1st Half Results as of July 31st, 2016
Milan, August 26th, 2016

AgendaPresentation
14:30 – 15:00
Carlo Mazzi – Chairman• Overview

Alessandra Cozzani – Group CFO• H1 2016 Financial Review
Stefano Cantino – Group Strategic Marketing Director• Commercial Update
Carlo Mazzi – Chairman• Outlook
Q&A Session
15:00 – 15:30

1st Half Results as of July 31st, 20161

Overview
New pathway to sustainable growth
Carlo Mazzi
Chairman

1st Half Results as of July 31st, 20162

Overview
Mixed H1 2016
SALES PERFORMANCE STILL IMPACTED BY TOUGH TRADING CONDITIONS• Macro-economic environment remains volatile• Geo-political backdrop reducing tourist flows globally• Rapidly evolving spending patterns and behaviour of international luxury consumers

SUCCESSFUL COST EFFICIENCY PROGRAMME AND ACTION PLAN PROGRESSED• Maintaining satisfactory operating margins: Ebitda at 21%, Ebit at 14%• High level of gross margin maintained thanks to industrial efficiencies• Excellent progress on costs with significant reduction in operating expenses YoY• Strong operating cash flow thanks to more efficient inventory management• Fully self-financed growth• Capex normalised with expansion phase now complete; priority to store refurbishment• Healthy net financial position• Encouraging initial results from e-tailing partnerships

1st Half Results as of July 31st, 2016

3

New pathway to sustainable growth
Adapting to an evolving marketplace
ACTION PLAN UNDERWAY LEVERAGING PRADA’S UNIQUE LUXURY HERITAGE• Boost online sales with roll-out of own e-commerce platform, achieving global coverage andcontinue to strengthen relationships with e-tailers• Improved digital engagement with new generation of consumers• Redefining product offer strengthening all strategic price points, while providing a more intimate andtailored shopping experience• Rolling out new store concept with personalized areas dedicated to specific product categories• Further rationalization of retail network and optimization of spaces within stores• Enhanced operational flexibility and efficiency through a rigorous structural review of costs

2016 is a turning point

1st Half Results as of July 31st, 20164

H1 2016 Financial Review
Alessandra CozzaniGroup CFO

1st Half Results as of July 31st, 20165

H1 2016: at a glance
Mixed performance; cost reduction program taking effect
Condendsed P&L€mH1 2016

H1 2015% yoy

Net Revenues

1,554.2

1,824.4-15% / -13% at fx

Gross Margin

72.2%

72.7%

EBITDA

330.0

440.1

EBITDA Margin

21.2%

24.1%

EBIT

213.7

293.2

EBIT Margin

13.8%

16.1%

Net Income

141.9

188.6

-25%

-27%

-25%

• High level of gross margin maintained thanks to industrial efficiencies• Satisfactory operating margins• EBITDA broadly in line with expectations

1st Half Results as of July 31st, 2016

6H1 2016: at a glance
Strong operating cash flow; healthy net financial position
Condensed Balance Sheet and Cash Flow€m

31 Jul 16

31 Jan 16

31 Jul 15

Non current assets

2,561

2,587

2,615

Net operating working capital

674

665

748

Other current assets / (liabilities), net

1726(82)

Other non current assets / (liabilities), net

(86)

(66)

(42)

Net invested capital

3,167

3,212

3,238

Consolidated shareholders’ equity

2,915

3,097

2,978

Net financial position (surplus)/deficit

252

115

260

Total

3,167

3,212

3,238

Operating cash flow267

368 (*)

63

Capital expenditure108

337 (*)

176(*) FY-12 months• Operating cash flow supported by progress on inventory management• Self-financed capital expenditure• Healthy net financial position, having also distributed the same level of dividends of the previous year
1st Half Results as of July 31st, 2016

