Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited
take no responsibility for the contents of this announcement, make no representation as to its
accuracy 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 SIX-MONTH PERIODENDED JUNE 30, 2022-

Prada Group reports net revenues of Euro 1.9 billion, up by 22.5% at constant exchange
rates on the first six months of 2021 and by 22.2% on those of 2019-

Net sales of the retail channel increased by 26.4% against the first six months of 2021
and by 37.7% versus the same period of 2019, at constant exchange rate-

Gross margin at 77.7%, up from 74.3% in 2021 mainly thanks to more profitable salesmix (71.7% in 2019)-

EBIT Adjusted1 (Euro 331 million, 17.4% of net revenues) increased considerably from2021 (Euro 166 million, 11.1%) and 2019 (Euro 150 million, 9.6%)-

Positive net financial position of Euro 179 million, after the payment of Euro 170 million
in dividends

1

EBIT Adjusted excludes Other non-recurring income and expenses that, for the six months ended June 30, 2022, consisted of Euro 26 million
write-down of non-current assets in Russia (nil for the six months ended June 30, 2021 and 2019).

1

The Prada GroupPRADA spa (“Prada” or the “Company”), together with its subsidiaries(collectively the “Group” or the “Prada Group”), is listed on the Hong Kong Stock
Exchange (HKSE code: 1913). The Prada Group is a leading business in theluxury goods industry, where it operates with the Prada, Miu Miu, Church’s and
Car Shoe brands producing and distributing leather goods, footwear andapparel. It also operates in the food industry with Marchesi 1824, in the mostprestigious sailing races with Luna Rossa and in the eyewear and fragrance
industries under licensing agreements.
The Prada Group owns 23 manufacturing plants (20 in Italy, 1 in the United
Kingdom, 1 in France and 1 in Romania) and its products are sold in 70 countries
worldwide, primarily through directly operated stores ("DOS"), of which there
were 627 at June 30, 2022. The Prada Group's products are also sold directly
through the brands' e-commerce activity and indirectly by selected prestigious
department stores, independent retailers in very exclusive locations, andimportant e-tailers.
The Company is a joint-stock company with limited liability, registered anddomiciled in Italy. Its registered ofﬁce is at via Fogazzaro 28, Milan. At June 30,
2022, 79.98% of the share capital was owned by PRADA Holding spa, a company
domiciled in Italy, and the remainder consisted of floating shares on the Main
Board of the Hong Kong Stock Exchange.

Basis of Presentation
The financial information presented herein refers to the group of companies
controlled by the Company, the operating parent company of the Prada Group,
and it is based on the unaudited Consolidated Financial Statements for the sixmonth period ended June 30, 2022.
With the exception of the application of the “IAS 29 - Financial Reporting inHyperinflationary Economies” in the first half of 2022, this report has been
prepared consistently with the accounting standards and policies used toprepare the 2021 Annual Report, since none of the new standards andamendments that became effective during the period had a material impact on
the figures and disclosures provided. Moreover, at the reporting date, there
were no differences between the International Financial Reporting Standards(“IFRS”) approved by the European Union (“EU”) and applicable to the PradaGroup, and those issued by the International Accounting Standard Board(“IASB”).
Application of IAS 29 - Financial Reporting in Hyperinflationary Economies
At June 30, 2022, the Turkish economy was considered to have ahyperinflationary economy according to the definition and criteria set out in “IAS
29 - Financial Reporting in Hyperinflationary Economies”. In fact, inflation in
Turkey has risen exponentially, with a cumulative inflation rate over three years
that exceeds 100%.

2

31 Dec 2020

30 June 2021

31 Dec 2021

30 June 2022

54.2%

53.2%

74.4%

136.4%

Three-year cumulative CPI*

*source: Turkish Statistical InstituteThis condition is one of the indicators stated in IAS 29, which requires, in orderto take into account the loss of the general purchasing power of the functional
currency, the restatement of the non-monetary items of the Statement of
Financial Position and of all the items of the Statement of Profit or Loss byapplying the change in the general price index (in this case the Consumer Price
Index or "CPI") from the date of acquisition and/or transaction to the end of thereporting period.
Monetary items are not restated because they are already presented in terms ofthe measuring unit current at the end of the reporting period. The financial
statement is translated at the closing exchange rate.
The general price index processed from 2009 (Prada Turkey date ofestablishment) until June 30, 2022 is as follows:

The following table reports the main impacts of the restatements of the nonmonetary items at June 30, 2022:(amounts in thousands of Euro)

Opening
restatement using
CPI
at December 31,
2021

Inflation effect ofthe period

June 30, 2022
restatement

Fixed assets

846

280

1,126

Inventories

185

1,156

1,341

Right-of-use assets

4,716

3,782

8,498

Deferred tax liabilities, net(1,322)(138)(1,460)

Other reserves(4,425)(4,619)(9,044)

-

461

461

Net profit / (loss) impact

Amendments to existing standards issued by IASB, endorsed by the European
Union and applicable to the Prada Group from January 1, 2022.
Effective Date forPrada GroupEU endorsement date

IFRS 3 Business Combinations

January 1, 2022

Endorsed in June 2021

IAS 16 Property, Plant and Equipment

January 1, 2022

Endorsed in June 2021

IAS 37 Provisions, Contingent Liabilities andContingent Assets

January 1, 2022

Endorsed in June 2021

Annual Improvements 2018-2020

January 1, 2022

Endorsed in June 2021

Amendments to existing standards

3

Amendments to existing standards issued by the IASB, endorsed by theEuropean Union, but not yet applicable to the Prada Group.
Amendments to existing standards

Effective Date forPrada GroupEU endorsement date

IFRS 17 Insurance contracts

January 1, 2023

Endorsed in November 2021

Amendments to IAS 1 Presentation of Financial
Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies

January 1, 2023

Endorsed in March 2022

Amendments to IAS 8 Accounting policies,
Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates

January 1, 2023

Endorsed in March 2022

New Standards and Amendments issued by the IASB, but not yet endorsed by
the European Union as of June 30, 2022.
Amendments to existing standards
Amendments to IAS 1 Presentation of Financial
Statements: Classification of Liabilities as
Current or Non-current - Deferral of Effective
Date
Amendments to IAS 12 Income taxes: deferred
tax related to assets and liabilities arising from asingle transaction
Amendments to IFRS 17 Insurance contracts:
Initial application of IFRS 17 and IFRS 9 –Comparative information (issued on 9 December
2021)

Date of possible
application

EU endorsement date

January 1, 2023

Not endorsed yet

January 1, 2023

Not endorsed yet

January 1, 2023

Not endorsed yet

Key financial information
Key economic figures(amounts in thousands of Euro)six months
ended
June 30
2022(unaudited)

six months
ended
June 30
2021(unaudited)

six months
ended
June 30
2019(unaudited)

Net Revenues
EBIT Adjusted (*)% incidence of EBIT Adjusted on Net Revenues
EBIT% incidence of EBIT on Net Revenues
Net Income/(Loss) of the Group
Earnings/(Losses) per share (Euro)Net Operating Cash Flow (**)

1,900,942
330,80217.4%
304,802
16.0%
188,2640.074
158,202

1,501,006
165,904
11.1%
165,904
11.1%
97,2430.038
315,601

1,570,123
150,4749.6%
150,474
9.6%
154,894
0.061
137,334(*) non-IFRS measure equal to EBIT less Other non-recurring income and expenses(**) non-IFRS measure equal to Net Cash Flow from operating activities less repayments of lease liability

Key indicators(amounts in thousands of Euro)

June 30
2022(unaudited)

December 31
2021(audited)

June 30
2021(unaudited)

Net Operating working capital
Net Invested capital (right of use Assets included)
Net Financial surplus/(deficit)
Group shareholders’ equity

