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, 2022-

Prada Group reported net revenues of Euro 4,200.7 million, up by 21.3% atconstant exchange rates on 2021;-

Retail sales increased by 23.8% at constant exchange rates on 2021;
All regions, except Asia Pacific, reported double-digit growth compared with
2021, with Europe +63.4%, Japan +30.5%, Middle East +23% and Americas+22.1%, all at constant exchange rates; Asia Pacific contracted by 1.7% over theyear, affected by pandemic-related restrictions in China, but returned to growthin the second half of the year;--

Gross margin increased to 78.8% of net revenues, against 75.7% in 2021;-

EBIT Adjusted1: Euro 845.2 million, corresponding to 20.1% of net revenues,
increasing by 69.2% versus 2021 (Euro 499.5 million, 14.8% of net revenues);-

Net financial surplus of Euro 534.9 million at December 31, 2022;-

Proposed dividend distribution of Euro 0.11 per share.
1

EBIT Adjusted excludes other non-recurring income / (expenses) that, for the twelve months ended December 31, 2022, consistedof Euro 69.2 million (Euro 10 million in 2021).

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 apparel. It
also operates in the food sector with the Marchesi 1824 brand, in the mostprestigious sailing races with Luna Rossa and in the eyewear and fragrance
industries under licensing agreements.
The Group owns 24 production facilities (21 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 612 at December
31, 2022. The Prada Group’s products are also sold directly through the brands’
e-commerce activity and indirectly in selected high-end department stores, by
independent retailers in very exclusive locations and by important 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
December 31, 2022, 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 listed 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 Consolidated Financial Statements for the twelve-month
period ended December 31, 2022.
At the date of presentation of this document, there were no differences between
the International Financial Reporting Standards (“IFRS”) approved by theEuropean Union (“EU”) and applicable to the Prada Group, and those issued by
the International Accounting Standard Board (“IASB”), excluding the two
amendments not endorsed yet in the table below.
In 2022 the Group applied IAS 29, “Financial Reporting in Hyperinflationary
Economies”, as already described in the Announcement of the consolidated
results for the six-month period ended June 30, 2022.

2

Amendments to existing standards issued by the IASB, endorsed by theEuropean Union and applicable to the Prada Group from January 1, 2022.
Amendments to existing standards
IFRS 3 Business Combinations
IAS 16 Property, Plant and Equipment
IAS 37 Provisions, Contingent Liabilities andContingent Assets
Annual Improvements 2018-2020

Effective Date forPrada GroupEU endorsement date

January 1, 2022
January 1, 2022

Endorsed in June 2021
Endorsed in June 2021

January 1, 2022

Endorsed in June 2021

January 1, 2022

Endorsed in June 2021

The introduction of these amendments did not have any effect on theConsolidated Financial Statements.
New standards and amendments to existing standards issued by the IASB,
endorsed by the European Union, but not yet applicable to the Prada Groupbecause they are effective for annual periods beginning on or after January 1,
2023.
New standards and amendments to existing
standards

Effective Date forPrada GroupEU endorsement date

IFRS 17 Insurance contracts

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

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 to assets 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 issued by the IASB, but not yet endorsed by the European Union
as of December 31, 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 – Noncurrent Liabilities with Covenants
Amendments to IFRS 16 Leases: Lease Liability in a
Sale and Leaseback (issued on 22 September 2022)

3

Date of possible
application

EU endorsement date

January 1, 2024

Not endorsed yet

January 1, 2024

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

twelve months
ended
December 31
2022

twelve months
ended
December 31
2021

4,200,674
845,17620.1%
775,99018.5%
465,193
0.182
695,527

3,365,667
499,484
14.8%
489,484
14.5%
294,2540.115
750,723(*) 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 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
2022

December 31
2021

690,573
5,073,699
534,900
3,482,217

602,038
4,936,402
237,653
3,113,894(*) 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

2022 highlights
2022 was characterised by challenging macroeconomic conditions following theoutbreak of war in Ukraine, interest rate hikes, and the continued impact of theCovid-19 public health emergency in some countries, particularly China.
However, the luxury goods sector, bolstered by strong local demand and somerecovery in global tourism flows, demonstrated resilience and provided
opportunities for growth.
The Prada Group reported strong growth in net revenues (+21.3% at constantexchange rates compared with 2021), with double-digit growth for both Pradaand Miu Miu, and in profitability (EBIT Adjusted +69.2% against 2021,
corresponding to 20.1% of net revenues), capitalising on its investments increative talent, innovation, supply chain and stores. In addition, the Group
increased the focus on client centrality and retail productivity, and continued to
optimise manufacturing processes, delivering a substantial profitability
improvement.
In Interbrand’s “Best Global Brands 2022” rankings, Prada registered more than
20% year-on-year value growth for the second year in a row, and ranked amongthe 15 fastest-growing brands.
Prada also topped the Lyst rankings for the October-December 2022 period;
Miu Miu ranked fourth in the same period. Lyst is a data analysis tool that each4

