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.

Via A. Fogazzaro n. 28, Milan, Italy
Registry of Companies of Milan, Italy: No. 10115350158(Incorporated under the laws of Italy as a joint-stock company)(Stock Code: 1913)

ANNOUNCEMENT
OF THE CONSOLIDATED RESULTS FOR THE YEARENDED JANUARY 31, 2013
FINANCIAL HIGHLIGHTS--Group’s net revenues were Euro 3,297.2 million, recording an
increase of 29.0% compared with the year ended January 31, 2012
Retail net sales were Euro 2,664.2 million, up by 35.6% comparedwith the year ended January 31, 2012
the number of Directly Operated Stores (DOS) reached 461
Retail Same Store Sales Growth (SSSG) was 14% compared with theyear ended January 31, 2012
EBITDA was Euro 1,052.5 million (representing a margin of 31.9%
on net revenues)
Group’s net income amounted Euro 625.7 million, an increase of
44.9% compared to Euro 431.9 million for the year ended January
31, 2012
Positive net financial position at Euro 312.6 million as at January
31, 2013
Net operating cash flow for the year ended January 31, 2013, wasEuro 759.3 million

1Consolidated results for the year ended January 31,
2013
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company”, or“PRADA spa”) is pleased to announce the audited Consolidated results of theCompany and its subsidiaries (collectively, the “Group”) for the year ended
January 31, 2013, together with the audited comparative figures for the year
ended January 31, 2012. 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 theGroup for the year ended January 31, 2013, and January 31, 2012, have been
audited by Deloitte & Touche spa.

Scope of work of Messrs. Deloitte & Touche spa
The figures in respect of the Group’s consolidated statement of financial
position, consolidated statement of comprehensive income and the related
notes thereto for the year ended January 31, 2013, as set out in thispreliminary announcement have been agreed by the Group's auditors, Messrs.
Deloitte & Touche spa, to the amounts set out in the Group’s audited
consolidated financial statements for the year. The work performed by
Messrs. Deloitte & Touche spa in this respect did not constitute an assurance
engagement in accordance with Auditing Standards issued by the Italian
Accounting Profession (CNDCEC) and recommended by Consob, the ItalianCommission for listed Companies and the Stock Exchange and consequently
no assurance has been expressed by Messrs. Deloitte & Touche spa on the
preliminary announcement.

2Key financial information
Key information on
income statement(amounts in thousands of Euro)

twelvemonthsended
January 31
2011
auditedtwelvemonthsended
January 31
2012
auditedtwelvemonthsended
January 31
2013
audited% changeon
January 31
2012

Net revenues
EBITDAEBIT
Income before tax
Net income of the Group
Average headcount (persons)
Earnings per share

2,046,651
535,930
418,387
388,229
250,8197,199
0.10

2,555,606
759,252
628,935
602,908
431,9298,067
0.17

3,297,219
1,052,469
889,781883,616
625,681
9,427
0.24

29.0%
38.6%
41.5%
46.6%
44.9%
16.9%
41.2%

26.2%
20.4%

29.7%
24.6%

31.9%
27.0%

as at
January 31
2011
auditedas atJanuary 31
2012
auditedas atJanuary 31
2013
auditedchange on
January 31
2012

320,759
1,585,559

357,648
1,817,327

317,7142,017,844(39,934)
200,517(375,421)

13,640312,648

299,008

1,204,350
206,860
367,712

1,822,743
278,856
479,954

2,320,022
351,129759,272

497,279
72,273279,318

EBITDA %EBIT %Key information on
Statement of financial position(amounts in thousands of Euro)Net operating working capital
Net invested capital
Net financial position
surplus/(deficit)
Group shareholders’ equity
Capital expenditure
Net operating cash flows

Highlights for the year ended January 31, 2013
During the year 2012 the PRADA Group consolidated its position at the head of
the worldwide luxury goods market. Despite the challenging global economic
environment, with some major concerns in Europe, the Group has madefurther important progress along its path of growth leveraging on the strengthof its brands and on a relentless commitment to innovation and quality. The
actions undertaken in the course of 2012 have always been consistent withthe long-term business expansion strategy implemented in recent years. The
Group went on investing massive resources in strengthening the retail channel
while maintaining a unique and powerful brand image: many new DOS were
unveiled in 2012, including the first ever stores in Brazil, Mexico, Morocco,
Kuwait and Ukraine and prestigious sponsorships and projects in fields otherthan Prada’s core business successfully took place. At the same time, theGroup strove tightly to control unit margins over the supply chain so as tobenefit from economies of scale resulting from the expansion withoutcompromising the Group’s reputation for craftsmanship and quality cultivatedthroughout its hundred-year long history. These strategies delivered
significant revenue growth and improved operating results for the twelve
months ended January 31, 2013.
The Group’s net revenue for the twelve months ended January 31, 2013,
totaled Euro 3,297.2 million, 29% more than in 2011, one of the highest
growth rates in the industry. The boost in sales, coupled with a further
improvement in profitability, was mainly achieved thanks to the performance3

of the retail channel. In fact, the Group’s EBITDA for the twelve months
ended January 31, 2013, totaled Euro 1,052.5 million, 38.6% up on 2011,
while reaching a record high of 31.9% as a percentage of net revenues. The
Group’s net profit was Euro 625.7 million, up by 44.9% compared to 2011 andstanding at 19% of net revenues.
The capital expenditure incurred during the year amounted to Euro 351.1
million and was mainly focused on the enlargement and renovation of the DOS
network. The investment program led to the opening of 78 new DOS, most ofthem completed in the second half of the year.
Free cash flows of the year enabled the Group to accumulate total of cash
and cash equivalents of some Euro 572 million and a positive net financial
position of Euro 312.6 million at January 31, 2013.
At January 31, 2013, the Group operated 461 DOS worldwide, employed morethan 10,000 people and had a market capitalization of some Euro 17 billion
based on the Hong Kong Stock exchange share price at the reporting date.

4

Consolidated income statement for the year ended January 31,
2013%

twelvemonthsended
January 31
2012
audited

%3,297,219(920,678)

100.0%-27.9%

2,555,606(727,581)

100.0%-28.5%

2,376,541

72.1%

1,828,025

71.5%(1,486,760)-45.1%(1,199,090)-46.9%

889,78127.0%

628,93524.6%

5(7,131)-0.2%(26,027)

-1.0%

5

966

-

-

-

883,61626.8%

602,90823.6%(250,339)-7.6%(166,483)-6.5%

Net income from continuing operations

633,277

19.2%

436,425

17.1%

Net income for the period

633,277

19.2%

436,425

17.1%

7,596

0.2%

4,496

0.2%

Net income – Group

625,68119.0%

431,929

16.9%

Depreciation, amortization andimpairment

162,6884.9%

130,3175.1%

1,052,469

31.9%

759,252

29.7%(amounts in thousands of Euro)Net revenues
Cost of goods sold

Note

3

Gross margin
Operating expenses

4

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

6

Net income – Non-controlling interests

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

7

twelvemonthsended
January 31
2013
audited

0.245

5

0.170

Consolidated income statement for the three months ended
January 31, 2013%

three
monthsended
January 31
2012
unaudited%

957,897(265,801)

100.0%-27.7%

825,228(232,852)

100.0%-28.2%

Gross margin

692,09672.3%

592,376

71.8%

Operating expenses(414,779)-43.3%(355,758)-43.1%

EBIT

277,31729.0%

236,61828.7%(2,837)-0.3%(8,167)

