Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited
take no responsibility for the contents of this announcement, make no representation as toits accuracy or completeness and expressly disclaim any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the contents of thisannouncement.

PRADA spa
(Stock Code: 1913)

ANNOUNCEMENT
OF THE CONSOLIDATED RESULTS FOR THE YEAR ENDEDJANUARY 31, 2016,
AND
CESSATION OF QUARTERLY FINANCIAL RESULTS
PUBLICATION- Net revenues were Euro 3,547.8 million, recording a decrease of 0.1%
compared with the twelve months ended January 31, 2015 (-7.7% atconstant exchange rates)- Retail net sales were Euro 3,059.7 million, up by 2.6% compared withthe twelve months ended January 31, 2015 (-5.3% at constantexchange rates)- EBIT was Euro 502.9 million, representing a margin of 14.2% on net
revenues- Group’s net income amounted to Euro 330.9 million, compared toEuro 450.7 million for the twelve months ended January 31, 2015
- Net financial position standing negative at Euro 114.8 million as atJanuary 31, 20161

Consolidated results for the year ended January 31,
2016
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company”, or“PRADA spa”) announces the audited Consolidated results of the Company
and its subsidiaries (collectively, the “Group”) for the year ended January
31, 2016, together with the audited comparative figures for the year ended
January 31, 2015. The following financial information has been prepared inaccordance with the International Financial Reporting Standards (“IFRS”) as
adopted by the European Union. The Consolidated results of the Group forthe year ended January 31, 2016, and January 31, 2015, were audited by
Deloitte & Touche S.p.A.

Scope of work of Messrs. Deloitte & Touche spa
The figures in respect of the Group’s consolidated statement of financial
position, consolidated statement of comprehensive income and the related
notes thereto for the year ended January 31, 2016, as set out in thispreliminary announcement have been agreed by the Group's auditors, Messrs.
Deloitte & Touche spa, to the amounts set out in the Group’s audited
consolidated financial statements for the year. The work performed by
Messrs. Deloitte & Touche spa in this respect did not constitute an assurance
engagement in accordance with Auditing Standards issued by the Italian
Accounting Profession (CNDCEC) and recommended by Consob, the ItalianCommission for listed Companies and the Stock Exchange and consequently
no assurance has been expressed by Messrs. Deloitte & Touche spa on the
preliminary announcement.

2Key financial information
Key information from the Statement ofProfit or Loss(amounts in thousands of Euro)

twelvemonthsended
Jan 31
2016(audited)

twelvemonthsended
Jan 312015(audited)

twelvemonthsended
Jan 312014(audited)

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

3,547,771
802,75822.6%
502,89314.2%
475,332
330,8880.129
336,895
368,465

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

3,587,347
1,143,186
31.9%
939,237
26.2%
922,896627,785
0.245
611,227
769,436-0.1%-15.9%-28.3%-28.8%-26.6%-26.6%-23.8%

12,414

11,962

10,816

3.8%

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

as at
Jan 31
2016(audited)

as at
Jan 312015(audited)

as at
Jan 312014(audited)change vs
Jan 31
2015

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

665,156
3,212,172(114,795)
3,080,340

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

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

101,747
382,813(303,583)
79,603

Average number of employees%change vs
Jan 312015

Highlights for the year ended January 31, 2016
The economic environment became tougher for the international luxury
goods market in 2015. Difficult times on Asian markets had a significant
impact on sales performance throughout the region, especially in Hong Kongand Macao where reductions in local consumption and in the flow of tourism
hit harder than elsewhere. At the same time, social and political tensions
felt worldwide further contributed to a general decrease in willingness toconsume and in tourist flows. Foreign exchange fluctuation also had asignificant effect as the competitive advantage produced by the weaker Euroin the first half of the year decreased due to instability on financial markets
over the summer period, reducing the flow of Chinese customers inparticular.
A swift response to this complicated situation was needed and, bearing in
mind its core commitment to research and innovation, the Group has
implemented a series of measures designed to combat pressure on operating
profit resulting from the lack of retail sales growth and the reduction in thewholesale. The main operating processes in the retail and production areas
have been reviewed in order to make them more efficient and measures toimprove the mix of products on sale have been identified. Prices have also
been adjusted to take account of foreign exchange rate market trends andbrand positioning. Last but not least, the range of corrective measures taken
has included action to reduce costs. Nevertheless the Group continued toprefer long-term growth targets committing resources to activities and3projects deemed essential to value creation. Accordingly, investment inindustrial and retail structures has continued, even though priorities were
adjusted during the year. Priority has also been given to initiatives designed
to strengthen brand identity and develop relations with an ever moresophisticated customer base. In this regard, it is worth mentioning, inaddition to the aforesaid sponsorships, directly organized events like the oneheld to celebrate the opening of the prestigious new freestanding Miu Miu
store in Aoyama, Tokyo.
Market response to the Group’s marketing initiatives and commercial
decisions has been positive overall although there have been contrasting
results in terms of distribution channel, product category and geographicalarea. Consolidated net revenues for the year amounted to Euro 3,547.8
million, broadly in line with 2014 at current exchange rates. The range ofmeasures adopted by management in relation to business processes and thecost structure have helped limit the reduction in profitability and thereporting period has ended with Group’s net income of Euro 330.9 million,
9.3% of net revenues; this is down on 2014 when Group’s net income stood at
Euro 450.7 million, or 12.7% of revenues.

4Consolidated Statement of Profit or Loss for the year ended
January 31, 2016
(amounts in thousands of Euro)Net revenues
Cost of goods soldtwelvemonths
% on
ended
Net
January 31
revenues
2016(audited)

Note3

twelvemonths
% on
ended
Net
January 31
revenues
2015(audited)

3,547,771(980,206)

100.0%-27.6%

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

100.0%-28.2%

2,567,565

72.4%

2,550,579

71.8%(2,064,672)-58.2%(1,849,028)-52.1%

502,89314.2%

701,551

19.8%(29,872)-0.9%(34,304)

-1.0%

2,311

0.1%

455

-

475,332

13.4%

667,70218.8%(141,994)-4.0%(208,484)-5.9%

333,3389.4%

459,218

12.9%

2,450

0.1%

8,488

0.2%

Net income – Group

330,8889.3%

450,730

12.7%

Depreciation, amortization andimpairment

299,8658.5%

252,698

7.1%

EBITDA

802,75822.6%

954,249

26.9%

Gross margin
Operating expenses

4

EBIT
Interest and other financial
income/(expenses), net
Dividends received from third parties

5

Income before taxes
Taxation

6

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

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

7

0.129

5

0.176

Consolidated Statement of Profit or Loss for the three months
ended January 31, 2016 (unaudited)(amounts in thousands of Euro)Net revenues
Cost of goods soldthreemonths
% on
ended
Net
Jan 31revenues
2016(unaudited)

Note

3

three
months
% on
ended
Net
Jan 31revenues
2015(unaudited)

965,227(284,766)

100.0%-29.5%

999,672(285,509)