quarter explores the purchasing habits of more than 200 million consumers
worldwide, providing a snapshot of the most loved brands and products of the
moment. According to Lyst, Miu Miu was the “2022 Brand of the Year”: thesuccessful 2022 Fall/Winter fashion show, highly appreciated by both critics
and the public, together with the launch of iconic products, increased the
popularity of the brand on social media, also due to the support of celebrities
and influencers.
The Group achieved double-digit growth in all the main product categories, i.e.
leather goods, ready to wear and footwear. For Prada, Prada Paradoxe, the first
women’s fragrance created from the Prada-L’Oréal partnership, was launchedin August; in October, Prada presented ETERNAL GOLD, its first sustainable finejewelry collection, made of 100% certified recycled gold. Both Paradoxe, with
its refillable bottle, and ETERNAL GOLD embed sustainable practices reflectedin every aspect of the Group’s business.
At Church’s, the focus has been an internal reorganisation process with the aimof repositioning the brand and improving its profitability. As part of this process,24 stores were closed as they were deemed non-strategic.
The investments in retail proceeded at accelerated pace with 191 projects
completed over the year, concentrated on renovations and improvements ofexisting stores and selective new store openings. The client experience wasenhanced with numerous special installations, nearly 130 pop-in and pop-up
shops. Prada Tropico was one of the most successful ones: the colors andatmospheres of whimsical distant lands inspired a fresh new landscape,reinterpreting Prada’s visual identity with a contemporary pop vocabulary.
The client experience was also the focus, at the beginning of the year, for therollout of “client journey”, a global project intended to reinforce client centrality
through the lens of empathy, warmth, passion, and energy.
In the digital arena, starting in June and with a launch per month, Prada
Timecapsule gained a new format: each month’s exclusive, limited-edition item
was sold together with a non-fungible token (NFT), marking the Group’s Web
3.0 debut. Simultaneously, Prada released Prada Crypted, the new Discord
server for the brand community, where users exchange ideas and draw
inspiration from connecting the fashion universe with the worlds of art,architecture, cinema, music, Web3, and more. Prada also debuted in the Meta
Avatars Store, the digital fashion store where Facebook, Instagram, andMessenger users can buy fashion items for their virtual alter-egos.
On the manufacturing front, the Group continued to invest in its factories and in
the vertical integration of the supply chain, to further improve manufacturingexpertise and quality control at every step of the process. To this end, in August,the Group acquired a 43.65% stake in Conceria Superior S.p.A., a company with60 years of experience in exceptional calfskin tanning techniques.
The organisation continued to be strengthened at all levels. The appointment ofAndrea Guerra as Prada Group CEO, in January 2023, represents afundamental governance change aimed at further evolving Prada Group and5easing the generational transition. Equally significant is the appointment ofGianfranco D’Attis as CEO of the Prada brand in December 2022.

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, 2022", “Consolidated statement of comprehensive
income for the twelve-month period ended December 31, 2022”, “Consolidated
statement of cash flows for the twelve-month period ended December 31,2022”, “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, 2022
and some of the “Notes to the Consolidated financial statements” thereto,
except for the effects deriving from the inclusion of the non-IFRS
measure “Other non-recurring income (expenses)” and “Recurring Operating
Income / (Loss) – EBIT Adjusted”. The work performed by Messrs. Deloitte &Touche S.p.A. in this respect does not constitute an assurance engagement inaccordance with International Standards on Auditing and consequently no
assurance has been expressed by Messrs. Deloitte & Touche S.p.A. on theannouncement.

6

Consolidated statement of Profit or Loss for the twelve
months closed at December 31, 2022 (includes Non-IFRS
Measures)(amounts in thousands of Euro)

Twelvemonthsended % on net
December revenues
31
2022

twelvemonthsended % on net
December revenues
31
2021change%changeNet sales (Note 1)
Royalties
Net revenues

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

98.2%
1.8%
100.0%

3,316,620
49,0473,365,667

98.5%
1.5%
100%

807,972
27,035835,007

24.4%
55.1%
24.8%

Cost of goods sold(888,580)-21.2%(818,309)-24.3%(70,271)

8.6%

Gross margin

3,312,094

78.8%

2,547,358

75.7%

764,73630.0%(137,469)-3.3%(115,319)-3.4%(22,150)

19.2%(359,114)-8.5%(294,251)-8.7%(64,863)

22.0%(1,704,363)-40.6%(1,421,169)-42.2%(283,194)19.9%(265,972)-6.3%(217,135)-6.5%(48,837)22.5%(2,466,918)-58.7%(2,047,874)-60.8%(419,044)

20.5%

Recurring operating income /(loss) – EBIT Adjusted

845,176

20.1%

499,484

14.8%

345,692

69.2%

Other non-recurring income /(expenses)(69,186)-1.6%(10,000)-0.3%(59,186)591.9%

Operating income / (loss) –EBIT775,990

18.5%

489,48414.5%

286,506

58.5%(24,498)-0.6%(31,216)

-0.9%

6,718

-21.5%(40,990)-1.0%(36,773)-1.1%(4,217)

11.5%

473

0.0%

160

0.0%

313

195.6%(65,015)-1.5%(67,829)

-2.0%

2,814

-4.1%

Income / (loss) before taxation

710,975

16.9%

421,655

12.5%

289,320

68.6%

Taxation(241,820)-5.8%(126,552)-3.8%(115,268)

91.1%

Net income / (loss) for theperiod469,155

11.2%

295,1038.8%

174,052

59.0%

Net income / (loss) - NonControlling interests

3,962

0.1%

849

0.0%

3,113

366.7%Net income / (loss) – Group

465,193

11.1%

294,2548.8%

170,93958.1%

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
December 31
2022

December 31
2021

4
5

1,091,622
331,915
760,457
22,483

981,786
329,547
662,654
1,762

6

2,373

22,866

7

215,9172,424,767

171,2202,169,835

8
8
9

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

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

1,125

1,125

4,952,811
7,377,578

4,789,176
6,959,011

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

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

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

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

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

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

Total liabilities and total net equity

7,377,578

6,959,011

Net current assets
Total assets less current liabilities

934,900
5,887,711

750,104
5,539,280(amounts in thousands of Euro)

Note

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 Shareholders’ equity
Current liabilities
Short-term lease liability
Short-term financial payables and bank overdrafts
Payables due 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

11
12

13

14

8

Consolidated statement of changes in equity(amounts in thousands of Euro, except for number ofshares)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)

54,139

-

-

-

-

-

-

-

-

-

-

(89,559)(89,559)-(89,559)(1,674)(91,233)

-

-

-

-

-

-

-

-

-

-

-

(141)

(141)

-

-

-

-

-

-

13,351922

14,273-

14,273-

14,273

-

-

(574)

-

-

(66)

-

-

(66)

-

(640)

(4,816)(5,456)

-

-

-

-

-

-

-

(1,128)(1,128)-(1,128)-(1,128)--71,367-(10,084)---(10,084)

294,254355,537

1,712

357,249

-

-

-

-

-

2,509

845

-

3,354

-

3,354

5

3,359

2,558,824

255,882

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

2,118,855

2,496,324

294,254

3,113,894(amounts inthousands of Euro)

