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 NINE MONTHSENDED OCTOBER 31, 2015

- Net revenues were Euro 2,582.5 million, an increase of 1.2% comparedwith the nine months ended October 31, 2014 (-7% at constantexchange rates)- Retail net sales were Euro 2,253.5 million, up by 3.8% compared with
the nine months ended October 31, 2014 (-4.9% at constant exchange
rates)- EBIT was Euro 373.9 million, representing a margin of 14.5% on net
revenues- Group’s net income amounted to Euro 235.1 million- Net financial position negative at Euro 197.8 million

1Consolidated results for the nine months ended
October 31, 2015
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company”, or“PRADA spa”) announces the unaudited Consolidated results of the Company
and its subsidiaries (collectively, the “Group”) for the nine months ended
October 31, 2015, together with the unaudited comparative figures for thesame nine months period ended October 31, 2014. The following financial
information has been prepared in accordance with the International Financial
Reporting Standards (“IFRS”) as adopted by the European Union. The
Consolidated results of the Group for the year ended January 31, 2015, wereaudited by Deloitte & Touche S.p.A.

Key financial informationninemonthsended
Oct 31
2015(unaudited)

twelvemonthsended
Jan 312015(audited)ninemonthsended
Oct 31
2014(unaudited)

2,582,544
595,400
23.1%
373,88914.5%
355,362
235,078
0.092
234,722200,804

3,551,696
954,24926.9%
701,55119.8%
667,702450,730
0.176
449,735
483,5972,552,023
681,67826.7%
496,433
19.5%
480,909319,3190.125
353,074
364,3221.2%-12.7%-24.7%-26.1%-26.4%-26.4%-44.9%

12,379

11,962

11,866

4.3%

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

as at
Oct 31
2015(unaudited)

as at
Jan 312015(audited)

as at
Oct 31
2014(unaudited)change vs
Jan 31
2015

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

732,291
3,212,948(197,778)
2,997,517

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

528,177
2,724,483
90,3882,797,832

168,882
383,589(386,566)(3,220)Key information from the Income
statement(amounts in thousands of Euro)Net revenues
EBITDAEBITDA %EBITEBIT %
Income before tax
Net income of the Group
Earnings per share (Euro)
Capital expenditure
Net operating cash flows
Average number of employees

2%change vsOct 312014

Highlights for the nine months ended October 31, 2015
Net revenues of the PRADA Group for the nine months ended October 31,
2015, amounted to Euro 2,582.5 million, reporting an increase of 1.2%
compared to the same period of 2014. The growth in sales was delivered by
the retail channel, thanks also to the exchange rates trends. However, from
July onwards the turmoil in financial markets partially mitigated such
positive impact, particularly with reference to the tourist flows of Chinese
customers. The management adopted further costs containments measureswith the aim to preserve economic margins and these initiatives allowed tolimit the dilution of the EBIT that, for the nine months under review,
amounted to Euro 373.9 million, or 14.5% of net revenues. The decline inprofitability compared to the 19.5% achieved in the same period last year
was mainly due to the rising selling costs associated with the expansion of
the retail network which were not absorbed by sales growth.
During the reporting period, the Group, with a long-term perspective,
continued anyway to invest in its industrial operations and, more selectively,in the retail network with renewals, relocations and some additional
openings. At the same time, the investments aimed at strengthening thebrands image went on and, to this extent, it is worth mentioning theunveiling of the new museum and cultural center in Milan operated by the
Prada Foundation and designed by Rem Koolhaas. The resonance of thisproject has been extremely wide all over the world and the location has
become since the beginning a “must see” for all visitors to Milan.
In the nine months period, the net cash flow from operating activities
amounted to Euro 200.8 million and was used, together with funds alreadyavailable, to support the investment plan of the period and the payment ofdividends. The net financial position at October 31, 2015, was negative andstood at Euro 197.8 million.

3

Consolidated income statement for the nine months ended
October 31, 2015
(amounts in thousands of Euro)Net revenues
Cost of goods soldnine months
nine months
ended
% on
ended
% on
October 31
Net October 31
Net2015 revenues
2014 revenues(unaudited)(unaudited)

Note

3

2,582,544(695,440)

100.0%-26.9%

2,552,023(715,608)

100.0%-28.0%

1,887,104

73.1%

1,836,415

72.0%(1,513,215)-58.6%(1,339,982)-52.5%

373,88914.5%

496,433

19.5%(20,089)-0.8%(15,979)

-0.6%

1,562

0.1%

455

-

355,36213.8%

480,909

18.9%(117,139)-4.6%(154,712)-6.1%

238,2239.2%

326,197

12.8%

3,145

0.1%

6,878

0.3%

Net income – Group

235,078

9.1%

319,319

12.5%

Depreciation, amortization andimpairment

221,511

8.6%

185,245

7.2%

EBITDA

595,400

23.1%

681,678

26.7%

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 period
Net income – Non-controlling interests

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

7

0.092

4

0.125

Consolidated income statement for the three months ended
October 31, 2015
(amounts in thousands of Euro)Net revenues
Cost of goods soldthreemonths
% on
ended
Net
Oct 31revenues
2015(unaudited)