100.0%-28.6%

Gross margin

680,46170.5%

714,163

71.4%

Operating expenses(551,456)-57.1%(509,045)-50.9%

EBIT

129,005

13.4%

205,118

20.5%(9,783)-1.0%(18,326)

-1.8%

749

0.1%

-

-

Income before taxes

119,97112.5%

186,792

18.7%

Taxation(24,855)-2.6%(53,771)-5.4%

Net income for the period

95,1169.9%

133,021

13.3%

(695)

-0.1%

1,610

0.2%

Net income – Group

95,811

9.8%

131,411

13.1%

Depreciation, amortization andimpairment

78,354

8.1%

67,453

6.7%

EBITDA

207,359

21.5%

272,571

27.3%

Interest and other financial
income/(expenses), net
Dividends received from third parties

Net income – Non-controlling interests

6Consolidated statement of financial position
as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

98

680,601
254,183
692,672
11,682708,966
346,284
654,5456,287

10

19,6293,240

12229,671
1,888,438

180,633
1,899,955

11
11

1,517,779
932,238
17,354
280,572
113,954721

1,474,218
943,304
30,529280,983
91,353
1,106

5,499

17,4292,868,117
4,756,555

2,838,922
4,738,877

270,1125,244
281,699
80,744
11,095654
142,271
791,819

263,335
3,083
437,420
133,91456,772
21
220,480
1,115,025

520,475
69,405
69,23336,882
161,317
10,047867,359
1,659,178

255,20385,754
63,695
41,634
128,752
17,283
13,384605,705
1,720,730

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

255,882
2,355,023
138,547
330,888
3,080,340
17,037
3,097,377

255,882
2,163,129
130,996
450,730
3,000,737
17,4103,018,147

Total Liabilities and Total Equity

4,756,555

4,738,877

Net current assets
Total assets less current liabilities

1,096,619
3,964,736

784,930
3,623,852(amounts in thousands of Euro)

Note

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Derivative financial instruments - current
Receivables from, and advance payments to,related parties - current
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Associated undertakings
Deferred tax assets
Other non-current assets
Derivative financial instruments non-current
Receivables from, and advance payments to,related parties – non-current
Total non-current assets
Total Assets

13
10

Liabilities and Shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans
Payables to related parties - current
Trade payables
Tax payables
Derivative financial instruments - current
Obligations under finance leases - current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term financial payables
Post-employment benefits
Provision for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments non-current
Payables to related parties – non-current
Total non-current liabilities
Total Liabilities

14
15

16

17

14

7

Statement of changes in consolidated shareholders’ equity(amounts in thousands of Euro, except for number of shares)

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

NonEquity of controllin
the Groupginterests(amounts inthousands of Euro)

Number of
SharesShare
CapitalTranslationReserve

Balance at January
31, 2014

2,558,824,000

255,882(49,438)410,047

3,699(11,452)

Allocation of 2013
net income

-

-

-

-

-

-

-

Dividends

-

-

-

-

-

-

- (281,471) (281,471)

-

-

-

-

-

-

-

(2,466)

-

-

-

-

-

-

-

-

-

180,434-(39,022)

-

-

-

-

-

-

(2,029)2,558,824,000

255,882

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

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

- (281,471) (281,471)-(281,471)(3,228)(284,699)

-

-

-

-

-

-

-

-

-

-

-

409

409

-

-

-

-

-

-

-

(726)

(726)

-

(726)

(39)

(765)

-

-

7,551

-

28,223-(10,182)-

18,041

330,888356,480

2,479

358,959

-

-

-

-

-

5,320

-

-

5,320

-

5,320

6

5,326

2,558,824,000

255,882

138,547410,047(7,100)(8,161)

Acquisition ofMarchesi Angelo srl
Capital injection in
subsidiaries
Comprehensive
income for the year
(recycled to P&L)
Comprehensive
income for the year
(not recycled to
P&L)
Balance at January
31, 2015
Allocation of 2014
net income
Dividends
Share capitalincrease
Transactions with
Non-controllingshareholders
Comprehensive
income for the year
(recycled to P&L)
Comprehensive
income for the year
(not recycled to
P&L)
Balance at January
31, 2016

8

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

627,785 2,687,554

Total
Equity13,986 2,701,540

-

-

-

-

(281,471)(9,378)(290,849)(2,466)-(2,466)107(2,359)

-

-

-

-

2,125

2,125

7,007

-

(32,015)450,730

599,149

10,573609,722--(2,029)-(2,029)(3)(2,032)627,785

627,785 (627,785)

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

450,730

450,730 3,000,737

450,730 (450,730)

933 1,959,304 2,355,023

330,888 3,080,340

17,410 3,018,147

17,037 3,097,377

Condensed statement of consolidated cash flows
twelve months
ended
January 31
2016(audited)

twelve months
ended
January 31
2015(audited)

Net cash flows from operating activities

368,465

483,597

Cash flows generated/(utilized) by investing activities(392,125)(368,870)

Cash flows generated/(utilized) by financing activities(9,777)(57,027)

Change in cash and cash equivalents, net of bank overdrafts(33,437)

57,700(amounts in thousands of Euro)Statement of consolidated comprehensive income
twelvemonthsended
January 31
2016(audited)

twelvemonthsended
January 31
2015(audited)

333,338

459,218

7,580
7,580

182,519
182,519

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

38,907(10,684)
28,223(52,817)
13,795(39,022)

Change in Fair Value reserve
Tax impact
Change in Fair Value reserve less tax impact(13,576)
3,394(10,182)

9,343(2,336)
7,007

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

6,526(1,200)5,326(2,338)306(2,032)

Consolidated comprehensive income for the period

364,285

607,690

2,485

10,570361,800

597,120(amounts in thousands of Euro)Net income for the period – ConsolidatedA) Items recyclable to P&L:
Change in Translation reserve
Tax impact
Change in Translation reserve less tax impactB) Item not recyclable to P&L:

Comprehensive income for the period – Non-controlling
Interests
Comprehensive income for the period – Group9

Notes to the consolidated results for the year ended
January 31, 2016
1.

Presentation of PRADA GroupPRADA spa (the “Company”), together with its subsidiaries (jointly the“Group”), is listed on the Hong Kong Stock Exchange (HKSE code: 1913). It is
one of the world leaders in the luxury goods sector where it operates with
the Prada, Miu Miu, Church’s and Car Shoe brands in the design, production
and distribution of luxury handbags, leather goods, footwear, apparel andaccessories. The Group also operates, under specific licensing agreements, inthe eyewear and fragrances. Its products are sold in 70 countries worldwide
through a network that included 618 Directly Operated Stores (DOS) at
January 31, 2016, and a select network of luxury department stores,
independent retailers and franchise stores.
The Company is a joint-stock company, registered and domiciled in Italy. Its
registered office is in via Fogazzaro 28, Milan, Italy.

2.