-1.0%

966

0.1%

-

-

Income before taxes

275,44628.8%

228,451

27.7%

Taxation(56,234)-5.9%(68,015)-8.2%

Net income from continuing operations

219,21222.9%

160,436

19.4%

Net income for the period

219,21222.9%

160,436

19.4%

2,083

0.2%

1,672

0.2%

Net income – Group

217,12922.7%

158,764

19.2%

Depreciation, amortization andimpairment

47,2794.9%36,127

4.4%

EBITDA

324,59633.9%

272,745

33.1%(amounts in thousands of Euro)Net revenues
Cost of goods sold

Note

3

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

Net income – Non-controlling interests

6

three
monthsended
January 31
2013
unauditedConsolidated statement of financial position(amounts in thousands of Euro)

Note

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Derivative financial instruments - current
Receivables and advance payments fromparent company and other related parties
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
Total non-current assets

9
8

as at
January 31
2012
audited

571,746
304,525
343,80243,060362,284
266,404
374,782894

10

19,493

12,864

12

104,823
1,387,449

100,275
1,117,503

11
11857,299
878,750
23,024
176,057
61,682
1,018
1,997,830

713,870863,526
15,631
175,736
57,302
1,826,065

3,385,279

2,943,568

13

Total Assets
Liabilities and Shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans
Payables to parent company and other relatedparties
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
Obligations under finance leases non-current
Post-employment benefits
Provisions for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments non-current
Total non-current liabilities

as atJanuary 31
2013
audited175,570

165,485

14

5,599

4,361

15

330,613
97,148912
575
131,645742,062

283,538
117,770
15,2001,453
128,777
716,584

78,830518
45,53846,91455,63684,905384
312,725

178,442
1,100
35,89856,92147,66575,656335
396,017

Total Liabilities

1,054,787

1,112,601

Share capital
Other reserves
Translation reserve
Net profit for the period
Shareholders’ Equity – Group

255,882
1,480,747(42,288)625,6812,320,022

255,882
1,152,171(17,239)431,929
1,822,743

10,4708,224

Total Liabilities and Shareholders’ Equity

3,385,279

2,943,568

Net current assets
Total assets less current liabilities

645,387
2,643,217

400,9192,226,984

16

17

Shareholders’ Equity – Non-controlling interests

7

Statement of changes in consolidated shareholders’ equity(amounts in thousands of Euro, except for number of shares)
Cash Actuarial
flow
gain
hedge (losses)
reserve
reserve(amounts inthousands of Euro)

Number of
SharesShare
ShareTranslation
premium
Capitalreserve
reserve

Balance at January
31, 2011 (audited)

250,000,000

250,000

209,298(40,012)

3,464

(948)

-

531,729

-

-

-

-

-

-

-

250,819 (250,819)

2,500,000,000

-

-

-

-

-

-

-

58,824,000
-

5,882
-

200,749
-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

22,773

2,558,824,000

255,882

410,047

Allocation of 2010
net profit
Conversion ofshares from Euro
1.0 to Euro 0.1 eachIssue of new shares
Dividends
Capital injection in
subsidiaries
Comprehensive
income for the year
(not recycled to
P&L)
Comprehensive
income for the year
(recycled to P&L)
Balance at January
31, 2012 (audited)
Allocation of 2011
net profit
Dividends
Capital injection in
subsidiaries
Comprehensive
income for the year
(recycled to P&L)
Comprehensive
income for the year
(not recycled to
P&L)
Balance at January
31, 2013 (audited)

Available
Other
for sale
Net profit
reserves
reserve

Equityattributa
Nonble tocontrolling
ownersinterestsof theGroup250,819 1,204,350

Total
Equity5,788 1,210,138

-

-

-

-

-

-

-

(35,000)-

206,631(35,000)(3,886)206,631(38,886)

-

-

-

-

1,412

1,412

(244)

-

-

-

(244)

(18)

(262)

(7,637)

-

(58)

-

431,929447,006

4,928

451,934(17,239)(4,173)(1,192)(58)

747,548

431,929 1,822,744

431,929 (431,929)

8,224 1,830,968

-

-

-

-

-

-

-

-

-

-

-

-

-

- (127,941)- (127,941)(5,576) (133,517)

-

-

-

-

-

-

-

-

-

-

1,166

1,166

-

-

-

(25,049)

24,321

-

5,544

-

625,681

630,497

6,656

637,153

-

-

-

-

-

(5,278)---(5,278)-(5,278)2,558,824,000

255,882

410,047(42,288)

20,148(6,470)5,486 1,051,536-

625,681 2,320,022-

10,470 2,330,492

Under Italian law, the Company is required to allocate a portion of its net
profit to non-distributable reserves and to provide additional information on
the distribution of earnings for the period.

8-Summarized statement of consolidated cash flows
twelve months
ended
January 31
2013
auditedtwelve months
ended
January 31
2012
auditedNet cash flows from operating activities

759,272

479,954

Cash flows generated (utilized) by investing activities(331,645)(257,147)

Cash flows generated (utilized) by financing activities(197,965)

40,410Change in cash and cash equivalents, net of bank overdrafts

229,662

263,217(amounts in thousands of Euro)Statement of consolidated comprehensive income
twelve months
ended
January 31
2013
auditedtwelve months
ended
January 31
2012
audited633,277

436,425

Change in Translation reserve
Tax impact
Change in Translation reserve less tax impact(25,989)(25,989)

23,20423,204

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

33,530(9,209)24,321(10,432)
2,795(7,637)

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

7,391(1,847)
5,544

(77)
19
(58)

Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact(6,369)1,091(5,278)

(705)
443
(262)

Consolidated comprehensive income for the period

631,875

451,672

6,656

4,910

625,219446,762(amounts in thousands of Euro)Net income for the period – ConsolidatedA) Items recycled to P&L:

B) Item not recycled to P&L

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

Notes to the consolidated results for the year ended
January 31, 2013
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) andis 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, fragrances and mobile telephone sectors. Its products are sold in 70
countries worldwide through a network that included 461 Directly Operated
Stores (DOS) at January 31, 2013, and a selected network of luxury
department stores, independent retailers and franchise stores.
The Company is a joint-stock company, registered and domiciled in Italy. Its
registered office is in Via Fogazzaro 28, Milan, Italy.

2.

Basis of preparation

The Consolidated financial statements of the PRADA Group as at January 31,
2013, including the “Consolidated statement of financial position”, the“Consolidated income statement for the year ended January 31, 2013”, the“Statement of consolidated comprehensive income”, the “Summarizedstatement of consolidated cash flows“, the “Statement of changes in
consolidated shareholders’ equity” and the “Notes to the consolidated
results for the year ended January 31, 2013” have been prepared inaccordance with the International Financial Reporting Standards (“IFRS”)
issued by the International Accounting Standards Board (“IASB”) as endorsedby the European Union.
At the date of presentation of these Consolidated financial statements, there
were no differences between IFRS as endorsed by the European Union andapplicable to the PRADA Group and those issued by the IASB.
IFRS also refers to all International Accounting Standards (“IAS”) and allinterpretations of the International Financial Reporting Interpretations
Committee (“IFRIC”), previously called the Standing Interpretations
Committee (“SIC”).
The contents of this Announcement on the consolidated results for the year
ended January 31, 2013, are included in the 2012 Annual Report of PRADA
spa.

10

3.

