Hong Kong Exchange 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 orin reliance upon the whole or any part of the contents of this announcement.

Via A. Fogazzaro n. 28, Milan, Italy
Registry of Companies of Milan, Italy: No. 10115350158(Incorporated under the laws of Italy as a joint-stock company)(Stock Code: 1913)

INTERIM RESULTS ANNOUNCEMENTFOR THE SIX MONTHS ENDED JULY 31, 2011
FINANCIAL HIGHLIGHTS-Group net revenues were Euro 1,134.3 million recording an increase of 21.1%-

Retail net sales were Euro 835.4 million, up by 33.4%-

The number of Directly Operated Stores reached 345-

Retail organic growth was 22%-

EBITDA margin totaled Euro 315 million (27.8% on net revenues)-

Group net income amounted Euro 179.5 million, an increase of 74.2%
compared to Euro 103 million for the six months ended July 31, 2010-

Net Financial Position at Euro 135.2 million-

Net operating cash flow for the six months period was Euro 209.6 million-

Fund raised through IPO was Euro 206.6 million

Interim Results
The board of directors (the “Board”) of PRADA S.p.A. (the “Company”) is pleased
to announce the audited consolidated interim results of the Company and its
subsidiaries (collectively, the “Group”) for the six months ended 31 July 2011
together with the comparative figures for the six months ended 31 July 2010. The
following interim financial information, including the comparative figures, has been
prepared in accordance with the International Financial Reporting Standards(“IFRS”) as adopted by the European Union.
The consolidated interim results of the Group for the six months ended July 31, 2011,
has been audited by Deloitte & Touche spa.
— 1 —Consolidated Income Statement(amounts in thousands of Euro)six months
ended July
31 2011Notes

six months
ended July
31 2010%%RetailWholesaleRoyalties
Net revenues

835,37273.6%
282,03124.9%
16,8781.5%
1,134,281 100.0%

626,17866.9%
294,223
31.4%
16,093
1.7%
936,494 100.0%

Cost of goods sold

(329,098) -29.0%(322,674) -34.5%

Gross margin

805,183

613,820

Operating expenses

4

71.0%

65.5%

(551,805) -48.6%(441,596) -47.2%

253,37822.3%

172,224

18.4%(11,600)-1.0%(19,613)-2.1%

241,77821.3%

152,611

16.3%(60,577)-5.3%(48,688)-5.2%

181,201

16.0%

103,923

11.1%

Net income from continuing
operations pertaining to minority
interests

1,669

0.1%

880

0.1%

Group net income from continuing
operations

179,532

15.8%

103,043

11.0%

Total Group net income

179,532

15.8%

103,043

11.0%

Amortization, Depreciation andImpairment

61,627

5.4%

52,996

5.7%

EBITDA

315,00527.8%

225,220

24.0%

EBIT
Interest and other financial expenses,
net

5

Income before taxation
Taxation

6

Net income from continuing
operations

Basic earnings per share(in Euro per share)
Diluted earnings per share(in Euro per share)

7

0.071

0.041

7

0.071

0.041

— 2 —

Consolidated Statement of Financial Position(amounts in thousands of Euro)

Notes

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories
Derivative financial instruments - current
Receivables from parent company and relatedparties
Other current assets
Assets held for sale
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
Total non current assets

9
8

11
11

Total Assets
Liabilities and Shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans
Payables to parent company and related parties
Other shareholders’ loans
Trade payables
Current tax liabilities
Derivative financial instruments - current
Obligations under finance leases - current
Other current liabilities
Total current liabilities

— 3 —

10

July 31 January 31
2011
2011

253,610291,657
366,813
7,321

96,572
274,175
280,409
7,379

13,092
98,648—1,031,141

36,31770,225
4,948
770,025

606,971867,196
1,753
158,079
49,241547
1,683,787

536,717869,119
1,753
141,378
44,8832,140
1,595,990

2,714,928

2,366,015

161,952618
574
303,963
150,555
3,564
3,847
117,981743,054

194,240
1,107
581
233,866
107,592
5,279
5,019
111,482
659,166(amounts in thousands of Euro)

Notes

Non-current liabilities
Long-term debt
Obligations under finance leases - non current
Long term employee benefits
Provisions for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments - non current
Total non current liabilities

July 31 January 31
2011
2011

221,457
1,555
35,10854,43248,45164,110554
425,667

303,408
2,509
34,83352,72552,71150,207318
496,7111,168,721

1,155,877

255,882
1,157,447(51,727)
179,532
1,541,134

250,000
743,543(40,012)250,819
1,204,350

Shareholders’ Equity — Non Controlling
Interests

5,073

5,788

Total Liabilities and Shareholders’ Equity

2,714,928

2,366,015

Net current assets
Total assets less current liabilities

288,087
1,971,874

110,859
1,706,849

Total Liabilities
Shareholders’ equity
Share capital
Other reserves
Translation reserve
Net profit for the period
Total Shareholders’ Equity — Group— 4 —Net Invested Capital
The following table contains the Statement of Financial Position, adjusted in orderto provide a better picture of the composition of the Net Invested Capital.
July 31 January 31
2011
2011