Share
CapitalTranslation
Reserve

Balance at
December 31, 2020

2,558,824

255,882-

Allocation of 2020
net loss
Dividends
Capital reduction in
subsidiaries
Gains/(losses) on
sales of Investmentsin equity instruments
Acquisition of
additional sharesfrom Non-Controlling
Interests
Acquisition of Luna
Rossa Challenge S.r.l.
Comprehensive
income/(loss) for theperiod (recyclable to
P&L)
Comprehensive
income/(loss) for theperiod (notrecyclable to P&L)
Balance at
December 31, 2021
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

Net Equity
Net Equity
attributabl
attributable
Total Nete to Nonto owners ofEquitycontrollingGroupinterests

Fair Value
Share
Cash flow
investment
Actuarials in equity
premium
hedge
Reserve
instrument
reserve
reserves Reserve

Number of
Shares(inthousands)

19,663 2,851,720

14,749 3,128,643

-

-

-

-

-

-

-

294,254294,254 (294,254)

-

-

-

-

-

-

-

-

-

-

(179,118)(179,118)-(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

918,805 3,501,022

Consolidated statement of cash flows for the twelve
months closed at December 31, 2022
twelvetwelvemonthsmonthsended
ended
December 31 December 31
2022
2021

(amounts in thousands of Euro)

Income / (loss) before taxation
Profit or loss adjustments
Depreciation of the right of use assets
Depreciation and amortization of property, plant and equipment
and intangible 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
Balance sheet changes
Other non-current assets and liabilities
Trade receivables, net
Inventories, net
Trade payables

710,975

421,655

451,533

426,221210,891

197,997

12,342
59,486
24,41340,99012,2586,513
25,267
36,77333,848(33,142)(3,578)(121,826)
13,351
15,112
1,392,805(49,522)(219,586)
1,123,697

5,491(29,790)
11,50290,297244
1,226,018(45,329)(37,161)
1,143,528

Business combination
Net cash flow utilised by investing activities(241,495)
18,000(5,000)473(19,549)(2,638)(250,209)(219,628)
364
20,000103
76,464(7,827)(6,741)(137,265)

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
Loans to related parties
Net cash flows generated / (utilised) by financing activities(179,118)(599)(428,170)(187,128)
9,837(2,200)(787,378)(89,559)(1,674)(392,805)(217,277)
240,000(33,412)(494,727)

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

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

511,536
27,858442,392
981,786

Other 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
Purchases of property, plant and equipment and intangible assets
Disposals of property, plant and equipment and intangible assets
Cash from real estate sale to related party
Earn-out paid to a related party
Dividends from investments
Disposals of equity instruments
Purchase of equity instruments
Acquisition of additional shares from Non-Controlling Interests

10Consolidated statement of comprehensive income for thetwelve months closed at December 31, 2022
twelvetwelvemonthsmonthsended
ended
December 31 December 31
2022
2021

(amounts in thousands of Euro)Net income/(loss) for the period

469,155

295,103

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

45,87645,876

72,23072,230Change in Cash Flow Hedge reserve
Tax impact
Change in Cash Flow Hedge reserve less tax impact

34,221(8,283)25,938(14,331)
4,247(10,084)

587
-

845
-

587

845

Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact(2,027)657(1,370)4,248(1,734)2,514

Comprehensive income/(loss) for the period - Consolidated

540,186

360,608

4,655

1,717

535,531358,891

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 impact

Comprehensive income/(loss) for the period – Non-controlling Interests
Comprehensive income/(loss) for the period – Group11

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.
Within the scope of the Prada Group’s activities, which consist of the
management and development of the brands owned, some transactions may bequalified 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. In particular, other non-recurringtransactions could include, for example, impairment losses or reversal of
impairment losses of fixed assets, restructuring costs, litigation costs, and gains
and losses on disposals of fixed assets only when they are related to unusualmaterial transactions considered outside the normal course of business.
For this purpose, in 2022 the Group introduced the use of a new non-IFRS
measure, “Other non-recurring income / (expenses)”, to identify the Nonrecurring transactions as defined above. Accordingly, the difference between
the “Operating income / (loss) - EBIT” and the “Other non-recurring income /(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.
For the twelve months ended December 31, 2022, the “Other non-recurringincome / (expenses)” include a Euro 42 million writedown of tangible fixed
assets and right of use assets as a result of the extraordinary market conditions
in Russia, a Euro 19.4 million writedown of the Church’s brand in context of thereorganisation process, and Euro 7.8 million for settlement of a litigation thatcan be considered of a non-recurring nature.
For better comparability, the amount of Euro 10 million in 2021, related to theprovision for a legal dispute, has been reclassified in the item “Other nonrecurring income / (expenses)”.
Alternative Performance Measure not further presented
In previous period the Group adopted an Alternative Performance Measure(“APM”) related to “Selling expenses of the closed stores during the lockdowns”
regarding the amount of operating expenses directly related to stores that could
not generate revenues due to the restrictions imposed during the pandemic. Dueto the reduction of the impacts of the lockdowns in the financial performance,
the Group evaluated that this measure no longer provides relevant informationand consequently this APM is no longer disclosed.
12

The reconciliation of Prada Group’s EBIT adjusted and EBIT with the nearest
IFRS measure (Net income / (loss) for the period) is reported below:(amounts in thousands of Euro)

twelvemonths% on netended
revenues
Dec. 312022

twelvemonths% on netended
revenues
Dec. 312021

Net income / (loss) for the period

469,155

11.2%

295,103

8.8%

Taxation

241,8205.8%

126,552

3.8%

Total financial income / (expenses)

65,015

1.5%

67,8292.0%

Operating income / (loss) - EBIT

775,990

18.5%

489,484

14.5%

Other non-recurring income / (expenses)

69,186

1.6%

10,000

0.3%

Recurring operating income / (loss) – EBIT Adjusted

845,176

20.1%

499,484

14.8%

13Notes to the consolidated results for the period closed at
December 31, 2022
1. Analysis of net revenues(amounts in thousands of Euro)

twelve months
ended
December 31
2022

twelve months
ended
December 31
2021

%
%
changechangecurrent constant
exc.rates exc.rates

3,736,971

89.0%

2,930,856 87.1%

27.5%

23.8%

Net revenues
Retail net sales (Directly Operated
Stores and e-commerce)
Wholesale net sales (independent
customers and franchisees)
Royalties
Total net revenues

