Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited takeno 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 S.p.A.
(Stock Code: 1913)

ANNOUNCEMENT
OF THE CONSOLIDATED RESULTS
FOR THE TWELVE-MONTH PERIODENDED DECEMBER 31, 2023-

Prada Group reported net revenues of Euro 4,726.4 million, up by 17.2% atconstant exchange rates on 2022.

-

Retail net sales increased by 17.2% at constant exchange rates on 2022.

-

Retail net sales of the Prada brand increased by 12.1% and Miu Miu by 58.2%, atconstant exchange rates.

-

Double-digit growth in Japan +43.8%, Asia Pacific +24%, Europe +14% andMiddle East +10.5%, all at constant exchange rates; Americas remained
substantially flat over the twelve-month period at +0.3%.

-

EBIT of Euro 1,061.7 million, corresponding to 22.5% of net revenues, increasing
by 36.8% versus 2022 (Euro 776 million, 18.5% of net revenues).

-

Group net income of Euro 671 million, up 44.2% versus 2022.

-

Net financial position positive for Euro 196.9 million as of December 31, 2023,
reflecting capex cash-out of Euro 759.2 million including strategic real estate
investments.

-

Proposed dividend distribution of Euro 0.137 per share.

1

Presentation of the Prada Group
Prada S.p.A. (“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 player in the luxury
goods industry, where it operates with the Prada, Miu Miu, Church’s and Car
Shoe brands producing and distributing leather goods, footwear and ready towear. It also operates in the food sector with the Marchesi 1824 brand, in themost prestigious sailing races with Luna Rossa and in the eyewear and beauty
industries under licensing agreements.
The Group owns 26 production facilities (23 in Italy, 1 in the United Kingdom, 1
in France and 1 in Romania) and its products are sold in 70 countries worldwide
mainly through its directly operated stores, which numbered 606 as ofDecember 31, 2023. The Prada Group’s products are also sold directly throughthe brands’ e-commerce activity and indirectly in selected high-end department
stores, by independent retailers in very exclusive locations and by important etailers.
The Company is a joint-stock company with limited liability, registered anddomiciled in Italy. Its registered ofﬁce is at via Fogazzaro 28, Milan. As of
December 31, 2023 (the reporting date of these Consolidated Financial
Statements), 79.98% of the share capital was owned by Prada Holding S.p.A., a
company domiciled in Italy, and the remainder consisted of floating shares listedon the Main Board of the Hong Kong Stock Exchange.

2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 Consolidated Financial Statements for the twelve-month
period ended December 31, 2023.
At the date of presentation of these Consolidated Financial Statements, there
were no differences between the IFRSs endorsed by the European Union andapplicable to the Prada Group and those issued by the IASB.
IFRSs also refer to all International Accounting Standards (“IAS”) and allinterpretations of the International Financial Reporting Interpretations
Committee (“IFRIC”), previously called the Standing Interpretations Committee(“SIC”).
New standards and amendments to existing standards issued by the IASB,
endorsed by the European Union and applicable to the Prada Group fromJanuary 1, 2023.
New standards and amendments to existing standards

IFRS 17 Insurance contracts
Amendments to IAS 1 Presentation of Financial Statements
and IFRS Practice Statement 2: Disclosure of Accounting
policies
Amendments to IAS 8 Accounting policies, Changes in
Accounting Estimates and Errors: Definition of Accounting
Estimates
Amendments to IAS 12 Income taxes: deferred tax related toassets and liabilities arising from a single transaction
Amendments to IFRS 17 Insurance contracts: Initial
application of IFRS 17 and IFRS 9 – Comparative information(issued on 9 December 2021)
Amendments to IAS 12 Income taxes: International Tax
Reform – Pillar Two Model Rules

Effective Date forPrada GroupEU endorsement dates

January 1, 2023

Endorsed in November 2021

January 1, 2023

Endorsed in March 2022

January 1, 2023

Endorsed in March 2022

January 1, 2023

Endorsed in August 2022

January 1, 2023

Endorsed in September 2022

January 1, 2023

Endorsed in November 2023

The introduction of these amendments did not have any effect on these
Consolidated Financial Statements.
The Group has applied the temporary exception, introduced in May 2023 by
IASB with the “Amendments to IAS 12 Income taxes: International Tax Reform –Pillar Two Model Rules”, regarding the accounting requirements for deferredtaxes under IAS 12; therefore, the Group neither recognises nor discloses
information about deferred tax assets and liabilities related to Pillar Two income
taxes.
During the year, the Prada Group has managed the implementation of the "Pillar
II" legislation, aimed at ensuring a global minimum level of taxation (“Global
minimum tax”) for multinational enterprise groups that satisfy certain
predefined parameters.
The implementation of the Global Minimum Tax, provided for in Directive No.
2022/2523 of December 15, 2022 (implementing the OECD/G20 Pillar II
proposal), is effective in Italy from January 1, 2024 as per Italian Legislative
Decree No. 209 of December 27, 2023.
3

Given the complexity of the system outlined in the above legislation to ensure
this minimum level of taxation, for the first three tax periods (for the PradaGroup - financial years 2024 to 2026) the possibility of applying a simplified
regime has been provided for (so-called “transitional safe harbours”). This
simplified regime is primarily based on accounting information already available
for each jurisdiction and the application of three tests (De Minimis test,
Simplified Effective Tax Rate test and Routine Profits test); passing at least oneof these tests allows the disapplication of any additional taxes required to reachthe prescribed minimum tax level and the reduction of compliance burdens.
Based on the information known or reasonably estimable to date, the PradaGroup's exposure arising from the application of Pillar II is evaluated as notmaterial because: (i) most of the Group's entities, assumed at aggregate level inthe jurisdictions in which they are located, pass at least one of the three tests
referred to above; (ii) with respect to entities that, on the other hand, do notsatisfy, at the aggregate level in the jurisdictions in which they are located, anyof the three tests mentioned above, it is considered that their profits, andtherefore the potential tax exposure arising from the Pillar II framework, do nothave a relevant impact on the profits and tax liability of the Group as a whole.
The Group, with the support of external consultants, has performed analyses
and simulations of the impacts of the new legislation that underlined the abovementioned conclusions and is setting up the compliance requirements related tothe application of Pillar II, which will be implemented by adequate company
systems and procedures.
In any case, since the Pillar II legislation is not effective as of 31 December 2023,
it had no impact on current taxes.
Amendments issued by the IASB, endorsed by the European Union but not yet
applicable to the Prada Group because they are effective for annual periods
beginning on or after January 1, 2024.
Amendments to existing standards
Amendments to IFRS 16 Leases: Lease Liability in a Sale andLeaseback (issued on 22 September 2022)
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current –Deferral of Effective Date - Non-current Liabilities with
Covenants

Effective Date forPrada GroupEU endorsement dates

January 1, 2024

Endorsed in November 2023

January 1, 2024

Endorsed in December 2023

Amendments issued by the IASB, but not yet endorsed by the European Union
as of December 31, 2023.
Amendments to existing standards
Amendments to IAS 7 Statement of Cash Flows and IFRS 7
Financial Instruments: Disclosures: Supplier Finance
Arrangements (Issued on 25 May 2023)
Amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates: Lack of Exchangeability (issued on 15 August
2023)

4

Date of possible
application

EU endorsement status

January 1, 2024

Not endorsed yet

January 1, 2025

Not endorsed yetKey financial information
Key economic indicators(amounts in thousands of Euro)Net revenues
EBIT Adjusted (*)% incidence on net revenues
EBIT (**)% incidence on net revenues
Net income of the Group
Earnings per share (Euro)Net operating cash flow (***)

twelve months
ended
December 31
2023

twelve months
ended
December 31
2022

4,726,411
1,061,692
22.5%
1,061,692
22.5%
671,0260.262
725,582

4,200,674
845,17620.1%
775,99018.5%
465,193
0.182
695,527(*) Non-IFRS measure equal to EBIT less other non-recurring income / (expenses)(**) Non-IFRS measure equal to Earnings before Interest and Taxation(***) Non-IFRS measure equal to net cash flow from operating activities less repayment of lease liability

Key financial position indicators(amounts in thousands of Euro)Net operating working capital (*)
Net invested capital (right of use assets included) (**)
Net financial surplus / (deficit) (***)
Group shareholders’ equity

December 31
2023

December 31
2022

734,7425,790,789
196,908
3,853,795

690,573
5,073,699
534,900
3,482,217(*) Non-IFRS measure equal to the sum of trade receivables (net), inventories (net) and trade payables(**) Non-IFRS measure equal to the sum of the total consolidated shareholders’ equity, the lease liability and net financial surplus/(deficit)(***) Non-IFRS measure equal to short-term and long-term financial payables due to third parties and related parties, net of cash andcash equivalents and short-term and long-term financial receivables due from third parties and related parties

