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

PRADA spa
(Stock Code: 1913)

ANNOUNCEMENT
OF THE CONSOLIDATED RESULTS FOR THE NINE MONTHSENDED OCTOBER 31, 2012
- Group’s net revenues were Euro 2,339.3 million, recording an increaseof 35.2% compared with the nine months ended October 31, 2011
- Retail net sales were Euro 1,917.6 million, up by 43.3% compared with
the nine months ended October 31, 2011
- the number of Directly Operated Stores (DOS) reached 428- Retail Same Store Sales Growth was 18% compared with the ninemonths ended October 31, 2011
- EBITDA was Euro 727.9 million, up by 49.6% compared with the ninemonths ended October 31, 2011 and representing a margin of 31.1% on
net revenues- Group’s net income amounted Euro 408.6 million, up by 49.6%
compared to Euro 273.2 million for the nine months ended October
31, 2011- Net financial position as at October 31, 2012, was positive andamounted to Euro 210.6 million- Net operating cash flow for the nine months ended October 31, 2012,
was Euro 535.6 million

1Consolidated results for the nine months ended
October 31, 2012
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company” or“PRADA spa”) is pleased to announce the unaudited Consolidated results of
the Company and its subsidiaries (collectively, the “Group”) for the ninemonths ended October 31, 2012, together with the unaudited comparative
figures for the nine months ended October 31, 2011.

Key financial informationninemonthsended
October 31
2011
unaudited

twelvemonthsended
January
31, 2012
auditedninemonthsended
October 31
2012
unaudited

1,730,379
486,507392,317374,458
273,165
7,880
0.108

2,555,606
759,252
628,935
602,908
431,929
8,067
0.170

2,339,322
727,873
612,464
608,170
408,552
9,243
0.160

28.1%
22.7%

29.7%
24.6%

31.1%
26.2%

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

as at
October 31
2011
unaudited

as atJanuary
31, 2012
audited

as at
October 31
2012
unauditedchange vsJanuary
2012

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

376,357
1,754,647(109,233)
1,639,144
178,100
292,966

357,648
1,817,327
13,6401,822,743
278,856
479,954332,749
1,923,534
210,569
2,121,976
202,987535,627(24,899)
106,207
196,929299,233-

Key information from the Income
statement(amounts in thousands of Euro)Net revenues
EBITDAEBIT
Income before tax
Net income of the Group
Average headcount (persons)
Earnings per share
EBITDA %EBIT %%
change vsOctober 31
2011

35.2%
49.6%
56.1%
62.4%
49.6%
17.3%
48.1%

Highlights for the nine months ended October 31, 2012
For the nine months ended October 31, 2012, the PRADA Group reported asolid business expansion together with an important increase in profitability
ratios thanks to the constant focus on its main objectives and the strong
momentum of its brands. The results were even more appreciable sinceachieved in a particularly challenging global economic environment.
Net revenues for the nine months ended October 31, 2012, amounted to Euro2,339.3 million, up by 35.2% compared to Euro 1,730.4 million recorded in thesame period of 2011 (+27.3% at constant exchange rates). The Same StoresSale Growth (SSSG) was +18%, a remarkable performance that confirmed thesuccess of the Group’s retail strategies.
The EBITDA achieved for the nine months ended October 31, 2012, totaled
Euro 727.9 million, an increase of 49.6% compared to Euro 486.5 million
posted in the same period of 2011. As a percentage on net revenues the2

EBITDA climbed up to 31.1% improving further the results already gained in
the first half of 2012 when its contribution was 30.3%.
The EBIT margin improved as well and, totaling Euro 612.5 million for thenine months ended October 31, 2012, posted an increase of +56.1% over Euro
392.3 million of the same period of 2011, while profitability on net revenues
increased up to 26.2% (+22.7% in the same period of last year).
For the nine months ended October 31, 2012, the Group’s net income
amounted to Euro 408.6 million (17.5% on net revenues), showing an increaseof 49.6% over Euro 273.2 million posted in the same period of last year.
The results of operations allowed the Group to continue to fund thecommitting investments program, to pay dividends for total cash out of Euro131 million and to strengthen further the positive net financial position
which, at the reporting date, stood at Euro 210.6 million.

3

Consolidated income statement for the nine months ended
October 31, 2012
(amounts in thousands of Euro)Net revenues
Cost of goods soldnine months
nine months
ended
% on
ended
% on
October 31
Net October 31
Net
2012 revenues
2011 revenues
unauditedunauditedNote32,339,322(654,877)

100.0%-28.0%

1,730,379(494,730)

