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

PRADA spa
(Stock Code: 1913)

ANNOUNCEMENT
OF THE CONSOLIDATED RESULTS
FOR THE TWELVE-MONTH PERIODENDED DECEMBER 31, 2021---

The Prada Group reports net revenues of Euro 3,365.7 million, up by 40.6% at constantexchange rates from 2020 and by 7.8% from 2019;
The retail channel experienced steady, progressive sales growth thanks to theperformance of full-price sales. Compared with 2019 sales at directly operated storesrose by 15.2% annually and by 23.5% in the last quarter, at constant exchange rates;
Asia Pacific, the Americas and the Middle East had double-digit growth compared with
2019; although affected for much of the year by persisting pandemic-related restrictions,in the final quarter compared to 2019, at constant exchange rates, Europe’s sales wereup and Japan’s sales were in line;-

Gross margin upswing to 75.7% of net revenues, against 72% for 2020 and 71.9% for 2019;-

EBIT above pre-Covid levels: Euro 489.5 million, corresponding to 14.5% of net revenues,
increasing by 59% versus the 2019 EBIT (Euro 306.8 million, 9.5% of net revenues);-

Net financial surplus of Euro 238 million at December 31, 2021, a strong progression
versus 2020;-

Proposed dividend distribution of Euro 179.1 million.

1

Presentation of the Prada GroupPRADA spa (“Prada” or the “Company”), together with its subsidiaries(collectively the “Group” or “Prada Group”), is listed on the Hong Kong Stock
Exchange (HKSE code: 1913). The Prada Group is a leading player in the luxury
goods industry, where it operates with the Prada, Miu Miu, Church’s and Car
Shoe brands producing and distributing leather goods, footwear and apparel. It
also operates in the food sector with Marchesi 1824 and in the eyewear andfragrance industries under licensing agreements.
The Group owns 23 production facilities (20 in Italy, 1 in the United Kingdom, 1
in France and 1 in Romania) and its products are sold in 70 countries worldwide
mainly through its directly operated stores, which numbered 635 at December
31, 2021. The Prada Group's products are also sold through the brands' ecommerce, in selected high-end department stores, by independent retailers invery exclusive locations, and by important e-tailers.
The Company is a joint-stock company with limited liability, registered anddomiciled in Italy. Its registered office is at via Fogazzaro 28, Milan. At
December 31, 2021, 79.98% of the share capital was owned by PRADA Holding
spa, a company domiciled in Italy, and the remainder consisted of floating
shares on the Main Board of the Hong Kong Stock Exchange.

Basis of Presentation
The financial information presented herein refers to the group of companies
controlled by the Company, the parent company of the Prada Group, and it isbased on the Consolidated Financial Statements for the twelve-month period
ended December 31, 2021.
At the date of presentation of this document, there were no differences between
the IFRSs as endorsed by the European Union and applicable to the Prada Groupand those issued by the IASB.
Amendments to existing standards issued by the International AccountingStandard Board (“IASB”), endorsed by the European Union and applicable to thePrada Group from January 1, 2021.
Effective Date forPrada Group

Amendments to existing standards
Amendments to IFRS 4 Insurance Contracts –deferral of IFRS 9
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16 Interest Rate Benchmark Reform- Phase 2
Amendments to IFRS 16 Leases: Covid-19-RelatedRent Concessions beyond 30 June 2021 (issued on
31 March 2021)

January 1, 2021
January 1, 2021
April 1, 2021

EU endorsement dateEndorsed in December
2020
Endorsed in January
2021
Endorsed in August 2021

The introduction of these amendments, with the exception of that relating to
IFRS 16, did not have any effect on the Consolidated Financial Statements.

2

Amendment to “IFRS 16 Leases” regarding Covid-Related Rent Concessions
On March 31, 2021, the IASB extended by one year the period of application of
the IFRS 16 practical expedient previously approved by the IASB on May 28,
2020. With this amendment, issued in response to the duration of the Covid-19
pandemic, immediate recognition in profit and loss of rent discounts is
applicable if the reduction regards payments originally due on or before June30, 2022 (and no longer by the original date of June 30, 2021), whereas theother terms of the standard and practical expedient adopted in 2020 remain
valid.
The amendment is effective for annual reporting periods beginning on or after
April 1, 2021.
Note that during the annual reporting period, the Group accounted for Covidrelated concessions of Euro 34.4 million in the Statement of Profit or Loss,basically none of which regarded the 2021 amendment, as no significant relatedcases had emerged at the reporting date.

Amendments to existing standards issued by the IASB, endorsed by theEuropean Union, but not yet applicable to the Prada Group because they are
effective for annual periods beginning on or after January 1, 2022.
Amendments to existing standards

Effective Date forPrada GroupEU endorsement date

IFRS 3 Business Combinations

January 1, 2022

Endorsed in June 2021

IAS 16 Property, Plant and Equipment
IAS 37 Provisions, Contingent Liabilities andContingent Assets
Annual Improvements 2018-2020

January 1, 2022

Endorsed in June 2021

January 1, 2022

Endorsed in June 2021

January 1, 2022

IFRS 17 Insurance contracts

January 1, 2022

Endorsed in June 2021
Endorsed in November
2021

Amendments to IAS 1 Presentation of Financial
Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies (issued on 12
February 2021)
Amendments to IAS 8 Accounting policies, Changes
in Accounting Estimates and Errors: Definition of
Accounting Estimates (issued on 12 February 2021)

January 1, 2023

Endorsed in March 2022

January 1, 2023

Endorsed in March 2022

New Standards and Amendments issued by the IASB, but not yet endorsed by
the European Union as of December 31, 2021
New IFRS and Amendments to existing standards
Amendment to IAS 1 Presentation of Financial
Statements (issued on 23 January 2020)
Amendments to IAS 12 Income taxes: deferred tax
related to assets and liabilities arising from a single
transaction
Amendments to IFRS 17 Insurance contracts: Initial
application of IFRS 17 and IFRS 9 – Comparative
information ( issued on 9 December 2021)
3

Date of possible
application

EU endorsement date

January 1, 2023

Not endorsed yet

January 1, 2023

Not endorsed yet

January 1, 2023

Not endorsed yetKey financial information
Key economic figures(amounts in thousands of Euro)

twelve months
ended
December 31
2021

twelve months
ended
December 31
2020

twelve months
ended
December 31
2019

3,365,667
489,484
14.5%
294,2540.115
750,723

2,422,739
20,061
0.8 %(54,139)(0.021)
262,100

3,225,594
306,7799.5%
255,7880.100
362,365

Net revenues
Operating income/(loss) - EBIT
% incidence on net revenues
Net income/(loss) of the Group
Earnings/(losses) per share (Euro)Net Operating Cash Flows (*)(*) non-IFRS measure equal to Net Cash flows from operating activities less repayments of lease liability

