Annual Results
for the twelve months ended January 31st, 2012
March 29th, 20122011 Annual Results: Results Presentation – March 29th, 20120

AgendaResults Presentation
Retail Overview

Page

223

2011 Annual Results – March 29th, 20121

Results Presentation
Donatello Galli2011 Annual Results: Results Presentation – March 29th, 20122

Key messages
12 Months

4th Quarter(*)

Turnover

Net Revenues grew by 25% (+26%at constant rates) with Retail up
38% (39% at constant rates)

Net Revenues grew by 25% (+24%at constant rates) with Retail up
42% (41% at constant rates)

Like-for-like SalesLike-for-like +23%, above 2010
achievements and in line with
October YTDContinuous Retail improvement:
like-for-like +24%

EBITDA up to € 759 mn, 29.7% onRevenues, 42% above 2010.
Net Profit at € 432 mn, 16.9% on
Revenues, 72% above 2010

EBITDA climbed to € 273 mn,33.1% on Revenues

75 new openings at the end of2011

24 new openings in the Quarter

Results

Retail openings
Earning per Shareand Dividends€ 0.17, +70% vs 2010
€ 5 cents proposed dividends pershare

Note(*): unaudited
2011 Annual Results: Results Presentation – March 29th, 20123

The Group at a glance – Full year
NET SALES BY CHANNELNET SALES BY REGION
10%

22%

1%

NET SALES BY PRODUCT
1%

18%
22%

35%
57%

21%
20%
78%
16%
RetailWholesale

Italy
EuropeNorth America
Asia ex-JapanJapan
Other Countries

Leather Goods
Ready to Wear
FootwearOther2011 Annual Results: Results Presentation – March 29th, 2012

4

Net Sales by Channel (€ mn) – Full year
2010

Mix %

2011

Mix %

2011 vs 2010

Retail

1,427.4

71%

1,964.5

78%+38%

Wholesale

589.7

29%

558.8

22%

-5%

Total

2,017.1100%

2,523.3

100%

+25%

 Retail improvement (+39% at constant rates) is mainly driven by like-for-likeincrease: +23%, above last year achievements and in line with October YTDresults Wholesale development slightly better than expectation
 Selective approach to Wholesale distribution

2011 Annual Results: Results Presentation – March 29th, 2012

5

Net Sales by Channel (€ mn) – 4th Quarter(*)
2010

Mix %

2011

Mix %

2011 vs 2010

Retail

440.7

67%

626.5

77%

+42%

Wholesale

213.3

33%

190.3

23%

-11%

Total

653.9

100%

816.8

100%

+25%

 Retail improvement (+41% at constant rates) is mainly driven by like-for-likeincrease: +24% with improving trends compared to October YTD
 Wholesale development has been affected by delayed deliveries due toadverse weather condition and transportation strikes in the last two weeks ofJanuary

Note(*): unaudited
2011 Annual Results: Results Presentation – March 29th, 20126

Quarterly evolution Retail Net Sales (same fx)
H1

Q3

Q4

FY

+37%

+42%

+41%+39%

17%

17%

15%

22%

25%

Like-for-Like growth

24%

16%

23%

Openings growth

2011 Annual Results: Results Presentation – March 29th, 2012

7

Net Sales by Brand (€ mn) – Full year
2010

Mix %

2011

Mix %

2011 vs 2010

Prada

1,586.8

79%

1,999.3

79%+26%

Miu Miu

353.0

17%

441.1

17%+25%Church’s

53.0

3%

59.2

2%

+12%

Car Shoe

17.9

1%

17.0

1%

-5%

Others

6.2

-6.7

-+7%

Total

2,017.1100%

2,523.3

100%

+25%

 Outstanding results especially for Prada and Miu Miu Slight decrease for Car Shoe2011 Annual Results: Results Presentation – March 29th, 2012

8

Net Sales by Brand (€ mn) – 4th Quarter(*)
2010

Mix %

2011

Mix %

2011 vs 2010

Prada

518.5

79%653.2

80%

+26%

Miu Miu

115.9

18%

143.7

18%+24%Church’s

14.22%

15.62%+10%

Car Shoe

4.2

1%

3.0--28%

Others

1.0-1.1-

+11%

Total

653.9

100%

816.8

100%

+25%

 Double digit growth for Prada, Miu Miu and Church’s
 Car Shoe has been also affected by a different delivery schedule in line with