387,6219.2%

385,764 11.4%

0.5%

-2.0%

76,0824,200,674

1.8%
100%

49,047 1.5%
3,365,667 100%

55.1%
24.8%

55.1%
21.3%

Retail net sales by geographical area
Asia Pacific
EuropeAmericasJapan
Middle East and other countries
Total retail net sales

1,231,659
1,187,466
781,825
368,739
167,282
3,736,971

33.0%
31.8%
20.9%
9.9%
4.4%
100%

1,192,109 40.7%
748,833 25.5%
571,692 19.5%
296,735 10.1%
121,487 4.2%
2,930,856 100%

3.3%
58.6%
36.8%
24.3%
37.7%
27.5%

-1.7%
63.4%
22.1%
30.5%
23.0%
23.8%

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

3,252,025
431,768
29,403
23,775
3,736,971

87.0%
11.6%
0.8%
0.6%
100%

2,537,061 86.6%
346,874 11.8%
29,835 1.0%
17,086 0.6%
2,930,856 100%

28.2%
24.5%
-1.4%
39.1%
27.5%

24.5%
20.3%
-2.3%
38.9%
23.8%

Retail net sales by product category
Leather goods
Clothing
Footwear
Other
Total retail net sales

1,862,453
1,085,660
690,707
98,151
3,736,971

49.8%
29.1%
18.5%
2.6%
100%

1,530,418 52.2%
825,587 28.2%
520,892 17.8%
53,959 1.8%
2,930,856 100%

21.7%
31.5%
32.6%
81.9%
27.5%

18.5%
27.0%
28.9%
77.1%
23.8%

14

2. Number of stores
December 31, 2022
Owned
Franchises

December 31, 2021
Owned
Franchises

December 31, 2020
Owned
Franchises

Prada
Miu Miu
Church’s
Car Shoe
Marchesi 1824

422
145
37
2
6

21
5
-

420
146
61
2
6

21
5
-

410
152
62
3
6

20
6
-

Total

612

26

635

26

633

26

December 31, 2022
Owned
Franchises

December 31, 2021
Owned
Franchises

December 31, 2020
Owned
Franchises

EuropeAsia Pacific
AmericasJapan
Middle East

209
190
104
86
23

21
5

228
193
105
88
21

21
5

222
194
108
88
21

21
5

Total

612

26

635

26

633

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.
December 31
2022

December 31
2021

465,192,638

294,253,615

Weighted average number of ordinary shares in issue

2,558,824,000

2,558,824,000

Basic and diluted earnings (losses) per share in Euro,
calculated on weighted average number of shares

0.182

0.115

Group net income/(loss) in EuroDividends per share
The Board of Directors of the Company has proposed a final dividend of Euro
281,470,640 (Euro 0.11 per share) for the twelve months ended December 31,
2022.
During 2022, the Company distributed dividends of Euro 179,117,680 (Euro0.07 per share), as approved at the General Meeting held on April 28, 2022 toapprove the December 31, 2021 financial statements.
The dividends and the related Italian withholding tax due (Euro 9.3 million),determined by applying the ordinary Italian tax rate to the entire amount of the15

dividends 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
2022

December 31
2021

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

342,110(11,595)
1,400

338,931(10,990)
1,606

Total

331,915

329,547(amounts in thousands of Euro)The change in the allowance for bad and doubtful debts is detailed below:(amounts in thousands of Euro)
Opening balance

December 31
2022

December 31
2021

10,99011,979

90
741
(136)
(90)

546
581
(1,129)(987)

11,595

10,990Exchange differences
Increases
Reversals
Utilization
Closing balance

An aging analysis of the trade receivables, before the allowance for bad anddoubtful debts, is shown below:
Overdue (days)
61 ≤ 90 91 ≤ 120(amounts in thousandsof Euro)Dec. 31Not
2022 overdue1 ≤ 3031 ≤ 60

Trade receivables

343,510 288,400

28,803

4,109

3,902

1,185

17,111

Total
December 31, 2022

343,510 288,400

28,803

4,109

3,902

1,185

17,111(amounts in thousandsof Euro)Dec. 31Not
2021 overdue1 ≤ 30Overdue (days)
31 ≤ 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

21,60016> 120

An aging analysis of the trade receivables, net of the allowance for bad anddoubtful debts, is shown below:
Overdue (days)
31 ≤ 60 61 ≤ 90
91 ≤ 120(amounts in thousandsof Euro)Dec. 31Not
2022 overdue1 ≤ 30Trade receivables lessallowance for bad anddoubtful accounts

331,915 286,800

28,731

3,645

3,896

1,182

7,661

Total
December 31, 2022

331,915 286,800

28,731

3,645

3,896

1,182

7,661

(amounts in thousandsof Euro)Dec. 31Not
2021 overdue1 ≤ 30Overdue (days)
31 ≤ 60 61 ≤ 90 91 ≤ 120> 120

Trade receivables lessallowance for bad anddoubtful 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

12,274> 120

5. Inventories, net
December 31
2022

December 31
2021

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

108,450
30,109699,849
10,493(88,444)

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

Total

760,457

662,654(amounts in thousands of Euro)The changes in the allowance for obsolete and slow-moving inventories are as
follows:
Rawmaterials

Finishedproducts

Total
allowance forobsolete andslow-moving
inventories

Opening balance

30,73529,17959,914

Exchange differences
Increases
Utilisation
Reversal

(3)
1,588
(98)
-

135
28,449
(896)
(645)

132
30,037(994)(645)

Closing balance

32,22256,22288,444(amounts in thousands of Euro)17

6. Receivables due from, and advance payments to, related parties- current
December 31
2022(amounts in thousands of Euro)

Financial receivables

December 31
2021

2,200

-

173

22,866

2,373

22,866

December 31
2022

December 31
2021

VAT

39,627

31,121

Taxation and other tax receivables

70,77556,864

Other assets

9,230

11,937

Prepayments

86,61763,068

Guarantee deposits

9,668

8,230

215,917

171,220

Other receivables and advances
Total

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

Total

8. Capital expenditure
The changes in the net carrying amount of property, plant and equipment forthe period ended December 31, 2022 are shown below:(amounts inthousands of Euro)Land andbuildings

Production
plant andmachineryOpening balance

830,284

56,709Leasehold
AssetsFurniture
Other
improveunder& fittings tangibles
ments
construction
290,156