Key indicators(amounts in thousands of Euro)

December 31
2021

December 31
2020

December 31
2019

Net operating working capital
Net invested capital(Right of Use Assets included)
Net financial surplus/(deficit)
Group shareholders’ equity

602,038

667,024

702,835

4,936,402

5,296,489

5,809,417

237,653
3,113,894(311,357)
2,832,057(405,544)
2,967,158

2021 highlights
The Covid-19 pandemic continued to fuel a transformation process in the luxury
goods market in 2021, making it truly evolve. The share of consumers belonging
to young generations increased considerably, as did the input of the digital sales
channels and local consumers. Ethical products, the social responsibility of thebrands and the significance of human beings in the buying experience, even in
the new physical-digital ecosystem, have become of paramount importance tothe industry’s value proposition.
Focusing on being relevant, sustainable and impactful, the Prada Group has
succeeded in evolving with the market in this scenario of mutations. The
combination of its unique creative prowess and a transformational omnichannel
strategy has enhanced the perceived value of the brands and products, paving
the way for revenue growth and putting the Group back on the path of long-termvalue creation.
The commercial strategy was behind this growth with a more profitable sales
mix, the elimination of markdowns, and a fully streamlined wholesale
distribution channel. The increase in the Group’s own e-commerce sites also
contributed to the growth, mainly with new customers.
Investments in retail space and processes raised store productivity rates andwere critical to strengthening the brand identities. In 2021 alone, 120 store
renovations were completed and 80 pop-up installations were set up, leading toincreased footfall in stores and a continuously evolving retail image. The Prada
Outdoor, Prada Holiday, Miu Miu Upcycled and Miu Miu Nuit pop-up shops

4

resonated the most, traveling around to some of the most prestigious
department stores and malls.
Investments in content and in traditional and digital communication channels led
to excellent results even in the online brand visibility metrics. Effective
communication campaigns made it possible to expand the involvement of thedigital community during successful events, such as the Prada 2022
Spring/Summer fashion show, the first be to presented simultaneously in twocities (Milan and Shanghai), and the 36th America’s Cup presented by Prada, themost viewed edition ever.
The omnichannel growth strategy included new investments that will soon leadto additional optimization of back end retail operations and greater use of data,
making the customer relationship management (CRM) activities even more
effective. Last but not least, having joined the Aura consortium as a founding
member enables the Group to further enrich the customer journey: throughblockchain technology, the Group’s brands will guarantee to customers
enhanced transparency and traceability. Moreover, a digital evolution roadmap
was approved during the year that will lead to a cutting-edge information system
for the Group in terms of engineering and technology, giving another competitive
advantage in the performance of all distribution and communication channels
and indeed the entire business operation.
The industrial area benefited from important reduction of complexity as well as
investments in the verticalization of the production process to enhance artisanal
know-how and further boost the high quality standards of the products. Use ofoperating capacity was optimized at the Levanella logistic hub, a forerunner oftechnology and sustainability in the industry and a crucial site for integrating
manufacturing processes with store procurement ones. Manufacturing activities
were also strengthened through the acquisition of the remaining minority stakes
in two subsidiaries, and the acquisition of a stake in Filati Biagioli spa, renowned
for Italian excellence in the production of cashmere and other noble yarns.
For Capital Markets Day in November, the strategic guidelines for the Group’s
sustainable growth were communicated as formalized based on the principles
and priorities that have always motivated the Prada Group, organized into threepillars: people, environment and culture.
The Group’s operating results improved considerably from those of the prepandemic levels, showing increases in both amounts and as a percentage of net
revenues. The consequential cash generation, net of investments and resumed
dividend payments, enabled the Group to accumulate enough cash assets toface confidently the important short and medium investments.

5

Scope of work of Messrs. Deloitte & Touche S.p.A.
The figures in respect of the Group’s “Consolidated Statement of financial
position”, “Consolidated Statement of Profit or Loss for the twelve-month
period ended December 31, 2021", “Statement of consolidated comprehensive
income for the twelve-month period ended December 31, 2021”, “Statement ofConsolidated cash flows for the twelve-month period ended December 31,
2021”, “Statement of changes in consolidated shareholders’ equity”, as set out
in this announcement have been agreed by the Group's auditors, Messrs.
Deloitte & Touche S.p.A., to the amounts set out in the Group’s audited
Consolidated financial statements for the twelve-month period ended
December 31, 2021 and some of the “Notes to the Consolidated financial
statements” thereto. The work performed by Messrs. Deloitte & Touche S.p.A.
in this respect does not constitute an assurance engagement in accordance with
International Standards on Auditing and consequently no assurance has been
expressed by Messrs. Deloitte & Touche S.p.A. on the announcement.

6

Consolidated statement of Profit or Loss for the twelve
months closed at December 31, 2021
(amounts in thousands of Euro)

twelve months
twelve months
twelve months
% on
% on
% on
ended
ended
ended
net
net
net
December 31
December 31
December 31
revenues
revenues
revenues
2021
2020
2019

Net sales (Note 1)
Royalties
Net revenues

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

98.5%
1.5%
100.0%

2,390,866
31,8732,422,739

98.7%
1.3%
100%

3,183,339
42,2553,225,594

98.7%
1.3%
100%

Cost of goods sold(818,309)-24.3%(679,361)-28.0%(905,982)-28.1%

Gross margin

2,547,358

75.7%

1,743,378

72.0%

2,319,612

71.9%

Product design and development costs
Advertising and communications costs
Selling costs
General and administrative costs
Total operating expenses(115,319)(294,251)(1,421,169)(227,135)(2,057,874)

-3.4%
-8.8%
-42.2%-6.7%-61.1%(102,232)(206,848)(1,259,827)(154,410)(1,723,317)

-4.2%
-8.5%
-52.0%-6.4%-71.1%(127,378)(231,011)(1,470,101)(184,343)(2,012,833)

-3.9%
-7.2%
-45.6%-5.7%-62.4%

489,484

14.5%

20,0610.8%

306,779

9.5%

EBITInterest and other financial
income/(expenses), net
Interest expenses on Lease Liability
Dividends from investments
Total financial income/(expenses)(31,216)-0.9%(29,480)-1.2%(25,174)-0.8%(36,773)160(67,829)

-1.1%
0.0%
-2.0%

(42,670)277(71,873)

-1.8%
0.0%
-3.0%

(48,980)2,135(72,019)

-1.5%
0.1%
-2.2%

Income / (loss) before taxation

421,655

12.5%(51,812)-2.1%

234,760

7.3%

Taxation(126,552)-3.8%(2,556)-0.1%

22,9640.7%

Net income / (loss) for the period

295,103

8.8%(54,368)-2.2%

257,724

8.0%

849

0.0%

(229)