679,640
5,123,469
179,479
3,226,538

602,038
4,936,402
237,653
3,113,894

622,203
5,113,568(101,814)
2,881,081

4

Highlights of the first six months of 2022
The global macroeconomic landscape remained highly uncertain for the first sixmonths of the year, creating a challenge in how companies implemented theirstrategy over the period. The global economic growth projections of early 2022
were revised downwards as a result of new geopolitical tensions and thecontinued impact of the pandemic. The conflict in Ukraine also increased
inflationary pressures and operational challenges stemming from global supply
chain disruption. Meanwhile, the resurgence of virus cases combined with strict
safety measures in Mainland China depressed consumer spending.
Despite this uncertain backdrop, the luxury goods sector, supported by strong
domestic demand and some recovery of global tourism flows, demonstrated
healthy resilience and provided a number of important development
opportunities.
In line with what it demonstrated in 2021, Prada Group succeeded in remaining
among those companies that best captured recovery in an industry
characterised by constantly evolving consumer trends across brand value,
quality and design excellence. Investments in artisanal know-how, creative
talent, customer centrality and digital made it possible to harness various
growth opportunities.
Prada Group’s observations on societal changes, research in historical archives
and collaborations with new partners have resulted in a range of products thatserves an increasingly connected, young and diverse clientele.
The Prada Triangle Bag, distinguished by the essential, universal Prada logo, isclearly one of the articles most symbolic of the trading performance in the
period. In addition, the Group has strengthened the brand identities throughcollections created through collaboration: Prada with Cassius Hirst, Miu Miu
with New Balance for the reinterpretation of the 574 sneaker, and Church’s with
Off-White for the “Off-WhiteTM c/o Church’s” genderless capsule collection.
In June a new image of the Timecapsule project was unveiled, in which theexclusive limited edition article was distributed for the first time with a nonfungible token (NFT), marking the Group's debut in Web 3.0. To mark theoccasion, Prada also released Prada Crypted, the new Discord server for thebrand’s community.
In the first six months of 2022 the Group's retail net sales experienced strong
double-digit growth against those of the first six months of 2021, which in turn
had already exceeded pre-pandemic levels. The sales increase, underpinned by
optimisation of the production processes as well as enhancement of retail
performance, enabled the Group to increase its operating margins substantially.
The plan to redesign retail space continued with close to 60 renovations,relocations and new openings. Investments in the shopping experience at stores,
which remains the main point of contact in the physical-digital ecosystem where
customer relations are shaped, were made with nearly 90 special pop-in andpop-up store events. Prada Tropico was undoubtedly one of the most successful
pop-up store series. It included colors and atmospheres of distant lands
inspiring an original landscape, reinterpreting Prada’s visual identity with5

contemporary, pop-culture based themes. On the total number of stores, some
Church’s stores closed in order to continue the right-sizing of the network forthe brand. Moreover, in January, the planned roll-out of the client journeybegan in line with a global project that recast the concept of customer centrality
with renewed values based on empathy, warmth, passion and verve.
The Group's ties with the world of culture were revitalised with the reopening to
the public of all the permanents projects at Fondazione Prada in Milan, which
now includes a new area dedicated to study and reading. During the 75th Cannes
Film Festival, Prada presented the third edition of its “The Sound of Prada”
musical program, following the successful Paris and London editions. The
seventh edition of Prada Mode, an itinerant private club dedicated tocontemporary culture, opened in Los Angeles and included leading figures in theworld of art and culture.
The Group’s connections with high-profile sports and the most advanced
frontiers of innovation will be further developed during the campaign around the37th America’s Cup, to be held in Barcelona in 2024. The Group will participate
in the competition through its subsidiary, Luna Rossa Challenge srl.
From a manufacturing stand point, investments in Group’s factories continued
along with the definition of new industrial verticalisation projects, which willsoon be implemented. Important steps were identified also in starting leather
tracing in order to increase supply chain transparency and to lay the foundations
also with a view to reducing CO2 Scope 3 emissions.
To foster the Group’s development, the work force was strengthened both atmanagerial and technical level, especially in the core business areas, while theCompensation & Benefit processes and methods were revised; this, forexample, led to targeted welfare initiatives to help employees deal with theconsiderably higher cost of living. The commitment to diversity, equity andinclusion continued in the first half with the introduction of numerous initiatives,
including the Dorchester Industries Experimental Design Lab, a three-year
program started up by Theaster Gates and the Prada Group to support andpromote talents of color working in various sectors. In addition, through the
Drivers of Change project, the Group has an ambitious plan to raise employees'
awareness about environmental sustainability and social responsibility in the 40
countries where it operates directly.

6

Consolidated statement of Profit or Loss for the six months
closed at June 30, 2022 (includes Non-IFRS Measures)(amounts in thousands of Euro)six
monthsended % on net
June 30 revenues
2022(unaudited)sixmonthsended % on net
June 30 revenues
2021(unaudited)sixmonthsended % on net
June 30 revenues
2019(unaudited)

Net Sales
Royalties
Net Revenues

1,872,418
28,524
1,900,942

98.5%
1.5%
100.0%

1,477,656
23,3501,501,006

98.4%
1.6%
100%

1,546,378
23,745
1,570,123

98.5%
1.5%
100%

Cost of goods sold(423,451)-22.3%(386,021)-25.7%(444,374)-28.3%

Gross margin

1,477,491

77.7%

1,114,985

74.3%

1,125,749

71.7%(68,581)-3.6%(63,736)-4.2%(65,053)-4.1%(155,168)-8.2%(126,892)-8.5%(101,477)-6.5%(795,510)-41.8%(651,139)-43.4%(706,565)-45.0%(127,430)-6.7%(107,314)-7.1%(102,180)-6.5%(1,146,689)-60.3%(949,081)-63.2%(975,275)-62.1%

Recurring Operating income /(loss) – EBIT Adjusted

330,80217.4%

165,904

11.1%

150,474

9.6%

Other non-recurring income
and expense(26,000)

-1.4%

-

-

-

-

Operating income / (loss) – EBIT

304,80216.0%

165,904

11.1%

150,474

9.6%(8,584)-0.5%(9,019)-0.6%(7,749)-0.4%(18,887)-1.0%(18,827)-1.3%(24,735)

-1.6%

119

0.0%

103

-0.0%

2,023

0.1%

(27,352)-1.4%(27,743)-1.9%(30,461)-1.9%

Income/(loss) before taxation

277,450

14.6%

138,1619.2%

120,013

7.7%

Taxation(88,033)-4.6%(41,273)-2.7%

34,4182.2%

Net Income/(Loss) for theperiod189,41710.0%

96,888

6.5%

154,431

9.9%

Net Income/(Loss) - NonControlling interests

1,153

0.1%

(355)

0.0%

(463)

0.0%

Net Income/(Loss) – Group

188,264

9.9%

97,243

6.5%

154,894

9.9%

Product design anddevelopment costs
Advertising andcommunications costs
Selling costs
General and administrative
costs
Total operating expenses

Interest and other financial
income / (expenses), net
Interest expenses on leaseliability
Dividends from investments
Total Financial
income/(expenses)

7

Consolidated statement of financial position(amounts in thousands of Euro)
AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Derivative financial instruments – current
Receivables from, and advance payments to, relatedparties - current
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right of use assets
Investments in equity instruments
Deferred tax assets
Other non-current assets
Derivative financial instruments – non-current
Receivables from, and advance payments to, relatedparties – non-current
Total non-current assets
Total Assets

Note

June 30
2022(unaudited)

December 31
2021(audited)

4
5

784,173
317,861
731,376
5,278

981,786
329,547
662,6541,762

6

24,13722,866

7

216,7122,079,537

171,2202,169,835

8
8
9

1,576,803
829,829
1,975,605
5,909
357,776
138,973510

1,564,853
829,405
1,956,289
5,696
287,462
144,346
-

1,125

1,125

4,886,530
6,966,067

4,789,176
6,959,011

409,547
159,700
3,668
369,597
167,781
43,760187,107
1,341,160

418,215
249,103
8,360
390,163
144,159
29,683
180,048
1,419,731

1,650,121444,667
71,42160,40936,627
117,956426
2,381,627
3,722,787

1,627,197
492,801
73,81959,20129,806
123,0274,786
2,410,637
3,830,368

Share capital
Total other reserves
Translation reserve
Net income / (loss) for the period
Net Equity attributable to owners of the GroupNet Equity attributable to Non-controlling interests
Total Net Equity