Basis of preparation

The Consolidated financial statements of the PRADA Group as at January 31,
2016, including the “Consolidated statement of financial position”, the“Consolidated Statement of Profit or Loss”, the “Statement of Consolidated
comprehensive income”, the “Summarized statement of consolidated cash
flows “, the “Statement of changes in consolidated shareholders’ equity” andthe “Notes to the consolidated financial statements” have been prepared inaccordance with the International Financial Reporting Standards (“IFRSs”)
issued by the International Accounting Standards Board (“IASB”) as endorsedby the European Union.
At the date of presentation of these Consolidated financial statements, there
were no differences between IFRS as endorsed by the European Union andapplicable to the PRADA Group and those issued by the IASB.
IFRS also refers to all International Accounting Standards (“IASs”) and allinterpretations of the International Financial Reporting Interpretations
Committee (“IFRIC”), previously called the Standing Interpretations
Committee (“SIC”).
The contents of this Announcement on the consolidated results for the year
ended January 31, 2016, are included in the 2015 Annual Report of PRADA
spa.

10

Amendments issued by the IASB, endorsed by the European Union andapplicable to the PRADA Group from February 1, 2015
The following amendments to IFRS have been endorsed by the European
Union and are applicable to the PRADA Group effective from February 1,
2015. These changes did not have any significant impact on the figures
reported in this Announcement:











Amendments to “IAS 19 Employee Benefits”;
Amendments to “IFRS 1 First Time Adoption of IFRS”;
Amendments to “IFRS 3 Business Combinations”;
Amendments to “IFRS 13 Fair Value Measurement”;
Amendments to “IAS 40 Investment Property”;
Amendments to “IFRS 2 Share-based Payment”;
Amendments to “IFRS 8 Operating Segments”;
Amendments to “IAS 16 Property, Plant and Equipment”;
Amendments to “IAS 24 Related Party Disclosure”;
Amendments to “IAS 38 Intangible Assets”;

11

3.

Net revenues analysis

Net revenues for the year ended January 31, 2016 (audited)
twelve months
ended
January 31
2016(audited)(amounts in thousands of Euro)Net sales of directly operated stores (DOS)Sales to independent customers andfranchisees
Royalties
Net revenues, total

twelve months
ended%
January 31
2015 change(audited)

3,059,732

86.3%

2,980,891

444,61212.5%

532,545

43,427
1.2%
3,547,771 100.0%

83.9%

2.6%

15.0% -16.5%

38,2601.1%
3,551,696 100.0%

13.5%
-0.1%

Net sales of directly operated stores (DOS)twelve months
ended
January 31
2016(audited)(amounts in thousands of Euro)

twelve months
ended%
January 31
2015 change(audited)

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

392,796 12.8%
665,784 21.8%
410,751 13.4%
1,080,012 35.3%
403,721 13.2%
103,521
3.4%
3,147
0.1%
3,059,732 100.0%

354,759 11.9%
644,819 21.6%
391,177 13.1%
1,130,205 37.9%
364,825 12.2%
92,881
3.1%
2,225
0.1%
2,980,891 100.0%

10.7%
3.3%
5.0%
-4.4%
10.7%
11.5%
41.4%
2.6%

Net sales of DOS by brand
Prada
Miu Miu
Church's
Other
Total

2,487,593 81.3%
501,667 16.4%
56,194
1.8%
14,2780.5%
3,059,732 100.0%

2,463,155 82.6%
454,968 15.3%
49,012
1.6%
13,7560.5%
2,980,891 100.0%

1.0%
10.3%
14.7%
3.8%
2.6%

Net sales of DOS by product line
Clothing
Leather goods
Footwear
Other
Total

541,627 17.7%
1,919,872 62.7%
537,498 17.6%
60,7352.0%
3,059,732 100.0%

512,271 17.2%
1,965,630 65.9%
448,696 15.1%
54,2941.8%
2,980,891 100.0%

5.7%
-2.3%
19.8%
11.9%
2.6%

12

Net sales to independent customers and franchisees(amounts in thousands of Euro)Net Sales to independent customers andfranchisees by brand
Prada
Miu Miu
Church's
Other
Total

13

twelve months
ended
January 31
2016(audited)

twelve months
ended%
January 31
2015 change(audited)

353,463 79.5%
62,648 14.1%
26,262
5.9%
2,239
0.5%
444,612 100.0%

432,282 81.2%
71,802 13.5%
25,029
4.7%
3,432
0.6%
532,545 100.0%-18.2%-12.7%
4.9%-34.8%-16.5%

Net revenues for the three months ended January 31, 2016
(unaudited)
three months
ended
January 31
2016(unaudited)(amounts in thousands of Euro)Net sales of directly operated stores (DOS)Sales to independent customers andfranchisees
Royalties
Net revenues, total

three months
ended%
January 31
2015 change(unaudited)

806,267

83.5%

809,21681.0%

149,065

15.4%

181,059

18.1% -17.7%

9,895
1.1%
965,227 100.0%

9,397
0.9%
999,672 100.0%

-0.4%

5.3%
-3.4%

Net sales of directly operated stores (DOS) for the threemonths ended January 31, 2016
three months
ended
January 31
2016(unaudited)(amounts in thousands of Euro)

three months
ended%
January 31
2015 change(unaudited)

Net sales of directly operated stores (DOS) bygeographical area
Italy
EuropeAmericas
Asia PacificJapan
Middle East
Other countries
Total

87,674 10.9%
155,000 19.2%
117,034 14.5%
295,587 36.7%
119,970 14.9%
30,141
3.7%
861
0.1%
806,267 100.0%

84,271 10.4%
164,344 20.3%
120,544 14.9%
305,681 37.8%
107,744 13.3%
25,980
3.2%
652
0.1%
809,216 100.0%

4.0%
-5.7%
-2.9%
-3.3%
11.3%
16.0%
32.3%
-0.4%

Net sales of directly operated stores (DOS) by
brand
Prada
Miu Miu
Church's
Other
Total

651,105 80.8%
133,343 16.5%
16,929
2.1%
4,890
0.6%
806,267 100.0%

663,714 82.0%
125,392 15.5%
15,615
1.9%
4,495
0.6%
809,216 100.0%

-1.9%
6.3%
8.4%
8.8%
-0.4%

Net sales of directly operated stores (DOS) by
product line
Clothing
Leather goods
Footwear
Other
Total

161,892 20.1%
493,674 61.2%
137,772 17.1%
12,9291.6%
806,267 100.0%

153,104 18.9%
518,944 64.1%
125,495 15.5%
11,673
1.5%
809,216 100.0%

5.7%
-4.9%
9.8%
10.8%
-0.4%

14

Net sales to independent customers and franchisees for thethree months ended January 31, 2016
three months
ended
January 31
2016(unaudited)(amounts in thousands of Euro)Net Sales to independent customers andfranchisees by brand
Prada
Miu Miu
Church's
Other
Total

124,183 83.3%
19,287 12.9%
5,045
3.4%
550
0.4%
149,065 100.0%

three months
ended%
January 31
2015 change(unaudited)

148,819 82.2%
27,880 15.4%
3,505
1.9%
855
0.5%
181,059 100.0%-16.6%-30.8%
43.9%-35.7%-17.7%

Number of storesas atJanuary 31
2016
DOS
franchises

as atJanuary 31
2015
DOS
franchises

Prada
Miu Miu
Church’s
Car Shoe
Marchesi

386
173
52
5
2

26
10
-

362
169
55
8
-

27
8
-

Total

618

36

594

35

as at
January 31
2016
DOS
franchises

as atJanuary 31
2015
DOS
franchises

ItalyEuropeAmericas
Asia PacificJapan
Middle East
Africa

54
167
117
183
74
21
2

5
26
5
-

51
167
110
175
70
17
4

6
3
22
4
-

Total

618

36

594

35

15

4.