Operating segment

Net revenues analysis
Net revenues for the year ended January 31, 2013
twelve months
ended
January 31
2013
auditedtwelve months
ended%
January 31
2012 change
auditedNet sales by geographical area
Italy
EuropeAmericas
Asia PacificJapan
Other countries
Total

528,302 16.2%
739,634 22.7%
484,103 14.9%
1,160,166 35.6%
293,245
9.0%
50,9781.6%
3,256,428 100.0%

445,611 17.6% 18.6%
540,131 21.4% 36.9%
392,677 15.6% 23.3%
872,992 34.6% 32.9%
256,693 10.2% 14.2%
15,226
0.6% 234.8%
2,523,330 100.0% 29.1%

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

2,649,559 81.4%
512,762 15.7%
68,447
2.1%
19,660
0.6%
6,000
0.2%
3,256,428 100.0%

1,999,345 79.2% 32.5%
441,054 17.5% 16.3%
59,224
2.3% 15.6%
17,0390.7% 15.4%
6,668
0.3% -10.0%
2,523,330 100.0% 29.1%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

563,322 17.3%
2,036,005 62.5%
625,390 19.2%
31,711
1.0%
3,256,428 100.0%

512,585 20.3%
1,426,537 56.5%
560,108 22.2%
24,1001.0%
2,523,330 100.0%

9.9%
42.7%
11.7%
31.6%
29.1%

Net sales by distribution channelDOS
Independent customers and franchises
Total

2,664,238 81.8%
592,190 18.2%
3,256,428 100.0%

1,964,499 77.9%
558,831 22.1%
2,523,330 100.0%

35.6%
6.0%
29.1%

Net sales
Royalties
Total net revenues

3,256,428 98.8%
40,791
1.2%
3,297,219 100.0%

2,523,330 98.7%
32,2761.3%
2,555,606 100.0%

29.1%
26.4%
29.0%

(amounts in thousands of Euro)

11

Prada brand sales
twelve months
ended
January 31
2013
auditedtwelve months
ended%
January 31
change2012
auditedNet sales by geographical area
Italy
EuropeAmericas
Asia PacificJapan
Other countries
Total

414,119 15.6%
589,780 22.3%
422,646 16.0%
969,864 36.6%
210,161
7.9%
42,9891.6%
2,649,559 100.0%

349,852 17.5% 18.4%
411,552 20.6% 43.3%
334,469 16.7% 26.4%
710,157 35.5% 36.6%
181,720
9.1% 15.7%
11,595
0.6% 270.8%
1,999,345 100.0% 32.5%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

467,161 17.6%
1,710,274 64.6%
444,462 16.8%
27,6621.0%
2,649,559 100.0%

434,461 21.7%
1,141,097 57.1%
402,348 20.1%
21,4391.1%
1,999,345 100.0%

7.5%
49.9%
10.5%
29.0%
32.5%

Net sales by distribution channelDOS
Independent customers and franchises
Total

2,189,977 82.7%
459,582 17.3%
2,649,559 100.0%

1,562,233 78.1%
437,112 21.9%
1,999,345 100.0%

40.2%
5.1%
32.5%

Net sales
Royalties
Total net revenues

2,649,559 98.5%
39,453
1.5%
2,689,012 100.0%

1,999,345 98.5%
31,3411.5%
2,030,686 100.0%

32.5%
25.9%
32.4%

(amounts in thousands of Euro)12

Miu Miu brand sales
twelve months
ended
January 31
2013
audited(amounts in thousands of Euro)

twelve months
ended%
January 31
change2012
auditedNet sales by geographical area
Italy
Europe84,252
100,519

16.4%
19.6%

Americas57,963

Asia PacificJapan

181,996
80,9047,128

1.4%

Other countries
Total

67,10386,178

15.2%
19.5%

11.3%

54,915

12.5%

5.6%

35.5%
15.8%

155,841
73,918

35.3%
16.8%

16.8%
9.5%

3,099

25.6%
16.6%

0.7% 130.0%

512,762 100.0%

441,054 100.0%

16.3%

Clothing
Leather goods

95,091
321,713

18.5%
62.8%

77,251
282,033

17.5%
64.0%

23.1%
14.1%

Footwear

91,90817.9%

79,109

17.9%

16.2%

Other

4,050

0.8%

2,661

0.6%

52.2%

512,762 100.0%

441,054 100.0%

16.3%

DOS
Independent customers and franchises

421,067
91,695354,227
86,827

80.3%
19.7%

18.9%
5.6%

Total

512,762 100.0%

441,054 100.0%

16.3%

Net sales

512,76299.8%

441,054

99.8%

16.3%

Royalties

1,248

0.2%

828

0.2%

50.7%

441,882 100.0%

16.3%

Net sales by product line

Total
Net sales by distribution channel

Total net revenues

82.1%
17.9%

514,010 100.0%

13

Church’s brand sales
twelve months
ended
January 31
2013
auditedtwelve months
ended%
January 31
change2012
auditedNet sales by geographical area
Italy
EuropeAmericas
Asia PacificJapan
Other countries
Total

16,550 24.2%
40,884 59.7%
2,842
4.1%
5,663
8.3%
2,180
3.2%
328
0.5%
68,447 100.0%

16,509 27.9%
0.2%
34,271 57.9% 19.3%
2,402
4.0% 18.3%
4,789
8.1% 18.3%
1,052
1.8% 107.2%
201
0.3% 63.2%
59,224 100.0% 15.6%

Net sales by product line
Clothing
Leather goods
Footwear
Total

967
1.4%
2,047
3.0%
65,433 95.6%
68,447 100.0%

762
1.3%
1,702
2.9%
56,760 95.8%
59,224 100.0%

26.9%
20.3%
15.3%
15.6%

Net sales by distribution channelDOS
Independent customers and franchises
Total

42,881 62.6%
25,566 37.4%
68,447 100.0%

38,346 64.7%
20,878 35.3%
59,224 100.0%

11.8%
22.5%
15.6%

Net sales
Royalties
Total net revenues

68,447 99.9%
90
0.1%
68,537 100.0%

59,224 99.8% 15.6%
107
0.2% -15.9%
59,331 100.0% 15.5%(amounts in thousands of Euro)

14

Car Shoe brand sales
twelve months
ended
January 31
2013
auditedtwelve months
ended%
January 31
change2012
auditedNet sales by geographical area
Italy
EuropeAmericas
Asia Pacific
Other countries
Total

10,937 55.7%
4,900 24.9%
651
3.3%
2,638 13.4%
534
2.7%
19,660 100.0%

10,294 60.4%
3,383 19.9%857
5.0%
2,174 12.8%
331
1.9%
17,039 100.0%

6.2%
44.8%
-24.0%
21.3%
61.3%
15.4%

Net sales by product line
Leather goods
Footwear
Total

1,948
9.9%
17,712 90.1%
19,660 100.0%

1,658
9.7%
15,381 90.3%
17,039 100.0%

17.5%
15.2%
15.4%

Net sales by distribution channelDOS
Independent customers and franchises
Total

8,595 43.7%
11,065 56.3%
19,660 100.0%

7,747 45.5%
9,292 54.5%
17,039 100.0%

10.9%
19.1%
15.4%

Net sales
Total net revenues

19,660 100.0%
19,660 100.0%

17,039 100.0%
17,039 100.0%

15.4%
15.4%

(amounts in thousands of Euro)

Geographical information
The following table reports the carrying value of most of the Group’s noncurrent assets by geographical area, as requested by IFRS 8 for entities, likethe PRADA Group, that have a single reportable segment.
(amounts in thousands of Euro)
Italy
EuropeAmericasJapan
Asia Pacific
Other countries
Total

January 31
2013

January 31
2012

484,945842,289
185,688
93,156
175,674
34,852416,542814,240
160,539
119,355
124,527
10,9381,816,604

1,646,141

The total amount of Euro 1,816.6 million (Euro 1,646.1 million at January 31,2012) relates to the Group’s non-current assets excluding, as requested by
IFRS 8, those relating to financial instruments, deferred tax assets andsurplus arising from a pension benefit scheme.