255,8822,623,899
158,493
188,264
3,226,538
16,742
3,243,280

255,882
2,496,324
67,434294,254
3,113,894
14,7493,128,643

Total Liabilities and Total Net Equity

6,966,067

6,959,011

Net current assets
Total assets less current liabilities

738,3775,624,907

750,104
5,539,280

Liabilities and Shareholders’ Equity
Current liabilities
Short-term lease liability
Short-term financial payables and bank overdrafts
Payables to related parties - current
Trade payables
Tax payables
Derivative financial instruments - current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term lease liability
Long-term financial payables
Long-term employee benefits
Provision for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments - non-current
Total non-current liabilities
Total Liabilities

10

11
12

13

14

8

Consolidated statement of changes in equity(amounts in thousands of Euro, except number of shares)
EquityOther
Reserves

Total Other
Reserves

Net
incomefor theperiod(3,359)410,047(5,794)(8,151)(25,188)2,262,759

2,633,673(54,139) 2,832,057

-

-

-

-

-

-

(54,139)(54,139)

-

-

-

-

-

-

-

(89,559)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

8,977

-

-

(1,721)

-

-

(7)

-

-

33,189-(3,590)

-

-

-

-

2,558,824

255,882

28,109

-

-

-

-

-

(amounts inthousands of Euro)

Share
CapitalTranslation
Reserve

Balance at December
31, 2020 (audited)

2,558,824

255,882-

Allocation of2020 loss
Dividends
Share capitalincrease/(reduction)
Release for disposalof equity instruments
Acquisition of
additional shares incompanies alreadycontrolled
Comprehensive
income/(loss) for theperiod(recyclable to P&L)
Comprehensive
income/(loss) for theperiod (notrecyclable to P&L)
Balance at June 30,
2021 (unaudited)
Dividends
Release for disposalof equity instruments
Acquisition of
additional shares incompanies alreadycontrolled
Acquisition of Luna
Rossa Challenge srl
Comprehensive
income/(loss) for theperiod(recyclable to P&L)
Comprehensive
income/(loss) for theperiod (notrecyclable to P&L)
Balance at December
31, 2021 (audited)
Allocation of 2021
net result
Dividends
Revaluation IAS 29
Comprehensive
income/(loss)
for the period(recyclable to P&L)
Comprehensive
income/(loss)
for the period (notrecyclable to P&L)
Balance at June 30,
2022 (unaudited)

Net Equity Net Equity
attributabl attributabl
Total Nete to
e to NonEquity
owners of controllingGroupinterests

Fair Value
Share
Cash flow
investments
Actuarialin equity
premium
hedge
Reserve instruments
Reserve
Reserve
Reserve

Number of
Shares(inthousands)

19,663 2,851,720

54,139---(89,559)-(89,559)(1,491)(91,050)

-

-

-

(141)

(141)

411

9,388

-

9,388

-

9,388

-

323

316

-

(1,405)(4,751)(6,156)

(385)

-

-

(3,975)97,243

126,4578

126,465

-

-

4,143

-

4,143

-

4,143

-

4,143

410,047(9,384)(8,543)(12,068)

2,119,795

2,499,847

-

-

-

-

-

-

-

-

-

(183)

(183)

-

-

-

-

4,374

511

4,885

-

4,885

-

4,885

-

1,147

-

-

(59)

-

(323)

(382)

-

765

(65)

700

-

-

-

-

-

-

-

(1,128)(1,128)-(1,128)-(1,128)--38,178-(6,494)385--(6,109)197,011229,080

1,704

230,784

-

-

-

-

-

2,509

(3,298)

-

(789)

-

(789)

5

(784)

2,558,824

255,882

67,434410,047(15,878)(5,708)(10,992)

2,118,855

2,496,324

-

-

-

-

-

-

-

294,254294,254 (294,254)

-

-

-

-

-

-

-

(179,118)
9,044(179,118)
9,044-(179,118)
9,044

-

-

91,059

-

3,668

-

-

-

3,668

188,264

282,991

1,993

284,984

-

-

-

-

-

-

(273)

-

(273)

-

(273)

-

(273)

2,558,824

255,882

158,493410,047(12,210)(5,708)(11,265)

2,243,035

2,623,899

9

97,243 2,881,081

294,254 3,113,894-

188,264 3,226,538

13,288 2,894,369

14,749 3,128,643--- (179,118)
9,044

16,742 3,243,280

Consolidated statement of cash flows for the six months
closed at June 30, 2022
(amounts in thousands of Euro)Six months
ended
June 30
2022(unaudited)

Six months
ended
June 30
2021(unaudited)

Six months
ended
June 30
2019(unaudited)

277,450

138,161

120,013

221,466
8,000

212,805-

229,419-

102,981

Income/(loss) before taxation
Profit or loss adjustments
Depreciation and write-downs of the right of use assets
Impairment of the right of use assets
Depreciation and amortization of property, plant and equipment andintangible assets
Impairment of property, plant and equipment and intangible assets
Non-monetary financial (income) expenses
Interest expenses on lease liability
Other non-monetary (income) expenses
Balance Sheet changes
Other non-current assets and liabilities
Trade receivables, net
Inventories, net
Trade payables
Other current assets and liabilities
Cash flows from operating activities
Interest paid (net), including interest paid on lease liability - third parties
Taxes paid
Net Cash flows from operating activities

99,212

108,561

19,844(13,699)
18,88718,017292
7,539
18,827
3,522

2,169
3,156
24,735
3,492(8,595)16,092(62,917)(24,291)(35,493)537,742(23,572)(139,495)
374,675

11,07023,246
40,711(17,541)
13,973551,817(24,969)(19,974)
506,874(7,414)(13,864)(50,401)
11,563(26,490)404,939(25,032)(15,724)
364,183

Purchases of property, plant and equipment and intangible assets
Disposals of property, plant and equipment and intangible assets
Earn-out paid to a related party
Dividends from investments
Disposals of equity instruments
Acquisition of additional shares from Non-Controlling Interests
Net Cash flow utilized by investing activities(88,597)411(5,000)119(93,067)(76,588)
15103
50,935(7,827)(33,362)(187,231)
860
2,023
(400)
(184,748)

Dividends paid to shareholders of PRADA spa
Dividends paid to Non-Controlling shareholders
Repayment of lease liability
Loans to a related party
Repayment of current portion of long-term borrowings –third parties
Arrangement of long-term borrowings – third parties
Change in short-term borrowings – third parties
Net Cash flows generated / (utilized) by financing activities(169,793)(216,473)(2,200)(84,859)(1,491)(191,273)-(145,536)(310)(226,849)-(136,519)(149,614)(222,580)

4,383(520,602)

90,00013,780(323,457)

100,000
41,425(453,850)

Change in cash and cash equivalents, net of bank overdrafts
Foreign exchange differences
Opening cash and cash equivalents, net of bank overdraft
Closing Cash and cash equivalents, net of bank overdraft(238,994)
40,878
981,786
783,670

150,055
12,221
442,392
604,668(274,415)
2,094
599,821327,500

Cash and cash equivalents, net of bank overdraft
Bank overdraft
Closing Cash and cash equivalents, net of bank overdraft

784,173(503)
783,670

604,668
604,668

327,500
327,500

10

Consolidated statement of comprehensive income for thesix months closed at June 30, 2022
(amounts in thousands of Euro)six
monthsendedJune 30
2022(unaudited)

twelvemonthsended
Dec. 312021(audited)sixmonthsendedJune 30
2021(unaudited)

Net income/(loss) for the period

189,417295,103

96,888Change in Translation reserve
Tax impact
Change in Translation reserve less tax impact

91,89991,89972,23072,23033,55233,552

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

4,756(1,088)
3,668(14,331)
4,247(10,084)(5,359)1,769(3,590)

(273)
-

845
-

4,143
-

(273)

845

4,143

Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact

-

4,248
(1,734)
2,514

(385)
(385)

Comprehensive Income/(Loss) for the period

284,711

360,608

130,608

Comprehensive Income/(Loss) for the period –Non-controlling Interests

1,993

1,717

8

282,718

358,891

130,600

A)

B)

Items recyclable to P&L:

Item not recyclable to P&L:

Change in Fair Value in equity instruments reserve
Tax impact
Change in Fair Value in equity instruments reserve less tax
impactComprehensive Income/(Loss) for the period – Group11