Note

3

three
months
% on
ended
Net
Oct 31revenues
2014(unaudited)758,111(196,920)

100.0%-26.0%

800,708(221,893)

100.0%-27.7%

Gross margin561,19174.0%

578,815

72.3%

Operating expenses(480,516)-63.4%(455,540)-56.9%

EBIT

80,675

10.6%

123,275

15.4%

Interest and other financial
income/(expenses), net(11,017)-1.5%(6,486)-0.8%

Income before taxes

69,6589.2%

116,789

14.6%

Taxation(23,000)-3.0%(41,637)-5.2%

Net income for the period

46,658

6.2%

75,152

9.4%

174

0.0%

679

0.1%

Net income – Group

46,484

6.1%

74,473

9.3%

Depreciation, amortization andimpairment

74,671

9.8%

65,568

8.2%

EBITDA

155,34620.5%

188,843

23.6%

Net income – Non-controlling interests

5Consolidated statement of financial position(amounts in thousands of Euro)

as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

9
8

527,248248,256
795,674
9,295

708,966
346,284
654,545
6,287

10

20,5903,240

12185,759
1,786,822

180,633
1,899,955

11
11

1,495,918
938,095
23,552298,964
101,871
1,050

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

7,835

17,4292,867,285
4,654,107

2,838,922
4,738,877

305,886
3,083
311,639
98,11525,419136,893881,035

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

417,448
68,29865,65739,097
157,150
10,252757,902
1,638,937
255,882
2,348,146
158,411
235,0782,997,517
17,6534,654,107

255,20385,754
63,695
41,634
128,752
17,283
13,384605,705
1,720,730
255,882
2,163,129
130,996
450,730
3,000,737
17,4104,738,877

905,787
3,773,072

784,930
3,623,852

NoteAssetsCurrent 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
Liabilities and Shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans
Payables to related parties - current
Trade payables
Current tax liabilities
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
Share capital
Total other reserves
Translation reserve
Net profit for the period
Total Shareholders’ equity – Group
Shareholders’ equity – Non-controlling interests
Total Liabilities and Shareholders’ equity

13
10

14
15

16

17

14

Net current assets
Total assets less current liabilities

6

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

Number of
SharesShare
CapitalTranslationReserve

Fair Value
Share
Cash flow
Total
Actuarial Available for
Otherpremium
hedge
Other
Reservesalereserves
reserve
reserve
Reserves
Reserve

Balance at January
31, 2014 (audited)

2,558,824,000

255,882(49,438)410,047

3,699(11,452)

-

-

-

-

-

-

-

-

-

-

-

-

-

- (281,471) (281,471)-(281,471)

-

-

-

-

-

-

-

(2,462)(2,462)-(2,462)106(2,356)

-

-

-

-

-

-

-

-

-

-

-

1,773

1,773

-

-

78,366-(11,204)

-

9,668

-

(1,536)319,319

396,149

7,937

404,086

-

-

-

-

-

(1,938)--(1,938)-(1,938)-(1,938)

Balance at October
2,558,824,000
31, 2014 (unaudited)

255,882

28,928410,047(7,505)(13,390)

13,776 1,790,775 2,193,703

319,319

2,797,832

Allocation of 2013
net income
Dividends
Acquisition ofMarchesi Angelo srl
Capital injection in
subsidiaries
Comprehensive
income for the ninemonths(recyclable to P&L)
Comprehensive
income for the ninemonths(not recyclable to
P&L)

Dividends
Acquisition ofMarchesi Angelo srl
Capital injection in
subsidiaries
Comprehensive
income for the threemonths(recyclable to P&L)
Comprehensive
income for the threemonths(not recyclable to
P&L)

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

627,785

Net
incomefor theperiodEquityNonattributable controlli
to owners
ngof Group interests

627,785

627,785 (627,785)

2,687,554-

Total
Equity13,986 2,701,540--(6,763) (288,234)

17,039 2,814,871

-

-

-

-

-

-

-

-

-

-

-

(2,615)(2,615)

-

-

-

-

-

-

-

(4)

(4)

-

(4)

1

(3)

-

-

-

-

-

-

-

-

-

-

-

352

352

-

-

102,068-(27,818)-(2,661)-(30,479)

131,411203,000

2,636

205,636

-

-

-

-

-

(91)

-

-

(91)

-

(91)

(3)

(94)

2,558,824,000

255,882

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

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

450,730

3,000,737

-

-

-

-

-

-

-

-

-

-

-

-

-

- (281,471) (281,471)-(281,471)

-

-

-

-

-

-

-

-

-

-

-

409

409

-

-

-

-

-

-

-

(723)

(723)

-

(723)

(39)

(762)

-

-

27,415-

20,694-(5,535)-15,159235,078

277,652

3,101

280,753

-

-

-

-

-

1,322

-

-

1,322

-

1,322

-

1,322

Balance at October
2,558,824,000
31, 2015 (unaudited)

255,882

158,411410,047(14,629)(12,159)