Operating expenses
twelve months
ended
January 31
2016(audited)% on netrevenues

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

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

134,272
191,695
1,517,443
221,262

3.8%
5.4%
42.8%
6.2%

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

3.7%
4.8%
37.8%
5.8%

Total

2,064,672

58.2%

1,849,028

52.1%(amounts in thousands of Euro)

5.

Interest and other financial income/(expenses), net
twelve months twelve months
ended
ended
January 31
January 31
2016
2015
(audited)(audited)(amounts in thousands of Euro)Interests expenses on borrowings
Interest expenses others
Interest income
Exchange gains /(losses) – realized
Exchange gains/(losses) – unrealized
Other financial income/(expenses)(14,779)
(44)
3,816
3,221
(17,489)(4,597)(12,891)
(400)
3,314
8,854
(30,045)(3,136)

Total(29,872)(34,304)

6.

Taxation
twelve months twelve months
ended
ended
January 31
January 31
2016
2015
(audited)(audited)(amounts in thousands of Euro)

Current taxation
Deferred taxation

158,157(16,163)

252,712(44,228)

Income taxes

141,994

208,484

16

7.

Earnings and dividends per share

Earnings per share
Earnings per share are calculated by dividing the net income of the period
attributable to Group’s shareholders by the weighted average number ofordinary shares in issue.
twelvemonthsended
January 31
2016(audited)Group net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average
number of shares

twelvemonthsended
January 31
2015(audited)

330,888,425 450,730,284
2,558,824,000 2,558,824,000
0.129

0.176

Dividend per share
The Board of Directors of PRADA spa has proposed a final dividend of Euro
281,470,640 (or Euro 11 cents per share) for the twelve months ended
January 31, 2016.
During the year ended January 31, 2016, the Company distributed dividendsof Euro 281,470,640, as approved by the Shareholders’ Meeting held on May
26, 2015 to approve the financial statements for the year ended January 31,
2015. Payment of the dividends and the related Italian withholding tax
liability (Euro 11.3 million), arising from the application of the Italianordinary withholding tax rate to the full amount of dividends paid tobeneficial owners of the Company shares held through the Hong Kong Central
Clearing and Settlement System, was completed by January 31, 2016.

17

8.

Inventories, net
as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

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

107,782
20,925
614,423(50,458)

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

Total

692,672

654,545(amounts in thousands of Euro)

The increase in finished products relates to the different approach toreplenishment which started in the last few months of 2014, as well as to thelower than expected volume of sales.
Materials being worked upon by third parties are included in raw materials.
Work in progress includes materials at the production stage with PRADA spa,other production companies included in the scope of consolidation and third
party sub-contractors.
Movements on the allowance for obsolete and slow moving inventories areanalyzed as follows:Rawmaterials

Finished
Products

Total

26,79837,40164,199

1
(42)

(4)
108
(13,804)(3)
108(13,846)

26,757

23,70150,458

as at
January 31
2016(audited)

as atJanuary 31
2015(audited)

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

235,718(6,546)25,011

317,147(7,784)36,921

Total

254,183

346,284(amounts in thousands of Euro)
Balance at January 31, 2015
Exchange differences
Increases
Utilization
Balance at January 31, 20169.

Trade receivables, net(amounts in thousands of Euro)

The decrease in trade receivables from third parties is due to a reduction insales to independent customers and third party franchisees.
Trade receivables from related parties mainly refer to the sale of finishedproducts to Fratelli Prada spa, a related company and franchisee of the
Prada Group. During the year, Prada spa took over management of the Prada
store in Galleria Vittorio Emanuele II, Milan from Fratelli Prada Spa.

18

The allowance for doubtful debts was determined on a specific basis
considering all information available at the date the financial statements
were prepared. It is revised periodically to bring receivables as close as
possible to their fair value.
Movements during the period were as follows:as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

Opening balance

7,784

10,432

Change in scope of consolidation
Exchange differences
Increases
Utilized
Reversals(47)
418(1,321)
(288)

17
463
109
(3,173)(64)

Closing balance

6,546

7,784

(amounts in thousands of Euro)The following table contains a summary of total receivables by due date
before the allowance for doubtful debts:(amounts inthousands of Euro)

as at
January
31, 2016(audited)

Not
overdue

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 90

Trade receivables

260,729

217,808

17,077

6,848

Total

260,729

217,808

17,077

6,848(amounts inthousands of Euro)

as at
January
31, 2015(audited)

Not
overdue1 ≤ 3031 ≤ 60

Trade receivables

354,068

283,878

28,279Total

354,068

283,878

28,27991 < 120

≥ 120

5,257

3,400

10,339

5,257

3,400

10,33961 ≤ 90

91 < 120≥ 120

11,202

10,0293,840

16,840

11,202

10,0293,840

16,840Overdue (days)

The following table contains a summary of trade receivables by due dateafter the allowance for doubtful accounts:(amounts inthousands of Euro)

as at
January 31
Not2016 overdue(audited)

Overdue (days)
1 ≤ 3031 ≤ 60 61 ≤ 90

91 < 120≥ 120

Trade receivables
less allowance for
doubtful accounts

254,183

217,327

17,077

6,848

5,257

3,400

4,274

Total

254,183

217,327

17,077

6,848

5,257

3,400

4,274

19

(amounts inthousands of Euro)

as at
January 31
Not2015 overdue(audited)

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade receivables
less allowance for
doubtful accounts

346,284

283,137

28,279

11,202

10,029

3,840

9,797

Total

346,284

283,137

28,279

11,202

10,029

3,840

9,797

10. Receivables from, and advance payments to, relatedparties – current and non-current
Receivables from, and advance payments to, related parties current are
detailed as follows:as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

Financial receivables
Prepaid sponsorship
Other receivables and advance payments

13,626
6,003

11
3,229

Receivables from, and advance payments to, related parties current

19,6293,240(amounts in thousands of Euro)

Receivables from, and advance payments to, related parties non-current are
detailed as follows:as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

Prepaid sponsorship
Deferred rental income – long-term
Loans

3,164
1,632
703

12,3794,309
741

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

5,499

17,429(amounts in thousands of Euro)20

11. Capital expenditure
Changes in the net book value of Property, plant and equipment in the period
ended January 31, 2016, are as follows:(amounts inthousands ofEuro)