Wholesalers expectations

Note(*): unaudited
2011 Annual Results: Results Presentation – March 29th, 2012

9Net Sales by Geography (€ mn) – Full year
2010

Mix %

2011ch.
Mix % as%reportedsame FX393.3
450.5
326.8
613.8

19%
22%
16%
30%

445.6
540.1
392.7
873.0

18%
21%
16%
35%

+13%+20%+20%+42%+13%+21%+26%+45%

Retaillike-for-like
+28%
+19%
+16%
+33%

375.4

19%

544.8

22%

+45%

+50%

+40%

220.9
11%
256.7
10%
11.8
1%
15.2
1%
2,017.1 100% 2,523.3 100%

+16%
+29%
+25%+12%
+31%
+27%

+1%
+23%

Italy
EuropeN. America
Far East
Greater China(*)

JapanOthers
Total

% ch.

Note(*): PRC, HK, Macau All markets growing double digit with Far East, and among this Greater China,

increasing its share on total
 Very positive results in Japan despite the Tsunami
 Double digit like-for-like growth in all markets excluding Japan
2011 Annual Results: Results Presentation – March 29th, 201210

Net Sales by Geography (€ mn) – 4th Quarter(*)

Italy
EuropeN. America
Far East
Greater China(**)

JapanOthersTotal

2010

Mix %

2011

ch.
Mix % as%reportedsame FX

126.7
146.9
109.8
195.9

19%
22%
17%
30%

127.4
167.5
135.0
293.3

16%
21%
17%
36%

+1%
+14%
+23%
+50%

+1%
+14%
+24%
+48%

Retaillike-for-like+25%
+24%
+19%
+32%

122.8

19%

185.5

23%+51%

+52%

+39%

70.3
4.3
653.9

11%
100%

87.8
5.8
816.8

11%
1%
100%

+25%
+35%
+25%

+17%
+37%
+24%

+4%
+24%

% ch.

Notes: (*)unaudited(**): PRC, HK, Macau

 All markets growing double digit excluding Italy affected by Wholesale (Retail+46%)
 Double digit like-for-like growth in all markets excluding Japan because of theTsunami
2011 Annual Results: Results Presentation – March 29th, 201211

Net Sales by Product (€ mn) – Full year
2010

Mix %

2011

Mix %

2011 vs 2010

Leather Goods

1,013.950%

1,426.5

57%+41%

Footwear

503.1

25%

560.1

22%

+11%

Ready to Wear

483.6

24%

512.6

20%

+6%

Others

16.51%

24.1

1%

+46%

Total

2,017.1100%

2,523.3

100%

+25%

 The increasing weight of Leather Goods driven by channel and geographical mix
 Ready to Wear growth in line with Budget

2011 Annual Results: Results Presentation – March 29th, 201212

Net Sales by Product (€ mn) – 4th Quarter(*)
2010

Mix %

2011

Mix %

2011 vs 2010

Leather Goods

333.8

51%

466.9

57%

+39%

Footwear

159.7

24%168.7

21%+6%

Ready to Wear

156.1

24%

174.9

21%+12%Others

4.3

1%

6.2

1%

+85%

Total

653.9

100%

816.8

100%

+25%

 The increasing weight of Leather Goods driven by channel and geographical mix
 Footwear and Ready to Wear show a more moderate increase, mainly due toWholesale

Note(*): unaudited
2011 Annual Results: Results Presentation – March 29th, 201213

Group Profit and Loss – Full Year€ mn

FY 2010%Net Sales
Royalties
Net Revenues
COGS
Gross Profit

2,017.1
29.6
2,046.7 100.0%(658.8)1,387.9 67.8%

2,523.332.3
2,555.6 100.0%(727.6)
1,828.0 71.5%

Product Development
Advertising & Promotion
Selling
G&A
EBIT(97.2)(85.1)(642.5)(144.7)418.4 20.4%(103.1)(129.2)(802.9)(163.9)628.9 24.6%

Net Financial Expenses
Income Taxes
Minority Income
Group Net Income(30.1)(134.7)(2.7)
250.8 12.3%(26.0)(166.5)(4.5)
431.9 16.9%

D&A
EBITDA

117.5
535.9 26.2%

130.3
759.3 29.7%

2011 Annual Results: Results Presentation – March 29th, 2012

FY 2011%14Gross Margin Development – Full year Shift towards Retail Change in Markdown policy
 Shift towards more favourable geographical and product mix

 Scale effectRetail71.5%

67.8%

2010

Channel Mix Markdowns

Scale effect

Others, FX

2011 Annual Results: Results Presentation – March 29th, 2012

2011

15

EBITDA Development – Full year
 2011 EBITDA margin benefited from the gross margin improvement andpositive scale effect partially offset by increasing communication expenses