2023 Highlights
In 2023 the Prada Group achieved an excellent performance sustained by thecontinuous creative momentum of its brands. While the year was characterisedby the resurgence of severe geopolitical tensions, especially in Middle East, anduncertainty on the economic outlook, the luxury sector proved its resilience and
the Group’s results reflect significant progress on the path of its strategic,organisational and digital evolution.
Group’s net revenues grew by 17.2% at constant exchange rates compared to2022. The Group has reported 12 consecutive quarters of retail growth, driven
by full price like-for-like sales, with positive contributions from both volumes
and average price.
At brand level, Prada delivered a high-quality, solid performance with retail net
sales increasing by 12.1% in the year. Miu Miu retail net sales grew by 58.2% in
2023, an outstanding result confirming the brand strong desirability across all
product categories and regions.
The EBIT margin (22.5%) showed further expansion, coupled with substantial
marketing investments behind the brands. The Group closes the year with a net
cash position of Euro 197 million, which reflects capex cash-out of Euro 759
5million, including the acquisition of the highly strategic real estate asset at 724
5th Avenue (New York).
At Prada, the year was characterised by continuous desirability, sustained by an
evolved organisation and rigorous execution. The excellent reception of both
Menswear and Womenswear fashion shows and collections confirms theenduring success of the brand’s creative codes, with impactful campaigns andtalent strategy boosting visibility and interest globally. A well-balanced productcategory mix drove growth and resilience, thanks to the ability to continuously
innovate and to successfully interpret contemporaneity.
At the same time, the unveiling of exclusive collaborations, like the “Adidas
Football for Prada” collection and the groundbreaking partnership with Axiom
Space on NASA’s lunar spacesuits for Artemis III mission, surprised theaudience.
Successful activations realised over the period, including Prada Extends in
Bangkok, the 9th and 10th iterations of Prada Mode, the Pradasphere II
exhibition in Shanghai and the successful opening of Prada Caffè in London, also
contributed to deliver a distinctive brand experience worldwide.
As for Miu Miu, the outstanding performance was supported by the strong
foundations laid in recent years across brand, product, distribution and talents.
The thriving brand momentum enabled growing awareness and desirability,
driving remarkable commercial response across all product categories andregions.
2023 saw multiple successful launches in Leather Goods and Footwear, as well
as a strong performance in Ready-to-Wear, cementing the brand positioning as
trendsetter. Likewise, the viral collaborations with New Balance and Church’s
amplified the reach towards a broader community, as a reflection of the branddynamic identity.
Brand heat was also supported by powerful campaigns and several talent
activations, while successful event formats and special projects continued tofoster the Miu Miu global community.
At Church’s, the focus on the internal reorganisation continued in 2023, withspecific attention to rationalise both corporate and industrial processes insupport of the brand’s repositioning.
The Group progressed with the upgrade of the retail network, completing about
130 renovation and relocation projects over the year, in line with the strategic
objective of achieving retail excellence. Following 26 openings and 32 closuresover the period, the Group closes the year with 606 Directly Operated Stores.
In the digital arena, the efforts converged on a multiyear transformation
program involving the overall tech landscape to support operations and revenue
growth. The program includes initiatives encompassing omnichannel
capabilities, product lifecycle, finance and retail ERP, reporting, and planning
processes integration.
On the industrial front, the Group continued to invest in its factories and in thevertical integration of the supply chain, to further improve manufacturing6

expertise and quality control at every step of the process. In this context, theacquisition of a minority stake in Luigi Fedeli e Figlio S.r.l., an Italian familybusiness globally recognised for the quality of its knitwear and fine yarns, is atestament of the Group’s unwavering commitment to protect Italian know-how.
2023 also saw significant progress in environmental sustainability, with Scope
1&2 GHG emissions reduced by 58% over the year compared to the 2019baseline. In this regard, the Group also signed an ambitious Collective Virtual
Power Purchase Agreement (CVPPA), which will start in the next few years,
together with 11 other brands in The Fashion Pact coalition, to promoterenewable energy additionality in Europe. Ongoing efforts are also directed toreduce Scope 3 GHG emissions in line with the Group’s Science-Based Targets
2029, in particular by focusing upstream on the transition of some key raw
materials to lower impact alternatives.
Recently, the Group also invested in the purchase of Sustainable Aviation Fuel(SAF) credits from accredited partners to accelerate on the decarbonisation of
the aviation industry.
On the People part of the ESG strategy, the Group is particularly proud of its
initiatives centered on gender equality and the achievement of 44% women
representation in its leadership team. Notably, a new Chief People Officer was
appointed in September 2023.
The Group’s commitment to culture and water conservation continued over theperiod, with increased funding to support the SEA BEYOND education program,which has been expanded to include scientific research and humanitarian
projects, with a focus on increasing ocean awareness.
Finally, the year marked the onboarding of Andrea Guerra as Prada Group CEO
in January, as well as other strategic appointments: the result is a strengthenedorganisation, well equipped to drive the evolution of the Group while delivering
on its growth ambition.

7

Scope of work of Messrs. Deloitte & Touche S.p.A.
The figures in respect of the Group’s “Consolidated statement of financial
position”, “Consolidated statement of Profit or Loss for the twelve-month
period ended December 31, 2023", “Consolidated statement of comprehensive
income for the twelve-month period ended December 31, 2023”, “Consolidated
statement of cash flows for the twelve-month period ended December 31,
2023”, “Consolidated statement of changes in equity”, as set out in thisannouncement have been agreed by the Group's auditors, Messrs. Deloitte &Touche S.p.A., to the amounts set out in the Group’s audited Consolidated
financial statements for the twelve-month period ended December 31, 2023 andsome of the “Notes to the Consolidated financial statements” thereto, except
for the effects deriving from the inclusion of the non-IFRS measures “Other
non-recurring income / (expenses)” and “Recurring operating income – EBIT
Adjusted”. The work performed by Messrs. Deloitte & Touche S.p.A. in thisrespect does not constitute an assurance engagement in accordance with
International Standards on Auditing and consequently no assurance has been
expressed by Messrs. Deloitte & Touche S.p.A. on the announcement.

8

Consolidated Statement of Profit or Loss for the year ended
December 31, 2023 (includes Non-IFRS Measures)(amounts in thousands ofEuro)

twelvemonths
% on
ended
net
December 31 revenues
2023

twelvemonths
% on
ended
net
December 31 revenues
2022

change%changeNet sales (Note 1)
Royalties
Net revenues

4,622,882
103,529
4,726,411

97.8%
2.2%
100%

4,124,592
76,0824,200,674

98.2%
1.8%
100%

498,290
27,447525,737

12.1%
36.1%
12.5%

Cost of goods sold(924,640)-19.6%(888,580)-21.2%(36,060)

4.1%

Gross margin

3,801,771

80.4%

3,312,094

78.8%

489,67714.8%(150,616)-3.2%(137,469)-3.3%(13,147)9.6%(420,288)-8.9%(359,114)-8.5%(61,174)

17.0%(1,872,626)-39.6%(1,704,363)-40.6%(168,263)

9.9%(296,549)-6.3%(265,972)-6.3%(30,577)

11.5%(2,740,079)-58.0%(2,466,918)-58.7%(273,161)

11.1%

Recurring operating income –EBIT Adjusted

1,061,692

22.5%

845,176

20.1%

216,516

25.6%

Other non-recurring income /(expenses)--(69,186)-1.6%

69,186 -100.0%

1,061,692

22.5%

775,99018.5%

285,70236.8%(32,031)-0.7%(24,498)-0.6%(7,533)30.7%(58,825)-1.2%(40,990)-1.0%(17,835)

43.5%

627

0.0%

473

0.0%

154

32.6%

(90,229)-1.9%(65,015)-1.5%(25,214)

38.8%

Income before taxation

971,46320.6%

710,975

16.9%

260,488

36.6%

Taxation(298,071)-6.3%(241,820)-5.8%(56,251)