(amounts in thousands of Euro)
Non current assets
Current assets excluding financial assets
Current liabilities excluding financial liabilities
Net working capital
Assets held for saleLong-term liabilities, including deferred taxation
Post employment benefits
Provisions for risks
Net invested capital
Shareholders’ equity — Group
Shareholders’ equity — Non Controlling Interests
Total consolidated shareholders’ equity
Long term financial payables
Short term financial payables, net of cash and cash
equivalents
Net financial payables
Shareholders’ equity and net financial payables— 5 —1,683,787
776,122576,682
199,440—
113,115
35,10854,432
1,680,572
1,541,134
5,073
1,546,207
223,012

1,595,990
634,462459,047
175,415
4,948
103,236
34,83352,725
1,585,559
1,204,350
5,788
1,210,138
305,917(88,647)
134,365
1,680,572

69,504375,421
1,585,559

Net Financial Position(amounts in thousands of Euro)

July 31 January 31
2011
2011

Long term debt
Obligations under finance leases

221,457
1,555

303,4082,509

Long term financial payables

223,012305,917

Short term financial payables and bank overdrafts
Payables to parent company and related parties
Receivables from parent company and related parties
Obligations under finance leases
Payables to other shareholders
Cash and cash equivalents

161,952—(1,410)3,847
574(253,610)

194,240
281(34,044)5,019
581(96,572)

Short term financial payables, net of cash and cash
equivalents(88,647)

69,504

Net Financial Position

134,365

375,421

Net Financial Position, excluding receivables/payables
with parent company, related parties and othershareholders (NFP used to calculate covenants)

135,202408,604

0.22
27.16

0.76
17.77

NFP/EBITDA ratio
EBITDA/ net financial charges ratio— 6 —Summarized Statement of Consolidated Cash Flows
six months six months
ended July ended July
31 201031 2011(amounts in thousands of Euro)Net cash flows from operating activities

209,598

142,908

Cash flows generated/(utilized) by investing activities(134,880)(86,934)

Cash flows generated/(utilized) by financing activities

99,518(43,042)

Change in cash and cash equivalents, net of bankoverdrafts

174,236

12,932

Notes to the Consolidated Financial Statements
1.

Presentation of PRADA GroupPRADA Group is a world leader in the design, production and distribution of luxury handbags,
leather goods, footwear, apparel, accessories, eyewear and fragrances. Through its
directly-operated-stores network (DOS) and a select number of wholesalers, the Group operates
on all major international markets.
The Company is a joint-stock company, incorporated and domiciled in Italy. Its registered office
is in via Fogazzaro 28, Milan, Italy.

2.

Basis of preparation
The report of the Board of Directors refers to the Group of companies controlled by PRADA spa(the “Company”), holding company of the PRADA Group (the “Group”) and it is based on theConsolidated Financial Statements of the Group at July 31, 2011, together with comparative
figures for the six-months ended July 31, 2010. The following financial information, including
comparative figures, was prepared in accordance with IFRS as adopted by the European Union.
The IFRS adopted by the European Union are similar, as applicable to the PRADA Group, tothose issued by the IASB.
IFRS also refer to all the International Accounting Standard (“IAS”) and all the interpretationsof the International Financial Reporting Interpretation Committee (“IFRIC”), previously named
the Standing Interpretations Committee (“SIC”).

— 7 —The Group has prepared the Consolidated Statement of Financial Position classifying separately
current and non current assets and liabilities.
The Consolidated Income Statement is presented by destination.
The Consolidated Financial Statements have been prepared on a going concern basis and arepresented in Euro, which is the same as the functional currency of the Company.
3.

Operating segment
The Group’s matrix-based organizational structure - whereby responsibility is assigned
cross-functionally in relation to brands, products, distribution channels and geographical areas,
together with the complementary nature of the production processes of the various brands andthe many relationships between the different business segments - means that operating segmentscompliant with IFRS8 cannot be identified also in light of the fact that only income statement
results at Group level are provided to the highest decision maker. For this reason, the businesshas been considered as a single operating segment as this better represents the specificcharacteristics of the PRADA Group business model.
Detailed information on net revenues by brand, geographical area, product and distribution
channel is provided below.

— 8 —Net sales analysis(am ounts in thousands of Euro)six months ended
July 31 2011

six months ended
July 31 2010

Net sales by geographical area
Italy
EuropeNorth America
Asia PacificJapan
Other countries
Total

213,444
250,664
171,853
367,995
107,193
6,254
1,117,403

19.1%
22.4%
15.4%
32.9%
9.6%
0.6%
100%

184,301
211,794
147,617
271,703
99,1075,879
920,401

20.0%
23.0%
16.1%
29.5%
10.8%
0.6%
100%

15.8%
18.4%
16.4%
35.4%
8.2%
6.4%
21.4%

Net sales by brand
Prada
Miu Miu
Church’s
Car shoe
Other
Total

878,383
198,872
27,0039,711
3,434
1,117,403

78.6%
17.8%
2.4%
0.9%
0.3%
100.0%

724,334
159,219
23,4409,811
3,597
920,401

78.7%
17.3%
2.5%
1.1%
0.4%
100.0%

21.3%
24.9%
15.2%
-1.0%
-4.5%
21.4%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