Non-IFRS Measures
The Group uses certain financial measures (“non-IFRS measures”) to assess its
business performance and to help readers understand and analyze its financial
situation. Although they are used by the Group's management, the measures are
not universally or legally defined and are not regulated by the IFRS adopted toprepare the consolidated financial statements. Other companies operating in
the luxury goods business might use the same measures, but with different
calculation criteria, so non-IFRS measures should always be read in conjunction
with the related explanatory notes, and they may not be directly comparablewith those used by other companies.
Within the scope the Prada Group’s activities, which consist of the managementand development of the brands owned, some transactions may be qualified as
non-recurring when their nature, amount or frequency requires separate
disclosure in order to offer the reader a better understanding of the Group’s
operating result. For this purpose, in 2022 the Group introduced the use of a
new non-IFRS measure, “other non-recurring income and expenses”, to identify
the non-recurring transactions as defined above. Consequently, the difference
between the “operating result” (or “EBIT”) and the “other non-recurring income
and expenses” is defined as the “recurring operating result” (or “EBIT Adjusted”)
and represents the metric with which the Prada Group intends to measure theresults of the operating activities. This measure, adopted with consistency andstability over time, enables maintaining continuity in understanding the businessperformance. Therefore, impairment and write-downs of non-current assets,
restructuring costs, litigation costs and gains or losses on disposals of fixed
assets might be excluded from the recurring operating result (or EBIT adjusted)according to their nature, amount and frequency.
For the six months ended June 30, 2022, the other non-recurring income andexpenses include a write-down of Euro 26 million of tangible fixed assets andright-of-use assets as a result of the extraordinary market conditions in Russia.
The reconciliation of Prada Group’s EBIT adjusted and EBIT with the nearest
IFRS measure (Net Income/ (Loss) for the period) are reported below:(amounts in thousands of Euro)

six
six
six
monthsmonthsmonthsended % on net
ended % on net
ended % on net
June 30 revenues
June 30 revenues
June 30 revenues
2022
2021
2019
(unaudited)(unaudited)(unaudited)

Net Income / (Loss) for the period

189,41710.0%

96,888

6.5%

154,431

9.9%

Taxation

88,033

4.6%

41,273

2.7%(34,418)-2.2%

Total Financial income/(expenses)

27,352

1.4%

27,7431.9%

30,461

1.9%

Operating Income / (Loss) - EBIT

304,80216.0%

165,904

11.1%

150,474

9.6%

Other non-recurring income
and expenses

26,000

1.4%

-

-

-

-

Recurring Operating Income /(Loss) – EBIT Adjusted

330,80217.4%

165,904

11.1%

150,4749.6%

12Notes to the consolidated results for the period closed atJune 30, 2022
1. Analysis of Net Revenues(amounts in thousands of Euro)six months ended
June 30, 2022
(unaudited)

six months ended
June 30, 2021
(unaudited)

six months ended
June 30 2019
(unaudited)

Net Sales by geographical area
EuropeAsia Pacific
AmericasJapan
Middle East and Other countries
Total Net Sales

590,386
620,099
408,791
169,438
83,704
1,872,418

31.5%
372,70733.1%
644,71621.8%
262,7389.1%
135,905
4.5%
61,590100% 1,477,656

25.2%
598,800
43.6%
498,57817.8%
215,676
9.2%
180,556
4.2%
52,768
100% 1,546,378

38.7%
32.2%
14.0%
11.7%
3.4%
100%

Net Sales by brand
Prada
Miu Miu
Church's
Other
Total Net Sales

1,625,887
216,378
19,546
10,607
1,872,418

86.8% 1,264,829
11.6%
190,9381.0%
15,7520.6%
6,137
100% 1,477,656

85.6% 1,284,429
12.9%
220,774
1.1%
32,8440.4%
8,331
100% 1,546,378

83.1%
14.3%
2.1%
0.5%
100%

Net Sales by product line
Leather goods
Clothing
Footwear
Other
Total Net Sales

928,102497,434
405,604
41,2781,872,418

49.6%
793,64726.6%
372,07421.7%
290,229
2.2%
21,706
100% 1,477,656

53.7%
867,852
25.2%
339,44219.6%
309,393
1.5%
29,691
100% 1,546,378

56.1%
22.0%
20.0%
1.9%
100%

1,677,950

89.6% 1,281,439

86.7% 1,231,918

79.7%

10.4%

13.3%

314,460

20.3%

Net Sales by channel
Net Sales of Directly Operated Stores(DOS)
Sales to independent customers andfranchisees
Total Net Sales
Net Revenues
Net Sales
Royalties
Total Net Revenues

194,468

196,217

1,872,418

100% 1,477,656

100% 1,546,378

100%

1,872,418
28,524
1,900,942

98.5% 1,477,656
1.5%
23,350100% 1,501,006

98.4% 1,546,378
1.6%
23,745
100% 1,570,123

98.5%
1.5%
100%

13

2. Number of stores
June 30, 2022
Owned
Franchises

December 31, 2021
Owned
Franchises

June 30, 2021
Owned
Franchises

Prada
Miu Miu
Church’s
Car Shoe
Marchesi 1824
and others

421
146
52
2

22
5
-

420
146
61
2

21
5
-

415
148
62
2

20
5
-

6

-

6

-

6

-

Total

627

27

635

26

633

25

June 30, 2022
Owned
Franchises

December 31, 2021
Owned
Franchises

June 30, 2021
Owned
Franchises

EuropeAmericas
Asia PacificJapan
Middle East

219
105
195
86
22

22
5

228
105
193
88
21

21
5

225
106
193
88
21

20
5

Total

627

27

635

26

633

25

3. Earnings per share and dividends, basic and diluted
Earnings per share
Earnings (losses) per share are calculated by dividing the net profit (or net loss)of the period attributable to the Group’s shareholders by the weighted average
number of ordinary shares outstanding.

Group net income/(loss) in Euro
Weighted average number of ordinary shares in issue
Basic and Diluted earnings (losses) per share in Euro, calculated
on weighted average number of shares

six months
ended
June 30
2022(unaudited)

six months
ended
June 30
2021(unaudited)

188,264,166
2,558,824,000

97,243,973
2,558,824,000

0.074

0.038

Dividends paid
During the six-month period ended June 30, 2022, the Company distributed
dividends of Euro 179,117,680, as approved at the General Meeting held on
April 28, 2022 for the approval of the financial statements for the year ended
December 31, 2021.
The dividends net of withholding taxes (Euro 169.8 million) were paid during theperiod under review, whereas the withholding tax (Euro 9.3 million), calculated
by applying the ordinary Italian tax rate to the entire amount of the dividends
14distributed to the beneficial owners of the Company’s shares held through theHong Kong Central Clearing and Settlement System, was paid in July 2022.

4. Trade receivables, net
June 30
2022(unaudited)

December 31
2021(audited)

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

328,105(11,696)
1,452

338,931(10,990)
1,606

Total

317,861

329,547(amounts in thousands of Euro)The change in the Allowance for doubtful debts is detailed below:(amounts in thousands of Euro)

Opening balance

June 30
2022(unaudited)

December 31
2021(audited)

10,99011,979

343
444
(24)
(57)

546
581
(1,129)(987)

11,696

10,990Exchange differences
Increases
Reversals
Utilization
Closing balance

An aging analysis of the Trade receivables, before the Allowance for doubtful
debts, is shown below:(amounts in thousandsof Euro)June 30
Not
2022
overdue(unaudited)

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

Trade receivables

329,557 222,093

29,087

11,805

11,942

13,28841,342

Total
June 30, 2022

329,557 222,093

29,087

11,805

11,942

13,28841,342(amounts in thousandsof Euro)Dec. 312021(audited)

Overdue (days)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

Trade receivables

340,537 284,762

11,103

15,126

4,187

3,759

21,600Total
December 31, 2021

340,537 284,762

11,103

15,126

4,187

3,759

21,60015

An aging analysis of the Trade receivables, net of the Allowance for doubtful
debts, is shown below:(amounts in thousandsof Euro)June 30
Not
2022
overdue(unaudited)

Trade receivables lessallowance for doubtful
accounts
Total
June 30, 2022

Overdue (days)
1 ≤ 3031 ≤ 60 61 ≤ 90

91 ≤ 120> 120

317,861 220,421

29,043

11,793 11,913

13,26031,431

317,861 220,421

29,043

11,793 11,913

13,26031,431(amounts in thousandsof Euro)Dec. 312021(audited)

Not
overdue

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

Trade receivables lessallowance for doubtful
accounts

329,547

283,363

10,96815,045

4,146

3,751

12,274

Total
December 31, 2021

329,547

283,363

10,96815,045

4,146

3,751

12,274The increase of some Euro 19 million in the amount overdue by more than 120
days related to the slowdown of activities in Mainland China following the surgeof Covid-19 cases in the six months under review. A significant part of thereceivable overdue has been collected at the date of approval of these Interim
Condensed Consolidated Financial Statements and the management do not
expect any loss on the remainder.