Land andbuildings

Balance atJanuary 31,2015 (audited)

477,940

21,176513,302

178,661

70,273

212,866

1,474,218

60,349(15,798)1

15,709(10,199)(79)

97,555(168,866)(2,565)53,271(46,978)
(519)

8,145
(11,522)(102)

68,472(89)

303,501(253,363)(3,353)(2,585)(21)(5,286)(3,147)(244)(1,127)(12,410)

119,924

2,168

50,5809,069

19,635(183,210)

18,166-(63)(6,003)(2,670)

(76)

(168)

(8,980)639,831

28,691

478,717

187,687

86,109Additions
Depreciation
Disposals
Exchangedifferences
Other
movements
Impairment
Balance atJanuary 31,
2016 (audited)

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

96,744 1,517,779

Changes in the net book value of Intangible assets in the period ended
January 31, 2016, are as follows:
Trademarks

Balance atJanuary 31,2015 (audited)

277,232

513,214

106,492

10,82816,725

18,813

943,304376(11,528)
-

337
-

693
(19,272)(1,928)6,834(3,998)(97)71(2,016)-25,083-33,394(36,814)(2,025)

(842)

(173)

(3,564)

(78)

-

(65)

(4,722)-(160)

15,634
(545)

1,551
(3)

207 (17,583)
-

(191)
(708)

265,238

513,218

97,51015,037

Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance atJanuary 31,
2016 (audited)

Store
Goodwill
Lease
SoftwareAcquisitions

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

21

14,987

26,248932,238

12. Other current assets
as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

VAT
Income tax and other tax receivables
Other assets
Prepayments
Deposits

59,917
100,838
12,242
51,863
4,811

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

Total

229,671

180,633

as at
January 31
2016(audited)

as atJanuary 31
2015(audited)

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

73,974
13,716
7,778
18,48670,004
9,056
2,515
9,778

Total

113,954

91,353(amounts in thousands of Euro)

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

14. Payables to related parties – current and non-current
The current portion of payables to related parties is detailed as follows:as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

Financial payables
Other payables

4,858
386

2,371
712

Payables to related parties – current

5,244

3,083

(amounts in thousands of Euro)The non-current portion of payables to related parties is detailed as follows:as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

Other payables – other related parties-

13,384

Payables to related parties – non-current-

13,384(amounts in thousands of Euro)

Following the transaction with the non-controlling interests of subsidiary
Pellettieri D’Italia in the first half of 2015, Fin-reta srl is no longer a related
party but a third party. Consequently, the related payables have been
reclassified to “Other non-current liabilities”.

2215. Trade payables(amounts in thousands of Euro)

as at
January 31
2016(audited)

as atJanuary 31
2015(audited)

Trade payables – third parties
Trade payables – related parties

266,701
14,998410,402
27,018

Total

281,699

437,420

The decrease in trade payables is mainly due to the different manufacturing
planning adopted at the end of the year.
The following table contains a summary of trade payables by due date:as atJanuary 31
2016(audited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade payables

281,699

246,525

16,418

10,190

1,912

670

5,984

Total

281,699

246,525

16,418

10,190

1,912

670

5,984

as at
January 31
2015(audited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade payables

437,420392,284

21,893

10,967

1,936

1,424

8,916

Total

437,420392,284

21,893

10,967

1,936

1,424

8,916

(amounts inthousands of Euro)(amounts inthousands of Euro)

Overdue (days)

Overdue (days)

16. Other current liabilities
as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

54,132
16,37971,760128,346
17,35474,780Total

142,271

220,480(amounts in thousands of Euro)

The decrease in payables for capital expenditure is mainly explained bysettlement of the final balance of Euro 55 million due for the purchase of the
Milan property used as the Group headquarters.

23

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

Provision fortax disputes

Other
Provisions

Total

Balance at January 31, 2015
(audited)

1,876

25,53736,282

63,695

Exchange differences
Reclassifications
Reversals
Utilized
Increases

(1)
70
(101)
(247)
444

2
(70)
(264)
(2,613)
254

(165)
(228)
(3,324)
11,781(164)(593)(6,184)
12,479Balance at January 31, 2016
(audited)

2,041

22,84644,346

69,233(amounts in thousands of Euro)

Provisions for risks and charges represent the Directors’ best estimate of
maximum contingent liabilities. In the Directors’ opinion and based on theinformation available to them, as supported by the opinions of independent
experts at the reporting date, the total amount provided for risks andcharges is reasonable considering the contingent liabilities that could arise.

24

Management Discussion and Analysis for the threemonths ended January 31, 2016 (unaudited)
Net revenues for the three months ended January 31, 2016, totaled Euro
965.2 million, 3.4% less than for the same period in fiscal year 2014. In moredetail, net sales of finished products totaled Euro 955.3 million, a 3.5%
decrease with contrasting performances in the two distribution channels,
while royalties income increased by 5.3% thanks to higher sales of eyewear
and fragrances.
Sales to independent customers and franchisees reported a decrease, as
already highlighted in the previous quarters, because of the selective
strategy adopted. Overall, the wholesale channel recorded a 17.7% decrease
in revenues compared to the three months ended January 31, 2015.
The retail channel, with net sales of Euro 806.3 million, remains in line withthe final quarter of 2014 albeit with contrasting trends in the various
geographical areas: growth in Japan, Italy and the Middle East werecompensated by reductions in other regions. The three months in question
were affected by ongoing weakness on Asian markets but also by uncertainty
on the European market in the wake of the tragic events in Paris.
Gross margin for the final quarter of fiscal year 2015 stood at 70.5%, slightly
down on 71.4% for the final quarter of fiscal year 2014.
EBIT margin for the quarter also decreased compared to the same period inprior year: from 20.5% of net sales to 13.4%. The profitability of the period
was impacted by non-recurring expenses such as indemnities and onerous
leases for an amount equal to some Euro 9 million.
The Group’s net income represented 9.8% of net sales against 13.1% in the
final quarter of prior year.

25Management Discussion and Analysis for the year ended
January 31, 2016
Retail channel net sales
Retail sales for the twelve months ended January 31, 2016, amounted toEuro 3,059.7 million, 2.6% up on 2014 at current exchange rates but 5.3%
down at constant exchange rates. The number of Directly Operated Stores(DOS) increased from 594 at January 31, 2015, to 618 at January 31, 2016.