0.0%

1,936

0.1%

294,2548.8%(54,139)-2.2%

255,788

7.9%

Net income / (loss) –Non-controlling interests
Net income / (loss) – Group
Basic and diluted earnings / (losses)
per share (in Euro per share) - (Note 3)

0.115(0.021)7

0.100

Consolidated statement of financial position
December 31
2021

December 31
2020

4
5

981,786
329,547
662,6541,762

442,392
290,380
666,222
10,691

6

22,86651,035

7

171,2202,169,835

194,188
1,654,908

8
8
9

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

1,506,011
832,445
2,054,338
66,191
251,888
142,712

1,125

19,434

4,789,176
6,959,011

4,873,019
6,527,927

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

403,593
300,577
3,481
289,578
68,863
7,789
153,382
1,227,263

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

1,729,819
451,200
73,25645,41629,250110,754
9,249
2,448,944
3,676,207

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

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

255,882
2,633,673(3,359)(54,139)
2,832,057
19,6632,851,720

Total Liabilities and Total Net Equity

6,959,011

6,527,927

Net current assets
Total assets less current liabilities

750,104
5,539,280

427,645
5,300,664(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, relatedparties - current
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right of Use assets
Investments in equity instruments
Deferred tax assets
Other non-current assets
Receivables from, and advance payments to, relatedparties – non-current
Total non-current assets
Total Assets
Liabilities and Shareholders’ Equity
Current liabilities
Short-term lease liability
Short-term financial payables and bank overdrafts
Payables to related parties - current
Trade payables
Tax payables
Derivative financial instruments - current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term lease liability
Long-term financial payables
Post-employment benefits
Provision for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments - non-current
Total non-current liabilities
Total Liabilities

10

11
12

13

14

8

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

Total Other
Reserves

Net
incomefor theperiod61,437410,047(8,469)(4,516)(9,982)2,006,971

2,394,051

255,788

2,967,158

-

-

-

-

-

-

204,612

204,612 (204,612)

-

-

-

-

-

-

-

-

-

-

51,176

51,176(51,176)

-

-

-

-

-

(64,796)

-

2,675

-

-

-

2,675

(54,139)(116,260)(1,755)(118,015)

-

-

-

-

-

(3,635)(15,206)-(18,841)-(18,841)

1(18,840)

2,558,824

255,882(3,359)410,047(5,794)(8,151)(25,188)2,262,759

2,633,673(54,139)

2,832,057

-

-

-

-

-

-

-

(54,139)(54,139)

54,139

-

-

-

-

-

-

-

-

-

-

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

-

-

-

-

-

-

-

-

-

-

-

(141)

(141)

-

-

-

-

-

-

13,351922

14,273-

14,273-

14,273

-

-

(574)

-

-

(66)

-

-

(66)

-

(640)

(4,816)(5,456)

-

-

-

-

-

-

-

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

294,254355,537

1,712

357,249

-

-

-

-

-

2,509

845

-

3,354

-

3,354

5

3,359

2,558,824

255,882

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

2,118,855

2,496,324

294,254

3,113,894(amounts inthousands of Euro)

Share
CapitalTranslation
Reserve

Balance at
December 31, 2019

2,558,824

255,882-

Allocation of 2019
net income - retained
earnings
Allocation of 2019
net income extraordinary reserve
Comprehensive
income/(loss) for theperiod (recyclable to
P&L)
Comprehensive
income/(loss) for theperiod (notrecyclable to P&L)
Balance at
December 31, 2020
Allocation of 2020
net income
Dividends
Capital reduction in
subsidiaries
Gains/(losses) on
sales of Investmentsin equity instruments
Acquisition of
additional sharesfrom Non-Controlling
Interests
Acquisition of Luna
Rossa Challenge srl
Comprehensive
income/(loss) for theperiod (recyclable to
P&L)
Comprehensive
income/(loss) for theperiod (notrecyclable to P&L
Balance at
December 31, 2021

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

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

Number of
Shares(inthousands)

921,417 2,988,575

19,663 2,851,720

14,749 3,128,643

Consolidated statement of cash flows for the twelve
months closed at December 31, 2021
twelvetwelvetwelvemonthsmonthsmonths
ended
ended
ended
December 31 December 31 December 31
2021
2020
2019

(amounts in thousands of Euro)

Income/(loss) before taxation
Profit or loss adjustments
Depreciation and write-downs of the Right of Use assets
Depreciation and amortization of property, plant and equipment andintangible assets
Impairment of property, plant and equipment and intangible assets
Non-monetary financial (income) expenses
Gain on disposal of fixed assets
Interest expenses on Lease Liability
Other non-monetary (income) expenses
Balance Sheet changes
Other non-current assets and liabilities
Trade receivables, net
Inventories, net
Trade payables
Other current assets and liabilities
Cash flows from operating activities
Interest paid (net), including interest paid on Lease Liability
Taxes paid
Net cash flows from operating activities

421,655(51,812)

234,760

426,221443,910456,310

197,996203,720

222,309

6,514
25,267
36,77333,84821,29436,700(36,942)
42,670(74,598)

11,45024,10848,9806,089

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

59,21016,186
9,134(34,894)
56,435
691,013(54,374)(44,220)
592,419(14,189)
1,077(60,719)(15,735)(18,867)
895,573(59,552)(26,126)
809,895

Purchases of property, plant and equipment and intangible assets
Disposals of property, plant and equipment and intangible assets
Real estate sale to related party
Dividends from investments
Disposals of equity instruments
Acquisition of additional shares from Non-Controlling Interests
Financial investments
Business combination
Net cash flow utilized by investing activities(219,628)
364
20,000103
76,464(7,827)(6,741)(137,265)(109,557)
2,320
277(42,950)(149,910)(310,957)
1,779
2,135
28,074(400)(4,993)(17,899)(302,261)

Dividends paid to shareholders of PRADA spa
Dividends paid to Non-Controlling shareholders
Repayment of Lease Liability
Repayment of current portion of long-term borrowings –third parties
Arrangement of long-term borrowings – third parties
Change in short-term borrowings – third parties
Repayment of loans from related parties
Loans to related parties
Net cash flows generated / (utilized) by financing activities(89,559)(1,674)(392,805)(330,319)(153,529)(1,113)(447,530)(217,277)(205,593)(268,940)

240,000(33,412)(494,727)

175,000(35,608)
2,000
(750)
(395,270)

200,000(19,004)(2,375)(692,491)

Change in cash and cash equivalents, net of bank overdrafts
Foreign exchange differences
Opening cash and cash equivalents, net of bank overdraft
Closing cash and cash equivalents, net of bank overdraft

511,536
27,858442,392
981,786

47,239(25,916)
421,069
442,392(184,857)
6,105
599,821421,069

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

981,786
981,786

442,392
442,392

421,069
421,069

10

Consolidated statement of comprehensive income for thetwelve months closed at December 31, 2021
twelvetwelvetwelvemonthsmonthsmonths
ended
ended
ended
December 31 December 31 December 31
2021
2020
2019