5. Inventories, net
June 30
2022(unaudited)

December 31
2021(audited)

Raw materials
Work in progress
Finished products
Return assets
Allowance for obsolete, slow-moving inventories
and return assets
Revaluation IAS 29

101,572
34,429657,136
6,342

99,83729,938585,547
7,246(69,444)(59,914)

1,341

-

Total

731,376

662,654(amounts in thousands of Euro)

16

The changes in the Allowance for obsolete, slow-moving inventories and returnassets are as follows:Rawmaterials

Finishedproducts andreturn assets

Total
allowance forobsolete, slowmoving
inventories
and return assets

Opening balance

30,73529,17959,914

Exchange differences
Increases
Utilization

(3)
7,200
-

189
2,172
(28)

186
9,372
(28)

Closing balance

37,93231,512

69,444(amounts in thousands of Euro)

6. Receivables from, and advance payments to, related parties current(amounts in thousands of Euro)

June 30
2022(unaudited)

December 31
2021(audited)

Short-term loans
Other receivables and advances

2,211
21,92622,866

Total

24,13722,866

June 30
2022(unaudited)

December 31
2021(audited)

VAT
Income taxation and other tax receivables
Other assets
Prepayments
Deposits

45,69862,342
8,371
90,844
9,457

31,121
56,864
11,93763,068
8,230

Total

216,712

171,220

7. Other current assets(amounts in thousands of Euro)17

8. Capital expenditure
The changes in the Net carrying amount of property, plant and equipment forthe period ended June 30, 2022 are shown below:
Production Leasehold
AssetsFurniture
Other
plant and improveunder& fittings tangibles
machineryments
construction

Total net
carrying
amount(amounts inthousands of Euro)Land andbuildings

Opening balance(audited)

830,284

56,709290,156 268,920

67,75751,027 1,564,853

Additions
Depreciation
Disposals
Exchange differences
Other movements
Impairment
Revaluation IAS 29

665(9,639)(8)21,4271,024(18,000)-

3,750(5,963)
(13)
(41)
1,075
(15)
-

20,553
13,511(40,500) (19,077)
(106)
(196)
7,993
5,352
8,931
1,674
(1,172)
(328)
962
289

5,235
(7,840)
1
185
106
(9)
123

32,343(58)
2,884(12,848)(320)-

Closing balance(unaudited)

825,753

55,502286,817 270,145

65,55873,028 1,576,803

76,057(83,019)(380)
37,800(38)(19,844)
1,374

The changes in the Net carrying amount of intangible assets for the period ended
June 30, 2022 are shown below:(amounts inthousands of Euro)

Trademarks
and other
AssetsStore Lease
Other
intellectual Goodwill
Softwarein
Acquisitions
intangibles
property
progressrightsOpening balance(audited)

217,230 513,486

469

Additions
Amortization
Disposals
Exchange differences
Other movements
Revaluation IAS 29

960(5,779)(744)-

Closing balance(unaudited)

211,667 513,486-

79,474

13,936

829,40541,465(172) (12,436)
(31)
1
26
(8) 11,849
4

2 18,708(1,575)- (11,850)-

21,139(19,962)
(31)
(717)
(9)
4

294

3,237

829,82980,351

4,810

Total net
carrying
amount20,794

Impairment test
As required by IAS 36, "Impairment of Assets,” intangible assets with indefinite
useful lives are not amortized, but they are tested for impairment at least once
per year. The Group does not report any intangible assets with indeﬁnite useful
lives apart from goodwill. At June 30, 2022, goodwill amounted to Euro 513.5
million, as detailed by cash generating unit ("CGU") hereunder:18

June 30
2022
(unaudited)

December 31
2021(audited)

Italy Wholesale
Asia Pacific and Japan Retail
Italy Retail and Pasticceria Marchesi 1824
Germany and Austria Retail
United Kingdom Retail
Spain RetailFrance and Montecarlo RetailNorth America Retail and Wholesale
Production Division

78,355
311,936
33,825
5,064
9,300
1,400
11,70048,00013,90678,355
311,936
33,825
5,064
9,300
1,400
11,70048,00013,906

Total Goodwill

513,486

513,486(amounts in thousands of Euro)IAS 36 requires an entity to assess at each reporting date whether there areindications of impairment losses for any other non-current asset recognised in
the Statement of Financial Position. In light of the extraordinary market
conditions in Russia, the Prada Russia CGU was tested for impairment at June30, 2022.
The method used to identify the recoverable amount (value in use) of the CGU
consisted of discounting the projected cash flows (Discounted Cash Flow)generated by the net invested capital in Russia. Value in use was calculated as
the sum of the present value of future cash flows expected from the businessplan projections and the present value of the related operating activities at theend of the period (terminal value).
A multi-scenario approach was used for the test, based on three hypotheticalcases that were assigned likelihood of occurrence calibrated according to theassumptions made by the Directors. The three scenarios range from therecovery of business in the medium term to the impossibility of returning tonormal market conditions.
The business plans used for the impairment tests covered an explicit period up
to five years, depending on the considered scenario. The rate used to discountthe cash flows was the weighted average cost of capital (WACC). For the period
ended June 30, 2022, the WACC used to discount the cash flows generated by
the Russia CGU was 20.6% and it was determined taking into due consideration
the risk profile of the CGU itself. The “g” rate of growth used to calculate theterminal value was 6.9%, in light of the inflation and GDP growth outlooks in themarket.
The results of the impairment test led Directors to write down the assets of the
CGU by Euro 26 million: Euro 18 million of the writedown was allocated toreduce the value of the properties owned in Moscow and St. Petersburg, and theremaining Euro 8 million to reduce the value of the right-of-use assets referring
to leases. The impairment loss of the properties owned was supported by anappraisal conducted by a leading independent firm of the sector.
The net invested capital of the CGU following the writedown was Euro 96 million(translated at the June 30, 2022 exchange rate).

19However, since values in use and fair values are measured on the basis ofestimates and assumptions, management cannot guarantee that the value of
goodwill or other tangible or intangible assets will not be subject to impairment
losses in the future.

9. Right of Use assets
The changes in the Net carrying amount of the right of use assets for the period
ended June 30, 2022 are shown below:(amounts in thousands of Euro)

Real Estate

Other

Total net
carrying amountOpening balance (audited)

1,952,834

3,455

1,956,289

New contracts, initial direct costs
and remeasurements
Depreciation
Contracts termination
Impairment
Exchange differences
Revaluation IAS 29

206,6311,060

207,691(220,486)(142)(8,000)31,900
9,340

(980)
(15)
8
-

(221,466)(157)(8,000)31,908
9,340

Closing balance (unaudited)

1,972,077

3,528

1,975,605

The increase in "new contracts, initial direct costs and remeasurements" wasattributable to lease renewals (largely in America and Europe) and theremeasurement of lease liabilities to adjust to the indexes typically used in thereal estate industry (mainly the consumer price index). The writedowns refer tothe aforementioned impairment loss resulting from the impairment test on
Russia.
The foreign exchange differences for the period affected the change in the rightof-use assets, as a result of the depreciation of the Euro against the maincurrencies of the countries in which the Group operates.
The caption "other" of Euro 3.5 million include plant, machinery, vehicles andhardware.

10. Other non-current assets
June 30
2022(unaudited)

December 31
2021(audited)

Guarantee deposits
Deferred rental income
Pension fund surplus
Prepayments for commercial agreements
Other long-term assets

59,698450
13,031
52,167
13,627

61,842383
13,30954,253
14,559Total

138,973

144,346(amounts in thousands of Euro)

20

The guarantee deposits refer primarily to security deposits paid under retailleases.