26.2%

3.7%

0.0%

0.7%

29.7%

Other Costs

2011(0.9)%

2010

Gross Margin

Sellingexpenses

A&P

2011 Annual Results: Results Presentation – March 29th, 201216

EBITDA by Brand (€ mn) – Full year
PradaMiu Miu

2.031

1.615

442

355
32.4%

28.1%

657

454

2010

2011

21.8%

22.1%

7798

2010

Church’sCar Shoe

5953

2011

1812.7%

13.3%

78

2010

17-4-2
2011

2010

Net Revenues

2011

EBITDA

2011 Annual Results: Results Presentation – March 29th, 201217

Capex Driven by DOS Openings (€ mn) – Full year Retail includes new openings, refurbishments and relocations
 Corporate & Industrial includes the buy-back of industrial facilities for approx.
€ 36 mn279
207

88

53191
154

2010

Corporate & IndustrialRetail2011
2011 Annual Results: Results Presentation – March 29th, 201218

DOS Network Development
388631953671

207

Jan-1143+75 OPENINGS-6 CLOSINGS+6994245

Car ShoeChurch’s
Miu Miu
PradaJan-12

2011 Annual Results: Results Presentation – March 29th, 201219

Main Balance Sheet items (€ mn)
January 2011

January 2012

Net Financial Position

408.6(15.8)

Net Operating Working Capital

320.8

357.6

NOWC on Net Revenues

15.7%

14.0%

Capital Employed (average)

1,538

1,701

ROCE

27.2%

37.0%

2011 Annual Results: Results Presentation – March 29th, 201220

Operating Cash Flow (€ mn)
44480

436(257)
223

Net
IncomeD&A/Other

Operating Cash
FlowCapex

2011 Annual Results: Results Presentation – March 29th, 2012

Free Operating
Cash Flow21NFP evolution (€ mn)
 Strong Cash Flow from Operation contributed, on top of IPO proceeds, to sharp

debt decrease

409

436

637

NFP
Jan-11

Net
IncomeOperatingWorking
Capital

130
D&A

205

257
Capex

Dividends
paid

Share
Capital46(16)

OthersNFP
Jan-12

Positive change
Negative change
2011 Annual Results: Results Presentation – March 29th, 201222

Retail Overview
Armando Tolomelli2011 Annual Results: Retail Overview – March 29th, 201223

Retail Overview
388 DOS at Jan 2012 with 75 openings and 6 closing
EUROPE: 115 (+27)

NORTH AMERICA: 47 (+8)

JAPAN: 65 (+9)

ITALY: 44 (+7)

ASIA (EX-JAPAN): 115 (+16)
MIDDLE EAST: 2 (+2)

2011 Annual Results: Retail Overview – March 29th, 201224

Retail Overview
 2/3 of 2011 openings occurred in Europe and US that we

don’t consider “mature markets” because of the increasing
travellers flows which helped us enjoying double digits like-for-like growth in these markets

2011 Annual Results: Retail Overview – March 29th, 2012

25Retail Overview
 In the last couple of years Retail sales to “travellers”

increased by almost 10 p.p. up to almost half of our Retailbusiness Most important “travellers” are Chinese Japanese From other Far East countries
 Russian Brazilian
2011 Annual Results: Retail Overview – March 29th, 201226

Retail Overview – Italy
7 news openings in 2011
 Selective openings in touristic cities

 44 stores at the end of the year, more than 50% Prada Retail Revenue growth +45%, LFL +28%

2011 Annual Results: Retail Overview – March 29th, 201227

2011 openings – Italy
Prada Forte dei Marmi

2011 Annual Results: Retail Overview – March 29th, 201228

2011 openings – Italy
Prada Palermo

2011 Annual Results: Retail Overview – March 29th, 201229

2011 openings – Italy
Prada Padova

2011 Annual Results: Retail Overview – March 29th, 201230

2011 openings – Italy
Miu Miu Capri2011 Annual Results: Retail Overview – March 29th, 201231

Retail Overview – Europe
28 new openings in 2011
 9 openings in Russia, of which 5 franchisee converted into

Retail concessions
 8 openings in UK, where we now have 39 stores(31 in London, of which 11 Church’s) 4 openings in France, where we now have 33 stores mainly

in Paris 3 openings in Spain, where we now have 8 stores mainly

in Madrid 3 openings in Germany, where we now have 13 stores Retail Revenue growth +43% (+44% same fx);