23.3%

Net income for the year

673,392

14.2%

469,155

11.2%

204,237

43.5%

2,366

0.1%

3,962

0.1%

(1,596)-40.3%

671,02614.2%

465,19311.1%

205,833

44.2%

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

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

Net income – Non-controllinginterests
Net income – Group9

Consolidated Statement of financial position
December 31
2023

December 31
2022

4
5

689,519
405,151
782,978
17,5501,091,622
331,915
760,457
22,483

6

138

2,373

7

267,4122,162,748

215,9172,424,767

88
92,032,876
846,024
2,024,552
41,610374,847
131,504890

1,577,125
817,8092,011,474
26,974
373,090
139,402
5,812

-

1,125

5,452,303
7,615,051

4,952,811
7,377,578

411,289
148,338
5,858
453,387
121,823
7,543
302,143
1,450,381

392,126
160,847
3,568
401,799
277,656
11,565242,306
1,489,867

1,699,599
338,42260,87549,86735,731
103,367
2,287,861
3,738,242

1,715,451
395,656
67,571
51,48640,855
115,670
2,386,689
3,876,556

Share capital
Total other reserves
Translation reserve
Net income for the year
Equity attributable to owners of the Group
Equity attributable to Non-controlling interests
Total equity

255,882
2,833,889
92,998671,026
3,853,795
23,014
3,876,809

255,8822,648,496
112,646465,1933,482,217
18,8053,501,022

Total liabilities and total equity

7,615,051

7,377,578(amounts in thousands of Euro)

Notes

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Derivative financial instruments – current
Receivables due from, and advance payments to,related parties - 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 due from, and advance payments to,related parties - non-current
Total non-current assets
Total assets

10

Liabilities and equity
Current liabilities
Lease liabilities – current
Short-term financial payables and bank overdraft
Payables due to related parties – current
Trade payables
Tax payables
Derivative financial instruments – current
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liabilities – non-current
Long-term financial payables
Long-term employee benefits
Provision for risks and charges
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities

11
12
13

14

10

Consolidated Statement of changes in equity(amounts in thousands of Euro, except number of shares)
Equity(amounts inthousands of Euro)

Number ofshares(inthousands)

Balance at
December 31, 2021

2,558,824 255,882

Allocation of 2021
net income
Dividends
Monetary revaluation
IAS 29Comprehensive
income/(loss) for theperiod (recyclable to
P&L)
Comprehensive
income/(loss) for theperiod (notrecyclable to P&L)
Balance at
December 31, 2022
Allocation of 2022
net income
Dividends
Share capital increase
Monetary revaluation
IAS 29Comprehensive
income/(loss) for theperiod (recyclable to
P&L)
Comprehensive
income/(loss) for theperiod (notrecyclable to P&L)
Balance at
December 31, 2023-

Actuarial
reserve

67,434 410,047(15,878)(5,708)

-

-

-

-

-

294,254(179,118) (179,118)

Share
Share Translation
premium
capitalreserve
reserve-

Fair Value
investmentsin equity
instruments
reserve

Cash
flow
hedge
reserve

Other
reserves

Total
other
reserves(10,992) 2,118,855 2,496,324

EquityEquityNet
attributable attributabl
incometo owners
e to Nonfor theof the controlling
year
Group
interests

Total
equity294,254

3,113,894

14,749 3,128,643

294,254 (294,254)

-

-

-

-

-

-

-

-

-

-

-

(179,118)(599)(179,717)

-

-

-

-

-

-

-

11,91011,910-11,910-11,910--45,212-25,938---25,938465,193536,343

4,626

540,969

-

-

-

-

-

(1,399)

587

-

(812)

-

(812)

29

(783)

2,558,824 255,882

112,646 410,047

10,060(7,107)(10,405) 2,245,901 2,648,496

465,1933,482,217

-

-

-

-

-

-

-

465,193

-

-

-

-

-

-

-

(281,471) (281,471)
-

-

-

-

-

-

-

-

6,843

-

-

(19,648)-(3,764)

-

-

-

-

-

-

-

(3,040)1,632

92,998 410,047

6,296(10,147)

2,558,824 255,882

11

465,193 (465,193)

18,805 3,501,022

-

-

-

-

(281,471)
-

(250)
2,571

(281,721)
2,571

6,843

-

6,843

-

6,843

-

(3,764)

671,026

647,614

1,899

649,513-(1,408)-(1,408)(11)(1,419)(8,773) 2,436,466 2,833,889

671,026

3,853,795

23,014 3,876,809

Consolidated Statement of cash flows for the year ended
December 31, 2023
twelvetwelvemonthsmonthsended
ended
December 31 December 31
2023
2022

(amounts in thousands of Euro)

Income before taxation
Profit or loss adjustments
Depreciation of the right of use assets
Depreciation and amortization of property, plant and equipment andintangible assets
Impairment of the right of use 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

971,463

710,975

445,465

451,533

230,915

210,891

18,633
9,614
48,93258,82534,005

12,342
59,486
24,41340,99012,258Other current assets and liabilities
Cash flows from operating activities
Interest paid (net), including interest paid on lease liability
Taxes paid
Net cash flows from operating activities(24,300)(85,400)(60,784)
56,351(8,768)
1,694,951(52,962)(486,708)
1,155,281(33,142)(3,578)(121,826)
13,351
15,112
1,392,805(49,522)(219,586)
1,123,697

Purchases of property, plant and equipment and intangible assets
Proceeds from the sale assets
Cash from real estate sale to related party
Earn-out paid to a related party
Dividends from investments
Purchase of equity instruments
Business combination
Net cash flow utilised by investing activities(759,676)
4,534
627(4,676)(759,191)(241,495)
18,000(5,000)473(19,549)(2,638)(250,209)

Dividends paid to shareholders of Prada S.p.A.
Dividends paid to Non-controlling shareholders
Repayment of lease liability
Repayment of current portion of long-term borrowings – third parties
Arrangement of long-term borrowings – third parties
Change in short-term borrowings – third parties
Capital increase from Non-controlling shareholders
Loans to related parties
Loans from related parties
Capital injection in associates
Net cash flows utilised by financing activities(281,471)(250)(429,685)(94,784)
25,475
4,436
2,560
2,500
(4,509)(775,728)(179,118)(599)(428,170)(187,128)
9,837(2,200)(787,378)

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(379,638)(22,481)
1,091,622
689,503

86,11023,726
981,786
1,091,622

Balance sheet changes
Other non-current assets and liabilities
Trade receivables, net
Inventories, net
Trade payables

12

Consolidated Statement of comprehensive income for theyear ended December 31, 2023
twelvetwelvemonthsmonthsended
ended
December 31 December 31
2023
2022

(amounts in thousands of Euro)Net income for the year

673,392

469,155(23,879)

71,814

Tax impact
Change in translation reserve less tax impact(20,115)(20,115)45,87645,876

Gains / (losses) on cash flow hedging instruments
Tax impact
Change in Cash Flow Hedge reserve less tax impact(4,973)
1,209(3,764)34,221(8,283)25,938(1,419)(783)

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

1,632
1,632

587
587

(Losses) / gains on remeasurement of defined benefit plans
Tax impact
Change in actuarial reserve less tax impact(4,076)
1,025(3,051)(2,027)657(1,370)Comprehensive income for the year - Consolidated

648,094

540,186

1,888

4,655

646,206

535,531

A)

Items that may be reclassified subsequently to P&L:

Foreign exchange differences on translation of foreign operations

B)

Items that will not be reclassified subsequently to P&L:

Comprehensive income for the year – Non-controlling Interests
Comprehensive income for the year – Group13

Non-IFRS measures
The Group uses certain financial measures (“non-IFRS measures”) to measure
its business performance and to help readers understand and analyse its
financial situation. Although they are used by the Group’s management, suchmeasures are not universally or legally defined and are not regulated by the IFRS
adopted to prepare these Consolidated Financial Statements. Other companies
operating in the luxury goods industry might use the same measures, but withdifferent calculation criteria. For this reason, it is important for non-IFRS
measures to always be read in conjunction with the related explanatory notes,
and for readers to be aware that such measures may not be directly comparablewith those used by other companies.
In 2022 the Group introduced the use of a new non-IFRS measure, “Other nonrecurring income / (expenses)”, to identify the non-recurring transactions
qualified by the Directors as non-recurring when their nature, materiality or
frequency requires separate disclosure in order to give readers additional
information of the Group’s operating results. Accordingly, the difference
between the “Operating income / (loss) - EBIT” and the “Other non-recurringincome / (expenses)” is defined as the “Recurring operating income/(loss) - EBIT
Adjusted” and represents the metric with which the Prada Group intends tomeasure the results of the operating activities. This non-IFRS measure, adopted
with consistency and stability over time, will allow to maintain continuity forunderstanding the business performance.
The reconciliation of Prada Group’s EBIT Adjusted and EBIT with the nearest
IFRS measure (Net income for the year) is reported below:(amounts in thousands of Euro)

twelvemonths
% on
ended
net
December 31 revenues
2023

twelvemonths
% on
ended
net
December 31 revenues
2022

Net income for the year

673,392

14.2%

469,155

11.2%

Taxation

298,0716.3%

241,820

5.8%

Total financial (income) / expenses

90,2291.9%65,015

1.5%

1,061,692

22.5%

775,990

18.5%

-

-

69,186

1.6%

1,061,692

22.5%

845,176

20.1%

Operating income - EBIT
Other non-recurring (income) / expenses
Recurring operating income – EBIT Adjusted