5,580 1,959,307 2,348,146

235,0782,997,517

Balance at January
31, 2015 (audited)
Allocation of 2014
net income
Dividends
Capital injection in
subsidiaries
Transactions with
non-controllinginterests
Comprehensive
income for the ninemonths(recyclable to P&L)
Comprehensive
income for the ninemonths(not recyclable toP&L)

7

450,730

450,730 (450,730)-

17,410 3,018,147--(3,228) (284,699)

17,653 3,015,170

Condensed statement of consolidated cash flows
nine months
ended
October 31
2015(unaudited)nine months
ended
October 31
2014(unaudited)

Net cash flows from operating activities

200,804

364,322

Cash flows generated/(utilized) by investing activities(304,629)(311,966)

Cash flows generated/(utilized) by financing activities(84,504)(128,915)

Change in cash and cash equivalents, net of bank overdrafts(188,329)(76,559)(amounts in thousands of Euro)Statement of consolidated comprehensive income
nine months twelve months
ended
ended
October 31
January 31
2015
2015
(unaudited)(audited)(amounts in thousands of Euro)Net income for the period – Consolidated

nine months
ended
October 31
2014(unaudited)

238,223459,218

326,197

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

27,371
27,371

182,519
182,519

79,42579,425

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

28,266(7,572)
20,694(52,817)
13,795(39,022)(15,092)
3,888(11,204)

Change in Fair Value reserve
Tax impact
Change in Fair Value reserve less tax impact(7,380)1,845(5,535)

9,343(2,336)
7,007

12,891(3,223)
9,668

1,823
(501)
1,322

(2,338)306(2,032)(2,033)95(1,938)282,075

607,690

402,148

Comprehensive income for the period – Noncontrolling Interests

3,101

10,5707,937

Comprehensive income for the period – Group

278,974

597,120394,211A) Items recyclable to P&L:

B) Item not recyclable to P&L:
Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact
Consolidated comprehensive income for the period8Notes to the consolidated results for the nine months
ended October 31, 2015
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 licensing agreements, in theeyewear and fragrances sectors. Its products are sold in 70 countries
worldwide through a network that included 612 Directly Operated Stores(DOS) at October 31, 2015, and a selected network of luxury department
stores, independent retailers and franchise stores. The Company is a jointstock company, registered and domiciled in Italy. Its registered office is in
Via Antonio Fogazzaro 28, Milan, Italy.

2.

Basis of preparation

The financial information for the nine months ended October 31, 2015,
included in this Announcement refers to the Group of companies controlledby PRADA spa, holding company of the PRADA Group (the "Group"), and isbased on its relevant unaudited Consolidated financial statements. Such
consolidated results for the nine months ended October 31, 2015, wereprepared on a consistent basis compared to the Consolidated financial
statements of the Group for the twelve months ended January 31, 2015, withthe exception of the revised IFRS issued by the International AccountingStandard Board (“IASB”) below reported. IFRS also refer to all theInternational Accounting Standards (“IAS”) and all the interpretations of theInternational Financial Reporting Interpretation Committee (“IFRIC”),
previously named the Standing Interpretations Committee (“SIC”).
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”;
9 Amendments to “IAS 38 Intangible Assets”;

3.

Net revenues analysis

Net revenues for the nine months ended October 31, 2015
(unaudited)nine months
ended
October 31
2015(unaudited)(amounts in thousands of Euro)nine months
ended%
October 31
2014 change(unaudited)

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

406,399 15.9%
557,395 21.9%
365,396 14.3%
845,550 33.2%
286,335 11.2%
83,442
3.3%
4,495
0.2%
2,549,012 100.0%

402,817 16.0%
544,141 21.6%
336,459 13.3%
902,855 35.8%
259,306 10.3%
74,017
2.9%
3,565
0.1%
2,523,160 100.0%

Net sales by brand
Prada
Miu Miu
Church's
Car Shoe
Other
Total

2,065,767 81.0%
411,686 16.2%
60,481
2.4%
7,420
0.3%
3,658
0.1%
2,549,012 100.0%

2,082,904 82.5% -0.8%
373,498 14.8% 10.2%
54,921
2.2% 10.1%
9,138
0.4% -18.8%
2,699
0.1% 35.5%
2,523,160 100.0%
1.0%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

422,633 16.6%
1,553,300 60.9%
523,194 20.5%
49,8852.0%
2,549,012 100.0%

412,500 16.4%
1,614,761 64.0%
451,979 17.9%
43,9201.7%
2,523,160 100.0%

Net sales by distribution channelDOS
Independent customers and franchises
Total

2,253,465 88.4%
295,547 11.6%
2,549,012 100.0%

2,171,675 86.1%
3.8%
351,485 13.9% -15.9%
2,523,160 100.0%
1.0%

Net sales
Royalties

2,549,012
33,532

2,523,160
28,863

Total net revenues

2,582,544 100.0%

10

98.7%
1.3%

0.9%
2.4%
8.6%
-6.3%
10.4%
12.7%
26.1%
1.0%

2.5%
-3.8%
15.8%
13.6%
1.0%

98.9%
1.1%

1.0%
16.2%

2,552,023 100.0%

1.2%

Net revenues for the three months ended October 31, 2015
(unaudited)
three months
ended
October 31
2015(unaudited)

three months
ended%
October 31
2014 change(unaudited)

