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 YEARENDED JANUARY 31, 2015

- Net revenues were Euro 3,551.7 million, recording a decrease of 1%
compared with the twelve months ended January 31, 2014 (-1.1% atconstant exchange rates)- Retail net sales were Euro 2,980.9 million, down by 0.5% comparedwith the twelve months ended January 31, 2014 (-0.4% at constantexchange rates)- EBITDA was Euro 954.2 million, representing a margin of 26.9% on net
revenues (31.9% in the twelve months ended January 31, 2014)- Group’s net income amounted to Euro 450.7 million, compared toEuro 627.8 million for the twelve months ended January 31, 2014
- Net financial position standing positive at Euro 188.8 million as atJanuary 31, 2015
- Net operating cash flow for the twelve months ended January 31,
2015, was Euro 483.6 million

1Consolidated results for the year ended January 31,
2015
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company”, or“PRADA spa”) announces the audited Consolidated results of the Company
and its subsidiaries (collectively, the “Group”) for the year ended January
31, 2015, together with the audited comparative figures for the year ended
January 31, 2014. The following financial information has been 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, 2015, and January 31, 2014, 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, 2015, 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 312015(audited)

twelvemonthsended
Jan 312014(audited)

twelvemonthsended
Jan 312013(audited)

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

3,551,696
954,24926.9%
701,55119.8%
667,702450,730
0.176
449,735
483,597

3,587,347
1,143,186
31.9%
939,237
26.2%
922,896627,785
0.245
611,227
769,436

3,297,219
1,052,469
31.9%
889,78127.0%
883,616
625,6810.245
351,129759,272-1.0%-16.5%-25.3%-27.7%-28.2%-28.2%-37.1%

11,962

10,816

9,427

10.6%

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

as at
Jan 312015(audited)

as at
Jan 312014(audited)

as at
Jan 312013(audited)change vs
Jan 31
2014

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

563,4092,829,359
188,7883,000,737

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

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

153,635
423,709(107,102)
313,183

Average number of employees%change vs
Jan 312014

Highlights for the year ended January 31, 2015
The 2014 financial year has ended with consolidated net revenues of Euro3,551.7 million, down by 1% compared to Euro 3,587.3 million in 2013. At
constant exchange rates, consolidated net revenues have remained almost
unchanged because, overall, exchange rates between other currencies andthe Euro had a negative impact on sales for a significant portion of the year
but then made a positive contribution and helped sales recover in the last
few months of the year. Sales in the retail channel – which comprised 594
DOS at January 31, 2015 – were broadly in line with 2013 while wholesalechannel sales fell by 3.4% and were again affected by the program ofrationalization and conversion into retail sales.
The international economic environment in which the Group operated in2014 was particularly challenging because of the ongoing economic
uncertainty and the political and social tension that affected several
important markets. Against this background, there was, generally, a lower
contribution from flows of tourists while local demand followed different
trends on the various markets: there was growth in Japan and the Americas
and decreases in Europe, Italy and Asia Pacific. Nonetheless, Prada Group has
continued to invest resources in pursuit of its medium/long-term objectives:it has confirmed the opening of new stores on markets not consideredsufficiently covered although some have been postponed until 2015; it has
also launched a number of communications initiatives in order to strengthenbrand image and reinforce the link with customers. At the same time, inorder to safeguard industrial margins and further increase production know3

how, there has been a major overhaul of certain internal production
processes, the effects of which will be visible from next year. However, as
the general situation during the year gradually became more complicatedthan could have been expected, management concluded that it was essential
to implement a series of measures aimed at containing costs at various
income statement levels.
The slowdown in the rate of growth and the accompanying increase in costs
linked to retail network expansion has hit operating margins: EBITDA for thetwelve months ended January 31, 2015 was Euro 954.2 million, or 26.9% of
net revenues against 31.9% in prior year, and EBIT totaled Euro 701.6 million,
or 19.8% of net revenues against 26.2% in prior year.
After net financial expenses of Euro 33.8 million (Euro 16.3 million in 2013)
and an effective tax rate almost in line with prior year (31.2% against 30.9%
in 2013), the Group’s net income amounted to Euro 450.7 million (12.7% of
net revenues against 17.5% in 2013).
The capital expenditure for 2014 totaled Euro 449.7 million and was mainly
dedicated to the expansion and renewal of the DOS network and to theacquisition for Euro 61.5 million of a property in Milan already used by theGroup as its Corporate Headquarters under a rental contract.
At January 31, 2015, the Group’s net financial position was positive by Euro
188.8 million. In the twelve months then ended, cash flows generated byoperating activities amounted to Euro 483.6 million and were almost entirely
employed – together with some existing cash – to finance capex and pay
dividends to the shareholders of PRADA spa (Euro 281.5 million) and the noncontrolling shareholders of subsidiaries (Euro 9.4 million).

4

Consolidated income statement for the year ended January 31,
2015(amounts in thousands of Euro)Net revenues
Cost of goods soldtwelvemonths
% on
ended
Net
January 31
revenues
2015(audited)

Note3

twelvemonths
% on
ended
Net
January 31
revenues
2014(audited)

3,551,696(1,001,117)

100.0%-28.2%

3,587,347(938,698)

100.0%-26.2%

2,550,579

71.8%

2,648,649

73.8%(1,849,028)-52.1%(1,709,412)-47.7%

701,55119.8%

939,237

26.2%(34,304)-1.0%(17,357)

-0.5%

455

-

1,016

-

667,70218.8%

922,89625.7%(208,484)-5.9%(285,091)-7.9%

459,218

12.9%

637,805

17.8%

8,488

0.2%

10,0200.3%

Net income – Group450,730

12.7%

627,785

17.5%

Depreciation, amortization andimpairment

252,698

7.1%

203,949

5.7%

EBITDA

954,24926.9%

1,143,186

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

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

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

7

0.176

5

0.245

Consolidated income statement for the three months ended
January 31, 2015
three
monthsended
January 31
2015(unaudited)

% on
Net
revenues

999,672(285,509)

100.0%-28.6%

1,011,246(271,837)

100.0%-26.9%

Gross margin

714,163

71.4%

739,409

73.1%

Operating expenses(509,045)-50.9%(477,986)-47.3%

EBIT

205,118

20.5%

261,423

25.9%(18,326)-1.8%(2,933)