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

295,103(54,368)

257,724

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

72,23072,230(66,321)(66,321)

28,911
28,911

Change in Cash Flow Hedge reserve
Tax impact
Change in Cash Flow Hedge reserve less tax impact(14,331)
4,247(10,084)

4,402(1,727)
2,675

2,730
(579)
2,151

845

(15,206)

59

-

-

-

845

(15,206)

59

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

4,248(1,734)2,514(4,676)
1,041(3,635)

614
(344)
270

Consolidated comprehensive income/(loss) for the period

360,608(136,855)

289,115

1,717(1,754)2,317

358,891(135,101)

286,798

A)

B)

Items recyclable to P&L:

Item not recyclable to P&L:

Change in Fair Value Investments inequity instruments reserve
Tax impact
Change in Fair Value Investments inequity instruments reserve less tax impact

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

Non-IFRS Measures
The Group uses certain financial measures (“non-IFRS measures”) to measure
its business performance and to help readers understand and analyze theresults of its operation and its financial situation. Although they are used by theGroup’s management, such measures are not universally or legally defined andare not regulated by the IFRS adopted to prepare the Consolidated Financial
Statements. Other companies operating in the luxury goods industry might use
the same measures, but with different calculation criteria. For this reason, nonIFRS measures should always be read in conjunction with the related notes, andmay not be directly comparable with those used by other companies.
As a result of the public health crisis, in 2020 the Group introduced a new nonIFRS measure, “Selling expenses of the closed stores during the lockdowns”
regarding the amount of operating expenses directly related to stores that could
not generate revenues due to the restrictions imposed during the pandemic. The
Group includes this non-IFRS measure to provide additional quantitative
information to improve the reader’s understanding of the impacts of the Covid19 pandemic on the business.
The Prada Group’s EBIT and EBITDA are reported below:(amounts in thousands of Euro)

twelvetwelvemonthsmonthsended
ended% on net% on net
December
Decemberrevenues
revenues
31
31
2021
2020
(unaudited)(unaudited)

twelvemonthsended% on net
Decemberrevenues
31
2019(unaudited)

Operating income / (loss) - EBIT

489,484

14.5%

20,0610.8%

306,779

9.5%

Selling expenses of the closed
stores during the lockdowns

43,602

1.3%

115,833

4.8%

-

-

EBIT excluding Selling expensesof the closed stores during the
lockdowns

533,08615.8%

135,894

5.6%

306,7799.5%

204,5106.1%

225,0149.3%

233,759

7.2%

426,22112.7%

443,91018.3%

456,31014.1%

630,73118.8%

668,924

27.6%

690,06921.3%

1,120,215

33.3%

688,98528.4%

996,848

30.8%

Depreciation, amortization andimpairment on tangible andintangible fixed assets
Depreciation and write-downs of
the Right of Use assets (*)
Total depreciation, amortizationand impairment
EBITDA(*) Shown without the impact of Covid-related rent discounts.

12Notes to the consolidated results for the period closed at
December 31, 2021
1. Analysis of Net Revenues(amounts in thousands of Euro)

twelve months
ended
December 31
2021

twelve months
ended
December 31
2020

twelve months
ended
December 31
2019

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

970,637
1,272,534
636,963309,704
126,782
3,316,620

29.3%
741,13138.4%
963,84519.2%
324,479
9.3%
280,232
3.8%
81,179100% 2,390,866

31.0% 1,228,437
40.3% 1,017,593
13.6%
455,402
11.7%
386,066
3.4%
95,841
100% 3,183,339

38.6%
32.0%
14.3%
12.1%
3.0%
100%

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

2,857,693
401,219
39,551
18,157
3,316,620

86.2% 2,012,620
12.1%
329,497
1.2%
36,964
0.5%
11,785
100% 2,390,866

84.2% 2,643,348
13.8%
450,491
1.5%
69,801
0.5%
19,699100% 3,183,339

83.0%
14.2%
2.2%
0.6%
100%

Net Sales by product line
Leather goods
Clothing
Footwear
Other
Total

1,698,470
908,041655,798
54,311
3,316,620

51.2% 1,310,938
27.4%
604,57119.8%
442,792
1.6%
32,565
100% 2,390,866

54.8% 1,765,799
25.3%
729,350
18.5%
627,576
1.4%
60,614
100% 3,183,339

55.5%
22.9%
19.7%
1.9%
100%

2,930,856

88.4% 2,115,370

88.5% 2,636,097

82.8%

11.6%

11.5%

547,242

17.2%

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

385,764

275,4963,316,620

100% 2,390,866

100% 3,183,339

100%

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

98.5% 2,390,866
1.5%
31,873
100% 2,422,739

98.7% 3,183,339
1.3%
42,255
100% 3,225,594

98.7%
1.3%
100%

13

2. Number of stores
December 31, 2021
Owned
Franchises

December 31, 2020
Owned
Franchises

December 31, 2019
Owned
Franchises

Prada
Miu Miu
Church’s
Car Shoe
Marchesi 1824 andothers

420
146
61
2

21
5
-

410
152
62
3

20
6
-

410
160
62
3

19
6
-

6

-

6

-

6

-

Total

635

26

633

26

641

25

December 31, 2021
Owned
Franchises

December 31, 2020
Owned
Franchises

December 31, 2019
Owned
Franchises

EuropeAmericas
Asia PacificJapan
Middle East

228
105
193
88
21

21
5

222
108
194
88
21

21
5

229
107
198
85
22

20
5

Total

635

26

633

26

641

25

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

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

December 31
2021

December 31
2020

294,253,615
2,558,824,000(54,138,620)
2,558,824,000

0.115(0.021)Dividend per share
The Board of Directors of the Company has proposed a final dividend of Euro
179,117,680 for the twelve months ended December 31, 2021 (Euro 0.07 pershare).
During 2021, the Company distributed dividends of Euro 89,558,840 (Euro0.035 per share), as approved at the General Meeting held on May 27, 2021 toapprove the December 31, 2020 financial statements.

14

The dividends and the related Italian withholding tax due (Euro 4.7 million),determined by applying the ordinary Italian tax rate to the entire amount of thedividends distributed to the beneficial owners of the Company’s shares held
through the Hong Kong Central Clearing and Settlement System, were fully paid
during the year.

