, andthe renovation of the Ca’ Corner della Regina building. The contract provides
for a maximum contribution of Euro 7.94 million, payable by January 31,
2015. The Company will be entitled to use images of the sponsored events,
as agreed with PPA.
On March 14, 2014, the Company acquired the 80% of the Angelo Marchesi
srl, owner of the historic Milanese pastry shop founded in 1824. The
acquisition is aimed at enhancing the “Pasticceria Marchesi” brand, asynonym to quality in the Italian food industry, joining it with Prada and Miu
Miu brands, leaders in the luxury goods market, within the Group’s
development worldwide.

OutlookIn 2013, the Group continued its program of development centered on
growth and, once again, achieved encouraging growth figures. However, themacroeconomic environment, especially in Europe, remains difficult and therecovery is struggling to take hold also because of the ongoing strength of
the Euro which does not help exports. The Group will balance its attempts toachieve growth and development with careful management of its operations
in order to ensure that the results achieved to date are built upon in future.

33

Corporate governance practices
The Company is committed to maintaining a high standard of corporate
governance practices and fulfilling its commitment to effective corporate
governance. The corporate governance model adopted by the Company
consists of a set of rules and standards with the aim at establishing efficientand transparent operations within the Group, to protect the rights of theCompany’s shareholders and to enhance shareholder value. The corporate
governance model adopted by the Company is in compliance with theapplicable regulations in Italy, as well as the principles of the Corporate
Governance Code (the “Code”) contained in Appendix 14 of 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 governance practices are set out in
the Company’s 2013 Annual Report.

Audit Committee
The Company has established an Audit Committee in compliance with Rule3.21 of the Listing Rules where at least one member possesses appropriate
professional qualifications in accounting or related financial management
expertise to discharge the responsibility of the Audit Committee. The
membership of the Audit Committee consists of three Independent NonExecutive Directors, namely, Mr. Gian Franco Oliviero Mattei (Chairman), Mr.
Giancarlo Forestieri and Mr. Sing Cheong Liu. The primary duties of the Audit
Committee are to assist the Board of Directors (the “Board”) in providing an
independent view of the effectiveness of the Company’s financial reporting
process and internal control and risk management systems, to oversee theexternal audit process and the internal audit process and to perform otherduties and responsibilities as are assigned to the Audit Committee by the
Board.
The Audit Committee held a meeting on April 1, 2014, to review the annual
results for the year ended January 31, 2014, before recommending it to theBoard for approval.

Compliance with the Code
The Board has reviewed the Company’s corporate governance practices andis satisfied that such practices have complied with the code provisions set
out in the Code, during the year ended January 31, 2014 (the “Reviewed
Period”).

Directors’ securities transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the 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 compliance with the Model Code throughout the
Reviewed Period. There was no incident of non-compliance during the34

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 ofthese procedures are no less exacting than the standard set out in the Model
Code.

Purchase, sale or redemption of the Company’s listed
securities
Neither the Company nor any of its subsidiaries has purchased, sold orredeemed any of the Company’s listed securities during the Reviewed Period.

Shareholders’ general meeting
The Shareholders’ general meeting of the Company will be held on Thursday,
May 22, 2014.
Notice of the Shareholders’ general meeting will be published on the
Company’s website at www.pradagroup.com and on the Hong Kong
Exchanges and Clearing Limited’s website at www.hkexnews.hk in due
course.

Final dividend
The Board recommends, for the twelve month period ended January 31,
2014, a final dividend of Euro 281,470,640 (or 11 Euro/cents per share).The
payments shall be made:
(i)
(ii)

in Euro to the shareholders recorded in the section of theCompany’s shareholders kept by the Company at its registeredoffice in Milan (Italy), andin Hong Kong dollars to the shareholders recorded in the section of
the Company’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 of approval of the final
dividend by the shareholders.

Subject to the shareholders’ approving the recommended final dividend,such dividend will be payable on or about Friday, June 20, 2014.

Closure of register of shareholders
The shareholders recorded on the Company’s shareholders register on
Thursday, May 22, 2014, opening of business, will be allowed to attend andvote at the Shareholders’ general meeting of the Company. In order toqualify for attending and voting at the Shareholders’ general meeting of theCompany, all transfers accompanied by the relevant share certificate(s) must
be lodged with:(i)the Company’s Hong Kong share registrar, Computershare Hong
35

Kong Investor Services Limited, 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)with the Company’s registered office in Milan (Italy), Via Antonio
Fogazzaro, 28, if the transfer concerns shares registered in thesection of the Company’s shareholders register kept by theCompany itself,

in any case, not later than 4:30 p.m. (Hong Kong time) on Monday, May 19,
2014. The Company’s shareholders register will be closed from Tuesday, May
20, 2014, to Thursday, May 22, 2014, both days inclusive, during which noshare transfer can be registered.
The final dividend will be paid to shareholders recorded on the Company’s
shareholders register on Friday, May 30, 2014. In order to qualify for thepayment of the final dividend, all transfers accompanied by the relevant
share certificate(s) must be lodged with:
(i)

(ii)

the Company’s Hong Kong share registrar, Computershare Hong
Kong Investor Services Limited, 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
the Company’s registered office in Milan (Italy), Via Antonio
Fogazzaro, 28, if the transfer concerns shares registered in thesection of the Company’s shareholders register kept by theCompany itself,

in any case, not later than 4:30 p.m. (Hong Kong time) on Wednesday, May
28, 2014. The Company’s shareholders register of the Company will be closed
from Thursday, May 29, 2014, to Friday, May 30, 2014, both days inclusive,
during which no share transfer can be registered.

36

Publication of Annual Results Announcement andAnnual 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 2013 Annual Reportwill be published on the same websites and dispatched to shareholders in due
course.

By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Chairperson
Milan (Italy), April 2, 2014
As at the date of this announcement, the Company’s executive directors are Mr.
Carlo MAZZI, Ms. Miuccia PRADA BIANCHI, Mr. Patrizio BERTELLI, Mr. Donatello
GALLI and Ms. Alessandra COZZANI; the Company’s non-executive director is Mr.
Gaetano MICCICHÈ and the Company’s independent non-executive directors are Mr.
Gian Franco Oliviero MATTEI, Mr. Giancarlo FORESTIERI and Mr. Sing Cheong LIU.

37