-0.3%

-

-

732

0.1%

Income before taxes

186,792

18.7%

259,222

25.6%

Taxation(53,771)-5.4%(69,957)-6.9%

Net income for the period

133,02113.3%

189,265

18.7%

1,610

0.2%

2,360

0.2%

Net income – Group131,41113.1%

186,906

18.5%

Depreciation, amortization andimpairment

67,453

6.7%

60,791

6.0%

EBITDA

272,57127.3%

322,214

31.9%(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

three
months
% on
ended
Net
January 31
revenues
2014(unaudited)Consolidated statement of financial position(amounts in thousands of Euro)

as at
January 31
2015(audited)

as atJanuary 31
2014(audited)

98

708,966
346,284
654,5456,287

568,414
308,405449,903
13,984

10

3,240

5,993

12

180,633
1,899,955

114,897
1,461,596

11
11

1,474,218
943,304
30,529280,983
91,3531,106

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

17,4291,487

2,838,922
4,738,877

2,426,696
3,888,292

NoteAssetsCurrent 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
Translation reserve
Total other reserves
Net profit for the period
Total Shareholders’ equity – Group
Shareholders’ equity – Non-controlling interests
Total Liabilities and Shareholders’ equity

13

10

263,335

61,909

14

3,083

4,894

15

437,420
133,91456,772
21
220,480
1,115,025

348,534
132,1453,803
524
154,666
706,47517

255,20385,754
63,695
41,634
128,752
17,283207,950
19
63,27952,66042,671
98,982
1,469

14

13,384

13,247605,705
1,720,730
255,882
130,996
2,163,129
450,730
3,000,737
17,4104,738,877

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

784,930
3,623,852

755,1213,181,817

16

Net current assets
Total assets less current liabilities

7

Statement of changes in consolidated shareholders’ equity(amounts in thousands of Euro, except for number of shares)
EquityEquityNonattributable controlli
to owners
ngof Group interests

Fair Value
Share
Cash flow
Total
Actuarial Available for
Otherpremium
hedge
Other
Reservesalereserves
reserve
reserve
Reserves
ReserveNet
incomefor year

5,486 1,051,536 1,480,747

625,681(amounts inthousands of Euro)

Number of
SharesShare
CapitalTranslationReserve

Balance at January
31, 2013

2,558,824,000

255,882(42,288)

410,047

20,148(6,470)

-

-

-

-

-

-

-

-

-

-

-

-

-

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

-

-

-

-

-

-

-

-

-

-

-

40

40

-

-

(7,150)-(16,449)-(1,378)-(17,827)

627,785

602,808

10,110612,918

-

-

-

-

-

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

2,558,824,000

255,882(49,438)410,047

3,699(11,452)

4,108 1,446,923 1,853,325

627,785

2,687,554

-

-

-

-

-

-

-

-

-

-

-

-

-

- (281,471) (281,471)-(281,471)

-

-

-

-

-

-

-

(2,466)(2,466)-(2,466)107(2,359)

-

-

-

-

-

-

-

-

-

-

-

2,125

2,125

-

-

180,434-(39,022)

-

7,007

-

(32,015)450,730

599,149

10,573609,722

-

-

-

-

-

(2,029)--(2,029)-(2,029)(3)(2,032)

2,558,824,000

255,882

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

11,115 1,790,771 2,163,129

450,730

3,000,737

Allocation of 2012
net income
Dividends
Capital injection in
subsidiaries
Comprehensive
income for the year
(recycled to P&)
Comprehensive
income for the year
(not recyclable to
P&L)
Balance at January
31, 2014
Allocation of 2013
net income
Dividends
Acquisition ofMarchesi Angelo srl
Capital injection in
subsidiaries
Comprehensive
income for the year
(recycled to P&)
Comprehensive
income for the year
(not recyclable to
P&L)
Balance at January
31, 2015

625,681

627,785625,681 (625,681)

627,785 (627,785)

2,320,022--

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

8

Total
Equity10,470 2,330,492--(6,634) (236,928)

13,986 2,701,540--(9,378) (290,849)

17,410 3,018,147

Condensed statement of consolidated cash flows
twelve months
ended
January 31
2015(audited)

twelve months
ended
January 31
2014(audited)

Net cash flows from operating activities

483,597

769,436

Cash flows generated/(utilized) by investing activities(368,870)(548,349)

Cash flows generated/(utilized) by financing activities(57,027)(219,797)

Change in cash and cash equivalents, net of bank overdrafts

57,7001,292(amounts in thousands of Euro)Statement of consolidated comprehensive income
twelvemonthsended
January 31
2015(audited)

twelvemonthsended
January 31
2014(audited)

459,218

637,805

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

182,519
182,519(7,057)(7,057)

Change in Cash Flow Hedge reserve
Tax impact
Change in Cash Flow Hedge reserve less tax impact(52,817)
13,795(39,022)(22,755)
6,306(16,449)

Change in Fair Value reserve
Tax impact
Change in Fair Value reserve less tax impact

9,343(2,336)
7,007(1,837)459(1,378)Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact(2,338)306(2,032)(6,403)
1,418(4,985)

Consolidated comprehensive income for the period

607,690

607,936

Comprehensive income for the period – Non-controlling
Interests

10,570

10,110Comprehensive income for the period – Group597,120

597,826(amounts in thousands of Euro)Net income for the period – ConsolidatedA) Items recyclable to P&L:

B) Item not recyclable to P&L:

9

Notes to the consolidated results for the year ended
January 31, 2015
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 and fragrances sectors. Its products are sold in 70 countries
worldwide through a network that included 594 Directly Operated Stores(DOS) at January 31, 2015, 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,
2015, 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, 2015, are included in the 2014 Annual Report of PRADAspa.
New standards and amendments issued by the IASB, endorsed by theEuropean Union and applicable to the PRADA Group from February 1, 2014
The following amendments to IFRS have been endorsed by the European
Union and are applicable to the PRADA Group effective from February 1,
2014. These changes do not have any significant impact to the Group as ofthe date of these consolidated financial statements:10 “IFRIC Interpretation 21 Levies”;
 Amendments to “IAS 36 Impairment of Assets”;
 Amendments to “IAS 39 Financial Instruments:









Recognition andMeasurement”;“Investment Entities”, meant as a group of amendments to IFRS 10, IFRS
12 and IAS 27;
Transition Guidance (amendments to IFRS 10, IFRS 11 and IFRS 12);“IFRS 10 Consolidated Financial Statements”;“IFRS 11 Joint Arrangements”;“IFRS 12 Disclosure of Interests in Other Entities”;
Amendments to “IAS 28 Investment in Associates and Joint Ventures”;
Amendments to “IAS 27 Separate Financial Statements”;
Amendments to “IAS 32 Financial Instruments: Presentation”.