15

Net revenues analysis for the three months ended January 31,
2013
three months
ended
January 31
2013
unaudited

three months
ended%
January 31
2012 change
unaudited

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

143,237 15.1%
203,144 21.4%
155,120 16.4%
345,472 36.4%
79,573
8.4%
21,8792.3%
948,425 100.0%

127,390 15.6% 12.4%
167,542 20.5% 21.2%
135,034 16.5% 14.9%
293,255 35.9% 17.8%
87,772 10.8% -9.3%
5,761
0.7% 279.8%
816,754 100.0% 16.1%

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

772,956 81.5%
152,098 16.0%
18,310
1.9%
4,525
0.5%
536
0.1%
948,425 100.0%

653,247 80.0% 18.3%
143,709 17.6%
5.8%
15,622
1.9% 17.2%
3,032
0.4% 49.2%
1,144
0.1% -53.1%
816,754 100.0% 16.1%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

175,393 18.5%
591,788 62.4%
175,046 18.5%
6,198
0.6%
948,425 100.0%

174,864 21.4%
467,007 57.2%
168,732 20.7%
6,151
0.7%
816,754 100.0%

0.3%
26.7%
3.7%
0.8%
16.1%

Net sales by distribution channelDOS
Independent customers and franchises
Total

746,686 78.7%
201,739 21.3%
948,425 100.0%

626,477 76.7%
190,277 23.3%
816,754 100.0%

19.2%
6.0%
16.1%

Net sales
Royalties
Total net revenues

948,425 99.0%
9,472
1.0%
957,897 100.0%

816,754 99.0%
8,474
1.0%
825,228 100.0%

16.1%
11.8%
16.1%

(amounts in thousands of Euro)

16

Number of storesas at January 31, 2013
Owned
Franchises

as at January 31, 2012
Owned
Franchises

Prada
Miu Miu
Church’s
Car Shoe

283
126
45
7

20
5
-

245
94
43
6

20
6
-

Total

461

25

388

26

as at January 31, 2013
Owned
Franchises

as at January 31, 2012
Owned
Franchises

ItalyEuropeAmericas
Asia PacificJapan
Middle East
Africa

48
137
66
130
66
11
3

5
6
14
-

44
115
47
115
65
2
-

5
6
1
14
-

Total

461

25

388

26

4.

Operating Expenses(amounts in thousands of Euro)

twelve months
ended
January 31
2013
auditedtwelve months
ended% of netJanuary 31
revenues
2012
audited% of netrevenues

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

111,370
150,574
1,040,133
184,683

3.4%
4.6%
31.5%
5.6%

103,120
129,184
802,770
164,016

4.0%
5.1%
31.4%
6.4%

Total

1,486,760

45.1%

1,199,090

46.9%

17

5.

Interest and other financial expenses, net
twelve months twelve months
ended
ended
January 31
January 31
2013
2012
auditedaudited(amounts in thousands of Euro)Interests expenses on borrowings
Interest income
Exchange gains / (losses) – realized
Exchange gains/ (losses) – unrealized
Other financial income / (expenses)
Dividends received from third parties(12,956)
4,804
1,550
4,314
(4,843)966(16,843)
2,689(1,158)(6,116)(4,599)-

Total(6,165)(26,027)

6.

Taxation
twelve months twelve months
ended
ended
January 31
January 31
2013
2012
auditedaudited(amounts in thousands of Euro)

Current taxation
Deferred taxation

258,613(8,274)

194,805(28,322)

Income taxes

250,339

166,483

The increase in income taxes in absolute terms is essentially due to growth of
the Group business in general. As a percentage of profit before taxation, thetax burden increased from 27.6% to 28.3%, essentially because of theextraordinary Euro 42 million tax charge regarding the rejection by the
Italian Tax Authorities of PRADA spa’s request not to apply the ItalianControlled Foreign Companies rules (CFC) to its Dutch sub-holding company
PRADA Far East bv.

7.

Earnings and dividends per share

Earnings per share
Earnings per share are calculated by dividing the net income attributable toGroup’s shareholders by the weighted average number of ordinary shares inissue.
twelve months twelve months
ended
ended
January 31
January 31
2013
2012
auditedauditedGroup’s net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average
number of shares

18625,681,459
2,558,824,000

431,928,921
2,535,777,885

0.245

0.170

On May 26, 2011, a Shareholders’ Meeting of PRADA spa resolved to change
the par value of the Company’s shares from Euro 1 to Euro 0.1 each. In
accordance with IAS 33, the number of shares in issue in 2011 was
retrospectively adjusted for the purposes of the calculation of earnings per
share.

Dividends per share
The PRADA spa Board of Directors recommended, for the twelve months
ended January 31, 2013, a final dividend of Euro 230.3 million (or 9.0
Euro/cents per share). For the year ended January 31, 2012, the final
dividend of Euro 127.9 million (or 5 Euro/cents per share) recommended by
the Board of Directors on March 29, 2012, was approved by the Annual
General Meeting held on May 22, 2012.
During the period ended January 31, 2013, the Company distributed dividendsof Euro 127,941,200, as approved by the Annual General Meeting held on May
22, 2012 to approve the financial statements for the year ended January 31,
2012. The payment of the dividends and the related Italian withholding tax
payable, arising from the application of the Italian ordinary withholding tax
rate to the whole amount of dividends paid to beneficial owners of theCompany shares held through the Hong Kong Central Clearing and Settlement
System, was completed by January 31, 2013.
During the year ended January 31, 2012, the Company distributed dividendsof Euro 35 million, as approved by the Shareholders’ Meeting held on March
28, 2011 to approve the financial statements for the year ended January 31,
2011. Some Euro 32.5 million of the dividend liability arising was offset
against receivables due from parent company PRADA Holding bv while theremaining amount was paid in April 2011.

8.

Inventories, net
as atJanuary 31
2013
auditedas atJanuary 31
2012
auditedRaw materials
Work in progress
Finished products
Allowance for obsolete and slow moving inventories

79,55924,620314,244(74,621)66,575
17,187360,379(69,359)

Total

343,802374,782(amounts in thousands of Euro)The containment in finished products was achieved thanks to measures
aimed at further improving the sell-through retail ratio so as to react better
to market changes and reduce risks.
Materials being worked upon by third parties are included in raw materials.
Work in progress includes materials at the production stage with PRADA spa,
Church & Co ltd and third party sub-contractors.

19Movements on the allowance for obsolete and slow moving inventories areanalyzed as follows:Rawmaterials

Finished
Products

Total

29,75439,60569,359

-

(21)
5,409
(126)

(21)
5,409
(126)

29,75444,86774,621

as at
January 31
2013
auditedas atJanuary 31
2012
audited

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

286,390(11,547)
29,682

259,063(11,681)
19,022

Total

304,525

266,404(amounts in thousands of Euro)
Balance at January 31, 2012 (audited)
Exchange differences
Increases
Uses
Balance at January 31, 2013 (audited)9.

Trade receivables, net

Trade receivables are detailed as follows:(amounts in thousands of Euro)

Trade receivables from third parties increased by Euro 27.3 million comparedto January 31, 2012, and stood at Euro 286.4 million at January 31, 2013.
Higher sales and royalties were the main reasons behind the increase.
Trade receivables from related parties included a total amount of Euro 28.4
million essentially arising from sales of finished products and royalties tocompanies owned by the main shareholder of PRADA Holding bv andoperating the retail business under franchise agreements.
The allowance for doubtful debts was determined on a specific basis
considering all information available at the date the financial statements
were prepared. It is revised periodically to bring receivables as close as
possible to their fair value.