268,920

67,75751,027 1,564,853
48,844

Additions

15,553

11,727

77,20258,892

12,294

Depreciation(19,765)(12,058)(82,363)(40,393)(15,611)

Disposals

Total net
carrying
amount224,512- (170,190)

(161)

(97)

(3,132)(1,267)

499

(311)

(4,469)Exchange differences(2,825)

(100)

658

2,441

24

588

786

Other movements

12,885

4,373

15,3283,232

100(36,020)(102)

Impairment(24,372)(76)(6,038)(3,439)(3,796)(2,147)(39,868)

-

-

1,168

312

123

-

1,603

811,599

60,478292,979

288,698

61,390

Revaluation IAS 29
Closing balance

18

61,981 1,577,125

The changes in the net carrying amount of intangible assets for the period ended
December 31, 2022 are shown below:(amounts inthousands of Euro)

Opening balance

Trademarks
andAssetsStore Lease
Other
intellectual Goodwill
Softwarein
Acquisitions
intangibles
property
progressrights217,230 513,486

Additions

Total net
carrying
amount469

79,474

4,810

13,936

829,405

17

19,95375

29,946

51,584(343) (25,572)(3,147)-(40,701)

-

(5)

(289)

-

1

(1,854)(73) (13,009)

(723)

1,398

195

(11,639)---(1,846)

-

4

(13)

-

-

90

12,269(19,400)

-

(102)

(29)

(17)

(70)

(19,618)

Revaluation IAS 29

-

-

-

5

-

-

5

Closing balance

185,743 513,681

135

85,803

1,648

30,799817,809

Amortization
Disposals
Exchange differences
Other movements
Impairment

-

(284)

Impairment test
As required by IAS 36 "Impairment of Assets”, intangible assets with indefinite
useful lives are not amortised, but they are tested for impairment at least once
per year. The Group does not report intangible assets with indefinite useful lives
other than goodwill. At December 31, 2022, goodwill amounted to Euro 513.7
million, detailed by cash generating unit (“CGU”) as shown below:
December 31
2022(amounts in thousands of Euro)

December 31
2021

Italy Wholesale

78,35578,355Asia Pacific and Japan Retail311,936

311,936

Italy Retail and Pasticceria Marchesi 1824

33,82533,825Germany and Austria Retail

5,064

5,064

United Kingdom Retail

9,300

9,300

Spain Retail

1,400

1,400

France and Montecarlo Retail

11,70011,700

North America Retail and Wholesale

48,00048,000

Production Division

14,101

13,906

Total Goodwill

513,681

513,486

The impairment tests did not identify any impairment losses for the CGUs listed
above or for other CGUs of the Group, except for the Russia and Church’s
CGUs, as described herein.

19

Prada Russia CGU
In view of the extraordinary market conditions in Russia, the Prada Russia CGU
was tested for impairment at December 31, 2022 (as it had been at June 30,2022).
The method used to estimate the recoverable amount of the Prada Russia CGU
consisted of a multi-scenario approach based on two hypothetical cases thatwere each assigned a likelihood of occurrence calibrated according to theassumptions made by the Directors, taking into account the information
available at the reporting date.
The first scenario assumes the recovery of business in mid-2024, whereas thesecond one assumes the impossibility of returning to normal market conditionsin the medium term and the consequential realisation of the assets throughliquidation of the subsidiary. The Discounted Cash Flow method used to identify
the recoverable amount (value in use) of the CGU consisted of discounting the
projected cash flows generated by the net invested capital of Prada Russia. The
business plan used for the impairment test in the scenario of business recovery
in 2024 covers an explicit period of five years. The rate used to discount the cash
flows is the weighted average cost of capital (WACC). For the year ended
December 31, 2022, the WACC used to discount the future cash flows of theRussia CGU was 21%, and it was determined by taking into due consideration
the risk profile of the CGU’s activities. The “g” rate of growth used to calculate
the terminal value was 6%, in light of the inflation and GDP growth outlooks in
the local market.
In the second scenario (impossibility of returning to normal market conditions),
precise assumptions were made for each of the assets recognised, and an
independent expert was employed to assist in estimating the fair values of thebuildings owned by the Russian subsidiary.
The results of the impairment test, using the multi-scenario approach, led
Directors to write down the fixed assets of the CGU by Euro 43.5 million. Euro
29.7 million of the impairment loss was allocated to reduce the value of theproperties owned in Moscow and St. Petersburg, Euro 12.3 million to fully write
down the value of the right of use assets referring to leases, and Euro 1.5 million
to fully write down the deferred tax assets. The impairment loss of theproperties owned was backed up by an appraisal conducted by a leading
independent firm of the sector, which estimated the fair value of the twobuildings using the Comparative Method of valuation, which compares the realestate being appraised to other comparable assets recently sold or offered on
the same market.
The net invested capital of the CGU following the writedown was Euro 29.9
million (translated at the December 31, 2022 exchange rate), of which Euro 27.9
million refers to the two buildings owned and the remainder to items of net
working capital.
With respect to the estimated recoverable amount of the buildings, the current
volatility characterising the Russian financial system has created significant
uncertainty in the real estate industry; in particular, the scarce liquidity in capital
markets means, in the case of realising assets through a sale in the short term,
more difficulties than those present in normal market conditions. This
circumstance entailed using a high level of judgment to estimate the recoverable
20