11

3.

Net revenues analysis

Net revenues for the year ended January 31, 2015
twelve months
ended
January 31
2015(audited)

twelve months
ended%
January 31
2014 change(audited)

Net sales by geographical area
Italy
EuropeAmericas
Asia PacificJapan
Middle East
Other countries
Total

553,429 15.8%
739,100 21.0%
492,151 14.0%
1,252,675 35.7%
367,625 10.5%
103,475
2.9%
4,981
0.1%
3,513,436 100.0%

552,897 15.6%
0.1%
776,494 21.9% -4.9%
487,990 13.8%
0.9%
1,292,753 36.4% -3.1%
340,784
9.6%
7.9%
91,114
2.6% 13.6%
6,175
0.1% -19.3%
3,548,207 100.0% -1.0%

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

2,895,437 82.4%
526,770 15.0%
74,041
2.1%
11,935
0.3%
5,253
0.1%
3,513,436 100.0%

2,943,633 83.0% -1.6%
519,142 14.6%
1.5%
68,6091.9%
7.9%
13,427
0.4% -11.1%
3,396
0.1% 54.7%
3,548,207 100.0% -1.0%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

594,756 16.9%
2,218,032 63.1%
644,666 18.3%
55,982
1.6%
3,513,436 100.0%

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

2.3%
-4.9%
8.4%
41.7%
-1.0%

Net sales by distribution channelDOS
Independent customers and franchises
Total

2,980,891 84.8%
532,545 15.2%
3,513,436 100.0%

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

-0.5%
-3.4%
-1.0%

Net sales
Royalties

3,513,436
38,2603,548,207
39,140

98.9%
1.1%

-1.0%
-2.2%

Total net revenues

3,551,696 100.0%

3,587,347 100.0%-1.0%(amounts in thousands of Euro)

12

98.9%
1.1%

Net revenues for the three months ended January 31, 2015
three months
ended
January 31
2015(unaudited)

three months
ended%
January 31
2014 change(unaudited)

Net sales by geographical area
Italy
EuropeAmericas
Asia PacificJapan
Middle East
Other countries
Total

150,612 15.2%
194,959 19.7%
155,692 15.7%
349,820 35.3%
108,319 10.9%
29,458
3.0%
1,416
0.1%
990,276 100.0%

154,334 15.4% -2.4%
204,482 20.5% -4.7%
152,311 15.2%
2.2%
360,775 36.0% -3.0%
101,029 10.1%
7.2%
26,078
2.6% 13.0%
1,992
0.2% -28.9%
1,001,001 100.0% -1.1%

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

812,533 82.1%
153,272 15.5%
19,120
1.9%
2,797
0.3%
2,554
0.3%
990,276 100.0%

829,223 82.9% -2.0%
151,144 15.1%
1.4%
17,348
1.7% 10.2%
2,474
0.2% 13.1%
812
0.1% 214.5%
1,001,001 100.0% -1.1%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

182,256 18.4%
603,271 60.9%
192,687 19.5%
12,062
1.2%
990,276 100.0%

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

-4.7%
-3.0%
7.5%
37.3%
-1.1%

Net sales by distribution channelDOS
Independent customers and franchises
Total

809,216 81.7%
181,060 18.3%
990,276 100.0%

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

-0.7%
-2.9%
-1.1%

Net sales
Royalties

990,276
9,397

1,001,001
10,245

99.0%
1.0%

-1.1%
-8.3%

Total net revenues

999,673 100.0%

1,011,246 100.0%-1.1%(amounts in thousands of Euro)

13

99.1%
0.9%

Number of storesas at January 31, 2015
Owned
Franchises

as at January 31, 2014
Owned
Franchises

Prada
Miu Miu
Church’s
Car Shoe

362
169
55
8

27
8
-

330
150
52
8

24
8
-

Total

594

35

540

32

as at January 31, 2015
Owned
Franchises

as at January 31, 2014
Owned
Franchises

ItalyEuropeAmericas
Asia PacificJapan
Middle East
Africa

51
167
110
175
70
17
4

6
3
22
4
-

51
150
91
157
72
16
3

6
6
20
-

Total

594

35

540

32

4.

Operative expenses
twelve months
ended
January 31
2015(audited)% on netrevenues

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

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

132,583
170,562
1,340,832
205,051

3.7%
4.8%
37.8%
5.8%

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

3.6%
4.8%
33.8%
5.5%

Total

1,849,028

52.1%

1,709,412

47.7%(amounts in thousands of Euro)

5.

Interest and other financial income/(expenses), net
twelve months twelve months
ended
ended
January 31
January 31
2015
2014
(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)(12,891)
(400)
3,314
8,854
(30,045)(3,136)(9,548)(12)
3,576(9,128)
1,448(3,693)

Total(34,304)(17,357)

14

6.

Taxation
twelve months twelve months
ended
ended
January 31
January 31
2015
2014
(audited)(audited)(amounts in thousands of Euro)

Current taxation
Deferred taxation

252,712(44,428)

320,176(35,085)

Income taxes

208,484

285,0917.

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.
twelvemonthsended
January 31
2015(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
2014(audited)

450,730,284 627,784,659
2,558,824,000 2,558,824,000
0.176

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, 2015.
During the year ended January 31, 2015, the Company distributed dividendsof Euro 281,470,640, as approved by the Shareholders’ Meeting held on May
22, 2014 to approve the financial statements for the year ended January 31,
2014.
The payment of the dividends and the related Italian withholding tax liability(Euro 11.3 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, 2015.

15

8.