20Movements during the period may be analyzed as follows:(amounts in thousands of Euro)

as at
January 31
2013
auditedas atJanuary 31
2012
audited11,681

10,537

(67)
805
(754)
(118)

198
2,369
(866)
(557)

11,547

11,681

Opening balance
Exchange differences
Increases
Uses
Reversals
Closing balance

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

as at
January
31, 2013
auditedOverdue (days)
Current

Trade receivables

316,072

Total

316,072(amounts inthousands of Euro)

as at
January
31, 2012
audited

Trade receivables

278,085

Total

278,085

1 < 3031 < 60

61 < 90

91 < 120≥ 120

263,079

27,328

7,708

5,852

1,607

10,498263,079

27,328

7,708

5,852

1,607

10,498

Overdue (days)
Current

1 < 3031 < 60

61 < 90

91 < 120≥ 120

226,300

18,991

12,096

5,031

2,167

13,500226,300

18,991

12,096

5,031

2,167

13,500The following table contains a summary, by due date, of trade receivables
less the allowance for doubtful accounts at the reporting date:(amounts inthousands of Euro)

as at
January 31
2013
auditedOverdue (days)
Current

Trade receivables
less allowance for
doubtful accounts

304,525

262,799

27,141

7,708

Total

304,525

262,799

27,141

7,708

1 < 3021

31 < 60 61 < 90

91 < 120

≥ 120

5,804

634

439

5,804

634

439

(amounts inthousands of Euro)

as at
January 31
2012
auditedCurrent

Overdue (days)

Trade receivables
less allowance for
doubtful accounts

266,404

Total

266,404

1 < 3031 < 60

61 < 90

91 < 120≥ 120

225,313

18,944

12,056

4,864

2,044

3,183

225,313

18,944

12,056

4,864

2,044

3,183

10. Receivables and advance payments from parent company
and other related parties
Receivables and advance payments from parent companies and relatedparties are detailed below:
as atJanuary 31
2013
auditedas atJanuary 31
2012
auditedFinancial receivables – other related parties
Other receivables – PRADA Holding bv
Other receivables – other related parties
Other receivables – other comp. controlled by PRADA Holding bv
Advance payments – other related parties

1,413
249
2,652
3
15,176

1,410
654
1,646
154
9,000

Total

19,493

12,864(amounts in thousands of Euro)

Advance payments includes Euro 12.3 million of advance payments made to
Luna Rossa Challenge NZ ltd and Luna Rossa Challenge srl, in accordance withthe contracts signed with subsidiary PRADA sa, for sponsorship of the Luna
Rossa yacht in relation to its participation on the XXXIV edition of theAmerica’s Cup to be held in San Francisco, California, in 2013. The remaining
Euro 2.9 million mainly consists of advances paid to Progetto Prada Arte srl
for cultural initiatives to be undertaken the following year.

2211. Capital expenditure
Changes in the net book value of “Property, plant and equipment” in theyear ended January 31, 2013, are as follows:
Production Leasehold
Furniture
plant and
improve& fittingsmachineryments(amounts inthousands of Euro)Land andbuildings

Balance at January
31, 2011 (audited)

145,602

15,042

220,112

72,10924,69559,157536,71740,806(5,055)-

7,030(6,635)(4)

110,797(62,899)(61)

29,329(18,691)(183)

18,825(5,850)(63)

51,820(15)

258,607(99,130)
(326)

1,443

28

14,637

2,405

325

3,501

22,339

288
-

15
-

24,011(2,273)

3,885
(470)

2,091
(41)

(30,627)(1,216)(337)(4,000)183,084

15,476304,324

88,38439,982

82,620713,870

35,371(5,977)(3)

8,977(7,087)(17)

136,368(84,272)(708)

48,655(25,324)(856)

24,347(6,932)(17,654)

73,617(1)

327,335(129,592)(19,239)

(898)

(23)

(18,247)(3,497)(351)(5,448)(28,464)

3,334(3,331)

122-

37,770(2,192)

3,252
(304)

1,223
(1,202)(44,583)
(700)

1,118
(7,729)211,580

17,448373,043

110,310

39,413

105,505

857,299

Additions
Depreciation
Disposals
Exchangedifferences
Other movements
Impairment
Balance at January
31, 2012 (audited)
Additions
Depreciation
Disposals
Exchangedifferences
Other movements
Impairment
Balance at January
31, 2013 (audited)

23

Other Assets under
tangible construction

Total net
book value

Changes in the net book value of “Intangible assets” in the year ended
January 31, 2013, are as follows:(amounts inthousands of Euro)

Trademarks

Goodwill

Balance at January
31, 2011 (audited)

312,460

503,946

36,087

6,385

7,869

2,372

869,119

-

-

-

-

-

-

-

166
(11,025)--

14,393(8,354)-

4,178(3,067)(4)

128(4,726)
(1)

1,384
-

20,249(27,172)
(5)

1,707

274

358

16

-

12

2,367

-

-

190
-

1,071
(1)

-

(2,278)(14)(1,017)(15)

303,308504,220

42,674

8,578

3,270

1,476

863,526--

15,694---

15,694286(11,137)--

17,476(9,471)-

1,909(2,963)(81)

9(1,677)-

7,740-

27,420(25,248)(81)(1,352)

(233)

(500)

(26)

-

(57)

(2,168)

-

-

(110)
-

571
-

86
(11)

(819)
(110)

(272)
(121)

291,105

503,987

65,763

7,988

1,677

8,230

878,750

Change in scope of
consolidation
Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance at January
31, 2012 (audited)
Change in scope of
consolidation
Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance at January
31, 2013 (audited)

Store Lease
Development Assets in
SoftwareAcquisitions
costs progress

Total net
book value

12. Other current assets
Other current assets are detailed as follows:as atJanuary 31
2013
auditedas atJanuary 31
2012
auditedVAT
Income tax and other tax receivables
Other assets
Prepayments and accrued income
Deposits

25,072
20,54016,731
41,266
1,214

37,372
6,597
15,33739,049
1,920

Total

104,823

100,275(amounts in thousands of Euro)24

13. Other non-current assets
Other non-current assets are detailed as follows:as atJanuary 31
2013
auditedas atJanuary 31
2012
auditedGuarantee deposits
Deferred rental income
Other receivables

50,8982,410
8,374

49,526
2,893
4,883

Total

61,68257,302(amounts in thousands of Euro)

14. Payables to parent company and other related parties
Payables to parent companies and other related parties are detailed asfollows:
as atJanuary 31
2013
auditedas atJanuary 31
2012
auditedFinancial payables – other related parties
Other payables – PRADA Holding bv
Other payables – other related parties
Other payables – other companies controlled by
PRADA Holding bv

5,018
120
458

3,574
528

3

259

Total

5,599

4,361

(amounts in thousands of Euro)

as at
January 31
2013
auditedas atJanuary 31
2012
audited

Trade payables – third parties
Trade payables – related parties

323,894
6,719

279,236
4,302

Total

330,613283,538(amounts in thousands of Euro)

15. Trade payables

The increase in Trade payables was due to the growth of the business ingeneral.