4. Trade receivables, net
December 31
2021

December 31
2020

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

338,931(10,990)
1,606

297,953(11,979)
4,406

Total

329,547

290,380(amounts in thousands of Euro)The change in the Allowance for doubtful debts is detailed below:
December 31
2021

December 31
2020

Opening balance

11,9799,354

Exchange differences
Increases
Reversals
Utilization

546
581(1,129)
(987)

(317)
4,135
(109)
(1,084)

Closing balance

10,99011,979(amounts in thousands of Euro)An aging analysis of the trade receivables, before the allowance for doubtful
debts, is shown below:
Overdue (days)
61 ≤ 90 91 ≤ 120(amounts in thousandsof Euro)Dec. 31Not
2021 overdue1 ≤ 3031 ≤ 60

Trade receivables

340,537 284,762

11,103

15,126

4,187

3,759

21,600Total
December 31, 2021

340,537 284,762

11,103

15,126

4,187

3,759

21,600(amounts in thousandsof Euro)Dec. 31
Not
2020 overdue1 ≤ 30Overdue (days)
31 ≤ 60
61 ≤ 9091 ≤ 120> 120

Trade receivables

302,359 265,763

6,157

12,724

1,492

895

15,328

Total
December 31, 2020

302,359 265,763

6,157

12,724

1,492

895

15,328> 120

An aging analysis of the trade receivables, net of the allowance for doubtful
debts, is shown below:

15

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

Trade receivables lessallowance for doubtful
accounts

329,547 283,363

10,96815,045

4,146

3,751

12,274

Total
December 31, 2021

329,547 283,363

10,96815,045

4,146

3,751

12,274(amounts in thousandsof Euro)Dec. 31
Not
2020 overdue1 ≤ 30Overdue (days)
31 ≤ 60 61 ≤ 90 91 ≤ 120> 120

Trade receivables lessallowance for doubtful
accounts

290,380

263,358

6,094

12,720

1,492

854

5,862

Total
December 31, 2020

290,380

263,358

6,094

12,720

1,492

854

5,862

5. Inventories, net
December 31
2021

December 31
2020

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

99,83729,938585,547
7,246

99,827
20,386586,917
6,974(59,914)(47,882)

Total

662,654666,222(amounts in thousands of Euro)The changes in the allowance for obsolete, slow-moving inventories and returnassets are as follows:Rawmaterials(amounts in thousands of Euro)

Total
allowance for
Finished
obsolete, slowProducts andmovingreturn assets
inventories
and return assets

Opening balance

24,44923,43347,882

Exchange differences
Increases
Utilization
Reversal

9
6,300
(23)
-

251
6,740
(784)
(461)

260
13,040(807)(461)

Closing balance

30,73529,17959,91416

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

December 31
2021

December 31
2020

Prepaid sponsorship
Other receivables and advances

22,86625,03226,003

Total

22,86651,035

December 31
2021

December 31
2020

VAT
Taxation and other tax receivables
Other assets
Prepayments
Deposits

31,121
56,864
11,93763,0688,230

34,677
100,406
4,605
48,319
6,181

Total

171,220

194,188

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

8. Capital expenditure
The changes in the Net book value of property, plant and equipment for theperiod ended December 31, 2021 are shown below:(amounts inthousands of Euro)Land andbuildings

Production
plant andmachineryOpening balance

762,501

58,676

Leasehold
AssetsFurniture
Other
improveunder& fittings tangibles
ments
construction
317,681 266,182

62,639Total net
carrying
amount38,332 1,506,011

Change in the
consolidation area
Additions
Depreciation
Disposals
Exchange differences
Other movements
Impairment-

508

61,094(18,328)
13,332
11,685-

5,885(11,993)
(21)
111
3,557
(14)

44,66533,568
4,406(83,831) (36,891) (10,035)
(249)
(70)
(24)
11,620
5,315
241
3,221
3,784
949
(3,175)(3,220)(88)

35,241 184,859- (161,078)
(364)
321
30,940(22,851)345(16)(6,513)

Closing balance

830,284

56,709290,156 268,920

51,027 1,564,853

224

252

9,669

67,757-

10,653The changes in the Net book value of intangible assets for the period ended
December 31, 2021 are shown below:

17

Trademarks
andAssets(amounts in thousands
Store Lease
Other
intellectual Goodwill
Softwareinof Euro)Acquisitions
intangibles
property
progressrightsTotal net
carrying
amountOpening balance

210,405 513,486

770

80,968

5,831

20,985

832,445

-

2

66

-

68

7
16,387(351) (19,982)
(1)
31
44
2,068

1,019
13,835(2,893)4783 (20,884)

31,885(36,919)
2,515
(589)

469

4,810

829,405

Change in the
consolidation area
Additions
Amortization
Exchange differences
Other movements

-

-

637
(13,693)
2,481
17,400-

Closing balance

217,230 513,486

79,474

13,936

Impairment test
As required by IAS 36, "Impairment of Assets,” intangible assets with indefinite
useful lives are not amortized, but they are tested for impairment at least once
per year. The Group does not report intangible assets with indefinite useful lives
other than goodwill. At December 31, 2021, goodwill amounted to Euro 513.5
million, detailed by cash generating unit (“CGU”) as shown below:

December 31
2021

December 31
2020

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

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

Total Goodwill

513,486

513,486(amounts in thousands of Euro)As a result of the impairment tests, no impairment losses were identified forthese CGUs or other CGUs of the Group. However, since values in use and fairvalues are measured on the basis of estimates and assumptions, management
cannot guarantee that the value of goodwill or other tangible or intangible assets
will not be subject to impairment in the future.

189. Right of Use assets
The changes in the carrying amount of the Right of Use assets for the period
ended December 31, 2021 are shown below:(amounts in thousands of Euro)

Real Estate

Other

Total net
carrying amountOpening balance

2,050,768

3,570

2,054,338

New contracts, initial direct costs
and remeasurements
Depreciation
Contracts termination
Exchange differences

304,325

2,582

306,907(424,352)(28,740)
50,833(1,851)(862)
16(426,203)(29,602)50,849

Closing balance

1,952,834

3,455

1,956,289

The increase for New leases, initial direct costs and remeasurements is
attributable to lease renewals (mainly in Asia Pacific and Europe) andremeasurement of the liability to adjust to indexes commonly used in the realestate industry (primarily the consumer price index).
Lease terminations amounted to some Euro 30 million for the period andreferred mainly to leases in Europe.
The exchange differences of the period impacted the Right to Use assets
considerably, as a result of Euro depreciation versus the main currencies of thecountries where the Group operates.
The caption “Other”, amounting to Euro 3.5 million, includes plant andmachinery, vehicles and hardware.