Inventories, net
as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

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

106,843
40,786571,115(64,199)

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

Total

654,545449,903(amounts in thousands of Euro)

The increase in inventories is generally due to the 54 more DOS (net) than atJanuary 31, 2014, and to a different replenishment strategy adopted in thelast few months of 2014 in order to improve the retail range.
Materials being worked upon by third parties are included in raw materials.
Work in progress includes materials at the production stage with PRADA spa,other production companies included in the scope of consolidation and third
party sub-contractors.
Movements on the allowance for obsolete and slow moving inventories areanalyzed as follows:Rawmaterials

Finished
Products

Total

Balance at January 31, 2014 (audited)

29,78037,54767,327

Exchange differences
Increases
Reversals
Utilization

99(3,000)
-

27
61
(234)
-

36
70
(3,234)-

Balance at January 31, 2015 (audited)

26,79837,40164,199(amounts in thousands of Euro)

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

9.

Trade receivables, net
as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

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

317,147(7,784)36,921

288,504(10,432)
30,333

Total

346,284

308,405(amounts in thousands of Euro)

The increase in trade receivables from third parties is mainly due to thehigher level of receivables from department stores denominated incurrencies other than the Euro.
16

Trade receivables from related parties includes an amount of Euro 29.3
million (Euro 25.5 million at January 31, 2014) 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 spa. Trade receivables from relatedparties also includes a total of Euro 1.5 million due from Fratelli Prada srl
and Progetto Prada Arte srl iand regarding chargebacks for their utilization ofpremises in Galleria Vittoria Emanuele II which PRADA spa holds under aconcession agreement with the Municipality of Milan.
The allowance for doubtful accounts 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 their fair value.
Movements during the period may be analyzed as follows:as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

Opening balance

10,432

11,547

Change in scope of consolidation
Exchange differences
Increases
Utilized
Reversals

17
463
109
(3,173)
(64)

55
830
(1,922)(78)

Closing balance

7,784

10,432(amounts in thousands of Euro)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, 2015(audited)

Current

Overdue (days)

Trade receivables

354,068

Total

1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

283,878

28,279

11,202

10,0293,840

16,840354,068

283,878

28,279

11,202

10,0293,840

16,840(amounts inthousands of Euro)

as at
January
31, 2014(audited)

Current

Trade receivables

318,837

Total

318,837

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

262,213

20,331

9,817

6,446

3,633

16,397262,213

20,331

9,817

6,446

3,633

16,397

17

The 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
2015(audited)

Current

Overdue (days)

Trade receivables
less allowance for
doubtful accounts

346,284

Total

346,284

1 ≤ 3031 ≤ 60 61 ≤ 90

283,137

28,279

11,202

283,137

28,279

11,202(amounts inthousands of Euro)

as at
January 31
2014(audited)

Current

Trade receivables
less allowance for
doubtful accounts

308,405

Total

308,405

91 < 120≥ 120

10,029

3,840

9,797

10,029

3,840

9,797

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

261,862

20,331

9,817

6,213

3,633

6,549

261,862

20,331

9,817

6,213

3,633

6,549

10. Receivables from, and advance payments to, parent
company and other related parties – current and non-current
as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

Financial receivables - other related parties
Other receivables - PRADA Holding spa and subsidiaries
Other receivables and advance payments - other related parties

11
5
3,224

2,008
392
3,593

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

3,240

5,993

(amounts in thousands of Euro)The financial receivables from other related companies of Euro 2 million
reported at January 31, 2014 were collected during the year from Luna Rossa
Challenge 2013 srl.
Other receivables and advance payments due from other related companies,
amounting to Euro 3.2 million at January 31, 2015, mainly refer to advancepayments made to related party Secva srl in fulfilment of obligations under
the consulting agreement signed with PRADA spa.

18

Receivables from, and advance payments to, parent company and otherrelated parties non-current is detailed as follows:as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

Prepaid sponsorship
Deferred rental income – long-term
Loans

12,379
4,309
741

1,487
-

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

17,4291,487(amounts in thousands of Euro)

Prepaid sponsorship refers to the amount paid to Luna Rossa Challenge srl –and relating to future reporting periods – for participation of the Luna Rossa
Sailing Team in the XXXV Edition of the America’s Cup which will be held in
Bermuda in 2017.
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.

11. Capital expenditure
Changes in the net book value of Property, plant and equipment in the period
ended January 31, 2015, are as follows:(amounts inthousands ofEuro)

Land andbuildings

Balance atJanuary 31,
2014 (audited)

390,677

20,279487,227

153,428

69,223

109,358

1,230,192

-

42

-

19

24

-

85

78,473(9,483)
(672)

9,189
(8,525)(31)

109,969(146,006)(465)

47,027(39,452)
(546)

9,733
(9,997)(103)

129,570(1,655)383,961(213,463)(3,472)

17,29974

41,365

13,478

1,180

7,900

81,296

1,646

148

23,2076,367

277(32,016)

(371)

-

-

(1,995)(1,660)

(64)

(291)

(4,010)477,940

21,176513,302

178,661

70,273

212,866

1,474,218

Change inscope ofconsolidation
Additions
Depreciation
Disposals
Exchangedifferences
Other
movements
Impairment
Balance atJanuary 31,2015 (audited)

Production Leasehold Furniture
AssetsTotal net
Other
plant and improve&
under
book
tangibles
machineryments
fittings
construction
value

19

Changes in the net book value of Intangible assets in the period ended
January 31, 2015, are as follows:
Trademarks

Balance atJanuary 31,
2014 (audited)

282,913504,373

78,994

10,63719,0295,343

901,289-

7,975

22,0652

1-30,043494(11,097)-(1)-

14,677(17,950)-

3,166(3,655)(7)

177(2,482)-

17,133(1)

35,647(35,185)
(8)

4,922

867

6,316

57

-

57

12,219

-

-

2,390
-

628
-

-

(3,678)
(41)

(660)
(41)

277,232

513,214

106,492

10,82816,725

18,813

943,304

Change in scopeof consolidation
Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance atJanuary 31,2015 (audited)

Store
Goodwill
Lease
SoftwareAcquisitions

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

12. Other current assets
as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

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

56,93453,307
11,45454,642
4,296

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

Total

180,633

114,897

as at
January 31
2015(audited)

as atJanuary 31
2014(audited)

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

70,004
9,056
2,515
9,778

57,158
6,923
5,786

Total

91,35369,867(amounts in thousands of Euro)

13. Other non-current assets(amounts in thousands of Euro)20

14. Payables to parent company and other related parties –current and non-current
as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

Other payables - PRADA Holding spa and subsidiaries
Financial payables - other related parties
Other payables - other related parties

2,371
712

136
4,130
628

Payables to parent company and other related parties – current

3,083

4,894

(amounts in thousands of Euro)

Financial payables towards other related parties, totaling Euro 2.4 million at
January 31, 2015, include an interest-free loan provided by Al Tayer, thenon-controlling shareholder of PRADA Middle East fzco, according to thenumber of shares held by it in said company. The loan was partially repaid
during the year.
The non-current portion of payables to parent company and other relatedparties is detailed as follows:as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

Other payables – other related companies

13,384

13,247

Payables to parent company and other related parties –non-current

13,384

13,247(amounts in thousands of Euro)

Other payables to other related companies include the amount due to FinReta srl in relation to the establishment of rights of usufruct (residual periodnine years) to a real estate property in Tuscany, Italy and the business party
to the rental agreement for said property which the Group is using as part ofits retail network expansion. The payable reported at January 31, 2015
represents the present value of future payments due.