212,371616,589
275,048
13,395
1,117,403

19.0%
55.2%
24.6%
1.2%
100.0%

214,006
455,641
242,655
8,099
920,401

23.2%
49.5%
26.4%
0.9%
100.0%

-0.8%
35.3%
13.3%
65.4%
21.4%

% change

Net sales by distribution channel
DOS (including outlet stores)
Independent customers, franchises
and related parties
Total

835,37274.8%

626,178

68.0%

33.4%

282,031
1,117,403

25.2%
100.0%

294,223
920,401

32.0%
100.0%

-4.1%
21.4%

Net sales
Royalties

1,117,403
16,87898.5%
1.5%

920,401
16,093

98.3%
1.7%

21.4%
4.9%

Total net revenues

1,134,281

100.0%

936,494

100.0%

21.1%

— 9 —

Prada brand sales(am ounts in thousands of Euro)six months ended
July 31 2011

six months ended
July 31 2010

Net sales by geographical area
Italy
EuropeNorth America
Asia PacificJapan
Other countries
Total

164,797
188,969
146,278
298,30775,275
4,757
878,383

18.8%
21.5%
16.6%
34.0%
8.6%
0.5%
100.0%

140,691
160,218
127,709220,828
70,502
4,386
724,334

19.4%
22.1%
17.7%
30.5%
9.7%
0.6%
100.0%

17.1%
17.9%
14.5%
35.1%
6.8%
8.5%
21.3%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

180,417487,546
198,363
12,057878,383

20.5%
55.5%
22.6%
1.4%
100.0%

186,050
351,469
179,557
7,258
724,334

25.7%
48.5%
24.8%
1.0%
100.0%

-3.0%
38.7%
10.5%
66.1%
21.3%

% change

Net sales by distribution channel
DOS (including outlet stores)
Independent customers, franchises
and related parties
Total

659,901

75.1%

490,302

67.7%

34.6%

218,482
878,38324.9%
100.0%

234,032
724,33432.3%
100.0%

-6.6%
21.3%

Net sales
Royalties

878,383
16,58298.1%
1.9%

724,334
15,120

98.0%
2.0%

21.3%
9.7%

Total net revenues

894,965

100.0%

739,454100.0%

21.0%— 10 —

Miu Miu brand sales(am ounts in thousands of Euro)six months ended
July 31 2011

six months ended
July 31 2010

Net sales by geographical area
Italy
EuropeNorth America
Asia PacificJapan
Other countries
Total

33,99341,491
24,294
66,37031,502
1,222
198,872

17.1%
20.9%
12.2%
33.4%
15.8%
0.6%
100.0%

29,26833,01018,72048,791
28,343
1,087
159,219

18.4%
20.7%
11.8%
30.6%
17.8%
0.7%
100.0%

16.1%
25.7%
29.8%
36.0%
11.1%
12.4%
24.9%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

31,601
127,10338,8301,338
198,872

15.9%
63.9%
19.5%
0.7%
100.0%

27,573102,30328,504839
159,219

17.3%
64.3%
17.9%
0.5%
100.0%

14.6%
24.2%
36.2%
59.5%
24.9%

% change

Net sales by distribution channel
DOS (including outlet stores)
Independent customers, franchises
and related parties
Total

153,18177.0%

116,193

73.0%

31.8%

45,691
198,87223.0%
100.0%

43,026
159,21927.0%
100.0%

6.2%
24.9%

Net sales
Royalties

198,872
241

99.9%
0.1%

159,219
845

99.5%
0.5%

24.9%
-71.5%

Total net revenues

199,113100.0%

160,064100.0%

24.4%— 11 —

Church’s brand sales(am ounts in thousands of Euro)six months ended
July 31 2011

six months ended
July 31 2010

% change

Net sales by geographical area
Italy
EuropeNorth America
Asia PacificJapan
Other countries
Total

7,369
15,665
1,116
2,322
413
118
27,003

27.3%
58.0%
4.2%
8.6%
1.5%
0.4%
100.0%

6,247
14,286
886
1,591
250
180
23,440

26.7%
60.9%
3.8%
6.8%
1.1%
0.7%
100.0%

18.0%
9.7%
26.0%
45.9%
65.2%
-34.4%
15.2%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

256
662
26,085—27,003

0.9%
2.5%
96.6%
—
100.0%

202
650
22,588—23,440

0.9%
2.8%
96.3%
—
100.0%

26.7%
1.8%
15.5%
—
15.2%

Net sales by distribution channel
DOS (including outlet stores)
Independent customers, franchises
and related parties
Total

17,31864.1%

15,294

65.2%

13.2%

9,685
27,00335.9%
100.0%

8,146
23,44034.8%
100.0%

18.9%
15.2%

Net sales
Royalties

27,003
55

99.8%
0.2%

23,440
72

99.7%
0.3%

15.2%
-23.6%

Total net revenues

27,058100.0%

23,512100.0%

15.1%— 12 —

Car Shoe brand sales(am ounts in thousands of Euro)six months ended
July 31 2011

six months ended
July 31 2010

% change

Net sales by geographical area
Italy
EuropeNorth America
Asia PacificJapan
Other countries
Total

6,545
1,890
145
973
—
158
9,711

67.4%
19.5%
1.5%
10.0%
—
1.6%
100.0%

7,029
1,844
226
476
11
225
9,811

71.6%
18.8%
2.3%
4.9%
0.1%
2.3%
100.0%-6.9%
2.5%-35.8%
104.4%-100.0%-29.8%-1.0%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