10. Other non-current assets
December 31
2021

December 31
2020

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

61,842383
13,30954,253
14,55960,051
533
11,27758,427
12,424

Total

144,346

142,712(amounts in thousands of Euro)

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

19

11. Payables to related parties - current
December 31
2021

December 31
2020

Financial payables
Other payables

3,360
5,000

3,101
380

Total

8,360

3,481

(amounts in thousands of Euro)

December 31
2021

December 31
2020

Trade payables – third parties
Trade payables – related parties

382,208
7,955

286,653
2,925

Total

390,163289,578(amounts in thousands of Euro)

12. Trade payables

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

Dec. 31
2021

Not
overdue1 ≤ 30Trade payables

390,163348,256

14,226

5,854

3,450

2,580

15,797

Total
December 31, 2021

390,163348,256

14,226

5,854

3,450

2,580

15,797(amounts inthousands of Euro)

Dec. 312020

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

Trade payables

289,578

262,158

10,830

2,725

1,139

652

12,074

Total
December 31, 2020

289,578

262,158

10,830

2,725

1,139

652

12,074> 120

13. Other current liabilities
December 31
2021

December 31
2020

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

43,57530,308106,165

39,95824,94488,480

Total

180,048

153,382(amounts in thousands of Euro)20

14. Provisions for risks and charges
The changes in the provisions for risks and charges are as follows:
Provision
for litigation

Provision fortax disputes

Other
Provisions

Total

389

1,858

43,16945,416

Exchange differences
Reversals
Utilized
Increases

4(120)
10,626

78
(656)
1,026

3,119
(491)
(2,978)
3,177

3,201
(491)
(3,754)
14,829

Closing balance

10,8992,306

45,99659,201(amounts in thousands of Euro)
Opening balance

The Provisions for risks and charges represent management’s best estimate of
the maximum amount of potential liabilities. In the Directors’ opinion, based on
the information available to them, the total amount accrued for risks andcharges at the reporting date is adequate in respect of the liabilities that could
arise from them.
Chora S.r.l., a company controlled by Prada’s former Board Chairman, Carlo
Mazzi, initiated a lawsuit in January 2022 against Prada in the Court of Milan
claiming for a one-off compensation following the non-renewal of the strategic
consulting agreement with Chora S.r.l..
Prada, taking into consideration the independent opinion of its legal counsels,considered reasonable a provision of Euro 10 million, which represents the best
estimate at this time of the contingent liability. The Company will continue tomonitor this case and will adjust the amount allocated for it at December 31,
2021, as necessary, in view of any new facts and/or circumstances.

21

Management Discussion and Analysis for the year ended
December 31, 2021
During the year the Prada Group obtained net revenues of Euro 3,365.7 million,
an increase at constant exchange rates of 7.8% against those of 2019 and 40.6%
against those of 2020. Except for the Chinese renminbi and a few othercurrencies, the foreign exchange rates of the main currencies weakened against
the Euro, and reduced the increase against 2019 by 3.4% and against 2020 by
1.7%.

Distribution channels
Over the twelve-month period, the net sales of the retail channel rose constantly
and progressively, thanks to the performance of full-price sales and local
customers. Sales of directly operated stores increased by 15.2% at constantexchange rates compared with 2019 (+11.2% at current exchange rates) and by
40.4% compared with 2020 (+38.6% at current exchange rates). Such results
need to be contextualized in an economic and operational scenario stillcharacterized by store closures ensuing from the restrictions adopted bygovernments to combat the pandemic: during the year the Group operated with
10% fewer stores on average (mainly in Europe and Japan).
There were 635 stores at December 31, 2021, after 2 additions net.
Direct e-commerce sales continued to benefit from important growth: 61% from
2020, and more than fivefold from 2019; they account for approximately 7% of
the total 2021 retail sales.
The wholesale channel continued to be streamlined, in accordance with theGroup’s strategies.

Markets
The retail sales in Asia Pacific of the twelve months ended December 31, 2021
rose at constant exchange rates by 30.1% from those of 2019 (+28.9% at current
exchange rates), with a remarkable growth in the Chinese Mainland, South
Korea and Taiwan (P.R.C.). Compared to 2020, the region grew by 29.1%(+30.4% at current exchange rates).
Retail sales in Europe showed a contraction of 11.5% at constant exchange rates
compared with 2019 (-15% at current exchange rates), although they resumed
growth in the second half of the year; set against the twelve months of 2020,
the region showed an increase of 35.1% (+33.4% at current exchange rates). It
should be noted that in most of the first half of the year this region was severely
affected by restrictions, which forced it to operate with 19% fewer stores on anannual basis.
Retail sales in the American market showed a surge compared to both 2019(+68.8% at constant exchange rates and +57.8% at current exchange rates) and22

2020 (nearly double at constant and current exchange rates). The growth wasachieved across all countries in the region.
The Japanese market was especially penalized by the persistent restrictive
measures in place. However, the region began to recover in the second half ofthe year, and its fourth-quarter retail sales were substantially in line with thoseof the same period of 2019. Set against full year 2019, the region showed adecline of 16.6% at constant exchange rates (-21.5% at current exchange rates),
whereas compared with 2020 it reported an increase of 16.3% at constantexchange rates (+9.2% at current exchange rates).
Retail sales in the Middle East were considerably higher than those of 2019(+42.7% at constant exchange rates and +35.2% at current exchange rates) and2020 (+61.8% at constant exchange rates and +56.5% at current exchange
rates).

Products
The Group’s retail growth involved all the product categories.
Clothing, the product category that best expresses the Group’s design
leadership, had 35.5% growth over 2019 in retail net sales and 52.8% over 2020.
Footwear, building on the success of lifestyle and new collections, had 15.7%
growth over 2019 and 49% over 2020. Leather goods, benefiting from both new
products and iconic ones, increased by 7.3% over 2019 and 31.2% over 2020.

BrandsPrada retail net sales increased by 20.6% at constant exchange rates versus
2019 (+16.2% at current exchange rates), with 29.2% growth in the last quarter.
Miu Miu fell by 6.7%, with the fourth quarter of 2021 almost in line against thesame three-month period of 2019. Church’s, affected by the geographicalexposure in Europe, fell by 41.4%. In contrast, compared with 2020, all thebrands reported gains: Prada +44% (+42% at current exchange rates), Miu Miu+19.8% (+18.9% at current exchange rates) and Church’s +11.4% (+11.7% atcurrent exchange rates).

Royalties
Royalty income rose by 16.1% from that of 2019 and by 53.9% from that of2020. The new agreement with L’Oréal gave an important boost to the fragrance
segment, whereas the increase for eyewear followed the trend with the longstanding partner, Luxottica.

Operating results
The gross margin of the twelve months ended December 31, 2021 corresponded
to 75.7% of the net revenues, up substantially from the 72% of 2020 as a resultof a better product, channel and country mix. It should also be considered thatthe 2020 margin had been affected by less absorption of production overheads
due to the sales contraction. In the second half of 2021 the gross margin was
76.8%.
23

The total operating expenses were Euro 2,057.9 million, up by Euro 334.6
million from those of 2020. The increase is attributable to the normalization of
expenditure levels, which in 2020 had benefited more from rent discounts andgovernment incentives. Compared with 2019, the increase is reduced to Euro
45.1 million, due essentially to greater communication activities and thepurchase of traditional and digital media space.
The operating result (EBIT) was Euro 489.5 million (14.5% of net revenues),
versus Euro 20.1 million for 2020. The EBIT was also much higher than for 2019
(Euro 306.8 million, 9.5% of net revenues).