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 CGU
The impairment test of the Church’s CGU - taking into account thereorganisation process that led to the closure of 24 stores deemed no longer
strategic by management – revealed the presence of impairment losses.
The Discounted Cash Flow method used to identify the recoverable amount(value in use) of the CGU consisted of discounting the projected cash flows
generated by the net invested capital of the Church’s Group. The recoverable
amount was estimated with the assistance of a leading consulting firm and withreference to key valuation parameters. The cash flow projections used for the
impairment test were based on the business plan drawn up by management,
which covers an explicit period of five years. The rate used to discount the cash
flows is the weighted average cost of capital (WACC). For the year ended
December 31, 2022, the WACC used to discount the cash flows generated by
the Church’s CGU was 10.6%, and it was determined taking into due
consideration the risk profile of the CGU’s activities. The “g” rate of growth used
to calculate the terminal value was 2.5%, in light of the prospective inflation in
the main countries where the Church’s Group operates and of the growth
outlook for the luxury goods market.
The results of the impairment test led Directors to write down the assets of the
CGU by Euro 19.4 million. The impairment loss was allocated entirely to thevalue of the brand, which was accordingly written down to Euro 44.3 million at
December 31, 2022. The brand is amortised and the remaining useful life is 17
years.
Given the high sensitivity of the CGU’s recoverable amount to potential changes
in the main assumptions used, the potential effects on the carrying amount (interms of larger or smaller writedowns) that could result from the increase anddecrease (up to 100 basis points) in the discount rate (WACC) and from thereduction (up to 100 basis points) of the (g) growth rate are set forth below(amounts in Euro/million):
WACC

g-rate

1.5%
2.0%
2.5%
(base case)

9.6%

10.1%

10.6%
(base case)

11.1%

11.6%

3.7
7.6

(1.5)
1.8

(6.1)
(3.2)

(10.2)(7.7)(13.9)(11.7)

12.0

5.6

-

(4.9)

(9.3)

Since values in use and fair values are measured on the basis of estimates andassumptions, management cannot guarantee that the value of goodwill or othertangible or intangible assets will not be subject to impairment in the future.

21

9. Right of Use assets
The changes in the net carrying amount of the right of use assets for the year
ended December 31, 2022 are shown below:(amounts in thousands of Euro)

Real Estate

Other

Total net
carrying amountOpening balance

1,952,834

3,455

1,956,289

6,293

-

6,293

495,069

2,671

497,740(449,532)(2,001)(451,533)(1,596)(316)(1,912)

Change in the consolidation area
New contracts, initial direct costs
and remeasurements
Depreciation
Contracts termination
Exchange differences

4,999

5

5,004

Impairment(12,342)-(12,342)

Revaluation IAS 29

11,935-

11,935

2,007,660

3,814

2,011,474

Closing balance

The increase for new leases, initial direct costs and remeasurements is
attributable to lease renewals (largely in America and Europe) and theremeasurement of the liability to adjust it to indexes commonly used in the realestate industry (mainly the consumer price index).
“Other”, amounting to Euro 3.8 million, includes plant, machinery, vehicles andhardware.

10. Other non-current assets
December 31
2022

December 31
2021

Guarantee deposits

64,216

61,842

Prepayments for commercial agreements

50,08054,253231

383

Pension fund surplus

6,426

13,309Other long-term assets

18,44914,559

Total

139,402144,346(amounts in thousands of Euro)Deferred rental income

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

22

11. Payables to related parties - current
December 31
2022

December 31
2021

3,568

3,360

-

5,000

3,568

8,360

(amounts in thousands of Euro)

December 31
2022

December 31
2021

Trade payables – third parties

396,159

382,208

Trade payables – related parties

5,640

7,955

401,799

390,163(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 (days)
31 ≤ 60 61 ≤ 90 91 ≤ 120(amounts inthousands of Euro)

Dec. 312022

Not
overdue1 ≤ 30Trade payables

401,799

374,150

9,666

5,057

136

1,836

10,954

Total
December 31, 2022

401,799

374,150

9,666

5,057

136

1,836

10,954(amounts inthousands of Euro)

Dec. 31
2021

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

13. Other current liabilities(amounts in thousands of Euro)

December 31
2022

December 31
2021

Payables for capital expenditure

73,24943,575

Accrued expenses and deferred income

28,97130,308Other payables

140,086

106,165

Total

242,306

180,048

The increase of Euro 62.3 million was due to higher payables for investments,
payables to employees and accruals for returns from customers.
23

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
Exchange differences
Reversals

Provision
for litigation

Provision fortax disputes

Other
Provisions

Total

10,8992,306

45,99659,201

(8)

80

82

154

(232)

(112)

(414)

(758)

(10,067)(68)(2,390)(12,525)

Increases

292

2,395

2,727

5,414

Closing balance

884

4,601

46,001

51,486

Utilised

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.
In relation to the provision for litigation, considering the execution on November
15, 2022, of a settlement agreement between the parties to terminate thedispute, Prada S.p.A. paid to Chora S.r.l. an all-inclusive amount of Euro 17.8
million. Prada S.p.A. utilised the Euro 10 million provision allocated in 2021 andrecognised costs for Euro 7.8 million in the item Other non-recurring income /(expenses).
The other risk provisions amount to Euro 46 million at December 31, 2022 andrefer primarily to contractual obligations to restore leased commercial
properties to their original condition.

24

Management Discussion and Analysis for the year ended
December 31, 2022
For fiscal year 2022, the Prada Group registered net revenues of Euro 4,200.7
million, an increase at constant exchange rates of 21.3% on 2021. Foreignexchange rates contributed positively for an additional 3.5%, for an increase of
24.8% on 2021, at current exchange rates.

Distribution channels
Over the twelve-month period, retail net sales experienced double-digit growthcompared with 2021, with an increase of 23.8% at constant exchange rates(+27.5% at current exchange rates).
There were 612 stores at December 31, 2022 following 17 store openings and
40 closures, including 24 Church’s stores as a result of the reorganisation
process.
Direct e-commerce sales accounted for approximately 7% of total retail sales,
in line with annual 2021 data. For the twelve-month period, retail net sales
accounted for approximately 89% of net revenues.
Wholesale net sales contracted by 2% at constant exchange rates compared with
2021, consistently with the Group’s selective strategies for this channel and theimpact of Covid-19 restrictions on the duty free customers.

Markets
In Asia Pacific, retail net sales for the twelve months ended December 31, 2022
slightly contracted by 1.7% at constant exchange rates from those of 2021(+3.3% at current exchange rates), with a return to growth in the second half ofthe year. Asia Pacific sales were adversely affected by continuous restrictions
imposed by authorities in China following the ongoing Covid-19 emergency.
Excluding China, all the other countries in the Asia Pacific region registereddouble-digit growth, with particularly buoyant markets in South East Asia.
Retail net sales in Europe, driven by domestic consumption and tourism
recovery, surged by 63.4% at constant exchange rates against those of 2021(+58.6% at current exchange rates), with all areas showing double-digit growth
except for Russia and Ukraine.
Retail net sales in the Americas increased by 22.1% at constant exchange rates(+36.8% at current exchange rates), compared to 2021.
The Japanese market rebounded mainly due to domestic consumption, withretail net sales up by 30.5% at constant exchange rates (+24.3% at current
exchange rates).
Retail net sales in the Middle East increased by 23% at constant exchange rates(+37.7% at current exchange rates), compared to 2021.