14Notes to the consolidated results for the period closed as ofDecember 31, 2023
1. Analysis of net revenues(amounts in thousands of Euro)Net revenues
Retail net sales (Directly Operated
Stores and e-commerce)
Wholesale net sales (independent
customers and franchisees)
Royalties
Total net revenues

twelve months
ended
December 31
2023

twelve months
ended
December 31
2022

4,189,676 88.6%

3,736,971 89.0%%%
changechangecurrent constant
exc.rates exc.rates(*)

Q4-23 vs
Q4-22%
changeconstant
exc.rates
(*)

12.1%

17.2%

17.4%

9.2%

11.8%

13.0%

32.1%

103,529 2.2%
4,726,411 100%

76,082 1.8%
4,200,674 100%

36.1%
12.5%

36.1%
17.2%

-5.8%
18.1%

Retail net sales by brand
Prada
Miu Miu
Church's
Other
Total retail net sales

3,488,276 83.3%
648,936 15.5%
28,555 0.7%
23,909 0.6%
4,189,676 100%

3,252,025 87.0%
431,768 11.6%
33,120 0.9%
20,058 0.5%
3,736,971 100%

7.3%
50.3%
-13.8%
19.2%
12.1%

12.1%
58.2%
-12.7%
19.4%
17.2%

9.5%
81.6%
3.4%
19.8%
17.4%

Retail net sales by geographic area
Asia Pacific
EuropeAmericasJapan
Middle East
Total retail net sales

1,446,146 34.5%
1,312,023 31.3%
767,365 18.3%
483,838 11.5%
180,304 4.3%
4,189,676 100%

1,231,659 33.0%
1,187,466 31.8%
781,825 20.9%
368,739 9.9%
167,282 4.4%
3,736,971 100%

17.4%
10.5%
-1.8%
31.2%
7.8%
12.1%

24.0%
14.0%
0.3%
43.8%
10.5%
17.2%

32.1%
7.5%
3.8%
37.6%
8.0%
17.4%

Retail net sales by product category
Leather goods
Ready to wear
Footwear
Other
Total retail net sales

1,910,061 45.6%
1,350,243 32.2%
777,099 18.5%
152,273 3.6%
4,189,676 100%

1,851,737 49.6%
1,085,660 29.1%
690,707 18.5%
108,867 2.9%
3,736,971 100%

3.1%
24.4%
12.5%
39.9%
12.1%

7.7%
30.6%
17.5%
44.4%
17.2%

7.6%
27.7%
20.4%
40.5%
17.4%

433,206

9.2%

387,621(*) calculated excluding the effect of the hyperinflation in Turkey

15

2. Number of stores
December 31, 2023
Owned
Franchises

December 31, 2022
Owned
Franchises

December 31, 2021
Owned
Franchises

Prada
Miu Miu
Church’s
Car Shoe
Marchesi 1824

428
141
28
2
7

20
5
-

422
145
37
2
6

21
5
-

420
146
61
2
6

21
5
-

Total

606

25

612

26

635

26

December 31, 2023
Owned
Franchises

December 31, 2022
Owned
Franchises

December 31, 2021
Owned
Franchises

EuropeAsia Pacific
AmericasJapan
Middle East

200
196
102
85
23

23
2

209
190
104
86
23

21
5

228
193
105
88
21

21
5

Total

606

25

612

26

635

26

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

Group net income in Euro
Weighted average number of ordinary shares in issue
Basic and diluted earnings per share in Euro,
calculated on weighted average number of shares

twelve months
ended
December 31
2023

twelve months
ended
December 31
2022

671,026,021

465,192,638

2,558,824,000

2,558,824,000

0.262

0.182

Dividends paid
The Board of Directors of the Company has proposed a final dividend of Euro
350,558,888 (Euro 0.137 per share) for the twelve months ended December 31,
2023.
During 2023, the Company distributed dividends of Euro 281,470,640 (Euro0.11 per share), as approved at the General Meeting held on April 27, 2023 toapprove the December 31, 2022 financial statements.

16

The dividends and the related Italian withholding tax due (Euro 14.7 million),determined by applying the ordinary Italian tax rate to the entire amount of thedividends distributed to the beneficial owners of the Company’s shares held
through the Hong Kong Central Clearing and Settlement System, were fully paid
during the year.

4. Trade receivables, net
December 31
2023

December 31
2022

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

414,621(11,341)
1,871

342,110(11,595)
1,400

Total

405,151

331,915(amounts in thousands of Euro)The change in the allowance for bad and doubtful debts is set forth below:
December 31
2023

December 31
2022

Opening balance

11,595

10,990Exchange differences
Increases
Reversals
Utilization

(244)
2,979
(173)
(2,816)

90
741
(136)
(90)

Closing balance

11,341

11,595(amounts in thousands of Euro)An aging analysis of the trade receivables, before the allowance for bad anddoubtful debts, is shown below:
Overdue (in days)
31 ≤ 60 61 ≤ 90 91 ≤ 120(amounts in thousandsof Euro)Dec. 31Not
2023 overdue1 ≤ 30Trade receivables

416,492 331,052

55,306

9,854

3,717

2,570

13,993

Total
December 31, 2023

416,492 331,052

55,306

9,854

3,717

2,570

13,993(amounts in thousandsof Euro)Dec. 31Not
2022 overdue1 ≤ 30Overdue (in days)
31 ≤ 60
61 ≤ 9091 ≤ 120> 120

Trade receivables

343,510 272,142

39,132

6,297

4,459

1,211

20,269

Total
December 31, 2022

343,510 272,142

39,132

6,297

4,459

1,211

20,26917> 120

An aging analysis of the trade receivables, net of the allowance for bad anddoubtful debts, is shown below:
Overdue (in days)
31 ≤ 60
61 ≤ 90 91 ≤ 120(amounts in thousandsof Euro)Dec. 31Not
2023 overdue1 ≤ 30Trade receivables lessallowance for bad anddoubtful accounts

405,151 329,418

54,350

8,780

3,578

2,548

6,477

Total
December 31, 2023

405,151 329,418

54,350

8,780

3,578

2,548

6,477

(amounts in thousandsof Euro)Dec. 31Not
2022 overdue1 ≤ 30Overdue (in days)
31 ≤ 60
61 ≤ 90 91 ≤ 120> 120

Trade receivables lessallowance for bad anddoubtful accounts

331,915

270,542

39,060

5,833

4,453

1,209

10,818

Total
December 31, 2022

331,915

270,542

39,060

5,833

4,453

1,209

10,818> 120

5. Inventories, net
December 31
2023

December 31
2022

Raw materials

115,531

108,450

Work in progress

38,58030,109Finished products

726,295

699,849

Return assets

12,942

10,493

Allowance for obsolete and slow-moving inventories(110,370)(88,444)

Total

782,978

760,457(amounts in thousands of Euro)

The stock increase was largely attributable to the need to support sales growth.
In 2023, the inventory allowance was increased, net of the utilisations andreversal, by Euro 21.9 million with allocations for slow-moving products andraw materials.