100.0%-28.6%

1,684,445

72.0%

1,235,649

71.4%(1,071,981)-45.8%(843,332)-48.7%

612,46426.2%

392,31722.7%(4,294)-0.2%(17,859)-1.0%

608,170

26.0%

374,458

21.6%(194,104)-8.3%(98,469)-5.7%

Net income from continuing operations

414,06617.7%

275,989

15.9%

Net income for the period

414,06617.7%

275,989

15.9%

5,514

0.2%

2,824

0.2%

Net income – Group

408,552

17.5%

273,165

15.8%

Depreciation, amortization andimpairment

115,409

4.9%

94,190

5.4%

EBITDA

727,87331.1%

486,50728.1%

Gross margin
Operating expenses

4

EBIT
Interest and other financial
income/(expenses), net

5Income before taxes
Taxation

6

Net income – Non-controlling interests

Basic and diluted earnings per share (inEuro per share)

7

0.160

4

0.108

Consolidated income statement for the three months ended
October 31, 2012%

three
monthsended
October 31
2011
unaudited%

791,949(214,006)

100.0%-27.0%

596,097(165,631)

100.0%-27.8%

Gross margin

577,94373.0%

430,466

72.2%

Operating expenses(360,362)-45.5%(291,528)-48.9%

EBIT

217,58127.5%

138,938

23.3%

Interest and other financial
income/(expenses), net(1,383)-0.2%(6,258)-1.0%

Income before taxes

216,198

27.3%

132,680

22.3%

Taxation(91,349)-11.5%(37,892)-6.4%

Net income from continuing operations

124,849

15.8%

94,78815.9%

Net income for the period

124,849

15.8%

94,788

15.9%

2,707

0.3%

1,155

0.2%

Net income – Group122,142

15.4%

93,633

15.7%

Depreciation, amortization andimpairment

40,9195.2%

32,564

5.5%

EBITDA

258,500

32.6%

171,502

28.8%(amounts in thousands of Euro)Net revenues
Cost of goods sold

Note

3

Net income – Non-controlling interests

5

three
monthsended
October 31
2012
unauditedConsolidated statement of financial position(amounts in thousands of Euro)

as at
October 31
2012
unaudited

as atJanuary 31
2012
audited98511,066
254,631
365,4223,936

362,284
266,404
374,782894

10

19,776

12,864

12

118,862
1,273,693

100,275
1,117,503

11
11785,022884,847
23,706
187,32062,080489
1,943,464

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

3,217,157

2,943,568

NoteAssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories
Derivative financial instruments - current
Receivables and prepayments 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

18
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
Provision for contingencies and commitments
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments non-current
Total non-current liabilities

232,053

165,485

14

5,110

4,361

15

287,304
130,377
4,495
710
115,017775,066

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

66,768564
43,01762,372
49,15085,286831
307,988

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

Total Liabilities

1,083,054

1,112,601

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

255,882
1,463,939(6,397)
408,552
2,121,976

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

12,127

8,224

Total Liabilities and Shareholders’ equity

3,217,157

2,943,568

Net current assets
Total assets less current liabilities

498,627
2,442,091

400,9192,226,984

16

17
18

Shareholders’ equity – Non-controlling interests

6

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

Balance at January
31, 2011
audited
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
Balance at January
31, 2012
audited
Allocation of 2011
net profit
Dividends
Capital injection in
subsidiaries
Comprehensive
income for theperiodBalance at October
31, 2012
unaudited

Number of
SharesShare
Share Translation
Capital premium
reserve
reserve

Cash Actuarial
flow
gains/
hedge (losses)
reserve
reserve

Available
Other Net profit
for sale reserves
reserve

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(7,637)2,558,824,000

255,882

410,047(17,239)(4,173)EquityNonattributa
controlling
ble tointerests
ownersof 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)

(58)

-

431,929446,762

4,910

451,672(1,192)(58)

747,548

431,929 1,822,743

431,929 (431,929)-

8,224 1,830,967

-

-

-

-

-

-

-

-

-

-

-

-

-

- (127,941)- (127,941)(2,645) (130,586)

-

-

-

-

-

-

-

-

-

-

1,168

1,168

-

-

-

10,842

3,060(1,336)

6,056-

408,552

427,174

5,380

432,5542,558,824,000

255,882

410,047(6,397)(1,113)(2,528)5,998 1,051,536

408,552 2,121,976

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.

7

-

-

12,127 2,134,103

Summarized statement of consolidated cash flows
nine months
ended
October 31
2012
unauditednine months
ended
October 31
2011
unaudited

Net cash flows from operating activities

535,627

292,966

Cash flows generated/(utilized) by investing activities(213,438)(187,836)

Cash flows generated/(utilized) by financing activities(168,263)

96,266

Change in cash and cash equivalents, net of bank overdrafts

153,926

201,396(amounts in thousands of Euro)Statement of consolidated comprehensive income
ninemonthsended
October
31, 2012
unaudited

twelve months
ended
January 31
2012
auditedConsolidated Net income for the period

414,066

436,425

Translation reserve adjustment
Tax impact
Translation reserve adjustment, net of tax impact

10,70910,70923,20423,204

Change in Cash flow hedge reserve
Tax impact
Change in Cash Flow Hedge reserve, net of tax impact

4,203(1,143)
3,060(10,432)
2,795(7,637)

Change in Actuarial gains/(losses) reserve
Tax impact(1,843)
507

(705)
443

Change in Actuarial reserve, net of tax impact(1,336)(262)

Change in Available for sale reserve
Tax impact
Change in Available for sale reserve, net of tax impact

8,075(2,019)
6,056

(77)
19
(58)

Comprehensive Consolidated Net income for the period

432,554451,672

5,380

4,910

427,174446,762(amounts in thousands of Euro)

Comprehensive Non-Controlling Interests Net income for theperiodComprehensive Group Net income for the period8Notes to the consolidated results for the nine months
ended October 31, 20121.