11. Payables to related parties - current
June 30
2022(unaudited)

December 31
2021(audited)

Financial payables
Other payables

3,663
5

3,360
5,000

Total

3,668

8,360

(amounts in thousands of Euro)

June 30
2022(unaudited)

December 31
2021(audited)

Trade payables – third parties
Trade payables – related parties

366,119
3,478

382,208
7,955

Total

369,597

390,163(amounts in thousands of Euro)

12. Trade payables

An aging analysis of the Trade payables at the reporting date is shown below:
June 30
2022(unaudited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

Trade payables

369,597

310,051

15,134

7,993

7,520

7,053

21,846

Total
June 30, 2022

369,597

310,051

15,134

7,993

7,520

7,053

21,846(amounts inthousands of Euro)

Dec. 312021(audited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

Trade payables

390,163348,256

14,226

5,854

3,450

2,580

15,797

Total
December 31, 2021

390,163348,256

14,226

5,854

3,450

2,580

15,797(amounts inthousands of Euro)

Overdue (days)

Overdue (days)

21

13. Other current liabilities
June 30
2022(unaudited)

December 31
2021(audited)

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

48,15625,952112,999

43,57530,308106,165

Total

187,107180,048(amounts in thousands of Euro)

14. Provisions for risks and charges
The changes in the Provisions for risks and charges are as follows:(amounts in thousands of Euro)

Opening balance (audited)
Exchange differences
Reversals
Utilized
Increases
Closing balance (unaudited)

Provision
for legal
disputes

Provision fortax disputes

Other
Provisions

Total

10,8992,306

45,99659,201

(21)
(14)
-

118
(35)
15

1,617
(97)
(1,027)
652

1,714
(97)
(1,076)667

10,8642,404

47,14160,409The provisions for risks and charges represent the Directors' best estimate of
the outflow that will be necessary to settle Group’s present obligations. In the
Directors' opinion, based on the information available to them, the total amountallocated for risks and charges at the reporting date is adequate in respect of
the liabilities that could arise from them.
The other risk provisions amount to Euro 47.1 million at June 30, 2022 and referprimarily to contractual obligations to restore leased commercial properties totheir original condition.
The provisions for legal disputes regard primarily the lawsuit filed by Chora S.r.l.
in January 2022 against PRADA spa, and no significant events or changes incircumstances occurred in the period that could require an adjustment to theamount allocated for them at December 31, 2021.
No significant events or changes in circumstances occurred that could require
an adjustment to the provisions allocated at December 31, 2021 for tax disputes
either.

22

Management Discussion and Analysis for the six months
ended June 30, 2022
During the reporting period, the Prada Group generated net revenues of Euro
1,900.9 million, up by 22.5% at constant exchange rates from those of the firstsix months of 2021 and by 22.2% from the same period of 2019. At current
exchange rates, the 2021 performance was boosted by an additional 4.2%, to26.6% growth.

Distribution channels
In the first six months of 2022, sales of the retail channel had double-digit
growth of 26.4% at constant exchange rates against the same period of 2021;
the increase was 37.7% versus the same period of 2019.
Direct e-commerce sales (included in the above results) in the first half rose by
29.1% versus the same period of 2021 and accounted for approximately 7% of
total retail sales, which is in line with the annual 2021 data.
There were 627 stores at June 30, 2022, following 7 openings and 15 closuresin the period, 9 of which related to the Church's brand.
Sales in the wholesale channel slightly declined by 3% compared to the first six
months of 2021 in line with the high-control strategy of the Group.

Markets
In Asia Pacific, the retail sales of the six months ended June 30, 2022 decreased
by 6.7% at constant exchange rates from those of the same period of 2021, due
to the decline in China ensuing from the restrictions imposed by the authorities
following Covid-19 outbreaks. The situation improved in June 2022 when the
restrictions were relaxed, and the decline was offset by double-digit growth inall the other countries in the region (Korea and Southeast Asia in particular).
Compared with the first six months of 2019, Asian Pacific sales increased by
26.1%.
Retail sales in Europe, driven by domestic consumption and the tourism
recovery in the second quarter of the period, showed an upsurge of 88.7% atconstant exchange rates against those of the first six months of 2021, and of
34.4% against the same period of 2019.
The retail sales of the American market rose by 41.1% at constant exchange
rates from those of 2021, staying on the positive trend of double-digit growthunderway in 2021. Compared with the first six months of 2019, the sales had
triple-digit growth. All the countries in the region reported sales gains.
The retail sales of the Japanese market rose by 28.2% at constant exchange
rates compared with the same period of 2021, which was still suffering frompersisting restrictions; the growth accelerated further in the second quarter. Set
against the first six months of 2019, the Japanese market showed a slightdecline of 2.9%.

23

At constant exchange rates, retail sales in the Middle East were 24% higher thanin the first six months of 2021 and 59.4% above those of the same period of
2019, continuing on 2021’s growth trend there as well.

Products
The Group posted retail growth across all product categories against the first six
months of 2021.
Sales of RTW rose by 32.1% from those of 2021, and footwear sales, up by
38.5%, performed even better thanks to lifestyle products and new collections.
Sales of leather goods, assisted by both novel and iconic products, rose by
18.1% over those of 2021. The increases compared with 2019 were: 64.8% for
RTW, 46.3% for footwear and 23.9% for leather goods.

BrandsThe Prada brand retail net sales were 28.1% higher than in the first six monthsof 2021 and 45.5% above those of the same period of 2019. Miu Miu's sales
increased by 13.6% from the first half of 2021 and by 5.3% from that of 2019.
The Prada brand benefited from important growth involving all the productcategories, based on an extensive, diversified clientele. Miu Miu finds itself in arelaunch phase, with solid growth rates in the first six months of 2022. Church’s,
the brand most affected by the geographical exposure to Europe, reported again of 28.7% on the 2021 sales.

Royalties
Royalty income, supported by the growth in the eyewear segment, rose by
22.2% versus the first six months of 2021.

Operating results
The gross margin for the six months ended June 30, 2022 corresponded to77.7% of the net revenues, up substantially from the 74.3% of 2021. A higher
average price, greater absorption of production overheads, a better sales mix interms of distribution channels and a favorable exchange rate were behind theimprovement despite cost inflation, for example in logistics costs. The increaseis even more significant when comparing the 2022 margin with that of the firsthalf of 2019 (71.7%).
Total operating expenses were Euro 1,146.7 million, up by Euro 197.6 million
from those of 2021. The increase is attributable, among other factors, to higher
variable costs ensuing from the sales increase, reduced benefits in terms of therent discounts and subsidies available in 2021, and greater communication
activities. The Euro 171.4 million increase compared to the 2019 data wasaffected by much higher communication expenses, particularly in the digitalareas.
The recurring operating result for the period, or EBIT Adjusted, was Euro 331
million (17.4% of net revenues), whereas in 2021 it was Euro 165.9 million(11.1%). The EBIT Adjusted was also considerably higher than that of the first24

half of 2019 (Euro 150.5 million, 9.6% of net revenues).

Financial expenses and income taxes
Net financial expenses, equal to Euro 27.4 million, were in line with thecomparative period: in 2022, the lower net interest expense resulting from theimprovement in the net financial position was offset by higher exchange rate
losses following the discontinuation of financial derivatives to hedge the Ruble
exchange rate risk against the Euro.
The income tax charge for the period was Euro 88 million, corresponding to
31.7% of the pre-tax profit.