25

The following table summarizes trade payables by maturity date.
as atJanuary 31
2013
auditedCurrent

1 < 3031 < 60

61 < 90

91 < 120≥ 120

Trade payables

330,613

301,940

14,991

3,859

3,119

1,180

5,524

Total

330,613

301,940

14,991

3,859

3,119

1,180

5,524

(amounts inthousands of Euro)

Overdue

as atJanuary 31
2012
auditedCurrent

1 < 3031 < 60

61 < 90

91 < 120≥ 120

Trade payables

283,538

251,483

17,392

5,507

2,553

2,131

4,472

Total

283,538

251,483

17,392

5,507

2,553

2,131

4,472

(amounts inthousands of Euro)

Overdue

16. Other current liabilities
Other current liabilities are detailed as follows:as atJanuary 31
2013
auditedas atJanuary 31
2012
auditedPayables for capital expenditure
Accrued expenses and deferred income
Other payables

57,9699,810
63,866

57,844
12,94457,989

Total

131,645

128,777(amounts in thousands of Euro)

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

Provision fortax disputes

Other
provisions

Total

Balance at January 31, 2012
(audited)

1,618

37,335

17,96856,921

Exchange differences
Reversals
Uses
Increases

(18)
(88)
(822)
1,085

(2,548)(7,532)(197)
409(1,254)(4,937)(2,048)
7,943(3,820)(12,557)(3,067)
9,437

Balance at January 31, 2013
(audited)

1,775

27,467

17,672

46,914(amounts in thousands of Euro)

Provisions represent the Directors’ best estimate of maximum contingent
liabilities. In the Directors’ opinion and based on the information available tothem as supported by the opinions of independent experts at the reporting
date, the total amount provided for risks and charges was reasonableconsidering the contingent liabilities that might arise.

26

Management Discussion and Analysis for the threemonths period ended January 31, 2013
Net revenues
In the three months ended January 31, 2013, consolidated net revenues
amounted to Euro 957.9 million and recorded an increase of 16.1% (+13.7% atconstant exchange rates) compared to Euro 825.2 million scored the samequarter of the 2011 financial year.
The business expansion was substantially achieved thanks to the retailchannel that, posting net sales for Euro 746.7 million (+19.2% as reported,+16.8% at constant exchange rates and +5% on a Same Store Sales Growth(SSSG) basis over the same quarter of 2011), contributed 78.7% of total net
sales in the three months ended January 31, 2013. The wholesale channel
totaled Euro 201.7 million, 6% more than in three months ended January 31,
2012 (+3.6% at constant exchange rates).
A net of 33 new stores (36 openings, 3 closing) was opened in the last threemonths ended January 31, 2013, including 10 in the Far East area.
All markets, except for Japan, delivered double-digit growth rates. The Asia
Pacific market, contributing 36.4% to the Group’s net sales for the threemonths ended January 31, 2013, recorded revenues for Euro 345.5 million(+17.8% as reported and +12.5% at constant exchange rates over the threemonths ended January 31, 2012). In Europe the Group continued to post theexcellent performances achieved all along 2012. In fact, net revenues in thisregion amounted to Euro 203.1 million in the three months ended January
31, 2013 (+21.2% as reported and +19.6% at constant exchange rates
compared to the same period of 2011).
In terms of product mix, the Leather goods division drove the Group’sbusiness expansion with a +26.7% increase compared to the three months
ended January 31, 2012 (+24% at constant exchange rates).
Net sales generated by the Prada brand amounted to Euro 773 million or
81.5% on net revenues, +18.3% more than in the three months ended January
31, 2013 (+15.8% at constant exchange rates).

Operating results
In the three months ended January 31, 2013, EBITDA totaled Euro 324.6
million, +19% compared to Euro 272.7 million posted in the same threemonths period of 2011. Profitability measured as a percentage on Net
revenues increased further from 33.1% in the three months ended January
31, 2012 to 33.9%. Such increase in profitability was substantially achieved
thanks to the improvement gained at the delivery margin level.
The Group’s net result amounted to Euro 217.1 million and recorded a+36.8% increase compared to Euro 158.8 million posted the three months
ended January 31, 2012. Due to some adjustments in tax assessments

27

recognized at year end, the incidence on net revenues grew up to 22.7% from
19.2% achieved last year.

28

Management Discussion and Analysis for the twelve
months period ended January 31, 2013
Net revenues
Consolidated net revenues for the year ended January 31, 2013, amounted
to Euro 3,297.2 million, 29% higher than the Euro 2,555.6 million recorded in
2011. At constant exchange rates, there was a 22.9% increase.

Distribution channels
The retail channel delivered net sales of Euro 2,664.2 million for the twelve
months ended January 31, 2013, an increase of 35.6% compared to 2011(+28.6% at constant exchange rates). The progress in the channel wasachieved thanks to double-digit Same Store Sales Growth (SSSG) which was
robust throughout the year and measured 14% at year end, as well as to theadditional 73 net new DOS opened in 2012 (78 openings and 5 closures). The
contribution of the retail channel to the Group’s net sales increased from
77.9% in the financial year 2011 to 81.8%.
The wholesale channel, mainly sustained by the Italian market, contributed
the remaining 18.2% and generated net sales of Euro 592.2 million for thetwelve months ended January 31, 2013, up by 6% compared to 2011 (+2.9%
at constant exchange rates).

Markets
In 2012 all regions posted double-digit rates of growth.
The Asia Pacific market reported net sales of Euro 1,160.2 million, an
increase of 32.9% (+22.7% at constant exchange rates) compared to the Euro
873 million posted in 2011. Its contribution to Group’s net sales rose to35.6% from 34.6% in 2011. The growth was achieved almost entirely by theretail network which, including the 15 new DOS opened during the year (16openings and 1 closure), owned a total of 130 DOS in the region at January
31, 2013. The Greater China area (PRC, Hong Kong and Macau) was involvedin the retail strengthening program with the opening of 12 DOS net (13openings and 1 closure) in Hong Kong, Macau, Hangzhou, Taiyuan, Jinan,
Chengdu, Nanjing, Beijing, Shenyang and Hefei. In 2012, the Greater China
area generated net sales of Euro 735.6 million, 35% up on 2011 (+24% atconstant exchange rates, +14% on a SSSG basis).
The European market recorded net sales of Euro 739.6 million, an increase of
36.9% compared to the Euro 540.1 million posted in 2011 (+34.3% at constantexchange rates and +26% on a SSSG basis). The Group’s ability to attract
travelers drove the performance of the retail channel which was excellent
throughout the year and recorded 53.9% growth at year end (+50.4% atconstant exchange rates). A total of 22 new DOS opened in 2012, including 9
in France and the largest store in Moscow in an impressive building at
Stoleshnikov Pereylok. The strengthening of the retail network also involved
the renovation of existing stores, leading to the unveiling of the refurbished
Prada flagship store on Old Bond Street, London. The wholesale channel

29

posted a slight 4.6% fall in net sales compared to the previous year (areduction of 5.1% at constant exchange rates).
The Italian market posted net sales of Euro 528.3 million, an increase of
18.6% compared to 2011. The retail channel contributed most of the growthwith a 27.5% increase in reported net sales and a 20% increase on a SSSG
basis compared to 2011. The wholesale channel posted 5.7% growth.
The American market reported net sales of Euro 484.1 million, 23.3% up on
the Euro 392.7 million generated in the previous year (+14.8% at constantexchange rates). Both the channels achieved double-digit rates of growth,
but it was the DOS network that fueled the performance as it delivered net
sales of 29.9% more than in 2011 (+21.1% at constant exchange rates and +3%
on a SSSG basis). Some 19 new DOS were opened in the region during theyear, including the first 5 stores ever in Brazil. The wholesale channel
increased by 12% (+4.1% at constant exchange rates).
On the Japanese market, where the Group largely operates through theretail channel, net sales for 2012 totaled Euro 293.2 million, up by 14.2%
compared to 2011 (+7.9% at constant exchange rates and -2% on a SSSG
basis). The efforts made to sustain the vitality of this very sophisticatedmarket led during the year to 5 openings, 4 closures and 11 relocations.
The sales growth in other countries was essentially attributable to the Middle
East region where, since mid-2011, the Group has embarked upon a DOS
expansion program which led to the opening of 9 new stores in 2012 in Abu
Dhabi, Kuwait city and Dubai, including the impressive free standing store in
the Mall of Emirates, key contributor to the 2012 performance. Overall, theMiddle East area delivered Euro 44.8 million in 2012 compared to some Euro
11.1 million in 2011, while the whole other countries area delivered Euro 51
million of net sales in 2012 compared to Euro 15.2 million in 2011.