15. Trade payables(amounts in thousands of Euro)

as at
January 31
2015(audited)

as atJanuary 31
2014(audited)

Trade payables – third parties
Trade payables – related parties

410,977
26,443337,807
10,727

Total

437,420

348,534

21

The increase in trade payables is essentially due to the intensification of
manufacturing activity in the last few months of the year in order to sustain
a different strategy of retail channel replenishment.
as atJanuary 31
2015(audited)

Current

Trade payables

437,420

Total

437,420(amounts inthousands of Euro)

Overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

392,284

21,893

10,967

1,936

1,424

8,916

392,284

21,893

10,967

1,936

1,424

8,916

as at
January 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

16. Other current liabilities
as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

128,346
17,35474,78070,848
10,842
72,976

Total

220,480

154,666(amounts in thousands of Euro)

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

Provision fortax disputes

Provisions
for othercharges

Total

Balance at January 31, 2014
(audited)

1,400

22,72428,536

52,660Exchange differences
Reclassifications
Reversals
Uses
Increases

79
152
(210)
(210)
665

10
(171)
2,974

4,122
(152)
(637)
(652)
5,065

4,211
(1,018)
(862)
8,704

Balance at January 31, 2015
(audited)

1,876

25,53736,282

63,695(amounts in thousands of Euro)22

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 liabilities that might arise.

23

Management Discussion and Analysis for the threemonths period ended January 31, 2015
Net revenues
In the three months ended January 31, 2015, Prada Group recorded net
revenues of Euro 999.7 million, a slight 1.1% decrease on the net revenues ofEuro 1,011.2 million recorded in the corresponding period of financial year
2013.
The overall results were driven by the retail channel which contributed 81.7%
of net sales for the period (81.4% in the comparative prior year period) andended the quarter with net revenues of Euro 809.2 million, 1.1% down on
Euro 814.6 million for the corresponding period in prior year. We highlightthe different timing of the Chinese New Year which fell in February this year
whereas, in prior year, it positively impacted net sales for the three months
ended January 31, 2014. In the last three months of the year, the Group
opened 17 new DOS and closed three, thus ending the 2014 financial yearwith a network of 594 directly operated stores.
The wholesale channel recorded net sales of Euro 181.1 million, down by
2.9% on the corresponding period in prior year. The decrease in this channel
was affected by the program to convert several independent wholesaleaccounts into DOS in North America.
Except for Italy which shows a small decrease because of the wholesale
effect, the sales trend for the quarter is similar to the annual trend withgrowth in the Americas, Japan and the Middle East and decreases in Asia
Pacific and Europe.
The net sales generated by the Prada brand in the three months ended
January 31, 2015 contributed 81.1% of net sales (82.8% in the corresponding
period in prior year) and amounted to Euro 812.5 million, a 2% decrease
compared to Euro 829.2 million for the same period in 2013. The Miu Miu
brand contributed 15.5% with net sales of Euro 153.3 million, a 1.4% increaseon the three months ended January 31, 2014. Finally, the Church’s brandrecorded a 10.2% increase in net sales compared to the three months ended
January 31, 2014, accelerating the growth already seen in the previous
quarters.
In the final quarter of 2014, the Group achieved net sales of Euro 603.3
million of leather goods, down by 3% on the three months ended January 31,
2014. Meanwhile, the clothing and footwear divisions recorded net sales
increases compared to said prior year period.

24

Operating results
EBITDA for the three months ended January 31, 2015 totaled Euro 213.9
million, or 27.3% of net sales. The dilution of EBITDA margin compared to thethree months ended January 31, 2014 was due to lower profitability at grossmargin level and to higher operating expenses also as a result of the lower
level of sales which led to a higher percentage incidence of operating
expenses. For the same reasons, EBIT margin also decreased from 25.9% in
the three months ended January 31, 2014, to 20.5%.

25Management Discussion and Analysis for the year ended
January 31, 2015
Sales channels
Retail sales for the twelve months ended January 31, 2015 totaled Euro2,980.9 million, slightly down compared to Euro 2,996.6 million for theprevious year. At constant exchange rates, retail sales were almost
unchanged on prior year. A total of 64 new DOS were opened during theyear, as driven by the program to convert some independent retailers inNorth America and Switzerland into DOS, while ten DOS were closed. At
January 31, 2015, the total number of DOS had increased to 594. On an SSSG
basis (same number of stores and constant exchange rates), the retail
network performed less well than in prior year, especially in relation to the
Asian market and leather goods.
The wholesale channel generated net sales of Euro 532.5 million, a decreaseof 3.4% compared to 2013 (-4.7% at constant exchange rates). This decreaseis in line with Group strategy which has, for some years, prioritized thedevelopment of the retail channel, and essentially relates to the Europeanand American markets. Nonetheless, it is worth noting the growth achievedin the wholesale channel in Asia, especially thanks to the strong performanceof DFS which are operated under selected franchising agreements.