7

Net sales by channel and region(€m)
1.801-18%-15%-9%-18%+3%0%-2%

1,801

1.528
1,529

Retail: -16% at constant exchange rate

H1 2015

EuropeAmericaJapanAsia
PacificMiddle
EastWholesale

FxImpact

H1 2016• Retail -18% yoy, and -16% yoy at constant exchange rates:• Conditions remain challenging in Asia Pacific; first signs of improving trends in Mainland China andstabilization in HK and Macau• Europe impacted by tourism decline; resilient local consumption; strong July start in UK; double digit organic
growth in Russia• US market remains tough; 3,513
LatAm however performed very well
• Strengthening of the Japanese Yen weighed on tourism in Japan; but resilience shown by local consumption• Improved performance in Middle East
• Wholesale +1% yoy and +3% yoy at constant exchange rates:• Recent partnerships with leading e-tailers (Net-a-Porter/My Theresa)• Double digit organic growth at Church’s
1st Half Results as of July 31st, 2016

8

Operating performance
Action to reduce costs and stabilize margins
EBIT (€m)
EBIT margin:

16%

12%

14%

210

214

H2 15

H1 16293

H1 15• Strong progress on cost savings delivers stable operating margins half-on-half• Cost reduction (excluding D&A) delivering 600bps positive impact on margin

1st Half Results as of July 31st, 2016

9

Cost reduction
Line-by-line review of operating costs
YoY change: €94m reduction in operating costs (-11%) €30m reduction in D&A

Operating expenses -12% yoy(€m)
1,033

Labour costs reduction in progress Freezing hiring of non-operationally critical staff
and short term incentives

113

908

6985
64
77

99

Systematic rent negotiations
Continuously trimming G&A and indirect costs(eg travel, consultancy, general services)

752
682

Advertising spending for the full year expected to bebroadly in line with last year
- Increasing investments in digitalcommunications and special projects- Reduced investment in traditional media

H1 15Selling

1st Half Results as of July 31st, 2016

Advertising & Promotion

H1 16
Product Development

G&A10

Cash flow and Balance sheet
Proactive inventory management supporting strong operating cash flow
Operating cash flow (€m)

Net inventories (€m)

Cash flow conversion:

As % of sales:

59%

14%

84%

81%

21%

20%

19%

779
693

305274625
267

Net working capitalabsorbing cash

646
591

526

6331
1

H2 14

2

H1 15

3

H2 15

 Strong operating cash flow generation

4

H1 16

21211028178

H1 15

FY 15

H1 16

Raw Materials

Work in Progress

Finished Products Inventory reduction plans making headway
1st Half Results as of July 31st, 2016

Cash conversion calculated as operating cash flow / EBITDA.

11

CapexPriority to shift from openings to refurbishment
Capex (€m)
Capex as %of sales:

10%

9%

7%

176
161
63
99

108
38

Corporate & Industrial
Retail113

H1 156270

H2 15

H1 16

 18 openings and 14 closings in H1-2016
 19 renovations and relocations

 Continuing to invest to enhance logistics and manufacturing efficiency
1st Half Results as of July 31st, 201612

Healthy Net Financial Position (*)
Positive changeNegative change(€m)
116
NFP
Jan-16(115)

NFP
NFP
Jan-16
Jan-16(111)

(113)

(9)
145
Net Income Net Operating
WorkingCapital(282)
D&A

Capex

Dividends

Other

NFP
NFP
Jul-16
Jul-16(246)6 NFP at €246m, improved by €12m compared to July, 31st 2015(*) NFP without related parties
1st Half Results as of July 31st, 201613

Commercial Update
Stefano CantinoGroup Strategic Marketing Director

1st Half Results as of July 31st, 201614

Retail footprint
Optimising the network to enhance sustainable growth• Extremely selective DOS openings only in highly attractive
new markets and detailed performance analysis of margin
dilutive stores, resulting in rationalisation of networks:- around 20 openings & 25 closings over FY 2016 atGroup level• Systematic rent renegotiations, particularly in Asia Pacific• Enhance the shopping experience to meet altered andmore sophisticated customer expectations and improveengagement- New store concepts create unique shopping
moments for all product categories, generating amore intimate and individual shopping experience• Focus remains on service and on surprising and delighting
customers

Initiatives to drive improved SSSG and ROI

1st Half Results as of July 31st, 201615

Wholesale
Strong platform for a progressive growthCompleted rationalisation of wholesale network••

Only maintained best-in-class strategic partners
Focus going forward on building relationships with key
accounts