Products
All product categories achieved positive performances. Leather goods led theway with Euro 2,036 million of net sales generated in 2012 compared to Euro
1,426.5 million in 2011 (+42.7% as reported and +35.5% at constant exchange
rates). The Leather goods performance, underpinned by strong growth in the
Far East region, was double digit growth for all brands, all channels and allother regions. This product category now contributes almost two thirds ofthe Group’s net sales. Footwear delivered net sales of Euro 625.4 million in2012, up by 11.7% compared to 2011 (+7.2% at constant exchange rates),with the sales generated on a more balanced geographical split. Net sales ofready to wear products were worst hit by the selective strategy regarding
wholesale accounts but still managed to achieve 9.9% growth (+4.9% atconstant exchange rates).

BrandsThe net sales generated by the Prada brand totaled Euro 2,649.6 million in2012, an increase of 32.5% compared to 2011 (+26.1% at constant exchange
rates). This brand, representing 81% of the Group’s net sales in 2012, haslargely benefited from the expansion strategy realized in recent years

30drawing on outstanding brand awareness.
Miu Miu net sales totaled Euro 512.8 million in 2012, 16.3% up on 2011(+10.7% at constant exchange rates). During the year, the Group continued
to sustain the brand with the opening of 32 new DOS all around the world: 8
in Europe, 8 in Asia Pacific, 7 in the Americas, 3 in Japan, 3 in the Middle
East, 2 in Italy and 1 in Africa. The Group’s objective through this strategy of
expansion was to achieve immediate revenue growth, as in 2012 and recent
years, while also increasing the brand’s critical mass so as to improve further
in future years the returns resulting from the high growth potential of thebrand.
The Church’s brand again achieved steady double figure growth. In 2012, its
net sales totaled Euro 68.4 million, up by 15.6% compared to 2011 (+10.7% atconstant exchange rates). In Europe, Church’s main market, net sales
increased by 19.3% (+13.2% at constant exchange rates).
The Car Shoe brand generated net sales of Euro 19.7 million in 2012, up by
15.4% compared to 2011 (+13.8% at constant exchange rates). A new DOS
was opened in Dubai during the year, taking the retail network to a total of 7
DOS at January 31, 2013.

Royalties
Income from royalty agreements contributed net revenues of Euro 40.8
million, up by 26.4% compared to Euro 32.3 million in 2011. The launch of
the Prada phone by LG 3.0 in 2012 contributed most to the increase, whilefragrances performed best in terms of rate of growth thanks to the launch of
Luna Rossa perfume and the strength of the Prada Candy great success.

Operating results
Gross margin for the year was Euro 2,376.5 million, up by 30% compared to
the Euro 1,828 million reported for 2011. Compared to net sales, the higher
rate of growth was achieved thanks to a more favorable sales mix in terms ofchannel, geographical area and product category as well as a positive
exchange rate effect.
Operating costs increased from Euro 1,199.1 million in 2011 to Euro 1,486.8
million. As a percentage of net revenues they decreased from 46.9% in 2011
to 45.1% (45.4% at constant exchange rates).
Product design and development costs increased slightly compared to 2011
but fell as a percentage of net revenues as most of the costs of thiscorporate area are fixed.
Advertising and communications costs raised from Euro 129.2 million to Euro
150.6 million while falling from 5.1% of net revenues in 2011 to 4.6%. The
increase in absolute terms was mainly attributable to higher purchases of
media space as well as to new sponsorships. In fact, during the year theGroup started to sponsor the Luna Rossa yacht that raced the 2012 America’s
Cup World series taking part in regattas in Naples, Venice, San Francisco and
Newport.

31

Selling costs increased from Euro 802.8 million in 2011 to Euro 1,040.1
million in 2012 mainly as a result of the ongoing enlargement and renovationof the DOS network. As a percentage of net revenues, they remained almost
unchanged (from 31.4% in 2011 to 31.5%).
General and administrative expenses increased from Euro 164 million in 2011
to Euro 184.7 million essentially because of business expansion which led tohigher overhead expenses. As a percentage of net revenues they decreased
from 6.4% to 5.6%.
EBITDA was Euro 1,052.5 million for the twelve months ended January 31,
2013, 38.6% up on the Euro 759.3 million achieved in 2011. The Group draw
on its revenue growth to increase profitability notwithstanding more retail
operating and overhead expenses and higher media and sponsorshipspending.
EBIT improved further as a result of smaller increases in depreciation,amortization and impairment adjustments. In fact, it stood at Euro 889.8
million, 41.5% higher than the Euro 628.9 million reported for 2011.
The tax charge for the year, represented as a percentage of profit before
taxation, was 28.3% against 27.6% last year. The 2012 tax rate was affectedby an extraordinary tax charge paid in October 2012, amounting to some Euro
42 million and related to the years 2010 and 2011. Despite this extraordinary
tax charge, equal to Euro 42 million, the profits generated by operating
activities were enough to lead to an improvement in the Group’s net income
in 2012 that raised Euro 625.7 million (Euro 431.9 million in 2011) or 19% of
net revenues (16.9% in 2011). Consequently, earnings per share haveincreased from Euro 0.17 to Euro 0.24.

32

Net invested capital
The following table reports the Statement of financial position as adjusted inorder to provide a better picture of the composition of the Net invested
capital.
(amounts in thousands of Euro)

as at
January 31
2013
auditedas atJanuary 31
2012
auditedNon-current assets (excluding deferred tax assets)
Trade receivables, net
Inventories, net
Trade payables
Net operating working capital
Other current assets (excluding financial position items)
Other current liabilities (excluding financial position items)
Other current assets/(liabilities), net
Provisions for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation, net
Other non-current assets/(liabilities), net
Net invested capital
Shareholders’ equity – Group
Shareholders’ equity – Non Controlling Interests
Total consolidated Shareholders’ equity
Long term financial payables
Short term financial , net surplus/(deficit)
Net financial position surplus/(deficit)
Shareholders’ equity and Net financial position

1,821,773
304,525
343,802(330,613)
317,714
165,962(230,285)(64,323)(46,914)(45,538)(85,289)
120,421(57,320)2,017,844(2,320,022)(10,470)(2,330,492)(79,348)
391,996
312,648(2,017,844)

1,650,329
266,404
374,782(283,538)
357,648
112,623(262,534)(149,911)(56,921)(35,898)(75,991)
128,071(40,739)
1,817,327(1,822,743)(8,224)(1,830,967)(179,542)
193,182
13,640(1,817,327)

At January 31, 2013, Net invested capital stood at Euro 2,017.8 million. It
had a similar breakdown at all three reporting dates analyzed with Noncurrent assets always making the greatest contribution to the net total. For
the twelve months ended January 31, 2013, the increase was again largely
attributable to the change in Non-current assets, essentially because ofcapital expenditure incurred during the year. The reduction in the Net
operating working capital, Euro 40 million, was entirely offset by the positivechange in the fair value of derivative financial instruments included in othercurrent assets for Euro 42.2 million and in other current liabilities for Euro
14.3 million.
Consolidated shareholders’ equity rose from Euro 1,831 million to Euro
2,330.5 million at January 31, 2013. The increase generated by the Group’s
net income for the twelve months ended January 31, 2013, Euro 625.7
million, was partially offset by the dividends of Euro 127.9 million distributed
to the PRADA spa shareholders (as approved by the Annual General Meetingon May 22, 2012 on the financial statements for the year ended January 31,2012) and by the dividends of Euro 5.6 million paid to Non-controllinginterests. Other changes resulting from translation differences and changes
in fair value equity reserves accounted for the rest of the increase.