Markets
In the twelve months ended January 31, 2015, the Asia Pacific market –which contributed 35.7% of total net sales making it the Group’s largest
market – recorded a 3.1% decrease (-4.5% at constant exchange rates),
generating net sales of Euro 1,252.7 million against Euro 1,292.8 million in
2013. Results in the region were hit by the negative performances recordedin Hong Kong and Macau. The Greater China area still benefited from growthon the Chinese domestic market and ended the year with net sales of Euro774.1 million, a decrease of 6.3% (-7.3% at constant exchange rates). In the
twelve month period, there were 18 new store openings in Asia Pacific, netof three closures. In terms of distribution channel, the retail channel
recorded a 5.5% decrease (-6.5% at constant exchange rates) while, as
already stated, the wholesale channel enjoyed double digit growth,
especially thanks to tourist flows in South Korea.
In Europe, net sales totaled Euro 739.1 million, a 4.9% decrease (samedecrease at constant exchange rates) compared to the previous year. Thanks
to new store openings during the year (17 net of one closure), the retailchannel limited its net sales decrease compared to prior year to -1.3% (-1.1%
at constant exchange rates). Wholesale results, already hit by general
weakness on the domestic market, were further limited by the
aforementioned strategy of rationalization of independent retailers.
In the twelve months ended January 31, 2015, the Italian market generated
total net sales of Euro 553.4 million, broadly in line with the Euro 552.9
million recorded in 2013. There was no significant difference in the26

respective performances of the two distribution channels with the retailchannel recorded a slight decrease and the wholesale channel slight growth.
The American market generated net sales of Euro 492.2 million, slightly up
on the Euro 488 million recorded in 2013: +0.9% at actual exchange rates and+0.3% at constant exchange rates. A total of 19 DOS were opened during theyear (net of two closures) and the retail channel recorded an overall
increase in net sales (+7.7% at actual exchange rates and +7.2% at constantexchange rates). Meanwhile, the wholesale channel recorded a double digit
drop in net sales (also because of the aforementioned program to convert
wholesale customers into DOS).
In the twelve months ended January 31, 2015, Japan recorded significant
growth with net sales of Euro 367.6 million, a 7.9% increase on prior year(+13.4% at constant exchange rates). The DOS network was rationalized withthe closure of three Prada stores and the opening of a Miu Miu store.
The Middle East market generated net sales totaling Euro 103.5 million, an
increase of 13.6% (+12.2% at constant exchange rates) compared to Euro 91.1
million the previous year. The excellent performances of footwear in generaland the Miu Miu brand must be highlighted.

Products
The footwear division has recorded net sales of Euro 644.7 million, an 8.4%
increase compared to prior year (+8.1% at constant exchange rates).
Footwear sales increased to 18.3% of consolidated net sales from 16.8% in
2013. With the sole exception of the North American market where footwear
sales fell slightly compared to prior year, growth was recorded in all
geographical areas, solely thanks to the retail channel (+19.1% at actual
exchange rates and at constant exchange rates).
Clothing contributed 16.9% of consolidated net sales in 2014 with total net
sales of Euro 594.8 million, a 2.3% increase on the Euro 581.6 million
reported for 2013 (+2.7% at constant exchange rates). The growth was driven
by the retail channel which recorded a 4.4% increase (+4.9% at constantexchange rates). As for footwear, clothing sales fell in the wholesale channel
compared to 2013.
Leather goods contributed net sales of Euro 2,218 million with a 4.9%
decrease compared to Euro 2,332.5 million in 2013 (-5% at constantexchange rates). The decrease recorded by this division affected all markets(except Japan) and hit the retail channel results of the Prada and Miu Miu
brands.

BrandsThe Prada brand generated net sales of Euro 2,895.4 million, slightly down
on 2013 when its sales totaled Euro 2,943.6 million. The decrease of 1.6% (1.7% at constant exchange rates) was broadly the same in both the retail andwholesale channels. From a geographical perspective, the results achievedby each brand in the various regions were consistent with the performanceof the Group as a whole, albeit with some variances in Italy, where Prada
achieved 4.5% net sales growth (Group +0.1%), and in the Middle East, where27

Prada grew by 5.4% (Group +13.6%). Meanwhile, sales performance by brandin terms of product line were exactly in line with Group performance.
The Miu Miu brand generated net sales of Euro 526.8 million, a 1.5% increase
compared to Euro 519.1 million in 2013 (+1.7% at constant exchange rates).
All of the growth was achieved in the retail channel which recorded a 4% net
sales increase (+4.4% at constant exchange rates). In contrast, the wholesalechannel recorded a double digit drop in net sales, at both actual exchange
rates and constant exchange rates. Except on the Italian market where there
was a significant fall in net sales compared to 2013 and, to a lesser extent,in Europe, the Miu Miu brand enjoyed double digit growth on all othermarkets. As for the Prada brand, the Miu Miu sales trend in terms of productline was wholly in line with the Group trend.
In the twelve months ended January 31, 2015, the Church’s brandcontributed consolidated net sales of Euro 74 million, up by 7.9% from Euro68.6 million the previous year (+4.9% at constant exchange rates). The sales
growth was driven by the DOS which, alone, achieved a 14.8% increase (+12%at constant exchange rates). Meanwhile, the wholesale channel recorded a
3.4% decrease in net sales (-6.8% at constant exchange rates).
The Car Shoe was hit especially hard by the slump in the wholesale channel.
It generated net sales of Euro 11.9 million, a decrease of 11.1% compared toprior year.

Royalties
In the twelve months ended January 31, 2015, licensing agreements
generated royalties income of Euro 38.3 million, 2.2% less than the Euro 39.1
million recorded in 2013. The decrease related entirely to revenues undersome minor licensing agreements that were terminated during the year.
Eyewear royalties performed very well with a 6.3% increase compared to2013.

Operating results
Gross margin – net revenue less cost of goods sold – was Euro 2,550.6 million
for the twelve months ended January 31, 2015, or 71.8% of net sales. The
decrease in gross margin percentage from 73.8% in 2013 was essentially due
to the different product mix and to unfavorable foreign exchange trends.
EBITDA for the year totaled Euro 954.2 million (26.9% of net revenues), down
compared to Euro 1,143.2 million in 2013 (31.9% of net revenues).
Meanwhile, EBIT for the year also decreased to Euro 701.6 million or 19.8% of
net revenues. The decrease was due to the aforementioned reduction ingross margin as well as to the higher incidence of operating expenses
because of ongoing investment in the retail network and initiatives aimed atstrengthening brand identity and the link with the clientele, above all the“Pradasphere” event in London and Hong Kong.
Net financial expenses for the year amounted to Euro 33.8 million. The
increase compared to the Euro 16.3 million recorded in 2013 was due tohigher net interest expenses because of higher average bank borrowing andto higher foreign exchange losses. The effective tax rate was 31.2%, in line28

with the rate of 30.9% recorded in 2013.
The financial year 2014 has ended with net income attributable to the Groupof Euro 450.7 million, or 12.7% of net revenues.