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 428 Directly Operated
Stores (DOS) at October 31, 2012, 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 Notes to the consolidated results for the nine months ended October 31,
2012, refer to the Group of companies controlled by PRADA spa (the"Company"), holding company of the PRADA Group (the "Group") and are
based on the consolidated results of the Group. Such consolidated results forthe nine months ended October 31, 2012, were prepared on a consistentbasis with respect to the Interim condensed consolidated financial
statements of the Group for the six months ended July 31, 2012, which, inturns, were prepared in accordance with the International Financial
Reporting Standards (“IFRS”) issued by the International Accounting Standard
Board (“IASB”) and as adopted by the European Union.
At the time these consolidated results for the nine months ended October 31,
2012, were prepared there were no differences between IFRS as endorsed by
the European Union, and applicable to the PRADA Group, and those issued by
the IASB.
IFRS also refer to all the International Accounting Standards (“IAS”) and all
the interpretations of the International Financial Reporting Interpretation
Committee (“IFRIC”), previously named the Standing Interpretations
Committee (“SIC”).

93.

Net revenues analysis

Net revenues for the nine months period ended October 31,
2012
nine months
ended
October 31
2012
unauditednine months
ended%
October 31
2011 change
unaudited

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

385,065 16.7%
536,490 23.2%
328,983 14.3%
814,694 35.3%
213,672
9.3%
29,0991.2%
2,308,003 100.0%

318,221 18.6% 21.0%
372,589 21.8% 44.0%
257,643 15.1% 27.7%
579,737 34.0% 40.5%
168,921
9.9% 26.5%
9,465
0.6% 207.4%
1,706,576 100.0% 35.2%

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

1,876,603 81.3%
360,664 15.6%
50,137
2.2%
15,134
0.7%
5,465
0.2%
2,308,003 100.0%

1,346,098 78.9%
297,345 17.4%
43,6022.6%
14,007
0.8%
5,524
0.3%
1,706,576 100.0%

39.4%
21.3%
15.0%
8.0%
-1.1%
35.2%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

387,929 16.8%
1,444,217 62.6%
450,344 19.5%
25,5131.1%
2,308,003 100.0%

337,721 19.8%
959,530 56.2%
391,376 22.9%
17,9491.1%
1,706,576 100.0%

14.9%
50.5%
15.1%
42.1%
35.2%

Net sales by distribution channelDOS
Independent customers and franchises
Total

1,917,552 83.1%
390,451 16.9%
2,308,003 100.0%

1,338,022 78.4%
368,554 21.6%
1,706,576 100.0%

43.3%
5.9%
35.2%

Net sales
Royalties

2,308,003
31,3191,706,576
23,803

98.6%
1.4%

35.2%
31.6%

Total net revenues

2,339,322 100.0%

1,730,379 100.0%

35.2%(amounts in thousands of Euro)

10

98.7%
1.3%

Net revenues for the three months period ended October 31,
2012
three months
ended
October 31
2012
unaudited

three months
ended%
October 31
2011 change
unaudited

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

125,739 16.1%
187,798 24.0%
104,281 13.3%
282,224 36.0%
69,7988.9%
13,476
1.7%
783,316 100.0%

104,776 17.8% 20.0%
121,925 20.7% 54.0%
85,790 14.6% 21.6%
211,743 35.9% 33.3%
61,728 10.5% 13.1%
3,211
0.5% 319.7%
589,173 100.0% 33.0%

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

643,170 82.1%
114,693 14.6%
19,127
2.4%
3,791
0.5%
2,535
0.4%
783,316 100.0%

467,714 79.4% 37.5%
98,474 16.7% 16.5%
16,5992.8% 15.2%
4,296
0.7% -11.8%
2,090
0.4% 21.3%
589,173 100.0% 33.0%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

139,252 17.8%
501,156 64.0%
135,054 17.2%
7,854
1.0%
783,316 100.0%

125,350 21.3%
341,873 58.0%
116,328 19.7%
5,622
1.0%
589,173 100.0%

11.1%
46.6%
16.1%
39.7%
33.0%

Net sales by distribution channelDOS
Independent customers and franchises
Total

687,586 87.8%
95,730 12.2%
783,316 100.0%

502,650 85.3%
86,523 14.7%
589,173 100.0%

36.8%
10.6%
33.0%

Net sales
Royalties

783,316
8,633

589,173
6,924

98.8%
1.2%

33.0%
24.7%

Total net revenues

791,949 100.0%

596,097 100.0%

32.9%(amounts in thousands of Euro)