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

120,189 16.1%
178,217 23.8%
100,484 13.4%
235,284 31.5%
90,433 12.1%
22,063
3.0%
985
0.1%
747,655 100.0%

116,009 14.6%
3.6%
182,602 23.0% -2.4%
103,007 13.0% -2.4%
283,634 35.8% -17.0%
84,044 10.6%
7.6%
22,087
2.8% -0.1%877
0.1% 12.3%
792,260 100.0% -5.6%

Net sales by brand
Prada
Miu Miu
Church's
Car Shoe
Other
Total

604,274 80.8%
117,767 15.8%
22,102
3.0%
1,906
0.3%
1,606
0.2%
747,655 100.0%

651,790 82.3% -7.3%
117,467 14.8%
0.3%
19,361
2.5% 14.2%
2,622
0.3% -27.3%
1,020
0.1% 57.5%
792,260 100.0% -5.6%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

134,404 18.0%
445,539 59.6%
152,779 20.4%
14,933
2.0%
747,655 100.0%

136,721 17.3% -1.7%
504,046 63.6% -11.6%
137,556 17.4% 11.1%
13,9371.7%
7.1%
792,260 100.0% -5.6%

Net sales by distribution channelDOS
Independent customers and franchises
Total

701,072 93.8%
46,583
6.2%
747,655 100.0%

729,514 92.1% -3.9%
62,746
7.9% -25.8%
792,260 100.0% -5.6%

Net sales
Royalties

747,655
10,457792,260
8,448

Total net revenues

758,112 100.0%(amounts in thousands of Euro)

11

98.6%
1.4%

98.9%
1.1%

-5.6%
23.8%

800,708 100.0%-5.3%

Number of storesas at
October 31
2015
DOS
franchises

as atJanuary 31
2015
DOS
franchises

as atOctober 31
2014
DOS
franchises

Prada
Miu Miu
Church’s
Car Shoe

380
173
54
5

29
11
-

362
169
55
8

27
8
-

350
167
55
8

26
7
-

Total

612

40

594

35

580

33

as at
October 31
2015
DOS
franchises

as atJanuary 31
2015
DOS
franchises

as atOctober 31
2014
DOS
franchises

ItalyEuropeAmericas
Asia PacificJapan
Middle East
Africa

52
168
114
184
73
19
2

5
27
8
-

51
167
110
175
70
17
4

6
3
22
4
-

52
164
104
170
70
17
3

6
3
21
3
-

Total

612

40

594

35

580

33

4.

Operational expenses
nine months
ended
October 31
2015(unaudited)% on netrevenues

nine months
ended
October 31
2014(unaudited)% on netrevenues

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

95,942
144,911
1,110,476
161,886

3.7%
5.6%
43.0%
6.3%

96,172120,295
971,608
151,907

3.8%
4.7%
38.0%
6.0%

Total

1,513,215

58.6%

1,339,982

52.5%(amounts in thousands of Euro)

5.

Interest and other financial income/(expenses), net
nine months
ended
October 31
2015(unaudited)nine months
ended
October 31
2014(unaudited)

Interests expenses on borrowings
Interest expenses others
Interest income
Exchange gains /(losses) – realized
Exchange gains/(losses) – unrealized
Other financial income/(expenses)(10,824)
(73)
2,237
1,613
(9,440)(3,602)(9,206)
(121)
2,394
2,816
(9,499)(2,363)

Total(20,089)(15,979)(amounts in thousands of Euro)

12

6.

Taxationnine months
ended
October 31
2015(unaudited)nine months
ended
October 31
2014(unaudited)

Current taxation
Deferred taxation

144,594(27,455)

182,699(27,987)

Income taxes

117,139

154,712(amounts in thousands of Euro)

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.
nine months
ended
October 31
2015(unaudited)Group net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average
number of sharesnine months
ended
October 31
2014(unaudited)

235,077,888 319,319,389
2,558,824,000 2,558,824,000
0.092

0.125

Dividend per share
During the nine months ended October 31, 2015, the Company distributed
dividends of Euro 281,470,640, as approved by the Shareholders’ Meeting heldon May 26, 2015, to approve the financial statements for the year ended
January 31, 2015.

13

8.

Inventories, net
as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

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

127,736
32,824699,204(64,090)

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

Total

795,674

654,545(amounts in thousands of Euro)

The increase in inventories was mainly attributable to a higher level of thestock of finished products due to the different approach to replenishment
which started in the last few months of 2014, to the 18 DOS openings fromJanuary 31, 2015, and to the volume of sales that in the last months of 2015
was lower than expected.
Movements on the allowance for obsolete and slow moving inventories areanalyzed as follows:Rawmaterials

Finished
Products

Total

26,79837,40164,199

4
-

3
33
(149)

7
33
(149)

26,80237,28864,090as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

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

225,814(7,213)29,655317,147(7,784)36,921

Total

248,256

346,284(amounts in thousands of Euro)
Balance at January 31, 2015 (audited)
Exchange differences
AdditionsUtilization
Balance at October 31, 2015 (unaudited)9.