—
1,250
8,461
—
9,711

—
12.9%
87.1%
—
100.0%

—
1,176
8,635
—
9,811

—
12.0%
88.0%
—
100.0%

—
6.3%
-2.0%
—
-1.0%

Net sales by distribution channel
DOS (including outlet stores)
Independent customers, franchises
and related parties
Total

4,161

42.8%

3,182

32.4%

30.8%

5,550
9,711

57.2%
100.0%

6,629
9,811

67.6%
100.0%-16.3%-1.0%

Net sales
Royalties

9,711—

100.0%—

9,811—

100.0%—-1.0%—

Total net revenues

9,711

100.0%

9,811

100.0%-1.0%— 13 —

Number of stores
July 31 2011
DOS franchises

January 31 2011
DOS franchises

July 31 2010
DOS franchises

Prada
Miu Miu
Church’s
Car Shoe

218
82
40
5

24
6
—
—

207
71
36
5

27
6
—
—

188
64
36
4

29
6
—
—

Total

345

30

319

33

292

35

July 31 2011
DOS franchises

4.

January 31 2011
DOS franchises

July 31 2010
DOS franchises

ItalyEuropeNorth
America
Far East
Japan
Middle East

42
97

5
12

37
88

5
13

36
79

5
13

40
108
58
—

—
13
—
—

34
104
56
—

—
13
—
2

23
99
55
—

—
15
—
2

Total

345

30

319

33

292

35

six months
ended
July 31% of net
2010
revenues% of netrevenues

Operating Expenses(am ounts in thousands of Euro)six months
ended
July 312011

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

51,45353,915357,156
89,281

4.5%
4.8%
31.5%
7.9%

49,27936,685289,150
66,482

5.3%
3.9%
30.9%
7.1%

Total

551,805

48.6%

441,59647.2%— 14 —

5.

Interest and other financial expenses, net
six months
ended
July 312011

six months
ended
July 312010

Interests expenses on borrowings
Interest income
Exchange gains / (losses) - realized
Exchange gains/ (losses) - unrealized
Other financial income / (expenses)
Revaluations and write-down of investments(8,966)
583
35
(924)
(2,328)—(7,569)993
551(12,190)(1,949)551

Total(11,600)(19,613)six months
ended
July 312011

six months
ended
July 312010

Current taxation
Deferred taxation

82,007(21,430)

62,501(13,813)

Total

60,577

48,688(am ounts in thousands of Euro)

6.

Taxation(am ounts in thousands of Euro)

7.

Earnings and dividends per share
Basic earnings per share are calculated by dividing the net profit attributable to equity ownersof PRADA spa by the weighted average number of ordinary shares in issue during the period.
six months
ended
July 312011
Group net result in Euro
Weighted average number of ordinary outstanding shares

six months
ended
July 312010

179,531,725
103,042,594
2,512,349,790 2,500,000,000

Basic earnings per share (in Euro per share)

0.071

0.041

Diluted earnings per share (in Euro per share)

0.071

0.041

— 15 —

On May 26, 2011, the Shareholders of PRADA spa resolved to change the par value of theCompany shares from Euro 1 to Euro 0.1 each. In accordance with IAS 33, the new number ofshares - some 2,500,000,000 - has been adjusted retrospectively for the purposes of thecalculation of earnings per share.
During the first half of the 2011, the Company distributed dividends of Euro 35 million, or Euro
0.14 per share, as approved by the Shareholders’ meeting held on March 28, 2011, in respect of
the financial statements ended January 31, 2011. These dividends were offset against receivables
due from controlling Shareholder PRADA Holding bv for an amount of Euro 32.5 million withthe remaining amount being paid.
During the year ended January 31, 2011, the Shareholders’ meeting held on April 28, 2010
approved a distribution of Euro 0.32 per share, representing a total dividend of Euro 80 million.
This dividend was paid on July 27, 2010, for an amount of Euro 27.9 million and, on the samedate, an amount of Euro 52.1 million was offset against the receivable due from our controllingshareholder. Furthermore, the Shareholders’ meeting on January 27, 2011 approved a distributionof Euro 0.124 per share, representing a total dividend of Euro 31 million which was paid in fullon the same date.
8.

Inventories(am ounts in thousands of Euro)

July 312011

January 31
2011

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

74,986
19,813
337,427(65,413)

63,672
17,186263,341(63,790)

Total

366,813

280,409

Materials being worked upon by third parties are included in raw materials.
Work in progress includes materials at the production stage with PRADA spa, Church & Co ltd
and third party sub-contractors.
The increase in inventories of finished products is consistent with the higher volume of
production necessary to supply the expanded DOS network as well as with the growth of thebusiness in general.

— 16 —

Movements on the allowance for obsolete and slow moving inventories are analyzed as follows:(am ounts in thousands of Euro)
Opening balance
Exchange differences
Increase
Decrease
Closing balance9.