11

98.9%
1.1%

Number of stores
October 31
2012
DOS
franchises

January 31
2012
DOS
franchises

October 31
2011
DOS
franchises

Prada
Miu Miu
Church’s
Car Shoe

270
108
44
6

19
6
-

245
94
43
6

20
6
-

230
89
41
5

19
5
-

Total

428

25

388

26

365

24

October 31
2012
DOS
franchises

January 31
2012
DOS
franchises

October 31
2011
DOS
franchises

ItalyEuropeAmericas
Asia PacificJapan
Middle East
Africa

48
129
56
120
66
6
3

5
6
14
-

44
115
47
115
65
2
-

5
6
1
14
-

42
107
40
110
64
2
-

5
6
13
-

Total

428

25

388

26

365

24

4.

Operating expenses
nine months
ended
October 31
2012
unaudited% on netrevenues

nine months
ended
October 31
2011
unaudited% on netrevenues

78,725
110,352
748,108
134,796

3.4%
4.7%
32.0%
5.7%

72,94690,544
556,592
123,250

4.2%
5.2%
32.2%
7.1%

1,071,981

45.8%

843,332

48.7%(amounts in thousands of Euro)

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

5.

Interest and other financial expenses, net
nine months
ended
October 31
2012
unauditednine months
ended
October 31
2011
unaudited

Interests expenses on borrowings
Interest income
Exchange gains /(losses) – realized
Exchange gains/(losses) – unrealized
Other financial income/(expenses)(9,408)
3,553
5,737
(659)
(3,517)(13,078)
1,394(2,628)(603)(2,944)Total(4,294)(17,859)(amounts in thousands of Euro)

12

6.

Taxationnine months
ended
October 31
2012
unauditednine months
ended
October 31
2011
unaudited

Current taxation
Deferred taxation

205,300(11,196)

117,305(18,836)

Income taxes

194,104

98,469(amounts in thousands of Euro)On October 19, 2012, the Italian tax authority declined the request filed by
PRADA spa not to apply the Italian CFC rule to its Dutch sub-holding company
PRADA Far East bv. The Company did not share the position of the Italian tax
authority so started to prepare all the necessary documentation in order tomake opposition against the decision taken by the Italian tax authority
before the Italian tax Court and to request to the Italian tax authority therefund of the amount paid. In fact, at the end of October, the Company, on
the basis of the opinion received by its advisors and with the aim to reduce
the risk of additional penalties, decided to pay about Euro 42 million. The
amount, included under the current taxation for the nine months ended
October 31, 2012, followed the “ravvedimento operoso” procedure andrepresented the taxes due in Italy on the taxable income of PRADA Far Eastbv at the level of PRADA spa for 2010 and 2011 tax years (plus interests andpenalties).
Given the above scenario at the reporting date, the Company deemed
appropriate to recognize through the income statements the amount paid.

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.
nine months
ended
October 31
2012
unauditedGroup’s net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average
number of sharesnine months
ended
October 31
2011
unaudited

408,552,227
273,164,791
2,558,824,000 2,528,011,429
0.160

0.108

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

13

retrospectively adjusted for the purposes of the calculation of earnings per
share.

Dividends per share
During the period ended October 31, 2012, the Company distributed dividends
for 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 finalized by October 31, 2012.
The Company may distribute dividends subject to the approval of theshareholders in an ordinary shareholders’ meeting.
No dividends have been declared or paid by the Company in respect of thenine months ended October 31, 2012.
During the year ended January 31, 2012, the Company distributed dividends
for 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
as at
October 31
2012
unaudited

as atJanuary 31
2012
auditedRaw materials
Work in progress
Finished products
Allowance for obsolete and slow moving inventories

87,29423,782
327,471(73,125)

66,575
17,187360,379(69,359)

Total

365,422374,782(amounts in thousands of Euro)

The increase in raw materials was in line with the needs of the production
cycles typical of this time of the year, while the healthy level of the finishedproducts was achieved as a result of a strategy to operate in a difficult global
economic environment while preserving margins.

14

9.

Trade receivables, net

Trade receivables are detailed as follows:
as at
October 31
2012
unaudited

as atJanuary 31
2012
audited

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

242,570
24,286(12,225)

259,258
18,827(11,681)

Total

254,631

266,404(amounts in thousands of Euro)

The decrease in trade receivables was mainly due to the F/W 2012 Prada and
Miu Miu collections wholesale deliveries that were cashed at the reportingdate.