Trade receivables, net(amounts in thousands of Euro)The reduction in trade receivables from third parties is mainly due toseasonality of the wholesale business in terms of shipping and collection.

14

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 at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

Financial receivables
Prepaid sponsorship
Other receivables and advance payments

13,629
6,961

11
5
3,224

Receivables from, and advance payments to, related parties current

20,5903,240(amounts in thousands of Euro)

Receivables from, and advance payments to, related parties non-current are
detailed as follows:
as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

Prepaid sponsorship
Deferred rental income – long-term
Loans

5,586
1,508
741

12,3794,309
741

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

7,835

17,429(amounts in thousands of Euro)

11. Capital expenditure
Changes in the net book value of Property, plant and equipment in the period
ended October 31, 2015, 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

47,222(11,202)(53)

12,600(7,514)(94)

69,395(127,376)(2,436)

21,434(36,291)
(617)

3,703
(7,905)(44)

55,033(4)(88)

209,387(190,292)(3,332)

10,196

40

(477)

(804)

(93)

199

9,061

118,9122,178

47,052

9,145

199(177,999)

(513)

-

(64)

(1,938)

(574)

(35)

-

(2,611)

643,015

28,322497,522

170,954

66,09890,007

1,495,918

Additions
Depreciation
Disposals
Exchangedifferences
Other
movements
Impairment
Balance at
October 31,
2015(unaudited)

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

15

Changes in the net book value of Intangible assets in the period ended
October 31, 2015, are as follows:
Trademarks

Balance atJanuary 31,2015 (audited)

277,232

513,214

106,492

10,82816,725

18,813

943,304231(8,659)
-

297
-

694
(14,994)(1,928)1,493(2,928)(96)

63(1,499)-22,557-25,335(28,080)(2,024)

2,594

465

(2,543)

(70)

-

(57)

389

-

(120)

15,746
(409)

1,336
-

(11) (17,371)
-

(300)
(529)

271,398

513,856

103,058

10,563

Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance at
October 31,
2015 (unaudited)

Store
Goodwill
Lease
SoftwareAcquisitions

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

15,27823,942

938,095

12. Other current assets
as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

VAT
Income tax and other tax receivables
Other assets
Prepayments and accrued income
Deposits

65,247
27,14427,22862,6963,444

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

Total

185,759

180,633

as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

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

73,966
12,836
2,630
12,43970,004
9,056
2,515
9,778

Total

101,871

91,353(amounts in thousands of Euro)

13. Other non-current assets(amounts in thousands of Euro)16

14. Payables to related parties – current and non-current
The current portion of payables to related parties is detailed as follows:
as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

Financial payables
Other payables

2,433
650

2,371
712

Payables to related parties – current

3,083

3,083

(amounts in thousands of Euro)The non-current portion of payables to related parties is detailed as follows:
as at
October 31
2015(unaudited)

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)As a result of transactions with Non-controlling shareholders of a Group’s
subsidiary during the nine months ended October 31, 2015, Fin-reta srl is nolonger a related party but a third party. Consequently, the payables inquestion are now reported under “Other non-current liabilities”.

15. Trade payables(amounts in thousands of Euro)

as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

Trade payables – third parties
Trade payables – related parties

297,040
14,599410,977
26,443

Total

311,639

437,420

as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

43,06816,497
77,328

128,346
17,35474,780

Total

136,893

220,480

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

Payables for capital expenditure include liabilities for capital expenditure for
Property, plant and equipment and Intangible assets. The decrease comparedto January 31, 2015, was due to the payment of Euro 55 million for thepurchase of the property in Milan used as the Company’s headquarter.

1717. Provisions for risks and charges
Movements in provisions for risks and charges are summarized as follows:(amounts in thousands of Euro)

Balance at January 31, 2015
(audited)
Exchange differences
Other
Reversals
Uses
Increases
Balance at October 31, 2015
(unaudited)

Provision
for litigation

Provision fortax disputes

Provisions
for othercharges

Total

1,876

25,53736,282

63,695

12
(87)
(46)
107

3
(1,908)
410

231
(761)
(778)
4,779

246
(848)
(2,732)
5,296

1,862

24,04239,75365,657

During the nine months ended October 31, 2015, there were no significant
developments regarding the litigations pending at January 31, 2015.
However, it is worth noting the evolution of the position of PRADA spa to theenquiries of the Italian Tax Authority on the “CFC” (Controlled Foreign
Companies) legislation. In October 2015, PRADA spa had a positive outcome
related to CFC rulings which were submitted on June 2015 to the Italian Tax
Authorities in order to obtain the non-application of the aforementioned
legislation for the tax year 2014 with reference to the companies controlled
by the Group and operating in "black list" countries. The positive outcome,which took effect from 2014 onwards - provided that significant changes inthe structures of the companies involved will not occur - did not result in any
change in the estimated tax burden of the period compared to the same ninemonths period of 2014 as the Directors considered reasonable not to include
any liability in this regard.
As for the Dutch sub-holding company PRADA Far East bv, the CFC ruling forthe non-application of the CFC legislation was not submitted for the tax year
2014 due to the absence of the legal regulatory requirements to qualify said
sub-holding as a CFC company. As a result, the Consolidated income
statement for the nine months ended October 31, 2015, does not contain any
tax liability arising from the CFC regime for the above-mentioned subsidiary,
while the nine months period under comparison included a charge of Euro 3
million.