EBITDA by Brand
twelve months ended
January 31, 2015
(amounts in thousandsof Euro)

Group

Prada

Net sales
Royalties

3,513,4
38,2602,895,4
34,868

526,7
3,378

Net revenues

3,551,6

2,930,3

EBITDA

954,24

EBITDA %twelve months ended
January 31, 2014
(amounts in thousandsof Euro)Car Shoe

Other

74,0
14

11,935
-

5,253
-

530,1

74,0

11,935

5,253

922,64

35,13

4,60

(7,295)

(835)

26.9%

31.5%

6.6%

6.2%

-

-

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

31.9%

35.4%

17.1%

6.4%

-

-

EBITDA %Miu Miu Church's

The PRADA brand generated EBITDA of Euro 922.6 million for the twelve
months ended January 31, 2015, 31.5% of net revenues and down by 12.5%
compared to the figure of Euro 1,054.1 million reported in 2013. Grossmargin was affected by a less favorable sales mix in terms of products soldand by the generally negative forex effect during the year. At the level ofoperating expenses, major investment in DOS network expansion eroded
profitability while revenue growth slowed down. In line with the long-term
vision for brand positioning, important communications initiatives wereconfirmed (e.g. the Pradasphere – an exclusive exhibition which explored thePrada Universe at the exceptional locations of Harrods Knightsbridge in
London and Central Ferry Pier 4 in Hong Kong) and the costs partially offset
by measures aimed at containing other expenses.
The Miu Miu brand generated EBITDA of Euro 35.1 million for the twelve
months ended January 31, 2015, 6.6% of net revenues and down by 60.7%
compared to the figure of Euro 89.3 million reported for 2013. For Miu Miu, afall in gross profit, essentially for the same reasons stated above for Prada,
and the operating expenses generated by retail network development hit
operating profits for the year, also considering moderate sales growth andthe relative size of the brand. In 2014, management continued to work on
29

the development of a strong brand identity, opening 19 DOS (net of one
closure), mainly in Asia Pacific, and undertaking communications initiatives(advertising campaigns, special projects and events) considered strategic forthe positioning of the brand.
The Church’s brand ended 2014 with EBITDA of Euro 4.6 million, a 5.4%
increase on the figure of Euro 4.4 million reported for 2013. The commercial
development of the brand, driven by SSSG and new openings, generated
higher net revenues than in prior year but also led to an increase in costs so
the brand was unable to benefit from operating leverage in 2014. Advertisingand communications expenses also increased significantly in 2014 in order tostrengthen the identity of the English brand.
The Car Shoe brand ended 2014 with negative EBITDA of Euro 7.3 million, afurther deterioration on prior year. Retail growth in 2014 did not make up forthe downturn in the wholesale segment.

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
2015(audited)

as atJanuary 31
2014(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
Debt to Equity ratio

2,557,198
346,284
654,545(437,420)
563,409
190,149(411,878)(221,729)(63,695)(85,754)(159,419)
239,349(69,519)
2,829,359(3,000,737)(17,410)(3,018,147)(254,462)
443,250
188,788(2,829,359)
n.a.

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)
n.a.

At January 31, 2015, Net invested capital stood at Euro 2,829.4 million, Euro
423.7 million more than reported at January 31, 2014.

30

At January 31, 2015, non-current assets, excluding deferred tax assets,
amounted to Euro 2,557.2 million, an increase of Euro 331.7 million
compared to January 31, 2014. This increase was mainly due to capex ofEuro 449.7 million for the year and to the restatement of property, plant andequipment and intangible assets expressed in currencies other than the Euro,
increasing their value by around Euro 94 million. Total capex included Euro
260.9 million to expand and renew the retail network, Euro 58.9 million tostrengthen production facilities and Euro 129.9 million relating to thecorporate area, Euro 61.5 million of which related to the aforementioned
purchase of the real estate property in Milan. Intangible assets at January
31, 2015 include assets with an indefinite useful life i.e. goodwill totaling
Euro 513.2 million. As required by “IAS 36 Impairment of Assets”, theseassets were subjected to an impairment test at the reporting date. The
value in use of the CGUs to which the goodwill have been allocated,essentially determined using methods based on discounted future cash flows,
did not reveal any impairment. The results of the impairment tests were
further supported by sensitivity tests.
Net operating working capital increased by Euro 153.6 million compared to
January 31, 2014 to stand at Euro 563.4 million. The increase is due to the
net increase of 54 DOS compared to prior year as well as to a different
replenishment strategy adopted in the last few months of 2014 in order toimprove the retail range. At the reporting date, raw materials and finishedproducts are recorded at estimated realizable amount which is net of
inventory provisions of Euro 64.2 million.
Total other current liabilities, net, increased from Euro 158.5 million at
January 31, 2014 to Euro 221.7 million mainly because of the larger negative
reporting date fair value of derivative instruments used to hedge theexchange risk and because of higher capex payables which, at January 31,
2015, also included Euro 55 million outstanding in relation to the purchase of
the corporate headquarter offices.
Other non-current liabilities, net, totaled Euro 69.5 million and remained
almost unchanged compared to January 31, 2014. The increase in nonmonetary liabilities for deferred lease income and long-term employee
benefits was offset by an increase in deferred tax assets mainly because ofhigher temporary differences between the tax value and consolidated
reported value of finished products.
Group shareholders’ equity amounted to Euro 3,000.7 million at January 31,
2015. During the year, dividends of Euro 281.5 million were distributed to
the PRADA spa shareholders (as approved by the Annual General Meeting on
May 22, 2014 on the financial statements for the year ended January 31,2014). The weakening of the Euro towards the end of the reporting period
led to the restatement of shareholders’ equity expressed in currencies otherthan the Euro thus generating an increase in the translation reserve of Euro
180.4 million.