18

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

Finishedproducts

Total
allowance forobsolete andslow-moving
inventories

Opening balance

32,22256,22288,444

Exchange differences
Increases
Utilisation
Reversal

9,441
-

(185)
12,801
(97)
(34)

(185)
22,242(97)(34)

Closing balance

41,66368,707110,370(amounts in thousands of Euro)

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

December 31
2023

December 31
2022

2

2,200

Other receivables and advances

136

173

Total

138

2,373

December 31
2023

December 31
2022

VAT

38,31739,627

Taxation and other tax receivables

82,85370,775

Other assets

15,063

9,230

Prepayments

124,244

86,617

6,935

9,668

267,412215,917

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

Guarantee deposits
Total

19

8. Capital expenditure
The changes in the net carrying amount of property, plant and equipment forthe period ended December 31, 2023 are shown below:(amounts inthousands of Euro)Land Production
and plant andbuildings machinery

Opening balance

811,599

Additions403,681

21,189117,364

Depreciation(20,246)(12,890)(101,572)

Disposals
Exchangedifferences
Other movements(3,904)

(113)

(217)

(542)

(211)

(2,751)(7,738)(10,696)23(10,400)(3,055)(261)(2,001)(26,390)

10,095

5,956

33,223

11,5703,421(60,793)

3,472(3,633)(3)(2,729)(1,058)(82)(2,109)(9,614)

-

-

1,896

79

117

44

2,136

1,186,896

74,640330,544302,205

67,284

Impairment
Revaluation IAS 29
Closing balance

60,478

Leasehold Furniture
AssetsOther
improve&under
tangiblesments
fittings
construction
292,979

288,698

Total net
carrying
amount

61,39061,981 1,577,125

49,053

13,23076,936(42,540)(10,320)

681,453- (187,568)

71,307 2,032,876

The increase in land and buildings included the investment in a highly strategic
building at 724, 5th Avenue (New York), which currently hosts a Prada store, fora consideration equal to US Dollar 425 million (Euro 393 million). The carrying
amount (resulting in Euro 366 million, including other direct charges) was
determined deducting from the purchase price the net of the lease liability andright of use assets immediately before the purchase (Euro 28.1 million).
Referring to the above-mentioned building, the floors that as of today are notused as retail premises are classified as investment property according to IAS
40 and measured with the application of cost model. Since the amount of suchinvestment property is not material it has been included in the line “property,
plant and equipment”.
The increase in leasehold improvements and furniture & fittings regarded
primarily restyling and relocation projects for the retail premises.
The assets under construction at the end of the period concern retail andindustrial projects.

20

The changes in the net carrying amount of intangible assets for the period ended
December 31, 2023 are shown below:(amounts inthousands of Euro)

Trademarks
andintellectual Goodwill
propertyrightsOpening balance
Additions
Amortization
Disposals
Exchange differences

Store
AssetsOtherlease Softwareinintangibles
acquisition
progress

185,743 513,681

Total net
carrying
amount135

85,803

1,648

30,799817,809-21,242

18

47,164

71,248(212) (31,074)

998

1,826

(10,626)-(1,435)-(43,347)

-

-

-

(356)

-

(49)

(405)

-

2

648

- (27,913)

71

671

-

1

(26)

Other movements

-

-

88

27,896

Closing balance

176,786 515,507

12 103,485

231

50,003846,024

Operating segments
Following the organisational changes undertaken with the announcement,
among others, of the appointment of a new Prada Group CEO as of January2023 and a new Prada CEO as of December 2022, and considering theincreasing verticalisation of the brands’ organisation, the Group has redefinedits segment reporting.
The Group has maintained a matrix-based organisational structure as inprevious years, but focus on brand performance has been increasing, andresources are increasingly allocated based on assessments at brand level.
The reporting system of the Group has been updated accordingly to provide the
top management with periodic brands’ reports, to support the neworganisational model described above.
Based on the new structure, since the end of 2023 the operating segments
identified by management, as defined by IFRS 8 “an operating segment isdefined as a business division whose operating results are regularly reviewed by
top management in order to adopt decisions to allocate appropriate resources
to the segment and assess its performance”, correspond to each owned brand.
For financial statements presentation all operating segments identified havebeen aggregated into a single reportable segment which corresponds to theentire Prada Group and concluded that, in doing so, the aggregation is still
consistent with the core principles of IFRS 8.
It should be noted that the two main brands, Prada and Miu Miu, have similar
economic and business profile and they represent together 99% of the Group’s
revenue. The other brands, which represent the remaining 1% of the Group’s
revenue, have been considered as not material.
The main economic indicators assessed to determine that the operating
segments Prada and Miu Miu have similar economic characteristics are:21

-long-term financial performance (in particular, average gross margin)-

currency, competitive, operating and financial risks.

Moreover, Prada and Miu Miu present products of similar nature, similar
production processes and customers and the same distribution channels.
Therefore, as of December 31, 2023 it has been identified only one reportablesegment as occurred in 2022 and previous years. Accordingly, thecorresponding information for 2022 should not be restated.

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 oncea year. The Group does not report intangible assets with indeﬁnite useful lives
other than goodwill.
As a consequence of the organisational changes carried out over the course of2023, management adopted a new reporting structure, modifying the way inwhich the goodwill is monitored. The new organisational model is focused bybrands.
Accordingly, as of December 31, 2023 the groups of cash-generating units(“CGUs”) which represent the lowest level within the Group at which
management tests goodwill for impairment correspond to the brands Prada and
Miu Miu, operating segments identified for segment reporting purpose incompliance with IFRS 8 as reported above in the paragraph "Operating
segments".
In accordance with IAS 36, the reallocation of the goodwill to the new groups of
CGUs has been performed using a relative value approach based on the relativevalue of the two groups of CGUs, estimated with the discounted cash flow
method as of December 31, 2023.
The summary of the goodwill allocation to the two groups of CGUs
corresponding to the operating segments Prada and Miu Miu is reported below:
December 31
2023(amounts in thousands of Euro)
Prada
Miu Miu

424,262
91,245

Total

515,507

The impairment tests as of December 31, 2023 did not identify any impairment
losses for the groups of CGU listed above.
The Discounted Cash Flow method used to identify the recoverable amount(value in use) of the group of CGUs consists of discounting the projected cash
flows generated by the activities directly attributable to the operating segment
to which the intangible asset or net invested capital has been assigned. Value in
use is the sum of the present value of the future cash flows expected on the basisof the business plan projections prepared by the management for each group of
CGUs and the present value of the related operating activities at the end of the22period (terminal value). The recoverable amount was estimated with theassistance of a leading consulting firm.
The business plans used for the impairment tests was prepared by the
management starting from the 2024 budget and cover a period of five years for
Prada while, considering the characteristics of the brand and life time cycle,
projections related to Miu Miu have been extrapolated until 2031 in order totake into value potential deriving from the investments incurred across theyears. The 2024 budget was approved by the Board of Directors on January 25,
2024. The business plans do not take into account either significant
improvements in the performance of the assets existing as of December 31,
2023 or future developments of new activities, except for the investments
planned in the 2024 budget for the retail premises’ restyling and renovation
projects and new openings that the Group has already substantially committed
to make.
For each group of CGUs tested, the weighted average cost of capital (“WACC”)
was determined by taking into due consideration the risk profile of the CGUs’group activities, as well as other specific parameters, such as geographic
diversification.
The “g” rate of growth used to calculate the terminal value was assumed equal
to 2.5%, in light of inflation expectations prospects and the long-term growth
expected for the luxury goods market.
The WACC (post-tax) and g-rates used for impairment tests of groups of CGUs
that include goodwill are reported below:
2023

CGU

WACC

g-rate

Prada

8.6%

2.5%

Miu Miu

8.6%

2.5%

Concerning such group of CGUs, an analysis of the sensitivity of the impairment
test has been performed to changes in the key assumptions used to determine
the recoverable amount for each of the group of CGUs to which goodwill isallocated. It has been verified that no reasonable change in the key assumptions
would generate a reduction in the recoverable amount to the extent ofconstituting an impairment loss.
However, since value in use is measured on the basis of estimates andassumptions, management cannot guarantee that the value of goodwill or othertangible and intangible assets will not be subject to impairment in the future.
IAS 36 requires an entity to assess at each annual reporting date whether there
are indications of impairment for any other asset (excluding goodwill) recognisedin the Statement of Financial Position. In this respect, the impairment testing of
the group of assets of Prada Russia and Church’s was performed, as describedhereunder.
23