18

Management Discussion and Analysis for the threemonths ended October 31, 2015
As already mentioned earlier, the third quarter results of 2015 were
negatively impacted by the increased volatility recorded on some markets
after summer.
In the three months ended October 31, 2015, net revenues amounted to Euro758.1 million, 5.3% down compared to the same period of 2014. In absoluteterms, the decline was recorded by the retail channel where all geographicalareas, except for Italy and Japan, showed reductions compared to the same
period of last year. In details, in markets such as Hong Kong and Macau thesituation worsened with strong contractions of traffic and retail sales ingeneral. In addition, the devaluation of the Renminbi recorded between
August and September had a negative impact on the purchases made by the
Chinese travelers.
Conversely, the gross margin of the three months period ended October 31,
2015, was 74%, showing an increase over the 72.3% recorded in thecomparative period. The improvement was positively contributed by theexchange rates, the efficiencies achieved in the industrial processes and by
the price adjustments implemented also to balance the spreads among
countries. EBITDA for the period amounted to Euro 155.3 million, or 20.5% of
net revenues (23.6% in the three months under comparison), while EBIT
totaled Euro 80.7 million, or 10.6% of net revenues (15.4% in the threemonths under comparison).
Facing this further deterioration of the economic scenario, the management
started new short-term actions in order to curb the overall level of operating
costs, and, at the same time, continued to work on the product offer in orderto support sales, leveraging on creativity and spirit of innovation.

Management Discussion and Analysis for the ninemonths ended October 31, 2015
Distribution channels
In the nine months ended October 31, 2015, retail sales amounted to Euro
2,253.5 million, showing an increase of 3.8% at current exchange rates and areduction of 4.9% at constant exchange rates. The growth during the period
was positively contributed by 32 net stores opening compared to October 31,
2014 (46 openings and 14 closures). By geographical area, results wereaffected by the exchange rate fluctuations since the weakening of the Euro
currency encouraged, until the summer, the flows of tourists into theEurozone and increased the counter value of the net sales generated in thevarious foreign currencies. Europe and Italy showed a growth, while
Americas and Middle East showed a growth in sales only at current exchange
rates. The Asia Pacific region was negative overall. The results in Japan wereinstead positive regardless of trend of the Japanese Yen, as retail sales also
increased at constant exchange rates and DOS number (the Same Store Sales
Growth rate was positive).
19

The wholesale channel generated net sales of Euro 295.5 million, down by
15.9% at current exchange rates and by 21.4% at constant exchange rates.
The continued selective strategy on independent customers (the latter also
responds to the need to limit the parallel market) significantly affected theperformance of the period together with the crisis linked to MERS in South
Korea.

Markets
In the nine months ended October 31, 2015, the Asia Pacific market
generated net sales of Euro 845.6 million, down by 6.3% at current exchange
rates and by 19.1% at constant exchange rates. Reductions in local
consumptions as well as tourists flow from Mainland China significantly
impacted the area, especially in Hong Kong and Macau where the decline insales was more evident. The Greater China (Hong Kong, Macau and China)
contributed net sales of Euro 536.2 million, down by 5.6% at current
exchange rates and by 20.9% at constant exchange rates.
In Europe, net sales amounted to Euro 557.4 million, recording an increase of
2.4% at current exchange rates and an increase of 0.8% at constant exchange
rates. The retail, thanks both to the existing stores (SSSG positive) and thenew openings (net 4 more DOS compared to October 31, 2014), led the sales
performance in the area. The growth recorded in the region was diluted by
the contractions reported in Great Britain and in Switzerland, where thetrend of the respective local currencies penalized visitors. The results forthe wholesale channel were negative both at current and constant exchange
rates for the above mentioned reasons.
The Italian market achieved net sales of Euro 406.4 million, up by 0.9% overthe same period of 2014. Retail channel sales reported a double-digit growththroughout the period especially thanks to the tourist flows favored by aweak Euro and despite the number of store networks remained the samefrom the comparable nine months. The only opening in the last twelve
months was the Prada store in Galleria Vittorio Emanuele II in Milan (thatbecame a DOS on April 1, 2015, after a period when it was operated under afranchise agreement by a related party). On the other hand, the selective
strategy coupled with the poor performances in the secondary cities led to adouble-digit percentage decline of the wholesale business.
Net sales in the American market amounted to Euro 365.4 million in the ninemonths ended October 31, 2015, reporting a growth of 8.6% at current
exchange rates and a reduction of 7.8% at constant exchange rates. Retail
and wholesale channels showed substantially the same trend compared tothe comparable period. The strengthening of the US Dollar had a negative
impact on travelers in the region. In the retail channel, it is worth noting theorganic development of the Canadian market.
The Japanese area, also supported by tourist flows, showed the mostsignificant and stable growth across the nine months, reporting net sales ofEuro 286.4 million which were up by 10.4% at current exchange rates and up
by 4.6% at constant exchange rates. The progress in Japan alone was evenbigger because the overall results of this area were penalized by the decline20

of the flows of tourists in Hawaii (which belong to the commercial area ofJapan) caused by the weakening of the Japanese Yen against the US dollar.
The Middle East generated net sales totaling Euro 83.4 million, up by 12.7%
at current exchange rates and down by 4.8% at constant exchange rates. The
entire region suffered from lower flows of tourists.