Rawmaterials

Finished
Products

Total

31,622

32,16863,790

(1)
—
—

3
1,621
—

2
1,621
—

31,62133,79265,413

Trade receivables, net
The Group manages the credit risk and reduces its negative effects through its commercial andfinancial strategy. Credit risk management is performed by controlling and monitoring thereliability and solvency of customers and is carried out by the Group’s Commercial Department.
At the same time, the fact that the total receivables balance is not highly concentrated on
individual customers and the fact that net sales are evenly spread around the world lead to a
reduced risk of financial losses.
Trade receivables are detailed as follows:(am ounts in thousands of Euro)

July 312011

January 31
2011

Trade receivables — third parties
Trade receivables — associated companies
Trade receivables — related parties

274,841—
16,816

255,839
1,924
16,412

Total

291,657

274,175

Net trade receivables increased at July 31, 2011 mainly because of higher sales.

(am ounts in thousands of Euro)

July 312011

January 31
2011

Third party trade receivables, grossAllowance for bad and doubtful debts

285,223(10,382)

266,376(10,537)

Total third party trade receivables, net

274,841

255,839— 17 —

Changes in the Allowance for bad and doubtful debts were as follows:(am ounts in thousands of Euro)

July 312011

January 31
2011

Opening balance

10,537

11,308

(80)
382
(457)
—

204
1,345
(2,069)(251)

10,382

10,537

Exchange differences
Increase
Utilized
Reversals
Closing balance

The following table contains the ageing of total trade receivables before the allowance for
doubtful debts at the reporting date:(amounts in thousands of Euro)Days overdue
Total

Current

0<30

31<60

61<90 01<120

Trade receivables

302,039

250,293

18,749

9,018

8,042

42

15,895

Total as at July 31 2011

302,039

250,293

18,749

9,018

8,042

42

15,895

Total

Current

0<30

31<60

61<90 01<120>120

Trade receivables

284,713238,248

18,543

7,438

4,176

342

15,966

Total as at January 31 2011

284,713238,248

18,543

7,438

4,176

342

15,966(amounts in thousands of Euro)>120

Days overdue

Trade receivables disclosed below include amounts overdue at the end of each reporting period,
net of their relevant provision for doubtful debt:
Days overdue
31<60
61<90

(am ounts inthousands of Euro)

Total

0<30

Trade receivables pastdue, net ofprovision for
doubtful debts

41,892

18,742

8,983

Total as at July 31
2011

41,892

18,742

8,983— 18 —

01<120

>120

8,006

26

6,135

8,006

26

6,135

Days overdue
31<60
61<90

(am ounts inthousands of Euro)

Total

0<30

Trade receivables pastdue, net ofprovision for
doubtful debts

36,356

18,463

7,390

Total as at January 31
2011

36,356

18,4637,390

01<120

>120

4,083

239

6,181

4,083

239

6,181

At the reporting date, the expected loss on doubtful receivables was fully covered by theallowance for doubtful receivables.
10.

Trade payables
Trade payables are detailed as follows:(am ounts in thousands of Euro)

July 312011

January 31
2011

Trade payables — third party
Trade payables — related parties
Trade payables — associated companies

301,782
2,181—

232,143
1,701
22

Total

303,963

233,866

The increase in trade payables is consistent with the higher volume of production necessary tosupply the expanded DOS as well as to the growth of the business in general.
The following table is an aged analysis of trade payables presented based on the due date at theend of the reporting period and as at January 31, 2011:(amounts in thousands of Euro)Days overdue
Total

Current

0<30

31<60

61<90 01<120>120

Trade payables

303,963

278,073

12,374

4,951

1,889

1,476

5,199

Total as at July 31 2011

303,963

278,073

12,374

4,951

1,889

1,476

5,199

(amounts in thousands of Euro)Days overdue
Total

Current

0<30

31<60

61<90 01<120>120

Trade payables

233,866

210,741

9,450

4,086

2,557

1,731

5,301

Total as at January 31 2011

233,866

210,741

9,450

4,086

2,557

1,731

5,301

— 19 —

11.

Capital expenditure
Changes in the net book value of “Property, plant and equipment” in the period ended July 31,
2011 are as follows:(amounts inthousands of Euro)Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Furniture& fittings

Balance at January 31,
2011

145,602

15,042

220,112

72,10924,69559,157536,717Additions

35,481

3,562

32,185

4,397

13,32632,294

121,245

Depreciation(2,190)(3,252)(29,393)(8,889)(2,748)—(46,472)

Disposals

AssetsOther
underequipment construction

Total
historical
cost

—

4

15

164

51

47

281

(1,157)(14)(2,180)

(304)

(25)

738

(2,942)Other movements

324

(8)

12,879

3,344

1,986

(18,041)484

Impairment and write
off

—

—

(454)

(166)

(1)

(1,159)(1,780)178,060

15,326

233,134

70,32737,182

72,942606,971

Exchange differences

Balance at July 31,
2011

Changes in the net book value of “Intangible assets” in the period ended July 31, 2011 are as
follows:(amounts inthousands of Euro)

Trademarks

Store Lease
Goodwill Acquisitions

Balance at January 31,
2011

312,460

503,946

Change inconsolidation area

—

—

—

—

—

—

—

Additions

64

—

1,252

831

823

10,511

13,481(5,485)—(3,784)(1,448)(2,646)—(13,363)

—

—

—

1

1

—

2

Amortization
Disposals
Exchange differences

36,087Development
Software
costs

6,385

7,869

Assets in
Total netprogress book value

2,372

869,119

(917)

(141)

(49)

(2)

(1)

2

(1,108)Other movements

—

—

(55)

808

—

(1,670)(917)