10. Receivables and prepayments from parent companies andother related parties
Receivables and prepayments from parent companies and other relatedparties are detailed below:
as at
October 31
2012
unaudited

as 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
Prepayments – other related parties

3,292
265
1,586
4
14,629

1,410
654
1,646
154
9,000

Total

19,776

12,864(amounts in thousands of Euro)The Prepayments – other related parties included Euro 11.2 million ofadvance payments made to Luna Rossa Challenge NZ ltd and Luna Rossa
Challenge srl, in accordance with the contracts signed for sponsorship of the
Luna Rossa yacht in relation to its participation in the XXXIV edition of theAmerica’s Cup. The remaining Euro 3.4 million essentially consisted ofadvances paid to Progetto Prada Arte srl and Stichting Fondazione Prada for
cultural initiatives to be undertaken after the reporting period.

1511. Capital expenditure
Changes in the net book value of Property, plant and equipment in the period
ended October 31, 2012, 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

12,793(4,471)(3)

5,168(5,228)(17)

76,397(62,313)(505)

27,662(18,490)
(340)

6,165
(5,021)(12,950)

52,984(1)

181,169(95,523)(13,816)

823

32

437

332

39

(462)

1,201

3,333
-

123
-

31,908
(799)

2,392
(263)

1,310
(16)

(39,338)
(529)

(272)
(1,607)

195,559

15,554349,449

99,67729,50995,274

785,022

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

16

Other Assets under
tangible construction

Total net
book value

Changes in the net book value of Intangible assets in the period ended
October 31, 2012 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

-

-

-

-

-

15,685

15,685201(8,347)--

16,046(6,375)-897(2,217)(81)(1,237)-

4,674-

21,818(18,176)
(81)

2,033

324

207

(17)

-

12

2,559

-

-

(83)
-

365
-

-

(664)
(102)

(382)
(102)

297,195

504,544

52,469

7,525

2,033

21,081

884,847

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 October
31, 2012(unaudited)

Store Lease
Development Assets in
SoftwareAcquisitions
costs progress

Total net
book value

The disposals of Other tangible assets essentially related to the sale of works
of art to related parties as disclosed by the Company’s announcement dated
June 28, 2012.
The change in scope of consolidation related to the purchase of two
companies owing strategic rental agreements in Switzerland.

1712. Other current assets
Other current assets are detailed as follows:
as at
October 31
2012
unaudited

as atJanuary 31
2012
auditedVAT
Income tax and other tax receivables
Other assets
Prepayments and accrued income
Deposits

27,987
9,944
30,98547,1442,802

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

Total

118,862

100,275

as at
October 31
2012
unaudited

as atJanuary 31
2012
auditedGuarantee deposits
Deferred rental income
Other receivables

54,002
2,368
5,710

49,526
2,893
4,883

Total

62,08057,302(amounts in thousands of Euro)

13. Other non-current assets
Other non-current assets are detailed as follows:(amounts in thousands of Euro)

14. Payables to parent companies and other related parties
Payables to parent companies and other related parties are detailed asfollows:
as at
October 31
2012
unaudited

as 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

3,694
115
1,299

3,574
528

2

259

Total

5,110

4,361

(amounts in thousands of Euro)18

15. Trade payables
Trade payables are detailed as follows:(amounts in thousands of Euro)

as at
October 31
2012
unaudited

as atJanuary 31
2012
audited

Trade payables – third parties
Trade payables – related parties

282,867
4,437

280,808
2,730

Total

287,304

283,538

as at
October 31
2012
unaudited

as atJanuary 31
2012
auditedPayables for capital expenditure
Accrued expenses and deferred income
Other payables

36,998
14,964
63,05557,844
12,94457,989Total

115,017

128,777

16. Other current liabilities
Other current liabilities are detailed as follows:(amounts in thousands of Euro)

17. Provisions for contingencies and commitments
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

4
(6)
(720)
4

(394)
(104)
(146)
939

11
(38)
(1,596)
7,497

(379)
(148)
(2,462)
8,440

Balance at October 31, 2012
(unaudited)

900

37,63023,84262,372(amounts in thousands of Euro)

During the nine months the Group recognized provisions for reinstatement
costs for an amount of Euro 7.5 million. Other than these commitments,
there were no significant developments in outstanding litigations at January
31, 2012, or any new controversies occurred during the period so as toconsiderably adjust the estimates made to account for Provisions for risks
and charges at January 31, 2012.

19

18. Deferred tax assets and liabilities
Deferred tax assets and liabilities are detailed by nature as follows:
October 31
2012
unaudited
DeferredDeferredtax
tax
assetsliabilities(amounts in thousands of Euro)

January 31
2012
auditedDeferred Deferredtax
tax
assets liabilities

Inventories
Receivables and other assets
Useful life of non-current assets
Deferred taxes due to acquisitions
Provision for risks / accrued expenses
Non deductible / taxable charges / income
Tax loss carried forward
Derivative financial instruments
Long term employee benefits
Other