Products
Leather goods posted net sales of Euro 1,553.3 million, reporting a decline of
3.8% at current exchange rates and a decline of 11.6% at constant exchange
rates compared to the same period of 2014. The contraction was mainly due
to the Prada brand which was particularly affected by the suffering of the
Asia Pacific and American markets.
Clothing recorded net sales of Euro 422.6 million, up by 2.5% compared to
the results achieved in the same period of 2014. At constant exchange rates,
the trend showed a decline of 5.6%, except for Japan where growth wasachieved also at constant exchange rates.
The footwear division generated net sales of Euro 523.2 million, posting a
15.8% growth compared to the results achieved in the same period of 2014.
The increase in sales was achieved also at constant exchange rates (+5.9%)
and in all regions.

BrandsThe Prada brand recorded net sales of Euro 2,065.8 million, down comparedto the same period of last year: by 0.8% at current exchange rates and by
8.9% at constant exchange rates.
Miu Miu brand generated net sales of Euro 411.7 million, recording an
increase of 10.2% at current exchange rates and of 0.9% at constantexchange rates. Sales growth was driven mainly by the positive saleperformances by shoes and leather goods, but partially offset by the decline
in the ready-to-wear division. From a geographical point of view, with the
exception of Asia Pacific, sales from Miu Miu increased at constant exchange
rates in all regions, and notably in Middle East.
In the nine months ended October 31, 2015, the Church’s brand posted net
sales of Euro 60.5 million, 10.1% up at current exchange rates and 1.7% up atconstant exchange rates over the same period a year earlier. The
commercial development was achieved thanks to the expansion of the retailchannel which showed net sales growth also on a SSSG basis. Thisdevelopment was diluted by the contraction recorded by the wholesale inEurope.
The net sales recorded by the Car Shoe brand were penalized by thecontraction of the wholesale and by the closure of the DOS operating in
London, Hong Kong and Singapore.

Royalties
During the nine months ended October 31, 2015, the licensing businessgenerated income amounting to Euro 33.5 million, which showed an increase21

of 16.2% over the same period of last year. The development has beenachieved through both the eyewear and the fragrance businesses, thanks also
to the launch of the first Miu Miu fragrance in August.

Operating results
Gross margin for the nine months ended October 31, 2015, amounted to Euro
1,887.1 million. As a percentage of net revenues, the gross margin increased
from 72% to 73.1% following the favorable effect of the exchange rates, theimprovements in industrial margins and the price adjustments implemented
also to balance the spreads among countries. Nevertheless, the geographicaland product mix of the nine months period were less favorable if comparedto the same period last year.
Operating expenses increased overall from Euro 1,340 million to Euro 1,513.2
million, raising their incidence on net revenues from 52.5% to 58.6%. In
absolute terms, the increase was attributable to the selling expenses,
essentially following the enlargement of the retail structure. To a lesser
extent, the increase in the activities of advertising and communication
resulted in an increase in operating expenses because of the higher spending
for media spaces, retail events and special projects. Other operating costs
were almost unchanged in absolute terms compared to the period undercomparison, thanks to the actions undertaken in the first months of the year
and after the summer to improve the efficiency of operational processes andreduce discretionary expenses. Overall, the increased incidence of theoperating expenses negatively impacted profitability with EBITDA that wentfrom 26.7% to 23.1%, and EBIT, from 19.5% to 14.5%.
The financial charges impacted the income statement for Euro 18.5 million,
slightly more than in the period under comparison. This was mainly due tointerest expenses on borrowings following the higher average level of bankdebt in the current period. Income taxes, although lower in absolute terms
compared to the nine months ended October 31, 2014, showed a higher
effective tax rate because of a different geographical distribution of thetaxable income.

22

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

as at
October 31
2015(unaudited)

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 of positive financial position
Debt to Equity ratio

2,567,580
248,256
795,674(311,639)
732,291
215,644(261,078)(45,434)(65,657)(68,298)(167,401)
259,867(41,489)
3,212,948(2,997,517)(17,653)(3,015,170)(416,707)
218,929(197,778)(3,212,948)
0.07