Prada Russia
For Prada Russia, the review of the estimated recoverable amount of the twobuildings owned in Moscow and St. Petersburg, which in substance represents
the residual value of the non-current assets allocated, was updated since thetrigger events that as of December 31, 2022 had resulted in a Euro 43.5 million
writedown of the fixed assets are still ongoing. Consistently with last year, theassessment was conducted with the support of leading independent real estate
firm, which estimated the fair value of the two buildings using the Comparative
Method of valuation, based on a comparison of the real estate being appraised
to other comparable assets recently sold or offered on the same market.
The carrying amount of the buildings recognised as of December 31, 2023,
compared to the related fair value as estimated above, led to a writedown ofEuro 2.5 million. Translated at the December 31, 2023 exchange rate, the net
invested capital of Prada Russia is Euro 13.3 million, of which Euro 18.7 million
refers to the two buildings owned, partially offset by the items of net working
capital. The reduction in value of the net invested capital compared to theprevious period (Euro 29.9 million, translated at the December 31, 2022
exchange rate) is mainly attributable to the loss of the period and the impact of
the exchange rate. With respect to the estimated recoverable amount of thebuildings, it should be noted that the current volatility in the Russian financial
system has created significant uncertainty in the real estate industry. The scarceliquidity in capital markets means more difficulties than those present in normal
market conditions in the event of selling assets in the short term. This
circumstance entailed using a high level of judgment to estimate the recoverable
amount of the assets tested. Therefore, management cannot guarantee that thevalue of the buildings owned in Russia will not be subject to additional
fluctuations (impairment losses or writedown reversals) in the future.
Church’s
For the Church’s group of CGUs, which include the value of the brand for Euro
42 million subject to depreciation with a residual useful life of 16 years, in 2022
the identification of a trigger event related to the beginning of the reorganisation
process led to a writedown of Euro 19.4 million, entirely allocated to the valueof the brand. An impairment test was carried out again in order to identify any
further potential impairment.
The Discounted Cash Flow method used to identify the recoverable amount(value in use) consisted of discounting the projected cash flows generated by thenet invested capital. The recoverable amount was estimated with the assistanceof a leading consulting firm. The cash flow projections used for the impairment
test were based on the business plan prepared by management. The rate used
to discount the cash flows is the weighted average cost of capital (WACC) in a
post-tax configuration. For the year ended December 31, 2023, the WACC used
to discount the cash flows generated by the Church’s group of CGUs was 8.6%,
and it was determined taking into due consideration the risk profile of the groupof CGU’s activities. The “g” rate of growth used to calculate the terminal value
was assumed equal to 2.5%, in light of the medium term inflation rate in the24medium countries where Church’s operates and of the growth outlook for the
luxury goods market.
The impairment tests as of 31 December 2023 did not identify any impairment
losses.
A sensitivity analysis was carried out to change the key assumptions used todetermine the recoverable amount for the group of CGUs. Specifically, asensitivity test was performed by including an execution risk premium in the
WACC calculation which raised from 8.6% to 11.6%. The results of the analysis
performed did not showed any potential impairment loss.

9. Right of use assets
The changes in the net carrying amount of the right of use assets for the year
ended December 31, 2023 are shown below:(amounts in thousands of Euro)

Real estate

Other

Total net
carrying amountOpening balance

2,007,660

3,814

2,011,474

New contracts, initial direct costs
and remeasurements
Depreciation

603,9632,850

606,813(443,251)(2,214)(445,465)

Contracts termination(74,854)(430)(75,284)

Exchange differences(60,201)(4)(60,205)

Impairment(18,633)-(18,633)

5,852

-

5,852

2,020,536

4,016

2,024,552

Revaluation IAS 29
Closing balance

The right of use assets increased by Euro 13.1 million, mainly as a result of newleases and remeasurements of existing leases totaling Euro 606.8 million, net of
depreciation of Euro 445.5 million, termination of contracts of Euro 75.3 millionof which Euro 74.8 million related to the acquisition of real estate investment in
724, 5th Avenue (New York) which was previously leased and has been acquiredin 2023 as reported in Note 8 “Capital expenditure”, writedowns of Euro 18.6
million and foreign exchange differences impact of Euro 60.2 million.
The increase for new leases, initial direct costs and remeasurements is
attributable to lease renewals (largely in Asia and Europe) and theremeasurement of the liability to adjust it to indexes commonly used in the realestate industry (mainly the consumer price index).
Right of use assets “other”, amounting to Euro 4 million, includes plant,
machinery, vehicles and hardware.

25

10. Other non-current assets
December 31
2023

December 31
2022

Guarantee deposits

70,51064,216

Prepayments for commercial agreements

45,90750,080Pension fund surplus

4,652

6,426

Deferred rental income-

231

Other long-term assets

10,43518,449Total

131,504

139,402(amounts in thousands of Euro)

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

11. Payables due to related parties - current
December 31
2023

December 31
2022

5,853

3,568

5

-

5,858

3,568

(amounts in thousands of Euro)

December 31
2023

December 31
2022

Trade payables – third parties

447,615

396,159

Trade payables – related parties

5,772

5,640

453,387

401,799(amounts in thousands of Euro)
Financial payables
Other payables
Total

12. Trade payables

Total

An aging analysis of the trade payables at the reporting date is shown below:
Overdue (in days)
31 ≤ 60 61 ≤ 90 91 ≤ 120(amounts in thousandsof Euro)Dec. 312023

Not
overdue1 ≤ 30Trade payables

453,387

372,015

56,875

8,958

3,473

1,694

10,372

Total
December 31, 2023

453,387

372,015

56,875

8,958

3,473

1,694

10,372(amounts in thousandsof Euro)Dec. 312022

Not
overdue1 ≤ 30Overdue (in days)
31 ≤ 60 61 ≤ 90 91 ≤ 120> 120

Trade payables

401,799

330,287

47,513

6,587

436

2,538

14,438

Total
December 31, 2022

401,799

330,287

47,513

6,587

436

2,538

14,43826> 120

13. Other current liabilities
December 31 December 31
2023
2022

(amounts in thousands of Euro)
Payables for capital expenditure

92,13773,249Accrued expenses and deferred income

24,052

28,971Other payables

185,954

140,086

Total

302,143

242,306

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

Provision
for legal
disputes

Provision fortax disputes

Other
provisions

Total

884

1,061

49,541

51,486

Exchange differences

(4)

(3)

(2,181)(2,188)

Reversals

(45)

(212)

(1,701)(1,958)

Utilisation

(104)

(897)

(5,940)(6,941)

Increases

402

633

8,433

9,468

1,133

582

48,152

49,867

Closing balance

The provisions for risks and charges represent Directors’ best estimate of the
maximum outflow of resources needed to settle liabilities deemed to beprobable. In the Directors’ opinion, based on the information available to them,
the total amount accrued for risks and charges at the reporting date is adequate
in respect of the liabilities that could arise from them.
Tax disputes
Since 2016, Prada Asia Pacific Ltd (a retail subsidiary wholly owned by Prada
S.p.A.) has been providing Prada S.p.A. with commercial services to support its
wholesale distribution business in Asia Pacific, for remuneration (in place until
2021) disclosed, as early as the 2016 tax year, to the Italian Tax Authority
through the submission of an advance pricing agreement application and various
explanatory documents. The Italian Tax Authority started discussions on the
topic on October 2022 and, in order not to have the 2016 fiscal year time barred,on April 28, 2023, it issued two tax notices (IRES and IRAP) in which it challenged
in full the deductibility of the remuneration paid to Prada Asia Pacific Ltd in the2016 fiscal year, setting higher taxes amounting to c. Euro 10.8 million andinterest amounting to c. Euro 2.3 million, while recognising (i) the possibility for
Prada S.p.A. to deduct the amount that, in the opinion of the Italian Tax
Authority, it should have recognised to Prada Asia Pacific Ltd, without however
quantifying it, and (ii) the non-application of penalties, by virtue of the27correctness of the Transfer pricing contemporaneous documentation preparedby Prada S.p.A..
Prada S.p.A. has filed an appeal against these tax notices within the legal
deadlines and discussions with the Italian Tax Authority are still ongoing.
Since the Italian Tax Authority has not yet formalised a final position on this
topic, in order to avoid time barring for the 2017 fiscal year, two preliminary tax
notices related to the 2017 fiscal year were also issued (“inviti a comparire” IRES
and IRAP) to start a settlement procedure on 29 December 2023. Following asimilar approach to that described above for the 2016 fiscal year, in these
documents the Italian Tax Authority sets higher taxes amounting to c. Euro 9.8
million, interest amounting to c. Euro 1.9 million and penalties amounting to c.
Euro 2.9 million. Prada S.p.A. expects the Italian Tax Authority to cancel thesepenalties, consistently with the approach adopted for 2016, once it will havevalidated the correctness of Prada S.p.A.’s 2017 transfer pricing
contemporaneous documentation (requested after the notices had been issued).
The Company, also supported by the opinion of a leading Tax consultancy firm,at this stage believes that there is no basis for recording a tax liability in relation
to this case.
Other risk provisions
The other risk provisions amount to Euro 48.2 million as of December 31, 2023
and refer primarily to contractual obligations to restore leased commercial
properties to their original condition.
In the year, liabilities for customs risk previously presented as provision for tax
disputes were reclassified to other risk provision for more accurate
representation. Other liabilities for customs duty risks are recognised at thereporting date in an amount of Euro 3.7 million, consisting of Euro 1 million fora mistaken customs classification of footwear imported into the United Statesand Euro 2.7 million for risks of assessments regarding price adjustments, split
among various non-EU countries.
Prada S.p.A. disputed an audit initiated by the Italian Customs Agency in 2012
for the tax years from 2007 to 2011, concerning the customs value of products.
The dispute involves three legal actions regarding the 2010 tax year, whichconcluded with unfavorable rulings from the Supreme Court in 2023, after theCompany had filed appeals in 2019 and 2020. The Company had already settled
the amounts owed pending judgment. Meanwhile, the Company established a
new method for measuring the value of imported products starting from May
2020, with retroactive effectiveness for the assessable years, in agreement with
the Italian Customs Agency. The application of such method led to the estimate,
for the previous years, of an end-of-period liability of approximately Euro 0.2
million.