81,519491
55,83430,790
3,617
6,605
410
7,410
644

1,577
13,02128,281
2,562
480
2,042
1,187

86,126
1,103
58,695
12,928
3,566
4,788
1,552
6,674
304

1,575
14,03228,556
267
535
2,015
685

Total

187,320

49,150175,736

47,66520

Management Discussion and Analysis for the threemonths period ended October 31, 2012
Net revenues
In the three months period ended October 31, 2012, the Group’s net
revenues amounted to Euro 791.9 million, up 32.9% (+25.2% at constantexchange rates) on Euro 596.1 million achieved in the same quarter of 2011.
The Group’s business expansion was substantially achieved thanks to thegrowth of the retail channel (+36.8% as reported, +28.4% at constantexchange rates and +14% SSSG) as it contributed 87.8% to the total of net
sales recorded in the third quarter of 2012 (85.3% in the same three months
period of 2011). A total of 14 new stores opened from August 1, 2012, among
which the Group’s first ever store in Kuwait City.
In the third quarter 2012 the wholesale channel posted net sales of Euro 95.7
million, achieving an increase of 10.6% over the same period of last year(+6.8% at constant exchange rates).
All markets delivered remarkable performances. In Europe, where theGroup’s brands continued to attract travelers, the Group managed tomaintain the impressive growth registered along the entire 2012: the SSSG of
the third quarter 2012, compared to the same period of last year, was 32%.
At the same time, the Asia Pacific market continued to be the pillar of the
progress in revenues, representing the highest share of geographical mix withEuro 282.2 million net sales posted in the third quarter of 2012 (+33.3% riseas reported and +21.1% at constant exchange rates).
In terms of product mix, the Leather goods division drove the growth with a+46.6% increase compared to the three months ended October 31, 2011(+37.7% at constant exchange rates). All the other products categories
achieved double digit paces of growth.
The Prada brand, contributing 82.1% to total Group’s net sales of the third
quarter 2012, or Euro 643.2 million, reported an increase of +37.5% over thesame quarter of 2011 (+29.4% at constant exchange rates).
Miu Miu, contributing 14.6%, or Euro 114.7 million, grew 16.5% compared tothe same three months of last year (+9.8% at constant exchange rates). The
development of this brand is not comparable to Prada since Miu Miu still has
a less extended international footprint and critical mass, two importantelements in the current market conditions.

Operating results
The EBITDA for the three months period ended October 31, 2012, amounted
to Euro 258.5 million and recorded an increase of 50.7% compared to Euro
171.5 million achieved in the same quarter of 2011. Profitability went from
28.8% to 32.6% mainly because of the higher contribution of the retailchannel (87.8% compared to last year’s 85.3% as already mentioned), thepositive impact of exchange rates fluctuations and the leverage effect on theoperating expenses.
21

The Group’s net result totaled Euro 122.1 million and recorded a 30.4%
growth over Euro 93.6 million of the same three months period of 2011. The
incidence on net revenues slightly decreased from 15.7% to 15.4% due to theextraordinary tax burden resulting from the payment of some Euro 42 million
occurred in October 2012 and explained under the Notes to the consolidated
results, paragraph 6 “Taxation”.

Management Discussion and Analysis for the ninemonths ended October 31, 2012
Net revenues
For the nine months ended October 31, 2012, the Group’s net revenues
amounted to Euro 2,339.3 million, a progress of 35.2% on Euro 1,730.4
million posted in the nine months ended October 31, 2011 (+27.3% atconstant exchange rates).

Distribution channels
The retail channel recorded net sales of Euro 1,917.6 million, an increase of+43.3% compared to Euro 1,338.0 million posted in the same period of 2011(+34.1% at constant exchange rates). The contribution to total net sales rosefrom 78.4% in the nine months ended October 31, 2011, to 83.1%.
The growth measured at the SSSG level was +18% and proved the strategy
focused on retail to be a proper way to pursue the expansion of the businessnotwithstanding the difficult global economic environment.
Since the beginning of the year a net of 40 new shops (42 openings, 2
closures) opened and, at October 31, 2012, the total number of DOS was
428. The retail network expansion program included the first stores ever inSouth and Central America (Sao Paolo, Brazil, and Mexico City, Mexico), in
Africa (Casablanca, Morocco), Ukraine (Kiev) and Kuwait. However, the mostof the new openings involved areas that still represented underpenetrated
markets such as Northern America and some European countries.
Contributing for the remaining 16.9% of total net sales, the wholesale
business, mainly sustained by the Italian market, scored a 5.9% growth ratecompared to the same period of 2011.