Net invested capital
The following table reclassiﬁes the Statement of financial position to provide a
better understanding of the composition of the Net Invested capital:
June 30
2022(unaudited)

December 31
2021(audited)

Right of use assets
Non-current assets (excluding deferred tax assets), net
Trade receivables, net
Inventories, net

1,975,605
2,499,857

1,956,289
2,490,047
329,547
662,654

Trade payables(369,597)
679,640(amounts in thousands of Euro)

317,861
731,376(390,163)

Net Operating working capital
Other current assets (excluding items of financial position)
Other current liabilities (excluding items of financial position)
Other current assets/(liabilities), net
Provision for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation assets/ (liabilities), net
Other non-current assets/(liabilities), net
Net Invested capital(60,409)(71,421)(66,216)
321,149
123,103
5,123,469

602,038
186,866(349,915)(163,049)(59,201)(73,819)(73,559)
257,656
51,077
4,936,402

Shareholder's equity – Group
Shareholder's equity – Non-controlling interests
Total Consolidated shareholders' equity
Long-term financial payables, net
Short-term financial, net surplus/(deficit)
Net Financial surplus / (deficit)
Net Financial deficit to Consolidated shareholders' equity ratio(3,226,538)(16,742)(3,243,280)(443,542)
623,021
179,479-5,5%(3,113,894)(14,749)(3,128,643)(491,676)
729,329
237,653-7.6%

Long-term lease liability
Short-term lease liability
Total Lease liability
Net Financial surplus / (deficit), including lease liability
Shareholders’ equity and Net Financial surplus / (deficit),
including lease liability(1,650,121)(409,547)(2,059,668)(1,880,189)(1,627,197)(418,215)(2,045,412)(1,807,759)(5,123,469)(4,936,402)

25

234,941(389,677)(154,736)

The Net Invested capital at June 30, 2022 is Euro 5,123 million, financed byequity of Euro 3,243 million and lease liabilities of Euro 2,060 million; the endof-period net financial position is a positive Euro 179.5 million.
The Right-of-use assets increased by Euro 19.3 million as a result of increases
for new leases and remeasurements of existing leases totaling Euro 207.7
million, revaluations of Euro 31.9 million from foreign exchange differences aswell as the adoption of IAS 29 in Turkey for Euro 9.3 million, net of thedepreciation and writedowns for the period amounting to Euro 229.5 million.
The Non-current assets, net increased by Euro 10 million (Euro 2,500 million atJune 30, 2022 versus Euro 2,490 million at December 31, 2021) due insubstance to the increase in Non-current assets. The capital expenditures forthe period amounted to Euro 97.2 million, against depreciation, amortizationand impairment losses of Euro 122.8 million, including the Euro 18 million
writedown of the assets in Russia following the extraordinary condition of themarket. The increase in this item was affected by revaluations for foreignexchange differences of Euro 37.1 million, due to a weaker Euro against themain currencies in which the Group's assets are denominated.
The Capital expenditures regarded primarily restyling and relocation projects,
investments in manufacturing structures, and technological and digital evolution
in all the business areas.
six months
ended
June 30
2022(unaudited)

six months
ended
June 30
2021(unaudited)

RetailReal estate
Production, Logistics and Corporate

62,05135,14541,59919,587
13,624

Total

97,19674,810(amounts in thousands of Euro)The Net Operating working capital at June 30, 2022 is Euro 680 million, up by
Euro 78 million compared with 2021. The increase was attributable largely tothe inventory increase supporting the sales growth.
Other current liabilities, net amount to Euro 155 million at June 30, 2022.
Other non-current assets, net present a Euro 72 million increase versus thecomparative period, attributable primarily to the increase in deferred tax assets
regarding greater temporary differences on the inventory tax bases.

26

Net financial position
The following table provides details of the Group’s Net Financial position:(amounts in thousands of Euro)

June 30
2022(unaudited)

December 31
2021(audited)

Bank borrowing – non-current(444,667)(492,801)

Financial payables and bank overdrafts - current
Financial payables to related parties - current
Total Financial payables – current(159,700)(3,663)(163,363)(249,103)(3,360)(252,463)

Total Financial payables(608,030)(745,264)

Cash and cash equivalents
Financial receivables from related parties - non-current
Financial receivables from related parties - current

784,173
1,125
2,211

981,786
1,125
6

Total Cash and cash equivalents and Financial receivables

787,509

982,917

Net Financial surplus / (deficit)

179,479

237,653

The Net Operating cash flow for the six-month period, after lease payments(Euro 216.5 million), was cash generation of Euro 158.2 million. At period end,
after the cash outflows for investing activities (Euro 93.1 million) and those forthe dividends payments (Euro 169.8 million), and net of the foreign exchange
revaluation of banks accounts denominated in currencies other than Euro, thenet financial surplus amounts to Euro 179.5 million.
June 30
2022(unaudited)(amounts in thousands of Euro)

June 30
June 30
2021
2019(unaudited) (unaudited)

Cash Flow from operating activities

537,742551,817404,939

Cost of net financial debt: interest paid
Lease liability: interest paid
Tax paid(4,685)(18,887)(139,495)(6,142)(18,827)(19,974)(452)(24,580)(15,724)

Net Cash Flow from operating activities

374,675

506,874

364,183

Repayment of lease liability(216,473)(191,273)(226,849)

Net Operating Cash Flow

158,202

315,601

137,334

Net cash flow utilized by investing activities(93,067)(33,362)(184,748)

Free Cash Flow

65,135282,239(47,414)

27

The total amount of undrawn lines of credit as at June 30, 2022 is Euro 752
million, consisting of Euro 400 million of committed lines and Euro 352 millionof uncommitted lines.
The loan covenants were fully complied with at June 30, 2022.
The following table sets forth the Lease Liability:(amounts in thousands of Euro)

June 30
2022(unaudited)

December 31
2021(audited)

Short-term lease liability
Long-term lease liability

409,547
1,650,121

418,215
1,627,197

Total

2,059,668

2,045,412

The lease liability increased by Euro 14 million from the December 31, 2021
amount primarily as a result of new leases and remeasurements (net of theclosures of the period) for Euro 207.8 million and positive foreign exchange
differences (Euro 31.2 million), offset in part by the payments made in the
period (Euro 216.5 million) and the obtainment of rent discounts (Euro 9
million).
The lease liability is concentrated in Japan, the U.S.A. and Italy.
The net financial indebtedness, including the lease liability, is Euro 1,880 million
at June 30, 2022 (Euro 1,808 million at December 31, 2021).

Events after the reporting date
There are no significant events after the end of the period to report.

OutlookDespite the highly uncertain global macro-economic environment, current
trading remains strong and the results of the first six months of 2022 accelerated
the Group’s trajectory towards the mid-term targets.
Going forward, several factors could influence the Group’s performance,
including the development of the health situation, the rate of recovery inconsumer spending in Mainland China, and global geopolitical developments
and economic risks as authorities seek to manage challenges of inflation andpossible recession.
These significant uncertainties make the Group vigilant, but it will continue topursue its strategy with confidence and determination. The Prada Group willcontinue to develop its brands focusing on creativity, quality and customer
experience.
To achieve long-term sustainable growth, the Group intends to balance margin
improvement with continued investment in its people, distribution network,
technological and manufacturing infrastructure, omni-channel capabilities andsustainability.

28

Corporate Governance practices
The Company is seamlessly engaged in 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 efficient andtransparent operations within the Group, to protect the rights of the Company’s
shareholders and to enhance shareholders’ value. Such corporate governancemodel adopted is in compliance with the applicable regulations in Italy, where
the Company is incorporated, 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”), where its shares are listed.

Compliance with the Code
The Board of Directors of the Company (the “Board”) has reviewed theCompany’s corporate governance practices and is satisfied that such practices
have complied with the code provisions set out in the Code throughout the six
months from January 1, 2022 to June 30, 2022 (the “Reviewed Period”).

The Board
The Board is responsible for setting up the overall strategy as well as reviewing
the operation and financial performance of the Company and the Group. The
Board is composed of eleven directors, of which five are executive directors,
one is a non-executive director, and five are independent non-executive
directors.
During the Reviewed Period, the Board has held three meetings on February 4,
March 14, and May 3, 2022.
The Board has established the Audit and Risk Committee, the Remuneration
Committee, and the Nomination Committee. Each Committee is chaired by anindependent non-executive director.
The written terms of reference of each Committee are on terms no less exacting
than those set out in the Code and are available on the websites of the Company
and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
On February 4, 2022, the Board established the Sustainability Committee,
chaired by an independent non-executive director.