BrandsCompared with 2021, Prada retail net sales increased by 24.5% at constantexchange rates (+28.2% at current exchange rates). Miu Miu retail net sales rose25

by 20.3% at constant exchange rates (+24.5% at current exchange rates). At
constant exchange rate Church’s retail net sales fell by 2.3% (-1.4% at current
exchange rate) impacted by the reorganisation process and store closures.
The net revenues by brand amounted to Euro 3,647.8 million for Prada, Euro
488.9 million for Miu Miu, Euro 36.8 million for Church’s and Euro 27.2 million
for the other brands.

Product categories
The Group reported double-digit growth across all product categories. Retailnet sales of leather goods, which benefited from growth of both new and classic
products, increased at constant exchange rate by 18.5% on 2021 (+21.7% atcurrent exchange rates). Sales of ready to wear, with new Prada and Miu Miucollections highly appreciated by the clientele, showed an increase of 27%
versus 2021 (+31.5% at current exchange rates). Thanks to both lifestyle andformal products, sales of footwear rose by 28.9% at constant exchange rates on
2021 (+32.6% at current exchange rates).

Royalties
Royalty income rose by 55.1% on 2021. Both eyewear and fragrances showeddouble-digit growth: eyewear continued the solid trend experienced in the firsthalf of the year, and fragrances were also supported by the launch of the newfragrance, Prada Paradoxe.

Operating results
Gross margin for the twelve months ended December 31, 2022 was 78.8% on
net revenues, up substantially from the 75.7% of 2021. Higher average prices,
greater absorption of production overheads, and a better sales mix in terms of
distribution channels are behind the improvement, despite the increase inproduction costs caused by inflationary pressures.
Operating expenses, excluding non-recurring income / (expenses), were Euro2,467 million, up by Euro 419 million from those of 2021. The increase is
primarily attributable to higher variable costs ensuing from higher sales, greatercommunication activities, higher personnel and other general and administrative
expenses, and reduced benefits in terms of rent discounts and subsidies that
had been available in 2021 due to Covid-19 emergency.
Recurring operating income for the period, or EBIT Adjusted, was Euro 845.2
million (20.1% of net revenues), compared to Euro 499.5 million (14.8%) in 2021.
For the twelve months ended December 31, 2022, other non-recurring income/ (expenses) include a Euro 42 million writedown of tangible fixed assets andright of use assets as a result of the extraordinary market conditions in Russia,
a Euro 19.4 million writedown of the Church’s brand in context of thereorganisation process, and Euro 7.8 million for settlement of a litigation thatcan be considered of a non-recurring nature.
The operating income for the period, or EBIT, amounted to Euro 776 million(18.5% of net revenues), compared to Euro 489.5 million (14.5%) in 2021.
26

Financial expenses and taxation
Net financial expenses amounted to Euro 65 million, a decrease of Euro 2.8
million on 2021 (Euro 67.8 million). The decrease is largely attributable to lower
interest costs associated with the net financial position, which improved fromthe previous year, and reduced foreign exchange losses, offset in part by higher
interest on new (and renewed) leases.
Tax expenses totaled Euro 241.8 million, corresponding to 34% of the pre-tax
income; the increased incidence compared to 2021 (30%) results from adifferent geographical distribution of profits, the prudential non-recognition of
the deferred taxes on writedowns of fixed assets in Russia, and the retroactive
effects of a bilateral agreement between tax authorities signed during the year.

Net income
Net income for the period amounted to Euro 469.2 million (11.2% of net
revenues), compared to Euro 295.1 million (8.8%) in 2021.

27

Net invested capital
The following table reclassifies the Statement of Financial Position to provide
information on the composition of net invested capital:
December 31
2022

December 31
2021

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

2,011,474
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

1,956,289
2,490,047
329,547
662,654(390,163)
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
Short-term financial, net surplus/(deficit)
Net financial surplus / (deficit)
Net financial surplus / (deficit) to consolidated shareholders'equity ratio(3,482,217)(18,805)(3,501,022)(394,531)
929,431534,900(3,113,894)(14,749)(3,128,643)(491,676)
729,329
237,653-15.3%-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(1,715,451)(392,126)(2,107,577)(1,572,677)(1,627,197)(418,215)(2,045,412)(1,807,759)(5,073,699)(4,936,402)(amounts in thousands of Euro)Net invested capital as at December 31, 2022 was Euro 5,074 million, withequity of Euro 3,501 million and lease liability of Euro 2,108 million; the net
financial position at the end of the period registered a surplus of Euro 534.9
million.
Right of use assets increased by Euro 55.2 million, mainly as a result of increases
for new leases, remeasurements of existing leases, and consolidation perimeterchanges totaling Euro 504 million, net of depreciation of Euro 451.5 million andwritedowns of Euro 12.3 million regarding leases in Russia.
The non-current assets (net) rose by Euro 27 million (Euro 2,517 million at
December 31, 2022 versus Euro 2,490 million at December 31, 2021).
The capital expenditures of the year amounted to Euro 276.1 million, against
depreciation, amortisation and writedowns of Euro 275.4 million, including the28Euro 29.7 million writedown of assets in Russia and the Euro 19.4 million
writedown of the Church’s brand.
twelve months twelve months
ended
ended
December 31 December 31
2022
2021

(amounts in thousands of Euro)

Retail168,935

85,742-59,453

Production, logistics and corporate

107,161

71,549Total

276,096

216,744

Real estate

Capital expenditures primarily relate to store restyling and relocation projects,
as well as the advancement of the technological and digital roadmap in theretail, manufacturing and corporate areas and continued investments in the
manufacturing facilities to strengthen the supply chain.
In addition to the capital expenditures, there was an investment of Euro 19.8
million for the 43.65% stake in Conceria Superior S.p.A., a long-standing
supplier of the Group. The acquisition represents another important step
towards vertical integration of the Prada Group’s supply chain, with the aim offurther increasing industrial know-how and quality control along all
manufacturing stages. In addition, the investment will accelerate progress onimportant issues such as traceability of raw materials and transparency of
supply chain.
The net operating working capital at December 31, 2022 totaled Euro 690.6
million, up by approximately Euro 88.5 million from that of 2021. The increaseis largely attributable to higher inventories.
The other current liabilities (net) amounted to Euro 293 million at December 31,
2022, up by Euro 130 million from December 31, 2021, essentially due to thehigher current tax liability.
The other non-current assets (net) of Euro 147.6 million at December 31, 2022
showed an increase of Euro 96.5 million from the prior year, attributable mainly
to the increase in deferred tax assets referring to greater temporary differenceson the inventory values.