Extremely successful debut on NET-A-PORTER.COM
and mytheresa.com••

In July 2016, Prada debuted on NET-A-PORTER.COM
and mytheresa.com for womenswear
Prada will launch on MR PORTER.COM for menswear
in September 2016

1st Half Results as of July 31st, 201616

Licensing
Maintaining good growth momentum
Successful fragrance launches••New Miu Miu fragrance very well received
in all geographies
Launched quintessential Prada fragrances
La Femme and L’Homme

Eyewear performing well••

Prada MOD glasses, a flagship partnershipwith Luxottica
Miu Miu Scenique – digital project

1st Half Results as of July 31st, 201617

Emphasizing and growing social media presence
Engaging with millennials and converting followers into customers•

Focused efforts to raise the brand’s profile among the ‘always connected’ millennials through innovativesocial media projects•In China: successfully launched on Sina Weibo in February 2016; WeChat presence expanding rapidly•Achieved further rapid growth across all international social media (see data below)•Working on potential launch of ‘shoppable’ content with selected key items on Instagram

Prada: “The most ‘engaged with’ brand on Instagram during Milan’s Men’s Fashion Week with 206k
interactions on the Sunday, reaching 8.6m followers.”
Source : Blogmeter
Prada followers: Current (increase in H1 2016)

5.7m,+2m
5.7m

729k,729k +39k+2m
1st Half Results as of July 31st, 2016+39k9.3m,
9.3m +1.7m+1.7m

191k,+13k
191k
+13k

87.4k

132k

132k

87.4k
18

E-commerce strategy
Global roll-out plans supported by social media coverage
Roll-out of e-commerce platform in all major markets over next two years• Launch first in China, HK, Singapore• Brazil, ME, Russia, Australia, Korea, Taiwan, Malaysia to follow• Deepening and enlarging product categories
Fully integrate e-commerce within the business• Unique shopping experience between online and offline• Evolution of the operating model to support efficient stock allocation, warehouse management andlogistics• Capture synergies between Marketing, IT and Operations
Development of omni-channel offer to capture
younger generations• Integrate digital offering with physical stores
Further develop partnerships with e-tailers

1st Half Results as of July 31st, 201619

Merchandising strategy
Enriched, tailored to our sophisticated customers
and true to our brand
Building a leather goods offer that covers all strategic
prices ranges, while preserving essence of brand• Novelties well received in all strategic price ranges• Very good response to newly-launched bags in high pricerange• Ongoing new launching in both entry-mid price range

Further offer segmentation providing
a more balanced portfolio
Enrich iconic lines and leverage on our heritage ofinnovation
Increasingly localised product mix• Market and store-driven merchandising policy• Increased price harmonization on new products

1st Half Results as of July 31st, 201620

Outlook
Carlo Mazzi
Chairman

1st Half Results as of July 31st, 201621

Outlook
Pathway to sustainable growth
in a rapidly evolving market
Prada is an iconic brand set to prosper in a
rapidly evolving sector
We have a clear vision for our future and arestrongly positioned in key global markets
Our action plan is underway and starting todeliver benefits
2016 is a turning point: sustainable future
growth in revenues and earnings

1st Half Results as of July 31st, 201622

Q&A SESSIONAPPENDIX

1st Half Results as of July 31st, 201624

Group Profit and Loss – 1st Half€m

July 2016

Net Sales

1.529,398,4%1.801,4

98,7%Royalties

24,9

1,6%

23,1

1,3%

Net Revenues

1.554,2100%

1.824,4

100,0%

COGS(432,2)

27,8%(498,5)27,3%Gross Margin

1.121,972,2%1.325,972,7%

Product Development(64,5)

4,1%(69,3)

3,8%

Advertising & Promotion(76,6)

4,9%(98,5)

5,4%

Selling(682,0)43,9%(752,0)

41,2%

G&A

(85,1)

5,5%(112,9)

6,2%

EBIT

213,7

13,8%

293,2

16,1%

Net Financial Income (Expenses)

(6,2)

0,4%

(7,5)

0,4%

Income Taxes(62,2)

4,0%(94,1)