33

Net financial position(amounts in thousands of Euro)

as at
January 31
2013
auditedas atJanuary 31
2012
auditedLong term debt
Obligations under finance leases(78,830)(518)(178,442)(1,100)Long term financial payables(79,348)(179,542)

Bank overdraft and short term loans
Payables to related parties
Receivables from related parties
Obligations under finance leases
Cash and cash equivalents(175,570)(5,018)1,413(575)
571,746(165,485)(3,574)
1,410(1,453)362,284

Short term net financial surplus/(deficit)

391,996

193,182

Net financial position surplus/(deficit)

312,648

13,640Net financial position surplus/(deficit), excluding
receivables/(payables) with parent company and other relatedparties

316,253

15,804n.a.

n.a

NFP/EBITDA

The Group’s net financial position turned into a net financial surplus during
the previous year thanks both to the capital injection resulting from thelisting of 58,824,000 PRADA spa shares on the Main Board of the Hong Kong
Stock exchange and to the results of operations. At January 31, 2013, theGroup net financial surplus improved further to Euro 312.6 million. In fact,
cash flows from operations generated during the year 2012 (Euro 759.3
million) allowed the Group to fund its capital expenditure program (Euro331.6 million), to pay dividends to PRADA spa shareholders (Euro 127.9
million), to pay dividends to Non-controlling interests (Euro 5.6 million) andto take the net financial surplus from Euro 13.6 million at January 31, 2012,
to Euro 312.6 million at the reporting date.

Analysis of Capital expenditure
The increase in Property, plant and equipment and Intangible assets was
mainly driven by the capital expenditure incurred during the year, as
allocated as follows: Euro 265.4 million in the retail area, Euro 42.8 million in
the production and logistics area and Euro 46.6 million in the corporate area.

Outlook for 2013
The Group remains confident that the strategy which has been coherently
deployed in recent years with regard to brand positioning and retail
expansion will again be a key success factor for the forthcoming fiscal year,
even in a general economic environment that remains challenging.

34

Corporate governance practices
The Company is committed to maintaining a high standard of corporate
governance practices and fulfilling its commitment to effective corporate
governance. The corporate governance model adopted by the Company
consists of a set of rules and standards with the aim of establishing efficientand transparent operations within the Group, to protect the rights of theCompany’s shareholders and to enhance shareholder value. The corporate
governance model adopted by the Company is in compliance with theapplicable regulations in Italy, as well as the principles of the Corporate
Governance Code (the “Code”) contained in Appendix 14 of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the “Listing Rules”).
Full details on the Company’s corporate governance practices are set out in
the Company’s 2012 Annual Report.

Audit Committee
The Company has established an Audit Committee in compliance with Rule3.21 of the Listing Rules where at least one member possesses appropriate
professional qualifications in accounting or 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. Gian Franco Oliviero Mattei (Chairman), Mr.
Giancarlo Forestieri and Mr. Sing Cheong Liu. The primary duties of the Audit
Committee are to assist the Board in providing an independent view of theeffectiveness of the Company’s financial reporting process and internal
control and risk management systems, to oversee the external audit process
and the internal audit process carried out by the internal audit departmentof the Company and to perform other duties and responsibilities as are
assigned to the Audit Committee by the Board.
The Audit Committee has held a meeting on April 3, 2013, to review theannual results for the year ended January 31, 2013 before recommending itto the Board for approval.

Compliance with the Code
The Board has reviewed the Company’s corporate governance practices andis satisfied that the Company’s corporate governance practices havecomplied with the code provisions set out in the Code on Corporate
Governance Practices formerly contained in Appendix 14 of the Listing Rules
during the period from February 1 to March 31, 2012, and the Code during
the period from April 1, 2012, to January 31, 2013 (the period from February
1, 2012, to January 31, 2013, both days inclusive is referred to as the“Reviewed Period”).

Directors’ securities transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the standard set out in the Model

35

Code for Securities Transactions by Directors of Listed Issuers (the “Model
Code”) contained in Appendix 10 of the Listing Rules. Specific written
acknowledgments have been obtained from each Director to confirm
compliance with the Model Code throughout the Reviewed Period. There was
no incident of non-compliance during the Reviewed Period.
The Company has also adopted written procedures governing securities
transactions carried out by the relevant employees who are likely to possess
inside information in relation to the Company and its securities. The terms ofthese procedures are no less exacting than the standard set out in the Model
Code.

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

Shareholders’ general meeting
The Shareholders’ general meeting of the Company will be held on Thursday,
May 23, 2013.
Notice of the Shareholders’ general meeting will be published on the
Company’s website at www.pradagroup.com and on the Hong Kong
Exchanges and Clearing Limited’s website at www.hkexnews.hk in due
course.

Final dividend
The Board recommends for the twelve month period ended January 31, 2013,
a final dividend of Euro 230.3 million (or 9.0 Euro/cents per share).The
payments shall be made in Euro to the shareholders recorded in the sectionof the Company’s shareholders register held at the Company’s registeredoffice in Milan (Italy) and in Hong Kong dollars to the shareholders recordedin the section of the Company’s shareholders register held 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 of approval of the final dividend by theshareholders.
Subject to the shareholders’ approving the recommended final dividend,such dividend will be payable on or about Thursday, June 20, 2013.

Closure of register of shareholders
The shareholders registered on the Company’s shareholders register on
Thursday, May 23, 2013, will be allowed to attend and vote at the
Shareholders’ general meeting of the Company. In order to qualify forattending and voting at the Shareholders’ general meeting of the Company,
all transfers accompanied by the relevant share certificate(s) must be lodged
with the Company’s Hong Kong share registrar, Computershare Hong Kong
Investor Services Limited, at Shops 1712-16, 17th Floor, Hopewell Centre,36

183 Queen's Road East, Wanchai, Hong Kong or with the Company’s
registered office in Milan (Italy), Via Antonio Fogazzaro, 28, if the transfer
concerns shares registered in the section of the Company’s shareholders
register kept by the Company itself, not later than 4:30 p.m. on Monday, May
20, 2013. The shareholders register of the Company will be closed from
Tuesday May 21, 2013 to Thursday May 23, 2013, both days inclusive, during
which no share transfer can be registered.
The final dividend will be paid to shareholders recorded on the Company’s
shareholders register on Friday, May 31, 2013. In order to qualify for thepayment of the proposed final dividend, all transfers accompanied by therelevant share certificate(s) must be lodged with the Company’s Hong Kongshare registrar, Computershare Hong Kong Investor Services Limited, at Shops
1712-16, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong
Kong or with the Company’s registered office in Milan (Italy), Via Antonio
Fogazzaro, 28, if the transfer concerns shares registered in the section of theCompany’s shareholders register kept by the Company itself, not later than
4:30 p.m. on Wednesday, May 29, 2013. The shareholders register of theCompany will be closed from Thursday, May 30, 2013, to Friday, May 31,
2013, both days inclusive, during which no share transfer can be registered.

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

By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Deputy Chairman

Milan (Italy), April 5, 2013
As at the date of this announcement, the Company’s executive directors are Ms.
Miuccia PRADA BIANCHI, Mr. Patrizio BERTELLI, Mr. Carlo MAZZI and Mr. Donatello
GALLI; the Company’s non-executive directors are Mr. Marco SALOMONI and Mr.
Gaetano MICCICHÈ and the Company’s independent non-executive directors are Mr.
Gian Franco Oliviero MATTEI, Mr. Giancarlo FORESTIERI and Mr. Sing Cheong LIU.

37