Markets
The Asia Pacific market generated net sales of Euro 1,080 million, remaining
the PRADA Group’s leading market. However, net sales fell by 4.4% atcurrent exchange rates and by 16.1% at constant exchange rates compared
to 2014. Sales in the region were greatly affected by the downturn recordedin Hong Kong and Macao. The Greater China area benefited from growth atcurrent exchange rates on the Chinese domestic market and ended theperiod with net sales of Euro 705.8 million, down by 8.3% at current
exchange rates and by 22% at constant exchange rates.
Net sales in Europe totaled Euro 665.8 million, increasing by 3.3% at current
exchange rates and by 1.8% at constant exchange rates. The flow of
travelers from Asia Pacific and the United States, attracted in part by the
weak Euro, sustained net sales in 2015, especially in the first half of the
fiscal year.
In Italy, the retail channel generated net sales of Euro 392.8 million, up by
10.7% on 2014. The growth was mainly driven by the flow of travelers andachieved almost entirely with the same store basis, as just one more DOS
was added during the year.
Net sales on the American market totaled Euro 410.8 million with a 5%
increase at current exchange rates and an 8.7% decrease at constantexchange rates. The drop in sales at constant exchange rates wasdetermined by the performance of the US market as the other countries inthis commercial area i.e. Canada, Brazil and Mexico also achieved growth inreal terms.
The Japanese commercial area was also boosted by a strong flow of tourists
and ended the 2015 fiscal year with net sales of Euro 403.7 million, a 10.7%
increase on prior year (+3.9% at constant exchange rates).
The Middle East region reported an increase of 11.5% at current exchange
rates and a decrease of 5% at constant exchange rates. The entire region
suffered from lower tourist flows.

Products
Footwear recorded net sales of Euro 537.5 million in the retail channel, withgrowth of 19.8% at current exchange rates and 10.6% at constant exchange
rates. This product line achieved sales growth at constant exchange rates inall geographical areas.
26

The clothing division recorded net sales totaling Euro 541.6 million with a
5.7% increase at current exchange rates and a 2.5% decrease at constantexchange rates. Sales growth was achieved in all geographical areas atcurrent exchange rates but only in Japan and Europe at constant exchange
rates.
Leather goods recorded net sales of Euro 1,919.9 million, down by 2.3% on
the figure of Euro 1,965.6 million for the twelve months ended January 31,
2015. At constant exchange rates, sales of this product line decreased by
9.8%. The sales performance of leather goods was affected by difficult
economic conditions in the Asia Pacific region.

BrandsThe Prada brand generated net sales of Euro 2,487.6 million in the retailchannel, reporting a 1% increase at current exchange rates. Footwear andclothing product lines achieved growth, while leather goods recorded a
reduction, especially in Asia Pacific. At constant exchange rates, Pradabrand net sales decreased by 6.7%. During the twelve months under review
29 new DOS were opened while 5 were closed.
Miu Miu recorded net sales of Euro 501.7 million, reporting a 10.3% increaseat current exchange rates. The brand achieved growth in all geographicalareas. In terms of product category, clothing sales remained broadly in linewith prior year while sales of leather goods and, especially, footwear
increased. At constant exchange rates, Miu Miu recorded net sales growth of
1.3%. During the twelve months under review, 11 new DOS were opened
while 7 were closed.
The Church’s brand recorded consolidated net sales of Euro 56.2 million
through its DOS network, a 14.7% increase compared to 2014. The sales
increase was achieved primarily on the European market where there was asteady rate of growth throughout the year. Three DOS were closed during
the twelve months under review.
Other brands mainly includes net sales of the Car Shoe brand, whose
performance for the year was affected by the closure of 3 DOS, as well as
the net sales of Marchesi 1824 patisserie products whose impact in absoluteterms is still immaterial to the Group, although it is growing.

Net sales to independent customers and franchisees
For the Prada and Miu Miu brands deliveries to independent customers andfranchisees reported a reduction in net sales in 2015, mainly as a result of
the ongoing selective strategy in Italy and Europe and, to a lesser extent, thecontraction in the South Korean market in relation to the MERS crisis.
In contrast, the Church’s brand reported net sales growth thanks to advances
in Japan, Europe and Italy, even though a decrease was recorded in Asia
Pacific.

27

Royalties
In the twelve months ended January 31, 2016, licensing agreements
generated royalties income of Euro 43.4 million, 13.5% more than in 2014.
The increase was due to higher sales of eyewear and fragrances, also thanks
to the launch of the first Miu Miu fragrance in August.

Operating results
During the period in response to constant but unforeseeable changes to theeconomic environment which slowed down sales in some regions,management identified a range of measures designed to limit pressure on
operating profit. Consequently, specific measures were adopted in order tomake retail and industrial processes more efficient, contain discretionary
costs and postpone certain capital expenditure projects.
Gross margin was Euro 2,567.6 million for the twelve months ended January
31, 2016, or 72.4% of net sales. The increase in gross margin percentage from
71.8% in prior year was achieved thanks to effects of industrial efficiencies
and price adjustments made to balance the spreads among countries.
Favorable foreign currency trends had a further positive impact.
Operating expenses increased as a percentage of net revenues essentiallybecause of retail network expansion had a lack of sales growth. In fact,
selling costs increased from Euro 1,340.8 million to Euro 1,517.4 million, orfrom 37.8% to 42.8% of net revenues in relation to the fixed costs included inthis caption (labor costs, rents and depreciation).
As part of advertising and communication, which remain essential activities
to sustain revenues, the Group favored initiatives aimed at strengthening
brand identity e.g. sponsorships, institutional events and special projects andat supporting the relationships with customers, also through increasingly
sophisticated use of the digital channel. In this regard, it is worthhighlighting the Digital Retail project launched towards the end of the year
and aimed at increasing the customer involvement through direct andpersonalized interactions.
Product design and development costs, totaling Euro 134.3 million or 3.8% of
net sales, were in line with prior year.
General and administrative costs were also subject to cost containment
measures although they were, at the same time, affected by certain nonrecurring expenses such as indemnities and onerous leases.
EBITDA for 2015 amounted to Euro 802.8 million, or 22.6% of net sales(compared to 26.9% in 2014), while EBIT totaled Euro 502.9 million, or 14.2%
of net sales (compared to 19.8% in 2014). The decrease in EBIT compared toprior year was also due to the higher incidence of depreciation andamortization.

28

EBITDA by brandtwelve months ended
January 31 2016
(amounts in thousands of
Euro)

Group

Prada

Miu Miu

Church’s

Other

Net sales
Royalties

3,504,344
43,427

2,841,056
37,436564,315
5,984

82,456
7

16,517-

Net revenues

3,547,771

2,878,492

570,299

82,463

16,517

EBITDA

802,758

797,453

11,621

3,567(9,883)

EBITDA %

22.6%

27.7%

2.0%

4.3%

-

twelve months ended
January 31 2015
Group(amounts in thousands of Euro)

Prada

Miu Miu

Church’s

Other

Net sales
Royalties

3,513,436
38,2602,895,437
34,868526,770
3,378

74,041
14

17,188-

Net revenues

3,551,696

2,930,305

530,148

74,055

17,188

EBITDA

954,249

922,644

35,1304,605(8,130)EBITDA %

26.9%

31.5%

6.6%

6.2%

-

The dilution in EBITDA for the PRADA brand is explained by the higher
incidence of operating expenses as the brand’s gross margin improved
compared to prior year thanks to measures taken at Group level in relation
to industrial processes and pricing strategies. At the same time retail
network expansion, with an increase in typical costs (rent and personnel
costs), was not accompanied by sufficient sales growth and EBITDA fell as aresult, although it remained among the highest in the industry.
The profitability of the Miu Miu brand continued to be under pressure as aresult of investments made in order to improve the visibility of the brandthrough a global distribution network and support the image with effective
communications. Although Miu Miu achieved sustained revenue growth in2015, it did not fully absorb the higher level of operating costs.
The Church’s brand achieved significant sales growth, especially in the retailchannel where growth on prior year was also achieved on a same store basis
and at constant exchange rates. Nonetheless, the brand was less profitable
mainly because of non-recurring operating expenses due to re-organization of
the commercial area.