29

Net financial surplus / (deficit)
The following table presents the composition of the net financial position:
December 31 December 31
2022
2021

(amounts in thousands of Euro)Bank borrowing – non-current(395,656)(492,801)

Financial payables and bank overdrafts - current
Payables to related parties - current
Total financial payables – current(160,847)(3,568)(164,415)(249,103)(3,360)(252,463)

Total financial payables(560,071)(745,264)

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

1,091,622
1,125
2,224

981,786
1,125
6

Total financial receivables and cash and cash equivalents

1,094,971

982,917534,900

237,653

Net financial surplus / (deficit)

The net operating cash flow for the twelve-month period, after the payment of
the lease liability (Euro 428.2 million), was positive for Euro 695.5 million. Afterthe cash outflows for investing activities (Euro 250.2 million), dividend payments(Euro 179.7 million), and net of the revaluation of the items of the net financial
position (Euro 31.6 million) due to the strengthening of the main currencies
against the Euro, the net financial surplus reached Euro 534.9 million at the endof the period.
December 31
2022

December 31
2021

Cash flow from operating activities

1,392,805

1,226,018

Cost of net financial debt: interest paid
Lease liability: interest paid
Tax paid(8,533)(40,989)(219,586)(8,556)(36,773)(37,161)

Net cash flow from operating activities

1,123,697

1,143,528

Repayment of lease liability(428,170)(392,805)

Net operating cash flow

695,527

750,723

Net cash flow utilized by investing activities(250,209)(137,265)

Free cash flow

445,318

613,458(amounts in thousands of Euro)

The total amount of undrawn lines of credit at December 31, 2022 is Euro 807
million, consisting of Euro 400 million of committed lines and Euro 407 millionof uncommitted lines.
30

All financial covenants were fully complied with at December 31, 2022 and they
are expected to be complied within the next 12 months as well.
The following table sets forth the lease liability:
December 31
2022

December 31
2021

Long-term lease liability
Short-term lease liability

1,715,451
392,126

1,627,197
418,215

Total lease liability

2,107,577

2,045,412(amounts in thousands of Euro)The lease liability increased from Euro 2,045 million at December 31, 2021 toEuro 2,108 million at December 31, 2022, primarily as a result of
remeasurements for lease extensions or modifications (Euro 496.2 million) netof the payments of the period (Euro 428.2 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
1,573 million at December 31, 2022 (Euro 1,808 million at December 31, 2021).

Events after the reporting dateNo significant events to be reported.

Outlook
The Group’s ambition for 2023 is to continue on a path of solid and abovemarket growth, investing behind brand desirability, in the renovation of the store
network, and in the industrial and technological infrastructure. However, themacroeconomic and geopolitical environment remain uncertain. China, among
other factors, will play an important role with respect to the Group’s ambition,and notwithstanding encouraging developments since the start of the year, theevolution is unpredictable. Therefore, the Group remains vigilant and maintains
a disciplined approach to costs and capital allocation.

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 shareholders 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 14 of the Rules Governing the Listing31

of Securities on The Stock Exchange of Hong Kong Ltd (the “Listing Rules”). Fulldetails on the Company’s corporate governance practices are set out in the
Company’s 2022 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, 2022 (the “2022 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 10 of the Listing Rules. In response to specific enquiries by theCompany, all Directors confirmed that they complied with the required standard
set out in the Model Code and the Company’s procedure at all applicable times
during the 2022 Year. There were no incidents of non-compliance during the2022 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 discharge 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 2022 Year, the Audit and Risk Committee held five meetings (with anattendance rate of 93.3%) mainly to review with senior management, theGroup’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 audit plan for the 2022 Year, the findings of both the internal and theexternal auditors, internal controls, risk assessment, annual review of thecontinuing connected transactions of the Group for 2021, tax and legal updates
and the financial reporting matters (including the annual results for the year
ended December 31, 2021 and the interim financial results as at June 30, 2022),
before recommending them to the Board for approval.
The Audit and Risk Committee also held three meetings on January 25, 2023,
February 27, and March 8, 2023, to examine and recommend to the Board theapproval of the 2023 budget of the Group, to discuss the audit activities for the32certification of the 2022 Year Separate Financial Statements and Annual Reportof the Company presented by Deloitte & Touche S.p.A., to evaluate themethodology applied to the impairment test, to discuss the status of the major
pending litigations, including tax litigations, of the Group, to have an update on
the internal audit and risk management activities, to present the 2023 Audit
Plan, to review, for the Year 2022, the annual results, the Sustainability Report,
the continuing connected transactions, and the Internal Audit Department andAudit and Risk Committee reports.

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 2022 Year.

Shareholders’ general meeting
The Shareholders’ general meeting of the Company will be held on Thursday,
April 27, 2023 (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 2022 Year, a final dividend of Euro
281,470,640 (Euro 0.11 per share).The payments shall be made:
(i)

(ii)

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), andin 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 19, 2023.

33

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 24, 2023 - 4:30
pm HK time/10:30
am CET timeBook closure (both sections) (Note 2)

From April 25 to April
27, 2023 (both days
inclusive)

Record date

April 25, 2023

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)

May 4, 2023 - 4:30
pm HK time/10:30
am CET timeBook closure (both sections) (Note 2)

May 5, 2023

Record Date

May 5, 2023

Dispatch date of dividend warrants

May 19, 2023

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(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.

34

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 2022 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

Chairman

Milan (Italy), March 9, 2023

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

35