5,2%

Net Income

145,3

9,3%

191,6

10,5%

Minority Income

3,4

0,2%

3,0

0,2%

Group Net income

141,9

9,1%

188,6

10,3%

D&A

116,3

7,5%

146,8

8,0%

EBITDA

330,0

21,2%

440,1

24,1%

1st Half Results as of July 31st, 2016

July 201525

Net Sales by Channel – 1st Half€mRetailWholesaleTotal

1st Half Results as of July 31st, 2016

July 2015

July 2016% change
as reported% change
constant FX

1,552.4

86%

1,276.6

83%-18%-16%

249.0

14%

252.7

17%

+1%

+3%

1,801.4

100%

1,529.3

100%-15%-13%

26

Net Sales by Geography – 1st Half€mJuly 2015

RetailEurope

541.6

35%

Americas203.8

Far East

July 2016% change
as reported% changeconstant FX

429.5

34%-21%-18%

13%

168.5

13%-17%-15%

557.6

36%

435.0

34%

-22%

-18%

368.4

24%

278,7

22%-24%-21%

Japan (**)

194.2

13%

189.7

15%-2%-9%

Middle East

53.4

3%

52.8

4%

-1%

-Others

1.7-

1.1--38%-23%

Greater China(*)

Total Retail
Total Wholesale
Total

1,552.4

86%

1,276.6

83%

-18%

-16%

249.0

14%

252.7

17%

+1%

+3%

1,801.4

100%

1,529.3

100%

-15%

-13%

Note(*): PRC, HK, Macau
Note(**): Japan and Hawaii

1st Half Results as of July 31st, 201627

Net Sales by Brand – 1st Half
% change
as reported% change
constant FX

81%

-19%

-17%

217.5

17%-16%-14%

2%

25.1

2%-3%

+1%

-5.5

--15%-15%€m

July 2015

Prada

1,262.2

81%

1,028.5

Miu Miu

257.9

17%

Church’s

25.8

Other6.5

Total Retail
Total Wholesale
Total

1st Half Results as of July 31st, 2016

July 2016

1,552.4

86%

1,276.6

83%

-18%

-16%

249.0

14%

252.7

17%

+1%

+3%

1,801.4

100%

1,529.3

100%

-15%

-13%

28

Net Sales by Product – 1st Half€m2015

2016% change
as reported% changesame FX

Leather Goods

997.1

64%

776.8

61%

-22%

-21%

Footwear

272.9

18%

247.6

19%-9%-6%

Ready to Wear

248.9

16%

223.3

18%

-10%

-8%

Others

33.5

2%

28.9

2%

-14%

-11%

1,552.4

86%

1,276.6

83%

-18%

-16%

249.0

14%

252.7

17%

+1%

+3%

1,801.4

100%

1,529.3

100%

-15%

-13%

Total Retail
Total Wholesale
Total

1st Half Results as of July 31st, 201629

Prada – Total Net Sales by Channel – 1st Half
-16% as reported / -14% constant fx

Sales Development – last six months (€m)-17%

+4%-2%

1,461

H1 2015

1,234

RetailWholesale

Fx
ImpactH1 2016

Positive change
Negative change

1st Half Results as of July 31st, 201630

Miu Miu – Total Net Sales by Channel – 1st Half
-15% as reported / -14% constant fx

Sales519Development – last six months (€m)

527

564

294

H1 2015-14%-11%-1%

RetailWholesale

Fx
Impact249

H1 2016

Positive change
Negative change

1st Half Results as of July 31st, 2016

31

EBIT Development
EBIT Development – last six months (€m)

16.1%-0.5%

-2.7%

+0.5%

+0.7%

-0.3%

13.8%

2015

GMSelling

A&P

G&AP&D2016

1st Half Results as of July 31st, 201632

Retail Overview - 622 Dos at July 31st, 2016 (*)
4 Net openings (**)

EUROPE: 171 (+4)
JAPAN: 77 (+3)

NORTH AMERICA& MEXICO: 104 (-2)

ITALY: 53 (-1)
ASIA (EX-JAPAN): 184 (+1)
MIDDLE EAST: 20 (-1)

AFRICA: 2
SOUTH AMERICA: 11(*) including 2 Marchesi shops in Italy(**) comparing to January 31st, 2016
1st Half Results as of July 31st, 201633