Markets
In the nine months ended October 31, 2012, all the geographical areas
contributed to the Group’s expansion in a balanced way, as all of themachieved double digit paces of growth higher than 20%.
Asia Pacific was the market that contributed the most to the boost inGroup’s revenues. Net sales in this area amounted to Euro 814.7 million,+40.5% compared to Euro 579.7 million recorded in the same period of lastyear (+27.9% at constant exchange rates). The growth was almost entirely
achieved through the DOS network that, counting 120 shops at the end of theperiod, posted net sales for Euro 771.5 million, a +42.4% increase over thesame period of 2011 (+18% SSSG and +29.3% at constant exchange rates). The
22

Greater China area (China, Hong Kong and Macau) contributed SSSG of +18%
and posted net sales of Euro 516.1 million, an increase of 43.6% compared toEuro 359.3 million recorded for the nine months ended October 31, 2011.
The European market performance, fuelled by travelers’ flows, was brilliant
and constant all along the nine months period of 2012. The area scored net
sales for Euro 536.5 million and significant growth rates: +44% as reported,+40.9% at constant exchange rates and +32% SSSG compared to previous
year. Focusing on the retail business, results were even more valuable: +63%
with total net sales amounting to Euro 432.5 million (Euro 265.3 million
recorded in the nine months ended October 31, 2011). New openings in thearea were 14 from the beginning of the 2012 financial period and, at thereporting date, the total number of DOS was 129.
The Italian market, totaling Euro 385.1 million, posted a +21% increase overthe same period of last year. The retail channel grew by +31.7% compared to
the nine months ended October 31, 2011, while the SSSG rate was +21%. A
total of 4 new DOS opened in 2012. The wholesale business scored a +4.9%.
As already mentioned in previous financial results, this channel partiallybenefitted from a shift in deliveries occurred at the end of the last financialyear.
Net sales in the American market were Euro 329 million, +27.7% compared toEuro 257.6 million posted in the same period of 2011 (+16.3% at constantexchange rates). The retail channel generated a cumulated +34.7% increaseover the nine months ended October 31, 2011, while the SSSG rate was +6%.
In the area the Group counted 53 DOS at the reporting date and new
openings occurred in these nine months period were 6. Also the wholesale
business delivered a double digit growth compared to the nine months ended
October 31, 2011, with a +14.2% increase as reported and a +4.3% atconstant exchange rates.
In the nine months ended October 31, 2012, the Japanese market generated
total net sales for Euro 213.7 million, posting an increase of 26.5% over thesame period of 2011 (+14.6% at constant exchange rates and +1% SSSG). The
number of DOS at the end of the period was 66 (2 openings and 1 closure
from the beginning of the year).
Thanks to the Middle East region, where the Group recently accelerated its
DOS expansion program (2 stores opened at the end of 2011 and 4 stores
opened this year), the Other countries net sales boosted to Euro 29.1 million
and recorded an increase of 207.4% compared to the same period of 2011(+188.4% at constant exchange rates).

Products
The Leather goods remained the top-selling product category and its
contribution to Group’s net sales was 62.6% (56.2% in the same period of lastyear) with Euro 1,444.2 million recorded in the nine months ended October
31, 2012, 50.5% higher than Euro 959.5 million reported in the same periodof last years (+41.1% at constant exchange rates). Results were mainly
achieved thanks to travelers and to the appreciation of this product category
in the Asia Pacific market where the increase recorded in the area for this23

segment was very strong. Noteworthy was also the performance of the
Leather goods in Europe.
The Footwear product category generated net sales of Euro 450.3 million in
the nine months ended October 31, 2012, up by 15.1% over Euro 391.4
million recorded in the same period of 2011 (+9.4% at constant exchange
rates). The European region, first market for this category, and Japan
contributed the most to the growth.
The Ready-to-wear, propelled by the European market, delivered net salesof Euro 387.9 million, an increase of +14.9% compared to the same period oflast year (+8.3% at constant exchange rates).

BrandsIn the nine months ended October 31, 2012, the Prada brand scored thehighest growth rate (+39.4% as reported and 31.1% at constant exchange
rates). Net sales amounted to Euro 1,876.6 million and the brand’scontribution to Group’s net sales rose up to 81.3% (78.9% in the same periodof 2011). The success was achieved in both distribution channels, in all
geographical markets and in all product divisions. The number of DOS opened
from the beginning of the financial period was 25 (27 openings, 2 closures).
Miu Miu net sales amounted to Euro 360.7 million and posted a +21.3%
increase compared to the nine months ended October 31, 2011 (+13.8% atconstant exchange rates). All geographical areas managed to achieve double
digit paces of growth and the Asia Pacific region was contributing the mostto the brand’ sales expansion representing 34.8% of Miu Miu net sales with anincrease of 22.2% compared to the same period of last year (+11.4% atconstant exchange rates). At the reporting date, Miu Miu counted 108 DOS
among which 14 new stores opened from February 1, 2012.
The Church’s brand scored a double digit growth of 15% compared to thenine months ended October 31, 2011 (+9.5% at constant exchange rates).
Europe, which is the main market for the brand, scored a +21.6% rise with
net sales totaling Euro 29.6 million compared to the same period of 2011(+14.4% at constant exchange rates).
Car Shoe net sales increased by 8% over the same period of last year. Retail
and wholesale channels delivered +12.3% and +5% respectively.

Royalties
The licensed products business contributed net revenues of Euro 31.3 million(Euro 23.8 million in the nine months ended October 31, 2011). The increaseof 31.6% was mainly due to higher sales of eyewear and to royalties earned
under the licensing agreement with LG for the sale of the new PRADA Phone
by LG 3.0.