28

Management discussion and analysis for the year ended
December 31, 2023
(growth percentages at constant exchange rates, unless differently specified)
The Prada Group generated net revenues of Euro 4,726.4 million in the twelve
months ended December 31, 2023, up by 17.2% compared to 2022. Exchange
rate fluctuations reduced growth by 4.7%, to 12.5%.
During the twelve months of 2023, retail net sales increased by 17.2% against
the same period of 2022; the Group has reported 12 consecutive quarters ofretail growth, driven by full price like-for-like sales, with positive contributions
from both volumes and average price. Over the period, retail net sales
accounted for 88.6% of total net revenues, therefore in line with 2022 level.
As of December 31, 2023, the Group operated 606 stores, following 26 openings
and 32 closures over the period.
Sales in the wholesale channel rose by 13% compared to the corresponding
period of 2022, with a controlled evolution of independent wholesale, in linewith the Group strategy, and a strong increase in the duty free stores channel.
Royalty income grew by 36.1% on 2022, a strong performance driven by thecontribution of both eyewear and fragrances.

BrandsPrada retail net sales increased by 12.1% over the year, showing high-quality
growth driven by full price like-for-like sales.
Miu Miu reported an excellent performance in the twelve-month period at+58.2% yoy, with strong growth across regions and product categories.
The net revenues by brand amounted to Euro 3,912.3 million for Prada, Euro753.2 million for Miu Miu, Euro 35.8 million for Church’s, and Euro 25.1 million
for the other brands.

Markets
Over the period the Group delivered double-digit growth across all regions,excluding Americas which ended the year flat.
In Asia Pacific, retail net sales rose by 24%, on a volatile basis of comparison in
2022. The highest growth rates were reported in Mainland China, Hong Kongand Macau.
In Europe, retail net sales rose by 14%, supported by strong demand from both
local clients and tourists. Growth was significant in the first semester, and in thefirst quarter in particular, with more normalised but solid performance
thereafter.
The Americas ended substantially flat over the twelve-month period at +0.3%,
with a sequential improvement in the last months of the year.
Japan remained the top performing region, as retail net sales increased by
43.8%, largely driven by domestic spending and increasingly by tourists.
29

Retail net sales in the Middle East also delivered a solid performance (+10.5%),
notwithstanding intensified geopolitical headwinds.

Products
Over the period, leather goods recorded retail net sales growth of +7.7%,
supported by both novel and iconic products, with an improving trend in the
fourth quarter driven by both Prada and Miu Miu. Ready to wear remained thefastest growing category at +30.6%, thanks to the success of both menswear
and womenswear collections. Footwear’s performance was also very strong at+17.5% against 2022, across genders and lines (lifestyle, sneakers and formal).

Operating results
The gross margin for the twelve-month period ended December 31, 2023
corresponded to 80.4% on net revenues, up from the 78.8% of 2022. Greater
absorption of production overheads, lower logistic costs, better sales mix interms of distribution channels and higher average prices were the key drivers of
this improvement.
Operating expenses totaled Euro 2,740.1 million, up by Euro 273.2 million
versus 2022. The increase was attributable primarily to higher variable costs
resulting from the increase in sales, marketing spend, personnel expenses, andother general and administrative costs.
The operating income for the period, or EBIT, was Euro 1,061.7 million, 22.5%of net revenues, compared to the Euro 776 million (18.5% of net revenues) of2022, which included non-recurring expenses of Euro 69.2 million.

Financial expenses and taxation
The net financial expenses of Euro 90.2 million were Euro 25.2 million higher
than in 2022. The increase was largely attributable to interest expenses on leaseliabilities and higher foreign exchange losses, partially offset by higher financial
interest income.
The taxation for the twelve months ended December 31, 2023 was Euro 298.1
million, corresponding to 30.7% of the profit before tax.

Net income
The net income for the year amounted to Euro 673.4 million (14.2% of net
revenues), versus Euro 469.2 million (11.2%) reported in 2022.

30

Net invested capital
The following table reclassifies the statement of financial position to provide
information on the composition of the net invested capital:
December 31
2023

December 31
2022

Right of use assets
Non-current assets (excluding deferred tax assets), net
Trade receivables, net
Inventories, net
Trade payables
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, net
Other non-current assets / (liabilities), net
Net invested capital

2,024,552
3,006,998
405,151
782,978(453,387)
734,742
276,123(422,541)(146,418)(49,867)(60,875)(57,459)
339,116
170,915
5,790,789

2,011,474
2,517,042
331,915
760,457(401,799)
690,573229,575(522,553)(292,978)(51,486)(67,571)(65,590)332,235
147,588
5,073,699

Shareholder's equity – Group
Shareholder's equity – Non-controlling interests
Total consolidated shareholders' equity
Long-term financial, net surplus / (deficit)
Short-term financial, net surplus / (deficit)
Net financial surplus / (deficit)
Net financial surplus / (deficit) to consolidated shareholders' equity ratio(3,853,795)(23,014)(3,876,809)(338,422)
535,330
196,908-5.1%(3,482,217)(18,805)(3,501,022)(394,531)
929,431534,900-15.3%

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 leaseliability(1,699,599)(411,289)(2,110,888)(1,913,980)(1,715,451)(392,126)(2,107,577)(1,572,677)(5,790,789)(5,073,699)(amounts in thousands of Euro)The net invested capital as of December 31, 2023 amounts to Euro 5,791
million, with equity of Euro 3,877 million and lease liabilities of Euro 2,111
million; the net financial position at the end of the period is a surplus of Euro
196.9 million.
The right of use assets increased by Euro 13.1 million, mainly as a result of newleases and remeasurements of existing leases totaling Euro 606.8 million, net of
depreciation of Euro 445.5 million, termination of contracts of Euro 75.3 millionof which Euro 74.8 million related to the acquisition of real estate investment in
724, 5th Avenue (New York) which was previously leased and has been acquiredin 2023 as reported in Note 8 “Capital expenditure”, writedowns of Euro 18.6
million and foreign exchange differences impact of Euro 60.2 million.
The non-current assets (net) rose by Euro 490 million (Euro 3,007 million as ofDecember 31, 2023 versus Euro 2,517 million at December 31, 2022) following
31

capital expenditures of the year amounting to Euro 752.7 million, against
depreciation, amortisation and writedowns of Euro 240.5 million.
twelve months twelve months
ended
ended
December 31 December 31
2023
2022

(amounts in thousands of Euro)

Retail

215,884

168,935

Real estate

381,711-

Production, logistics and corporate

155,106

107,161

Total

752,701

276,096

Real estate capital expenditures included the investment in a highly strategic
building at 724, 5th Avenue (New York), which currently hosts a Prada store, fora consideration equal to US Dollar 425 million (Euro 393 million). The carrying
amount (resulting in Euro 366 million, including other direct charges) was
determined deducting from the purchase price the net of the lease liability andright of use assets immediately before the purchase (Euro 28.1 million).
In addition, the Group continued to invest in store restyling and relocation
projects, in the advancement of the technological and digital roadmap in theretail, manufacturing and corporate areas and in the industrial area.
The net operating working capital as of December 31, 2023 is Euro 734.7
million, up by Euro 44.2 million from December 31, 2022: trade receivables
increased by Euro 73.2 million, inventories increased by Euro 22.5 million, andtrade payables increased by Euro 51.6 million.
The other current liabilities (net) amount to Euro 146.4 million as of December
31, 2023, down by Euro 146.6 million from December 31, 2022, essentially due
to the decrease of the current tax liability as a result of the payment of theincome taxes liability accounted as of December 31, 2022.
The other non-current assets (net) of Euro 170.9 million as of December 31,
2023 rose by Euro 23.3 million from December 31, 2022.