Financial expenses and taxation
The net financial expenses were Euro 67.8 million, down by Euro 4 million fromthose 2020. The decrease was due to less interest expenses, due to a smaller
amount and time horizon, and less net bank borrowings. Higher foreignexchange net losses partially offset the overall decrease of financial charges.
The income tax expense, net was Euro 126.6 million, corresponding to 30% of
the pre-tax income.

24

Net invested capital
The following table reclassifies the Statement of Financial Position to provide a
better view of net invested capital:
December 31
2021

December 31
2020

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

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

2,054,338
2,507,244
290,380
666,222

Trade payables(390,163)(289,578)

Net operating working capital
Other current assets (excluding items of financial position)
Other current liabilities (excluding items of financial position)
Other current assets/(liabilities), net
Provision for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation, net
Other non-current assets/(liabilities), net
Net invested capital

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

667,024
246,914(221,421)
25,493(45,416)(73,256)(61,576)
222,638
42,3905,296,489

Shareholder's equity – Group
Shareholder's equity – Non-controlling interests
Total Consolidated shareholders' equity
Long-term financial payables
Short-term financial, net surplus/(deficit)
Net financial surplus / (deficit)
Net financial deficit to Consolidated shareholders' equity ratio(3,113,894)(14,749)(3,128,643)(491,676)
729,329
237,653-7.6%(2,832,057)(19,663)(2,851,720)(450,075)
138,718(311,357)
10.9%

Long-term lease liability
Short-term lease liability
Total lease liability
Net financial surplus / (deficit), including lease liability
Shareholders’ equity and Net financial surplus / (deficit),
including lease liability(1,627,197)(418,215)(2,045,412)(1,807,759)(1,729,819)(403,593)(2,133,412)(2,444,769)(4,936,402)(5,296,489)(amounts in thousands of Euro)The net invested capital at December 31, 2021 amounts to Euro 4,936 million,
financed by net equity of Euro 3,129 million and lease liability of Euro 2,045
million; the financial position at December 31, 2021 is positive and amounting
to Euro 237.7 million.
The right of use assets decreased by Euro 98 million on account of thedepreciation charge of Euro 426.2 million, net of the increase due to new leases
and remeasurements of existing ones, equal to Euro 277.3 million, and foreignexchange appreciation of Euro 50.8 million.
The non-current assets (net) have remained consistent (Euro 2,490 million at
December 31, 2021 against Euro 2,507 million at December 31, 2020) because
the increase in fixed assets (Euro 55.8 million) was offset nearly entirely by thedecrease in non-current equity instruments (Euro 60.5 million), due mainly to25

the disposal of financial investments. The capital expenditures of the year
amounted to Euro 216.7 million, against depreciation, amortization and writedowns of Euro 204.5 million. The increase in the item was also affected byforeign exchange gains of Euro 33.4 million, as a result of the main currencies
in which the Group’s assets are denominated appreciating against the Euro, as
well as the acquisition of Luna Rossa for Euro 10.6 million.
twelve months
ended
December 31
2021

twelve months
ended
December 31
2020

RetailReal estate
Production, Logistics and Corporate

85,74259,45371,54961,056
60,686

Total

216,744

121,742(amounts in thousands of Euro)The capital expenditures regarded primarily store restyling and relocation
projects, as well as many technological and digital evolution projects in theretail, manufacturing and corporate areas. In addition, to have greater control
over its real estate space, the Group purchased two prestigious buildings inimportant shopping destination in Europe where Prada stores are located.
The net operating working capital at December 31, 2021 is Euro 602 million,
down by approximately Euro 65 million from that of 2020. The contraction was
substantially attributable to higher payables resulting from the intensification of
the production, commercial and communication activities in the final months of
2021.
The other current liabilities (net) are Euro 163 million at December 31, 2021,
turning around from an asset balance of December 31, 2020 as a result of thecurrent taxes due for the year.
The other non-current assets (net) show an increase of Euro 8.7 million from theprior year: deferred tax assets referring to larger temporary differences on thetax bases of inventory were offset in part by liabilities recognized for deferring
over the long term royalty income collected during the year.

26

Net financial surplus / (deficit)
The following table presents the composition of the net financial position:(amounts in thousands of Euro)

December 31
2021

December 31
2020

Bank borrowing – non-current(492,801)(451,200)

Financial payables and bank overdrafts - current
Payables to related parties - current
Total financial payables – current(249,103)(3,360)(252,463)(300,577)(3,097)(303,674)

Total Financial payables(745,264)(754,874)

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

981,7861,125
6

442,392
1,125-

Total Financial receivables and Cash and cash equivalents

982,917443,517

Net financial surplus / (deficit)

237,653(311,357)

The net operating cash flow for the twelve-month period, after the payment oflease liabilities (Euro 392.8 million), was cash generation of Euro 750.7 million,
which enabled to finance the cash outflows for investing activities (Euro 137.3
million), pay dividends (Euro 91.2 million), and convert the initial net financial
deficit of Euro 311.4 million into a net financial surplus of Euro 237.7 million.
December 31 December 31
2021
2020

(amounts in thousands of Euro)
Cash Flow from operating activities

December 31
20191,226,018

691,013895,573

Cost of net financial debt: interest paid
Lease Liability: interest paid
Tax Paid(8,556)(36,773)(37,161)(11,704)(42,670)(44,220)(10,338)(49,214)(26,126)

Net Cash Flow from operating activities

1,143,528

592,419809,895

Repayment of Lease Liability(392,805)(330,319)(447,530)

Net Operating Cash Flow

750,723

262,100

362,365

Net cash flow utilized by investing activities(137,265)(149,910)(302,261)

Free Cash Flow

613,458

112,190

60,104

The total amount of undrawn lines of credit as at December 31, 2021 is Euro
808 million, consisting of Euro 400 million of committed lines and Euro 408
million of uncommitted lines.
All financial covenants were fully complied with at December 31, 2021.
27

The following table sets forth the Lease Liability:
December 31
2021

December 31
2020

Short-term lease liability
Long-term lease liability

418,215
1,627,197

403,593
1,729,819

Total lease liability

2,045,412

2,133,412(amounts in thousands of Euro)The Lease liability decreased by Euro 88 million from that of December 31,
2020. This is the result of decreases for the payments of the period (Euro 393
million), as well as rent discounts and foreign exchange differences, andincreases (Euro 273 million) for new leases and re-measurements (net of theclosures of the period).
The lease liability is concentrated mainly in Japan, the U.S.A. and Italy.
The net financial indebtedness, including the lease liability, is Euro 1,808 million
at December 31, 2021 (Euro 2,445 million at December 31, 2020).