Impairment and write
off

—

—

—

—

—

(14)

(14)

306,121503,805

33,451

6,573

6,044

11,201

867,196

Balance at July 31,
2011— 20 —

Management discussion and analysis
Net revenues
Consolidated net revenues for the period ended July 31, 2011 amounted to Euro
1,134.3 million, posting a remarkable increase of 21.1% compared to the first half of2010. At constant exchange rates, the increase would have been equal to 24.1%.
Distribution channels
Retail net sales totaled Euro 835.4 million, up by 33.4% (36.9% at constant exchange
rates), compared to Euro 626.2 million posted in the first half of 2010. The growth
was attributable to the full contribution of the 27 net new store openings in thesecond half of 2010, to the contribution of the 26 net new store openings in the firsthalf of 2011 and to the excellent 22% of organic growth. The Group’s commitment
to improving its DOS network was also confirmed by the significant refurbishment
and expansion works that were carried out on 9 more stores.
At the reporting date the Group owned 345 stores and they contributed 74.8% ofGroup net sales (68% in the first half of 2010).
The wholesale business, in keeping with the Group’s distribution strategy, is in linewith the first half of last year and reached Euro 282 million, accounting for 25.2%of the Group’s net sales.
Markets
In the first half of 2011, net sales in Asia Pacific increased by 35.4% (41.1% atconstant exchange rates) to Euro 368 million from Euro 271.7 million in the same
period of 2010. This outstanding performance was achieved primarily thanks to 31%
organic growth and the 9 net new store openings since July 31, 2010. Greater China
made the greatest contribution to this performance.
In Europe, the Group’s second largest market, net sales increased by 18.4% (18.7%
at constant exchange rates) to Euro 250.7 million in the first six-months of the 2011
from Euro 211.8 million in the same period of 2010. This growth, driven by 18 net
new store openings since July 31, 2010, and by the 18% organic growth of the retailchannel, was partially offset by a drop in sales for the wholesale business (down by
9.4% compared to the first half of 2010). It is worth mentioning that, on July 12,2011, as part of a major DOS expansion in Russia, the Group opened its firstindependent store in Moscow.
— 21 —

Net sales on the Italian market increased by 15.8% to Euro 213.4 million in the firsthalf of 2011 from Euro 184.3 million in the same period of 2010. Sales trends in Italy
were fairly similar to those in Europe as a whole and led to an outstanding
performance for retail (increase of 48.2% compared to the first half of 2010) and a
decline in the wholesale business (decrease of 8.2% compared to the first half of2010).
The North American market recorded a 16.4% increase compared to the first half of2010. The growth was achieved thanks to the performances of both the retail and thewholesale channels. DOS sales, driven by an organic growth of 12% and 17 net store
openings since July 31, 2010, increased by 21% compared to the first half of 2010.
Thanks to deliveries to the US department stores and to the general recovery of theconsumer market, the wholesale channel performed well with a 9.7% increase
compared to the first half of 2010.
After being hit by the dramatic events in March 2011, the Japanese market remainedsolid for the Group’s brands as net sales increased by 8.2% (6% at constant exchange
rates). There have been 3 net new store openings since July 31, 2010, and organic
growth was almost flat.
After distribution network rationalization in the Middle East in 2010, the “Other
countries” area started to grow again: net sales increased by 6.4% to stand at Euro
6.3 million in the first six months of 2011 compared to Euro 5.9 million in the same
period of 2010.
Products
The 21.4% increase in the Group net sales was mainly achieved as a result of theout-performance of leather goods which grew by 35.3% in the first six months of2011 compared to the first half of 2010, increasing their contribution to the Group’s
net sales to 55.2%. The leather goods performance was mainly driven by the strong
expansion of the retail channel in Asia Pacific, where such products form the core of
the product sales mix.
BrandsThe Prada brand accounts for 78.6% of Group net sales (78.7% in the same period of
2010) and its sales performance was broadly in line with the comments made above
which apply to the entire Group. It is worth highlighting the worldwide success of thecolourful fruity stripes PRADA Woman 2011 S/S collection, the most used by global
magazines to grace their spring covers.
— 22 —

The Miu Miu brand, with a higher incidence in the retail and leather goods sales,
recorded the highest rate of growth in terms of net sales among the Group’s brands
with an increase of 24.9% (27.7% at constant exchange rates). Apart from Asia
Pacific, where Miu Miu achieved an outstanding 36% growth (42.2% at constantexchange rates), the North American market also confirmed its appreciation of thisbrand with a 29.8% increase in net sales compared to the first half of 2010 (40.8%
at constant exchange rates).
The Church’s brand confirmed its double-figure rate of growth with a 15.2% increase
compared to the first half of 2010 (16.4% at constant exchange rates). In Europe,
where 58% of the brands sales are concentrated, growth was solid with a 9.7%
increase (10.2% at constant exchange rates).
Despite the positive performance of the retail channel (30.8%), Car Shoe net sales
remained almost unchanged on a total basis with an overall 1% decrease.
Royalties
The licensed products business contributed net revenues of Euro 16.9 million (Euro16.1 million in the first half of 2010), including royalties of Euro 13.7 million onsales of eyewear (Euro 13.4 million in the first half of 2010), Euro 1.8 million onsales of perfume (Euro 1.8 million in the first half of 2010) and Euro 0.6 million froma new license with Hyundai, the Korean automaker, for the launch of a special limited
edition luxury version of their Genesis car. Overall, royalties income increase by
4.9% compared to the first half of 2010.
Operating results
EBITDA for the period ended July 31, 2011 amounted to Euro 315 million, 39.9%
more than in the first half of 2010, while rising from 24% to 27.8% of net revenues.
The significant improvement in operating profitability has been achieved mainly asa result of the actions taken to improve gross margin as a percentage of net revenues
and it rose from 65.5% in the first half of 2010 to 71% in the first half of 2011. The
higher incidence of retail channel sales, the increase in unit margins and the morefavorable ratio of full price sales to sales at promotional prices were the key factors
behind this improvement.