32

Net financial position
The following table provides details of the net financial position:
December 31 December 31
2023
2022

(amounts in thousands of Euro)Bank borrowing – non-current(338,422)(395,656)

Financial payables and bank overdrafts - current
Payables to related parties - current
Total financial payables – current(148,338)(5,853)(154,191)(160,847)(3,568)(164,415)

Total financial payables(492,613)(560,071)

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

689,5192

1,091,622
1,125
2,224

Total financial receivables and cash and cash equivalents

689,5211,094,971

Net financial surplus / (deficit)

196,908

534,900

The net operating cash flow for the twelve-month period, after the payment of
the lease liability (Euro 429.7 million), was positive for Euro 725.6 million. Afterthe cash outflows for investing activities (Euro 759.2 million), dividend payments(Euro 281.7 million), net of the devaluation of the items of the net financial
position (Euro 17.8 million) and other minor items, the net financial surplus
reached Euro 196.9 million at the end of the period.
December 31
2023

December 31
2022

Cash flow from operating activities

1,694,951

1,392,805

Net cash, interest received (paid)
Lease liability: interest paid
Tax paid

5,863(58,825)(486,708)(8,533)(40,989)(219,586)

Net cash flow from operating activities

1,155,281

1,123,697

Repayment of lease liability(429,685)(428,170)

Net operating cash flow

725,596695,527

Net cash flow utilized by investing activities(759,191)(250,209)

Free cash flow

(33,595)

445,318(amounts in thousands of Euro)

The total amount of undrawn lines of credit as of December 31, 2023 is equal toEuro 768 million, consisting of Euro 451 million of committed lines and Euro 317
million of uncommitted lines.
All financial covenants were fully complied with as of December 31, 2023 andthey are expected to be complied with within the next 12 months as well.
33

The following table sets forth the lease liability:
December 31
2023

December 31
2022

Long-term lease liability
Short-term lease liability

1,699,599
411,289

1,715,451
392,126

Total

2,110,888

2,107,577(amounts in thousands of Euro)The lease liability increased from Euro 2,108 million at December 31, 2022 toEuro 2,111 million at December 31, 2023, primarily as a result of
remeasurements for lease extensions or modifications for Euro 602.2 million netof the payments of the period for Euro 429.7 million, termination of contractsof Euro 108 million of which Euro 102 million due to the real estate investment
in 724, 5th Avenue (New York) which was previously leased and has beenacquired in 2023 as reported in Note 8 “Capital expenditure”, and the exchange
rate differences for the period for Euro 61 million.
The lease liability was concentrated mainly in Japan, the U.S.A. and Italy.
The net financial indebtedness, including the lease liability, amounted to Euro
1,914 million as of December 31, 2023 (Euro 1,573 million as of December 31,2022).

Events after the reporting dateNo significant events to be reported.

Outlook
The Group is mindful of persisting geopolitical and macro-economic
uncertainties and of the high comparison base going forward. Against thisbackdrop, the Group priority for 2024 remains to drive brand desirability andretail excellence further. As with 2023, while quarterly growth trajectory may
not be linear through the year, the Group retains the firm ambition of deliveringsolid, sustainable, above-market growth.

34

Corporate governance practices
The Company is committed to maintaining the highest standards of corporate
governance to create long-term sustainable value for all its stakeholders,
including its shareholders.
The corporate governance model adopted by the Company consists of a set ofrules, standards and structured procedures aimed at establishing efficient andtransparent operations within the Group, to protect the rights of the Company’s
shareholders, to enhance shareholder value and to uphold the Group’s
credibility and reputation. The corporate governance model adopted by theCompany complies with the applicable laws and regulations in Italy, where theCompany is incorporated, as well as with the principles set out in the Corporate
Governance Code (the “Code”) in Appendix C1 (formerly known as “Appendix14”) of the Rules Governing the Listing of Securities on The Stock Exchange ofHong Kong Ltd (the “Listing Rules”). Full details on the Company’s corporate
governance practices are set out in the Company’s 2023 Annual Report.

Compliance with the Code
The Board has reviewed the Company’s corporate governance practices and it
is satisfied that such practices have complied with the code provisions set out in
the Code, for the year ended December 31, 2023 (the “2023 Year”).

Directors’ securities transactions
The Company has adopted a written procedure governing Directors’ securities
transactions on terms no less exacting than those set out in the Model Code for
Securities Transactions by Directors of Listed Issuers (the “Model Code”) in
Appendix C3 (formerly known as “Appendix 10”) of the Listing Rules. In responseto specific enquiries by the Company, all Directors confirmed that they compliedwith the required standard set out in the Model Code and the Company’s
procedure during the 2023 Year. There were no incidents of non-complianceduring the 2023 Year.
The Company has also adopted a written procedure governing securities
transactions carried out by the relevant employees who are likely to possess
inside information in relation to the Company and its securities. This procedureis on terms no less exacting than those set out in the Model Code.

Audit and Risk Committee
The Company has established an Audit and Risk Committee in compliance with
Rule 3.21 of the Listing Rules, where at least one member possesses related
financial management expertise to perform the responsibility of the Audit andRisk Committee. The membership of the Audit and Risk Committee consists ofthree Independent Non-Executive Directors, namely, Mr. Yoël Zaoui(Chairman), Ms. Marina Sylvia Caprotti and Mr. Maurizio Cereda.
During the 2023 Year, the Audit and Risk Committee held six meetings (with anattendance rate of 94.44%) mainly to review with senior management, the35Group’s internal and External Auditor and the Board of Statutory Auditors, thesignificant internal and external audit findings and financial matters as required
under the Audit and Risk Committee’s Terms of Reference and to make relevant
recommendations to the Board. The Audit and Risk Committee’s review covered
the 2023 audit plan, the findings of both the internal and the External Auditor,
internal controls, risk assessment, annual review of the continuing connectedtransactions of the Group for 2022, the Group 2023 budget, the 2023
Sustainability Report, corporate reorganisation plans, intragroup merger andextraordinary transactions with third parties, Group policies, the methodology
applied to the impairment test, and tax and legal updates and the financial
reporting matters (including the annual results for the year ended December 31,
2022 and the interim financial results as at June 30, 2023, and the quarterly
results as at March 31, 2023, and September 30, 2023), before recommending
them to the Board for approval.
The Audit and Risk Committee also held two meetings on January 22, 2024 andMarch 4, 2023, to examine and recommend to the Board the approval of the2024 Group budget, to discuss the audit activities on the 2023 Separate
Financial Statements and Annual Report of the Company presented by Deloitte& Touche S.p.A., to evaluate the methodology applied to the impairment test,
to discuss the status of the major pending litigations, including tax litigations, ofthe Group, to have an update on the internal audit and risk management
activities, and to review, for the 2023 Year, the annual results, the Sustainability
Report, the continuing connected transactions, and the Internal Audit
Department and Audit and Risk Committee reports.

Purchase, sale or redemption of the Company’s listed
securities
During the 2023 Year, neither the Company nor any of its subsidiaries
purchased, sold or redeemed any of the Company’s listed securities.

Shareholders’ general meeting
The Shareholders’ general meeting of the Company will be held on Wednesday,
April 24, 2024 (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 shareholders of theCompany in due course.

Final dividend
The Board recommends, for the 2023 Year, a final dividend of Euro
350,558,888 (Euro 0.137 per share). The payments shall be made:(i)in Euro to the shareholders recorded in the section of the Company’s
shareholders register kept by the Company at its registered office in
Milan (Italy), and

36

(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 Euros as announced by the Hong Kong Association of Banks(www.hkab.org.hk) on the day the final dividend is approved by theshareholders.
Subject to the shareholders’ approval at the AGM of the final dividend, such
dividend will be paid by Friday, May 17, 2024.

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)

April 19, 2024 – 4:30
pm HK time/10:30
am CET timeBook closure (both sections) (Note 2)

From April 22 to April
24, 2024 (both days
inclusive)

Record date

April 22, 2024

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)

April 30, 2024 - 4:30
pm HK time/10:30
am CET timeBook closure (both sections) (Note 2)

May 2, 2024

Record Date

May 2, 2024

Dispatch date of dividend warrants

May 17, 2024

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 registered in
the section of the Company’s shareholders register kept by theCompany’s Hong Kong share registrar itself; or
37

(ii)

the Company’s registered office at Via Antonio Fogazzaro no. 28,
Milan 20135, Italy, if the transfer concerns shares registered in thesection of the Company’s shareholders register kept by theCompany itself.

2. No transfer of shares will be registered on the book closure date.

Publication of Annual Results Announcement and Annual
ReportThis 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 2023 Annual Report will be
published on the same websites and dispatched to shareholders of the Company
in due course.

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

Executive Deputy
Chairman

Milan (Italy), March 7, 2024

As at the date of this announcement, the Company’s executive directors are Mr. Patrizio
BERTELLI, Mr. Paolo ZANNONI, Ms. Miuccia PRADA BIANCHI, Mr. Andrea GUERRA,
Mr. Andrea BONINI and Mr. Lorenzo BERTELLI; and the Company’s independent nonexecutive directors are Mr. Yoël ZAOUI, Ms. Marina Sylvia CAPROTTI, Mr. Maurizio
CEREDA, Ms. Pamela Yvonne CULPEPPER and Ms. Anna Maria RUGARLI.

38