31

Net financial position surplus/(deficit)
as atJanuary 31
2015(audited)

as atJanuary 31
2014(audited)Long-term debt
Obligations under finance leases – non-current
Long-term financial receivables due from related parties(255,203)
741(207,950)(19)-

Long-term financial payables(254,462)(207,969)

Bank overdraft and short-term loans
Payables to related parties
Receivables from related parties
Obligations under finance leases
Cash and cash equivalents(263,335)(2,371)11(21)
708,966(61,909)(4,130)2,008(524)
568,414

Short-term net financial surplus/(deficit)

443,250

503,859

Net financial position surplus/(deficit)

188,788295,890

Net financial surplus/(deficit), excluding receivables/(payables)with related parties

190,407

298,012

n.a.

n.a.

(amounts in thousands of Euro)NFP/EBITDA ratio

At January 31, 2015, the Group’s net financial position showed a cash surplusof Euro 188.8 million. Operating cash flows for the twelve months then ended
amounted to Euro 483.6 million and were entirely employed, together withpart of the existing cash, to finance capital expenditure and to pay dividends
to the shareholders of PRADA spa (Euro 281.5 million) and to the noncontrolling shareholders of the subsidiaries (Euro 9.4 million). It must be also
noted that, during the year, in order to increase its financial flexibility while
taking advantage of favorable conditions available on the credit market, theGroup arranged a new revolving credit facility of Euro 315 million with a
syndicate of banks and Euro 150 million of the facility was utilized at thereporting date.

32

Significant acquisitions of subsidiaries
Marchesi Angelo srl
On March 14, 2014, the Group acquired 80% of Marchesi Angelo srl, owner ofthe historic Milanese patisserie founded in 1824. The acquisition was
intended to increase the value of the "Pasticceria Marchesi" brand,
synonymous with quality in the Italian culinary industry, bringing it together
with Prada and Miu Miu, leading brands in the luxury goods market, as part ofthe development of the Group all around the world. The net cash-out for theacquisition was Euro 7.7 million i.e. the net difference between theconsideration paid of Euro 8.4 million and the cash surplus of Euro 0.7 million
included in the equity acquired.
fair valueof net assets acquired(amounts in Euro thousand)Cash surplus
Tangible fixed assets
Other current assets/(liabilities)
Other non-current assets/(liabilities)
Net assets acquired

707
88
(53)
(210)
532

Non-controlling interests (measured in proportion to
net assets acquired)(107)

Consideration paid

8,400

Goodwill

7,975

Events after the reporting date
Nothing to report.

OutlookIn the first few months of 2015, the financial markets have reacted positively
to monetary policy stimulus, raising expectations of growth for the real
economy. However, there is still uncertainty on the international luxury
goods market because of local issues on certain markets and the ongoing
volatility of currencies. In this context, the Group is working to contain costsin the short-term and on broader measures that will increase the overall
efficiency of the business in terms of both the supply chain and store
productivity.

33

Corporate governance practices
The Company is committed to maintaining a high standard of corporate
governance practices as part of its commitment to effective corporate
governance. The corporate governance model adopted by the Company
consists of a set of rules and standards aimed toward establishing 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 2014 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 possesses related financial
management expertise to discharge the responsibility of the Audit
Committee. The membership of the Audit Committee consists of three
Independent Non-Executive Directors, namely, Mr. Gian Franco Oliviero
Mattei (Chairman), Mr. Giancarlo Forestieri and Mr. Sing Cheong Liu.
During the year ended January 31, 2015 (the “Reviewed Period”), the Audit
Committee held six meetings (with an attendance rate of 100%) mainly toreview with senior management, the Group’s internal and external auditor
and the board of statutory auditors, the significant internal and external
audit findings and financial matters as required under the Committee’s termsof reference. The Audit Committee’s review covers the audit plans andfindings of internal and external auditors, internal controls, risk assessment,
annual review of the continuing connected transaction of the Group, tax
update and financial reporting matters (including the annual, interim andquarterly results before recommending to the Board for approval).The Audit
Committee held a meeting on March 26, 2015, to review the annual results
for the year ended January 31, 2015.

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, for the entire Reviewed Period.

Directors’ securities transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the required standard set out inthe Model Code for Securities Transactions by Directors of Listed Issuers (the“Model Code”). Specific written acknowledgments have been obtained from34

each Director to confirm his/her compliance with required standard set out
in the Model Code and the Company’s relevant procedures regarding
directors’ security transactions for the duration of the Reviewed Period.
There were no incidents of non-compliance during the Reviewed Period.
The Company has also adopted written procedures governing securities
transactions carried out by the relevant employees who are likely to possess
inside information in relation to the Company and its securities. The terms 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 Tuesday,
May 26, 2015 (the “AGM”).
Notice of the AGM will be published on the Company’s website atwww.pradagroup.com and on the Hong Kong Exchanges and Clearing
Limited’s website at www.hkexnews.hk and dispatched to the shareholdersof the Company in due course.

Final dividend
The Board recommends, for the twelve month period ended January 31,
2015, a final dividend of Euro 281,470,640 (or Euro 11 cents per share).The
payments shall be made:(i)in Euro to the shareholders recorded in the section of theCompany’s shareholders register kept by the Company at its
registered office in Milan (Italy), and(ii)
in Hong Kong dollars to the shareholders recorded in the section of
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 Euro 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’ approval of the payment of the final dividend,such dividend will be payable on or about Monday, June 15, 2015.

35

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

May 20, 2015
4:30 pm (HK time)
From May 21 to 26,
2015 (both days
inclusive)

Book Closure (Note 2)
Record Date

May 26, 2015

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

June 1, 2015
4:30 pm (HK time)Book Closure (Note 2)

From June 2 to 3,
2015

Record Date

June 3, 2015

Expected dispatch date of dividend warrants

June 15, 2015

Notes:
1. All transfers accompanied by the relevant share certificate(s) must be
lodged with:(i)the Company’s Hong Kong share registrar, Computershare Hong
Kong Investor Services Limited whose address is at Shops 171216, 17th Floor, Hopewell Centre, 183 Queen's Road East,
Wanchai, Hong Kong, if the transfer concerns shares registeredin the section of the Company’s shareholders register kept by
the Company’s Hong Kong share registrar itself; or(ii)
the Company’s registered office at Via Antonio Fogazzaro no.
28, Milan 20135, Italy, if the transfer concerns sharesregistered in the section of the Company’s shareholders
register kept by the Company itself.
2. No transfer of shares will be registered on the book closure date.

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 2014 Annual Reportwill be published on the same websites and dispatched to shareholders of theCompany in due course.

By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Chairperson
Milan (Italy), March 27, 2015
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