— 23 —

Operating expenses increased from Euro 441.6 million in the period ended July 31,
2010 to Euro 551.8 million in the period ended July 31, 2011 and their incidence on
net revenues grew from 47.2% to 48.6%. At constant exchange rates, operating
expenses would have increased by 27.1% rather than by 25%. In details:•

Product design and development costs included both the design phase — i.e.
research and testing of shapes, fabrics, leather and production techniques plus
definition of the design concept - and the product development phase, involving
planning of products, production of prototypes and manufacture of the products
themselves. Their incidence on net revenues decreased compared to the same
period in last year from 5.3% to 4.5% as they have been absorbed to a greater
extent by net sales generated in the first half of 2011;•

Advertising and communications costs increased from Euro 36.7 million to Euro
53.9 million. They included expenses incurred to develop advertising campaigns
and organize fashion shows and other events plus sponsorship costs andoverheads attributable to this area of the business. The increase in absolute terms
on prior year is mainly due to incremental spending for media and press
advertising consistently with the Group’s strategy of increasing communications
expenses for the promotion of all the brands. At constant exchange rates,
advertising and communications costs would have increased by 49.2% rather
than by 47%;•

Selling costs increased from Euro 289.2 million to Euro 357.2 million and rosefrom 30.9% of net revenues to 31.5%. The increase is essentially due to the
expansion of the retail network which recorded a net increase of 53 stores since
July 31, 2010. At constant exchange rates general and administrative costs would
have increased by 26.2% rather than by 23.5%;•

General and administrative costs increased slightly from 7.1% of net revenues in
the first half of 2010 to 7.9% in the same period of 2011. In absolute terms, thesecosts increased from Euro 66.5 million to Euro 89.3 million as a result of higher
overhead expenses due to the expansion of the Group business. At constantexchange rates the general and administrative costs would have increased by
35.5% rather than by 34.3%.

Despite the major capital expenditure program undertaken since the year 2009, EBIT
still increased in absolute terms to reach Euro 253.4 million for the first half of 2011;it also increased from 18.4% of net revenues in the first half of 2010 to 22.3% in thefirst half of 2011. No significant impairment of assets incurred in either the first halfof 2010 or the first half of 2011.
— 24 —

Interests expenses on borrowings increased slightly compared to the first half of2010. The benefit of lower average bank borrowing was more than offset by anincrease in the cost of funding as the debt profile became more long term.
Furthermore, the first half 2011 was also affected by the cost of settlement of an IRS
contract relating to the US mortgage reimbursed in advance with funds raised by the
IPO.
Despite the higher level of income generated, the tax charge decreased from 31.9%
in the first half of 2010 to 25.1%, essentially because of the change in thegeographical mix of taxable income, as a result of the change in the geographical mixof sales with slightly more favorable tax rates, and provisions made in the first halfof 2010 for ongoing tax disputes.
The Group’s net income was Euro 179.5 million, or 15.8% of net revenues, a 74.2%
increase compared to net income of Euro 103 million reported in the first half of2010.
Net Invested Capital
The increase in the Net invested capital at July 31, 2011 was substantially due to themajor capital expenditure incurred during the first half of 2011.
Group Shareholders equity increased mainly because of the capital injection resulting
from the IPO (Euro 206.4 million) and the Net income for the six months period(Euro 179.5 million), as partially offset by dividends distributed (Euro 35 million)
and the negative impact of exchange rate fluctuation on net assets not denominatedin Euro (Euro 11.7 million).
Analysis of net operating working capital
The increase in Net operating working capital compared to January 31, 2011 was dueto the higher volumes of production and distribution, in line with the expansion insales activities.
Net Financial Position
At July 31, 2011, the Group’s Net Financial Position amounted to Euro 135.2 million,
with a Euro 273.4 million reduction compared to January 31, 2011.