29

Net invested capital
The following table contains the statement of financial position, as
reclassified in order to provide a better picture of the composition of Net
Invested Capital.
(amounts in thousands of Euro)

as at
January 31
2016(audited)

as atJanuary 31
2015(audited)

Non-current assets (excluding deferred tax assets)
Trade receivables, net
Inventories, net
Trade payables
Net operating working capital
Other current assets (excluding financial position items)
Other current liabilities (excluding financial position items)
Other current assets/(liabilities), net
Provisions for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation, net
Other non-current assets/(liabilities), net
Net invested capital
Shareholders’ equity – Group
Shareholders’ equity – Non-Controlling Interests
Total consolidated Shareholders’ equity
Long term financial payables
Short term financial , net surplus/(deficit)
Net financial position surplus/(deficit)
Shareholders’ equity and Net financial position
Debt to Equity ratio

2,586,841
254,183
692,672(281,699)
665,156
260,983(234,496)
26,487(69,233)(69,405)(171,364)
243,690(66,312)3,212,172(3,080,340)(17,037)(3,097,377)(519,772)
404,977(114,795)(3,212,172)
3.6%

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

At January 31, 2016, the Group had a solid balance sheet structure, foundedon net invested capital of Euro 3,212.2 million and financed by net debt ofEuro 114.8 million and Group shareholders’ equity of Euro 3,080.3 million.
At January 31, 2016, net non-current assets, excluding deferred tax assets,
amounted to Euro 2,586.8 million, pretty much in line with January 31, 2015,as capital expenditure for the year of Euro 336.9 million was almost equal todepreciation and amortization charges. Capital expenditure included Euro
175 million of investments in the retail network for both the final stage ofthe expansion strategy and renewal and relocation projects, Euro 57.9
million to strengthen production facilities and Euro 104 million in thecorporate area. Intangible assets at January 31, 2016, included goodwill
mainly relating to the distribution channels with a total value of Euro 513.2
million. The impairment test performed in accordance with IFRS at thereporting date did not identify any impairment of value.
At January 31, 2016, net operating working capital stood at Euro 665.2
million, an increase of Euro 101.7 million compared to January 31, 2015,
because of the higher level of inventories and lower trade payables, overall.
The increase in finished products related to the different approach to30

replenishment which started in the last few months of 2014, as well as to thelower than expected volume of sales. At the same time, different
manufacturing scheduling led to a reduction in trade payables at the end of
the year.
At January 31, 2016, other current liabilities were equal to other current
assets, eliminating the deficit of Euro 221.7 million recorded at January 31,
2015. This was mainly due to the settlement of capital expenditure payables,
the lower tax liability and the closure of derivative contracts.
The change in other non-current liabilities, net, was not significant as theincrease in non-monetary liabilities relating to rental contracts has been
offset by a decrease in long-term benefits in favor of key employees andcollaborators due to payments made during the year.
Group shareholders’ equity amounted to Euro 3,080.3 million at January 31,
2016. During the year, dividends of Euro 281.5 million were distributed to
the PRADA spa shareholders (as approved by the Annual General Meeting on
May 26, 2015).

Net financial position surplus/(deficit)
as atJanuary 31
2016(audited)

as atJanuary 31
2015(audited)

Bonds
Bank borrowing – non-current
Finance lease obligations – non-current
Total financial payables – non-current(130,000)(390,475)(520,475)(130,000)(125,203)(255,203)

Financial payables and bank overdrafts - current(270,112)(263,335)

Payables to parent company and related parties
Finance lease obligations – current
Total financial payables – current(4,858)(654)(275,624)(2,371)(21)(265,727)

Total financial payables(796,099)(520,930)

703

741

Financial receivables from related parties – current
Cash and cash equivalents
Total financial receivables and cash and cash equivalents - current

680,601
680,601

11
708,966
708,977

Total financial receivables and cash and cash equivalents

681,304

709,718

Net financial surplus/(deficit), total(114,795)

188,788

Net financial surplus/(deficit) excluding related party balances(110,640)

190,407-14.3%

n/a(amounts in thousands of Euro)

Financial receivables from related parties – non-current

NFP/EBITDA ratio31

At January 31, 2016, the Group’s net financial position showed a cash deficitof Euro 114.8 million. Operating cash flows for the twelve months then ended
amounted to Euro 368.5 million and were entirely employed, together withsome new bank debt, to finance capital expenditure (Euro 390 million) and topay dividends to the shareholders of PRADA spa (Euro 281.5 million) and to
the non-controlling shareholders of the subsidiaries (Euro 3.2 million).
During 2015, in order to increase its financial flexibility while taking
advantage of favorable conditions available on the credit market, the Grouparranged new medium/long-term bank loans totaling around Euro 320 million
and repaid debt of around Euro 45 million as it fell due. As a result, totalbank borrowing increased by Euro 275.2 million in absolute terms but its
structure in terms of original currency and interest rate also changed: theincidence of Euro borrowing increased from 55% of total at January 31, 2015,
to 73% while fixed rate borrowing – also considering amounts hedged via
derivatives – rose from 42% to 46%. Some of the borrowing requires
compliance with covenants which were fully respected at the reporting dateand mainly regard solvency ratios.
Cash and cash equivalents include bank current accounts used for
operational purposes and short-term deposits used to employ cash on a lowrisk basis; these cash and cash equivalents generally belong to Group’s
subsidiaries rather than to PRADA spa which, together with PRADA Japan coltd, carries most of the consolidated bank debt.

Events after the reporting date
As reported in the Announcement published by the Company on February 19,
2016, Director Donatello Galli resigned from the role of Executive Director
and CFO with effect from the same day. The Board of Directors thenappointed Alessandra Cozzani – already an Executive Director – as the new
CFO. On April 8, 2016, the Board also approved the appointment of Mr.
Stefano Simontacchi as Non-Executive Director of the Company with effectfrom the same day, to fill the casual vacancy caused by Mr. Galli’s
resignation.

Outlook for 2016
Throughout 2015, the luxury goods market had to deal with an economic
environment characterized by volatile financial markets and by heightening
geopolitical tension in many world regions. These conditions are still present
and 2016 is again set to be affected by instability which makes any shortterm forecasts uncertain. Bearing this in mind and in order to ensure theGroup achieves satisfactory profit levels, management has implemented athorough review of all operating processes. The results, in terms of greater
efficiency and productivity, will already be apparent in the months to come.
The Group will pay particular attention to new forms and methods ofcommunications designed to develop a relationship between its brands andan ever larger audience, maintaining a permanent dialogue involving all of
the various parts of the Prada universe. At the same time, the Group willcontinue to work towards providing a sound base for sustainable long-term
32

growth with investments tailored to make the most of the distinctive
features that make its brands unique: excellent product quality with
contemporary and innovative stylistic content and capacity to interpret thedesires of an ever more sophisticated and demanding customers.