Audit and Risk Committee
The Company has established an Audit Committee in compliance with Rule 3.21of the Listing Rules, where at least one member possesses appropriate
professional qualifications in accounting, or related financial management
expertise, to discharge the responsibility of the Audit Committee. The
Committee has changed its name to “Audit and Risk Committee” on July 27,
2022. The Audit and Risk Committee consists of three independent nonexecutive directors, namely, Mr. Yoël Zaoui (Chairman), Ms. Marina Sylvia
Caprotti, and Mr. Maurizio Cereda.
29

The primary duties of the Audit and Risk Committee are to assist the Board inproviding an independent view on the effectiveness of the Company’s financial
reporting process and its internal control and risk management systems, tooversee the external and internal audit processes and the implementation of theCompany’s risk management functions and to perform other duties andresponsibilities as are assigned to the Audit and Risk Committee by the Board.
During the Reviewed Period, the Audit Committee held three meetings on
February 23, March 9 and May 2, 2022, with an attendance rate of 100%. The
Audit and Risk Committee often invites the Company’s senior management, theGroup’s internal and external auditors and the members of the board of
statutory auditors to its meetings. The Audit Committee’s activities for the
Reviewed Period covered: the selection of the independent auditor of theCompany’s accounts for the years 2022 to 2024 to be proposed to theshareholders’ meeting on 28 April 2022, the audit plan for the year 2022, the
new Model of Organization of the Company pursuant to the Decree (as defined
below) and the new guidelines for the composition and functioning of theorganismo di vigilanza (supervisory body) pursuant to the same Decree (asdefined below), the findings of the internal auditors, internal controls, risk
assessment, annual review of the Group’s continuing connected transactions forthe year 2021, tax and legal updates (including management of data privacy
matters), the financial reporting matters (including the annual results for the year2021), before recommending them to the Board for approval.
The Audit and Risk Committee held a further meeting on July 27, 2022 to,among others, review the interim results for the period ended June 30, 2022,
before recommending them to the Board for approval.

Remuneration Committee
The Company has established a Remuneration Committee in compliance with
the Code. The Remuneration Committee consists of two independent nonexecutive directors, Ms. Marina Sylvia Caprotti (Chairwoman) and Mr. YoëlZaoui, and one executive director, Mr. Paolo Zannoni.
The primary duties of the Remuneration Committee are to makerecommendations to the Board on the Company’s policy and structure for the
remuneration package of Directors and senior management, and theestablishment of a formal and transparent procedure for developing policies onsuch remuneration. The recommendations of the Remuneration Committee arethen put forward to the Board for consideration and, where appropriate,
adoption.
During the Reviewed Period, the Remuneration Committee held two meetings
on February 4 and March 9, 2022, with an attendance rate of 100% to review
and recommend, among others, the remuneration of the members of the
Sustainability Committee, the adoption of a new long term incentive plan forsenior management and for executives, based on updated criteria, in line withthe current trends and market standards on long term incentive plans.

30Nomination Committee
The Company has established a Nomination Committee in compliance with theCode. The Nomination Committee consists of two independent non-executive
directors, Mr. Maurizio Cereda (Chairman) and Ms. Marina Sylvia Caprotti, andone executive director, Mr. Lorenzo Bertelli.
The primary duties of the Nomination Committee are to determine the policy forthe nomination of directors and to make recommendations to the Board forconsideration and, where appropriate, adoption on the structure, size andcomposition of the Board itself, on the selection of new Directors and on the
succession plans for Directors. In discharging its duties, the Nomination
Committees has considered the Board Diversity Policy and the Directors’
Nomination Policy.
During the Reviewed Period, the Nomination Committee held two meetings on
February 4 and March 14, 2022, with an attendance rate of 100% to establish
the Sustainability Committee and suggest the appointment of its members, andperform the annual review of the independence of independent non-executive
directors, as well as assess the composition of the Board.

Sustainability Committee
The Sustainability Committee consists of two independent non-executive
directors, Ms. Pamela Yvonne Culpepper (Chairwoman) and Ms. Anna Maria
Rugarli, and one executive Director, Mr. Lorenzo Bertelli.
The Sustainability Committee assists and supports the Board with proposing andadvisory functions in its assessments and decisions on sustainability, meaning
the processes, initiatives, and activities, aimed at overseeing the Company’scommitment to sustainable development along the value chain. Moreover, theCommittee supports the preparation and review of non-financial reports,
including the annual Sustainability Report, and communications concerning
sustainability to be submitted to the Board for approval.
During the Reviewed Period, the Sustainability Committee held a meeting on
April 22, 2022 to, among others, appoint the Chairwoman, present the Groupsustainability strategy, and review the Sustainability Report 2021 to besubmitted to the Board for approval.
The Sustainability Committee held a further meeting on July 13, 2022 to, among
others, present and discuss the Human Rights Policy and new Code of Ethics tobe submitted to the Board for approval, and discuss the sustainability action
plan and relevant ESG operational committee to be established at a Group level.

Board of Statutory Auditors
Under Italian law, the Company is required to have a board of statutory auditors,
appointed by the shareholders for a term of three financial years. The board of
statutory auditors has the authority to supervise the Company on its compliancewith the applicable law, regulations and the By-laws, as well as on its compliancewith the principles of proper management, in particular, on the adequacy of the31organizational, administrative and accounting structure adopted by theCompany and its functioning.
The board of statutory auditors of the Company consists of Mr. Antonino Parisi(Chairman), Mr. Roberto Spada, and Mr. David Terracina. The alternate
statutory auditors are Ms. Stefania Bettoni, and Ms. Fioranna Negri. During the
Reviewed Period, the members of board of statutory auditors attended threemeetings of the Board.

Organismo di Vigilanza (Supervisory Body)
In compliance with the Italian Legislative Decree 231 of June 8, 2001 (the“Decree”), the Company has established an organismo di vigilanza (supervisorybody) whose primary duty is to ensure the functioning, effectiveness andenforcement of the Model of Organization, adopted by the Company pursuant
to the same Decree.
The organismo di vigilanza (supervisory body) consists of three members
selected among qualified and experienced individuals and appointed by the
Board. As at June 30, 2022, the organismo di vigilanza (supervisory body)consists of Ms. Stefania Chiaruttini (Chairwoman), Mr. Yoël Zaoui and Mr.
Roberto Spada (who replaced Mr. Gianluca Andriani).

Dividends
The Company may distribute dividends subject to the approval of theshareholders in a shareholders’ general meeting.
No dividends have been declared or paid by the Company in respect of the
Reviewed Period.
On March 14, 2022, the Board recommended for the financial year 2021 thepayment of a final dividend of Euro 0.07 per share, representing a total dividendof Euro 179,117,680. The shareholders approved the distribution and paymentof the final dividend at the annual general meeting held on April 28, 2022. The
dividend was paid on May 27, 2022, while the relevant withholding tax was paidin July 2022.

Directors’ Securities Transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the standard set out in the Model
Code for Securities Transactions by Directors of Listed Issuers as set out inAppendix 10 of the Listing Rules (the “Model Code”). Specific written
confirmations have been obtained from each Director (where practicable) to
confirm his/her compliance with the required standard set out in the Model
Code and the Company’s relevant procedures regarding Directors’ securities
transactions for the Reviewed Period. There was no incident of non-complianceduring the Reviewed Period.
The Company has also adopted written procedures governing securities
transactions carried out by relevant employees who are likely to be in possessionof inside information in relation to the Company and its securities. The terms of32

these 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.

Publication of Interim Results Announcement and Interim
Report
The interim results announcement of the Company is published on the websitesof Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk and theCompany at www.pradagroup.com. The interim report will be available on thesame websites and dispatched to the shareholders of the Company in due
course.

By Order of the Board
PRADA S.p.A.
Mr. Paolo Zannoni

Chairman

Milan (Italy), July 28, 2022

As at the date of this announcement, the Company’s executive directors are Mr.
Paolo ZANNONI, Ms. Miuccia PRADA BIANCHI, Mr. Patrizio BERTELLI, Ms.
Alessandra COZZANI and Mr. Lorenzo BERTELLI; the Company’s nonexecutive director is Mr. Stefano SIMONTACCHI and the Company’s
independent non-executive directors are Ms. Marina Sylvia CAPROTTI, Mr.
Maurizio CEREDA, Mr. Yoël ZAOUI, Ms. Pamela Yvonne CULPEPPER and Ms.
Anna Maria RUGARLI.

33