Events after the reporting date
At the date of approval of these Consolidated Financial Statements, the Group
has suspended its retail operations in Russia.
At December 31, 2021 the Group had assets of approximately RUB 7 billion in
Russia (Euro 81 million at the year-end exchange rate), consisting mainly oftangible assets at 13 stores (10 Prada and 3 Miu Miu), working capital and cash
assets. The net revenues realized in Russia in 2021 accounted for approximately
2% of the consolidated net revenues.
The ongoing conflict in Ukraine has resulted in a high volatility of the financial
markets, a significant devaluation of the Ruble and a context of high uncertainty
whose future potential effects on the Group's consolidated financial statements
cannot be determined so far.The Management will continue to closely monitor
the evolution of the business and legal scenario in order to ensure the correct
valuation of the assets recognized in the consolidated financial statements of
the Group.
Chora S.r.l. initiated a lawsuit in January 2022 against Prada spa; more details
are provided in Note 14.

Outlook
The Prada Group’s start to 2022 has been strong. The long-term strategy is on
track, focused on distinctive brand identity, product quality and industrial
know-how, direct distribution and sustainability at the core of corporate values.
Decisive actions to evolve the business and navigate the changing luxury market
drove outstanding growth and increased profitability in 2021.
These results give the Group confidence to achieve its medium-term targets,even though it is difficult to predict the impact of the Ukraine conflict on the28

global economy. The concern is for all the colleagues and their families affectedby the war, as well as the local communities and all people suffering, to whom
the Group will continue to provide support.

Corporate Governance Practices
The Company is committed to maintaining the highest standards of corporate
governance to create long-term sustainable value for all its stakeholders,
including its shareholders.
The corporate governance model adopted by the Company consists of a set ofrules and standards aimed at establishing efficient and transparent operations
within the Group, to protect the rights of the Company’s shareholders, toenhance shareholder value and to uphold the Group’s credibility and reputation.
The corporate governance model adopted by the Company complies with theapplicable laws and regulations in Italy, where the Company is incorporated, as
well as the principles set out in the Corporate Governance Code (the “Code”) in
Appendix 14 of the Listing Rules. Full details on the Company’s corporate
governance practices are set out in the Company’s 2021 Annual Report.

Compliance with the Code
The Board has reviewed the Company’s corporate governance practices and issatisfied that such practices have complied with the code provisions set out in
the Code, for the year ended December 31, 2021 (the “2021 Year”).

Directors’ Securities Transactions
The Company has adopted a written procedure governing Directors’ securities
transactions on terms no less exacting than those set out in the Model Code. In
response to specific enquiry by the Company, all Directors confirmed that they
complied with the required standard set out in the Model Code and theCompany’s procedure at all applicable times during the 2021 Year. There were
no incidents of non-compliance during the 2021 Year.
The Company has also adopted a written procedure governing securities
transactions carried out by the relevant employees who are likely to possess
inside information in relation to the Company and its securities. This procedureis on terms no less exacting than those set out in the Model Code.

Audit Committee
The Company has established an Audit Committee in compliance with Rule 3.21of the Listing Rules, where at least one member possesses related financial
management expertise to discharge the responsibility of the Audit Committee.
The membership of the Audit Committee consists of three Independent NonExecutive Directors, namely, Mr. Yoël Zaoui (Chairman), Ms. Marina Sylvia
Caprotti and Mr. Maurizio Cereda.
During the 2021 Year, the Audit Committee held nine meetings (with anattendance rate of 100%) mainly to review with senior management, the Group’s
internal and external auditor and the board of statutory auditors, the significant
29internal and external audit findings and financial matters as required under the
Audit Committee’s Regulation and to make relevant recommendations to theBoard. The Audit Committee’s review covered the audit plan for the 2021 Year,the findings of both the internal and the external auditors, internal controls, risk
assessment, annual review of the continuing connected transactions of theGroup for 2020, tax and legal updates and the financial reporting matters(including the annual results for the year ended December 31, 2020 and theinterim financial results as at June 30, 2021), before recommending them to theBoard for approval.
The Audit Committee also held two meetings on February 23, 2022 and March
9, 2022, to review the Group results for the 2021 Year, before recommending
them to the Board for approval.

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 2021 Year.

Shareholders’ general meeting
The Shareholders’ general meeting of the Company will be held on Thursday,
April 28, 2022 (the “AGM”).
Notice of the AGM will be published on the Company’s website atwww.pradagroup.com and on the Hong Kong Exchanges and Clearing Limited’s
website at www.hkexnews.hk and dispatched to the shareholders of theCompany in due course.

Final Dividend
The Board recommends, for the 2021 Year, a final dividend of Euro
179,117,680 (Euro 0.07 per share).The payments shall be made:
(i)

(ii)

in Euro to the shareholders recorded in the section of the Company’s
shareholders register kept by the Company at its registered office in
Milan (Italy), andin Hong Kong dollars to the shareholders recorded in the section of
the Company’s shareholders register kept in Hong Kong.

The relevant exchange rate will be the opening buying T/T rate of Hong Kong
dollars to Euros as announced by the Hong Kong Association of Banks(www.hkab.org.hk) on the day the final dividend is approved by theshareholders.
Subject to the shareholders’ approval at the AGM of the final dividend, such
dividend will be paid by Friday, May 27, 2022.

Book Closure and Record Dates
For determining shareholders’ right to attend and vote at the AGM:
30

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

April 25, 2022 - 4:30
pm HK time/10:30
am CET timeBook closure (both sections) (Note 2)

From April 26 to April
28, 2022 (both days
inclusive)

Record date

April 26, 2022

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

May 5, 2022 - 4:30
pm HK time/10:30
am CET timeBook closure (both sections) (Note 2)

May 6, 2022

Record Date

May 6, 2022

Dispatch date of dividend warrants

May 27, 2022

Notes:
1. All transfers accompanied by the relevant share certificate(s) must be
lodged with:(i)the Company’s Hong Kong share registrar, Computershare Hong
Kong Investor Services Limited whose address is at Shops 171216, 17th Floor, Hopewell Centre, 183 Queen's Road East,
Wanchai, Hong Kong, if the transfer concerns shares registered in
the section of the Company’s shareholders register kept by theCompany’s Hong Kong share registrar itself; or(ii)

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

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

Publication of Annual Results Announcement and Annual
ReportThis Annual Results Announcement is published on the Company’s website atwww.pradagroup.com and on the Hong Kong Exchanges and Clearing Limited’s
website at www.hkexnews.hk. The Company’s 2021 Annual Report will be31

published on the same websites and dispatched to shareholders of the Company
in due course.
By Order of the Board
PRADA S.p.A.
Mr. Paolo Zannoni

Chairman
Milan (Italy), March 14, 2022

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

32