Corporate governance practices
The Company is committed to maintaining a high standard of corporate
governance practices as part of its commitment to effective corporate
governance. The corporate governance model adopted by the Company
consists of a set of rules and standards aimed toward establishing efficientand transparent operations within the Company and its subsidiaries (the“Group”), to protect the rights of the Company’s shareholders and toenhance shareholder value. The corporate governance model adopted by theCompany is in compliance with the applicable regulations in Italy, as well as
the principles of the Corporate Governance Code (the “Code”) contained inAppendix 14 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”).Full details on the
Company’s corporate governance practices are set out in the Company’s 2015
Annual Report.

Audit Committee
The Company has established an Audit Committee in compliance with Rule3.21 of the Listing Rules where at least one member possesses appropriate
professional qualifications in accounting or possesses related financial
management expertise to discharge the responsibility of the Audit
Committee. The membership of the Audit Committee consists of three
Independent Non-Executive Directors, namely, Mr. Gian Franco Oliviero
Mattei (Chairman), Mr. Giancarlo Forestieri and Mr. Sing Cheong Liu.
During the year ended January 31, 2016 (the “Reviewed Period”), the Audit
Committee held eight meetings (with an attendance rate of 87.5%) mainly toreview with senior management, the Group’s internal and external auditor
and the board of statutory auditors, significant internal and external audit
findings and financial matters as required under the Committee’s terms ofreference. The Audit Committee’s review covers the audit plans as well as
the findings of both the internal and external auditors, internal controls, risk
assessment, annual review of the continuing connected transaction of theGroup, tax updates and financial reporting matters ((including the annual
results for the year ended January 31, 2015, the first quarter results as ofApril 30, 2015, the interim financial results as of July 31, 2015 and third
quarter results as of October 31, 2015, before recommending them to theBoard for approval).The Audit Committee also held a meeting on April 8,
2016, to review the annual results for the year ended January 31, 2016,
before recommending it to the Board for approval.

33

Compliance with the Code
The Board has reviewed the Company’s corporate governance practices andis satisfied that such practices have complied with the code provisions set
out in the Code, for the entire Reviewed Period (i.e. the year ended January
31, 2016).

Directors’ securities transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the required standard set out inthe Model Code for Securities Transactions by Directors of Listed Issuers (the“Model Code”). Specific written acknowledgments have been obtained fromeach Director to confirm his/her compliance with required standard set out
in the Model Code and the Company’s relevant procedures regarding
directors’ securities transactions for the duration of the Reviewed Period.
There were no incidents of non-compliance during the Reviewed Period.
The Company has also adopted written procedures governing securities
transactions carried out by the relevant employees who are likely to possess
inside information in relation to the Company and its securities. The terms ofthese procedures are no less exacting than the standard set out in the Model
Code.

Purchase, sale or redemption of the Company’s listed
securities
Neither the Company nor any of its subsidiaries has purchased, sold orredeemed any of the Company’s listed securities during the Reviewed Period.

Shareholders’ general meeting
The Shareholders’ general meeting of the Company will be held on (Tuesday,
May 24), 2016 (the “AGM”).
Notice of the AGM will be published on the Company’s website atwww.pradagroup.com and on the Hong Kong Exchanges and Clearing
Limited’s website at www.hkexnews.hk and dispatched to the shareholdersof the Company in due course.

Final dividend
The Board recommends, for the twelve month period ended January 31,
2016, a final dividend of Euro 281,470,640 (or 11 Euro/cents per share).The
payments shall be made:(i)in Euro to the shareholders recorded in the section of theCompany’s shareholders register kept by the Company at its
registered office in Milan (Italy), and(ii)
in Hong Kong dollars to the shareholders recorded in the section of
the Company’s shareholders register kept in Hong Kong. The
relevant exchange rate will be the opening buying T/T rate of Hong
Kong dollars to Euros as announced by the Hong Kong Association of34

Banks (www.hkab.org.hk) on the day the final dividend is approvedby the shareholders.
Subject to the shareholders’ approval of the payment of the final dividend at
the forthcoming shareholders’ general meeting of the Company to be held on
Tuesday, May 24, 2016, such dividend will be paid on Monday, June 13, 2016.

Book Closure and Record Dates
For determining shareholders’ right to attend and vote at the AGM:

Latest time to lodge transfer documents with
the Company’s Hong Kong Share Registrar or theCompany in Milan (Note 1)

May 19, 2016 - 4:30 pm
HK time/10:30 am CET
time
From May 20 to 24, 2016
(both days inclusive)

Book closure (both sections) (Note 2)
Record date

May 24, 2016

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

May 30, 2016 - 4:30 pm
HK time/10:30 am CET
time

Book closure (both sections) (Note 2)

May 31, 2016

Record Date

May 31, 2016

Dispatch date of dividend warrants

June 13, 2016

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

35

Publication of Annual Results Announcement andAnnual Report
This Annual Results Announcement is published on the Company’s website atwww.pradagroup.com and on the Hong Kong Exchanges and Clearing
Limited’s website at www.hkexnews.hk. The Company’s 2015 Annual Reportwill be published on the same websites and dispatched to shareholders of theCompany in due course.

Cessation of Quarterly Financial Results Publication
The Board of the Company hereby announces that, following recent changes
in the Italian laws and practices, the Company will no longer announce andpublish the quarterly consolidated financial results of the Group for each of
the first three-month and nine-month periods of any financial year, including
the current one.
In the past, the Company had resolved to announce and publish the quarterly
financial results (the “Quarterly Reporting”) in order to voluntarily comply
with the laws and practices of quarterly results disclosure at that time
applicable to companies listed in Italy, although such laws and practices
were not strictly speaking applicable to the Company (which is not listed in
Italy).
The relevant Italian law on this matter has recently changed to the effectthat companies listed in Italy are no longer required to publish theirquarterly results.
In light of the above and having considered the fact that the Company willcontinue to fulfill its disclosure obligations in compliance with the Listing
Rules by publishing the Group’s annual and half-year financial results, theBoard is of the view that the Quarterly Reporting could be discontinued withimmediate effect.
By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Chairman
Milan (Italy), April 8, 2016

As at the date of this announcement, the Company’s executive directors are Mr.
Carlo MAZZI, Ms. Miuccia PRADA BIANCHI, Mr. Patrizio BERTELLI and Ms. Alessandra
COZZANI; the Company’s non-executive directors are Mr. Gaetano MICCICHÈ and
Stefano SIMONTACCHI and the Company’s independent non-executive directors are
Mr. Gian Franco Oliviero MATTEI, Mr. Giancarlo FORESTIERI and Mr. Sing Cheong
LIU.

36