LFL growth +19%
2011 Annual Results: Retail Overview – March 29th, 201232

2011 openings – Europe
Prada Moscow Barvika

2011 Annual Results: Retail Overview – March 29th, 201233

2011 openings – Europe
Prada Moscow Crocus

2011 Annual Results: Retail Overview – March 29th, 201234

2011 openings – Europe
Miu Miu Moscow Crocus

2011 Annual Results: Retail Overview – March 29th, 201235

2011 openings – Europe
Prada Moscow Stolesnikov

2011 Annual Results: Retail Overview – March 29th, 201236

2011 openings – Europe
Miu Miu Moscow Stolesnikov

2011 Annual Results: Retail Overview – March 29th, 201237

2011 openings – Europe
Miu Miu London Heathrow

2011 Annual Results: Retail Overview – March 29th, 201238

2011 openings – Europe
Prada Paris Av. Montaigne

2011 Annual Results: Retail Overview – March 29th, 201239

2011 openings – Europe
Miu Miu Barcelona

2011 Annual Results: Retail Overview – March 29th, 201240

2011 openings – Europe
Prada Berlin

2011 Annual Results: Retail Overview – March 29th, 201241

Retail Overview – North America
8 new openings in 2011
 Selective openings in important Malls in new cities

 47 stores at the end of the year, of which 5 in Hawaii
 Retail Revenue growth +25% (+32% same fx); LFL growth+16%2011 Annual Results: Retail Overview – March 29th, 201242

2011 openings – USA
Prada Atlanta

2011 Annual Results: Retail Overview – March 29th, 201243

2011 openings – USA
Miu Miu Short Hills

2011 Annual Results: Retail Overview – March 29th, 201244

Retail Overview – Middle East
2 new openings in 2011
 First 2 openings in the Middle East, Dubai, in August 2011

 More stores to be opened in the next 2-3 years

2011 Annual Results: Retail Overview – March 29th, 201245

2011 openings – Middle East
Prada Dubai Burjiman

2011 Annual Results: Retail Overview – March 29th, 201246

2011 openings – Middle East
Miu Miu Dubai Burjiman

2011 Annual Results: Retail Overview – March 29th, 201247

Retail Overview - Japan
12 new openings in 2011 12 openings and 3 closings with 9 additional stores 4 net openings for Prada, 47 stores at the end of the year 5 net openings for Miu Miu, 18 stores at the end of the year Retail Revenue growth +16% (+12% same fx);

LFL growth +1%

2011 Annual Results: Retail Overview – March 29th, 201248

2011 openings – Japan
Prada Osaka Umeda

2011 Annual Results: Retail Overview – March 29th, 201249

2011 openings – Japan
Miu Miu Tokyo Ginza

2011 Annual Results: Retail Overview – March 29th, 201250

2011 openings – Japan
Miu Miu Okinawa

2011 Annual Results: Retail Overview – March 29th, 201251

Business perspective – Far East
18 new openings in 2011 8 openings and 1 closing in China, 25 stores at the end of theyear
 6 openings in Korea, 30 stores at the end of the year 115 stores at the end of the year in the region, out of which

48 in Greater China
 Retail Revenue growth +45% (+48% same fx);

LFL growth +33%
 Greather China Revenue growth +45% (+50% same fx);

LFL growth +40%

2011 Annual Results: Retail Overview – March 29th, 201252

2011 openings – Far East
Prada China Shenyang

2011 Annual Results: Retail Overview – March 29th, 201253

2011 openings – Far East
Prada China Guangzhou

2011 Annual Results: Retail Overview – March 29th, 2012

54

2011 openings – Far East
Prada China Wenzhou

2011 Annual Results: Retail Overview – March 29th, 201255

2011 openings – Far East
Prada China Harbin

2011 Annual Results: Retail Overview – March 29th, 2012

56

2011 openings – Far East
Prada China Hangzhou

2011 Annual Results: Retail Overview – March 29th, 201257

2011 openings – Far East
Miu Miu China Shenyang

2011 Annual Results: Retail Overview – March 29th, 201258

2011 openings – Far East
Miu Miu China Guangzhou

2011 Annual Results: Retail Overview – March 29th, 201259

Retail Overview
 After 75 openings in 2011, we confirm the strategy alreadycommunicated and the average 80 openings per year for2012 and 2013
 As far as 2012, 50% of openings are planned in “fast growingmarkets” such as China, other Far East countries, Middle
East, Brazil and Morocco Nearly 40% of 2012 openings are planned for Miu Miu

2011 Annual Results: Retail Overview – March 29th, 201260