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 October 31, 2015, Net invested capital stand at Euro 3,212.9 million, an
increase of Euro 383.6 million compared to the figure reported at January
31, 2015.
The non-current assets, excluding deferred tax assets, amounts to Euro2,567.6 million at October 31, 2015, and the change compared to Euro2,557.1 million at January 31, 2015, is negligible as the investments for theperiod, amounting to Euro 234.7 million, were almost equal to thedepreciation and amortization charges. The capital expenditure wereallocated to the retail area for Euro 144.2 million, to the corporate area forEuro 52.9 million and to the industrial and logistics area for Euro 37.6
million. Retail investments for the period were supported in order tostrengthen further the retail network through 29 new openings and 27
projects dedicated to renewals, expansions and relocations of existing
stores.
The net operating working capital at October 31, 2015, amounts to Euro732.3 million, up by Euro 168.9 million from the figure of Euro 563.4 million
reported at January 31, 2015. The increase was mainly attributable to ahigher level of the stock of finished products due to the different approach23

to replenishment which started in the last few months of 2014, to the 18 DOS
openings from January 31, 2015, and to the volume of sales in the lastmonths of 2015 which were lower than expected.
Other current liabilities, net, decreased from Euro 221.7 million at January
31, 2015, to Euro 45.4 million, mainly as a result of the payment of debts forinvestments and the closure of derivative financial contracts.
The decrease in other non-current liabilities, net, which are equal to Euro
41.5 million as at October 31, 2015, and were Euro 69.5 million as at January
31, 2015, was mainly generated by the payment of a first tranche of longterm benefits plans to key employees, as well as by higher temporary
differences between the tax value and the value in the Consolidated
financial statements of the inventory of finished goods.
The Group shareholders' equity at October 31, 2015, is almost unchanged
compared to the figure of Euro 3,000.7 million reported at January 31, 2015.
The income for the nine months period and the positive change in thetranslation reserve due to the revaluation of net assets denominated incurrencies other than the Euro were offset by the distribution of dividends tothe shareholders of PRADA spa for Euro 281.5 million.

Net financial position surplus/(deficit)
as at
October 31
2015(unaudited)

as atJanuary 31
2015(audited)Long-term debt
Long-term financial receivables due from related parties(417,448)
741(255,203)
741

Long-term financial payables(416,707)(254,462)

Bank overdraft and short-term loans
Payables to related parties
Receivables from related parties
Obligations under finance leases
Cash and cash equivalents(305,886)(2,433)527,248(263,335)(2,371)11(21)
708,966

Short-term net financial surplus/(deficit)

218,929443,250

Net financial position surplus/(deficit)(197,778)

188,788(amounts in thousands of Euro)At October 31, 2015, the Group’s net financial position is negative and equal
to Euro 197.8 million. The cash flows from operating activities, net,
amounted to Euro 200.8 million and, together with the use of existing funds,
was used to support the investments for the period (Euro 304.6 million), pay
dividends to the shareholders of PRADA spa (Euro 281.5 million) and absorb
the increase in the net operating working capital (Euro 168.9 million). It isalso worth highlighting that the Group, in order to improve its financial
flexibility, while also taking advantage of the favorable conditions on the24credit market, signed in the period new medium/long-term facilities in Euroand Japanese yen for a total amount of approximately Euro 190 million.

OutlookOver the last few months there was a general worsening of themacroeconomic environment: in particular, continuing volatility on financial
markets and rising fears on the social and political landscape have madeconsumers less willing to spend and decreased tourist flows in somecountries. Against this background and also in light of the far-reachingchanges underway in the luxury goods segment, the Group is further stepping
up all its commercial and product-related initiatives to strengthen relations
with its increasingly sophisticated and demanding customer base. At thesame time, further cost containment measures were implemented following
a review of all business processes.
Stylistic continuity, one of the Group’s core strengths, together with aflexible organization capable of adapting to market changes, will be key
features of the Group’s strategy in the near future. This will allow the Groupto react to evolution in demand through design and creative decisions always
in line with the tradition and positioning of its brands. To this extent, themanagement is reviewing the organization in order to streamline processes
and further strengthen it with new key personnel. In the medium-term, theGroup remains optimistic about the outlook for the segment and confident
that the undoubted stylistic leadership of its brands and its positioning - with
global coverage already secured by its extensive retail network - will be key
factors in facing up successfully to future challenges.

25Corporate governance practices
Audit Committee
The Audit Committee, which comprises three independent non-executive
directors, on December 15, 2015, has reviewed the unaudited consolidated
results of the Company and its subsidiaries for the nine months ended
October 31, 2015.

Compliance with the Corporate Governance Code of the Listing
Rules
The Board has reviewed the Company’s corporate governance practices andis satisfied that the Company has complied with the applicable codeprovisions set out in the Corporate Governance Code contained in Appendix
14 of the Listing Rules during the nine months ended October 31, 2015.

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 nine months
ended October 31, 2015.

Publication of Announcement on Consolidated results for thenine months ended October 31, 2015
This announcement on the consolidated results for the nine months ended
October 31, 2015, is published on the Company’s website atwww.pradagroup.com and on the Hong Kong Stock Exchanges’ website atwww.hkexnews.hk.
By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Chairman
Milan (Italy), December 15, 2015
As at the date of this announcement, the Company’s executive directors are
Mr. Carlo MAZZI, Ms. Miuccia PRADA BIANCHI, Mr. Patrizio BERTELLI, Mr.
Donatello GALLI and Ms. Alessandra COZZANI; the Company’s non-executive
director is Mr. Gaetano MICCICHÈ and the Company’s independent nonexecutive directors are Mr. Gian Franco Oliviero MATTEI, Mr. Giancarlo
FORESTIERI and Mr. Sing Cheong LIU.

26