— 25 —

As shown in the Summarized Statement of Cash Flows, the capital injection resulting
from the IPO (Euro 206.6 million, included in the line “Cash flows generated byfinancing activities”) and cash flows generated by operating activities (Euro 209.6
million) enabled the Group to fund its capital expenditure for the period (Euro 134.9
million), to pay dividends (Euro 6.4 million), to reduce its bank borrowing by Euro
100.7 million and to increase its cash and cash equivalent by Euro 174.2 million at
July 31, 2011.
Dividends distributed to Shareholders totaling Euro 35 million were settled asfollows: Euro 32.5 million offset against receivables from parent company PRADA
Holding bv and Euro 2.5 million paid in cash.
Analysis of capital expenditure
Taken together, “Property, plant and equipment” and “Intangible assets” showed a netincrease of Euro 68.3 million. Investments incurred during the period amounted toEuro 134.7 million and were distributed as follows: Euro 72.9 million in the retailarea, Euro 45.4 million in the industrial and logistics area and Euro 16.4 million in
the corporate area. Depreciation charges for the period totaled Euro 59.8 million andwrite-downs amounted to Euro 1.8 million.
Outlook for the second half of 2011
In the second half of 2011, the Group will continue to pursue growth, leveraging on
its creative and innovation capabilities and investing in the expansion of the DOS
network and on the promotion of its brands.
In the current climate of increasing global economic uncertainty, these actions will
be carried out maintaining rigorous control on costs and preserving flexibility.
Corporate Governance Practices
The Company is committed to maintaining a high standard of corporate governancepractices. The corporate governance model adopted by the Company consists of a setof rules and standards with the aim of establishing efficient and transparent
operations within 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 and the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited(the “Listing Rules”).
The Board is responsible for setting up the overall strategy as well as reviewing theoperation and financial performance of the Company.
— 26 —

The Board has established the following committees:
1.

Audit Committee

2.

Remuneration Committee

3.

Supervisory Body

Audit Committee
The Company has established an audit committee in compliance with Rule 3.21 of the
Listing Rules. The members of the audit committee consist of three independent
non-executive 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 review and supervise the financial reporting process and internal
controls of the Company. On 19 September 2011, the audit committee discussed theauditing and internal controls activities of the Company and reviewed the audited
consolidated interim financial statements of the Company for the six months ended
31 July 2011.
Remuneration Committee
The Company has established a remuneration committee in compliance with the Codeon Corporate Governance Practices as set out in Appendix 14 to the Listing Rules(the “Code”). According to its terms of reference, the primary duties of the
remuneration committee are to make recommendations to the Board on the
Company’s policy and structure for all remuneration of directors and senior
management, the establishment of a formal and transparent procedure for developing
policy on such remuneration and the appointment of Directors and management ofBoard succession. The remuneration committee consists of two independent
non-executive directors, Mr. Gian Franco Oliviero Mattei (Chairman) and Mr.
Giancarlo Forestieri and one non-executive director, Mr. Marco Salomoni. On 19
September 2011, the remuneration committee has reviewed the budget for theattribution of specific benefits to the management of the Company and its staff.
Supervisory Body
In compliance with Italian Legislative Decree 231 of 8 June 2001 (the “Decree”), theCompany has established a supervisory body whose primary duty is to ensure thefunctioning, effectiveness and enforcement of the Company’s Model of Organization,
adopted by the Company pursuant to the Decree. The supervisory body consists of— 27 —

three members appointed by the Board selected among qualified and experienced
individuals, including non-executive directors, qualified auditors, executives orexternal individuals. The supervisory body consists of Mr. David Terracina(Chairman), Mr. Franco Bertoli and Mr. Marco Salomoni.
Board of Statutory Auditors
Under Italian law, a joint-stock company is required to have a board of statutory
auditors, appointed by the shareholders, with the authority to supervise the Company
on its compliance with the law and the by-laws, compliance with the principles ofproper management and, in particular, on the adequacy of the organizational,
administrative and accounting structure adopted by the Company and on its
functioning. The board of statutory auditors of the Company consists of Mr. Antonino
Parisi (Chairman), Mr. Riccardo Perotta and Mr. Gianandrea Toffoloni.
Dividends
The Company may distribute dividends subject to the approval of the shareholders inan ordinary shareholders’ meeting.
No dividends have been declared or paid by the Company in respect of the six months
ended 31 July 2011.
Compliance with the Code on Corporate Governance Practices of the Listing
Rules
The Board has reviewed the Company’s corporate governance practices and issatisfied that the Company has complied with the code provisions set out in the Codefrom the time of its listing on 24 June 2011 to 31 July 2011.
Directors’ Securities Transactions
The Company has adopted written procedures governing Directors’ securities
transactions in compliance with on terms no less than the standard set out in the
Model Code for Securities Transactions by Directors of Listed Issuers (the “Model
Code”) contained in Appendix 10 of the Listing Rules. Relevant employees who arelikely to be in possession of unpublished price-sensitive information of the Group arealso subject to compliance with the written procedures. Specific written confirmation
has been obtained from each Director to confirm compliance with the Model Codefrom the time of listing on 24 June 2011 to 31 July 2011. There was no incident of
non-compliance during the period from the Company’s listing on 24 June 2011 to 31
July 2011.
— 28 —

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 period from 24 June 2011 to 31 July
2011.
Publication of Interim Results Announcement and Interim Report
This interim results announcement is published on the Company’s websites of atwww.pradagroup.com and the Hong Kong Exchanges and Clearing Limited’s website
at www.hkexnews.hk. The 2011 interim report will be dispatched to the shareholdersof the Company and published on the same websites in due course.
By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Deputy Chairman
Milan (Italy), 19 September 2011
As at the date of this announcement, the Company’s executive directors are Ms. Miuccia PRADA
BIANCHI, Mr. Patrizio BERTELLI, Mr. Carlo MAZZI and Mr. Donatello GALLI; the Company’s
non-executive directors are Mr. Marco SALOMONI and 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.

— 29 —