Operating results
For the nine months ended October 31, 2012, the EBITDA amounted to Euro727.9 million, recording an increase of 49.6% compared to Euro 486.5 million
reported for the same period of 2011. In terms of profitability, EBITDA
24

margin increased its contribution on net revenues from 28.1% to 31.1%. This
result was achieved thanks to the leverage effect earned on the operating
expenses and to the improvement at gross margin level, which in turns
benefitted from the change in the channel mix and from the positive impact
of exchange rates fluctuations.
The Group’s operating expenses for the nine months ended October 31,
2012, totaled Euro 1,072.0 million and represented 45.8% on net revenues
while their incidence was up to 48.7% in the same period of 2011. All of theoperating expenses increased in absolute terms because of the expansion of
the operations, but none went up as a percentage on net revenues. In
particular, General and administrative decreased from 7.1% in the ninemonths ended October 31, 2011, to 5.8%.
In the nine months ended October 31, 2012, EBIT improved as well standingat Euro 612.5 million, more than 56.1% compared to Euro 392.3 million
recorded in the nine months ended October 31, 2011. EBIT margin went from
22.7% to 26.2% on Group’s net revenues.
The tax charge of the nine months ended October 31, 2012, represented as apercentage on result before taxation, was 31.9%. Such tax rate included theeffect of an extraordinary tax burden paid in October 2012 and related to theyears 2010 and 2011.
Despite the above mentioned extraordinary tax charge, the profitability
earned from operations in the nine months ended October 31, 2012, wasenough to score an improvement in the Group’s net income (+49.6%
compared to the nine months ended October 31, 2011), both in absoluteterms (from Euro 273.2 million to Euro 408.6 million) and as a percentage on
net revenues (from 15.8% to 17.5%).

25

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

as at
October 31
2012
unaudited

as 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

1,756,144
254,631
365,422(287,304)
332,749
139,283(251,305)(112,022)(62,372)(43,017)(86,118)
138,170(53,337)
1,923,534(2,121,976)(12,127)(2,134,103)(67,332)
277,901
210,569(1,923,534)

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 October 31, 2012, Net invested capital stood at Euro 1,923.5 million, Euro106.2 million higher than Euro 1,817.3 million reported at January 31, 2012.
In the period, the disbursement for the capital expenditures to sustain theretail network expansion increased the value of the Net invested capitalwhile the change in the net working capital and other reduced it to a lesser
extent.
Despite Group’s business expansion, the net working capital slightly
decreased from Euro 357.6 million in January 31, 2012, to Euro 332.7 million
at October 31, 2012. This healthy level was achieved mainly thanks to thecontainment of the finished products which was obtained following planned
actions aimed at further improving the sell-through ratio so as to better
react to market changes and reduce risks.
The Group’s equity raised Euro 2,122 million at October 21, 2012 from Euro
1,822.7 million at January 31, 2012. The strengthening was achieved mainly
thanks to the Group’s net result for the nine months ended October 31, 2012
(Euro 408.6 million), net of the dividends paid to PRADA spa Shareholders(Euro 127.9 million) and of the dividends paid to Non-controlling
Shareholders (Euro 2.6 million). Other changes in equity reserves occurred
during the nine months ended October 31, 2012, risen further the amount of
the Group’s equity for Euro 18.6 million.
26

Net financial position surplus/(deficit)(amounts in thousands of Euro)

as at
October 31
2012
unaudited

as atJanuary 31
2012
auditedLong-term debt
Obligations under finance leases(66,768)(564)(178,442)(1,100)Long-term financial payables(67,332)(179,542)

Bank overdraft and short term loans
Payables to related parties
Receivables from related parties
Obligations under finance leases
Cash and cash equivalents(232,053)(3,694)3,292(710)
511,066(165,485)(3,574)
1,410(1,453)362,284

Short-term net financial surplus/(deficit)

277,901

193,182

Net financial position surplus/(deficit)

210,569

13,640

The results of operations allowed the Group to generate net cash flows forEuro 535.6 million that were used to fund the ongoing investments programfor Euro 213.4 million, to pay dividends to PRADA spa shareholders for Euro
127.9 million, to pay dividends to Non-controlling interests for Euro 2.6
million and to further cumulate cash and cash equivalents to raise the net
positive financial position to Euro 210.6 million at October 31, 2012.

Analysis of capital expenditure
The change in Property, plant and equipment and Intangible assets taken
together is largely due to the capital expenditure for the nine months period
ended October 31, 2012 (Euro 203 million), to the change in scope of
consolidation for the purchase of two companies owing strategic rental
agreements in Switzerland (Euro 15.7 million), less depreciation, amortizationand impairment (Euro 115.4 million). The Group’s capital expenditure for thenine months period was allocated for Euro 160.1 million in the retail area, forEuro 27.6 million in the production and logistics (mainly for the acquisition of
two facilities in Italy) and for Euro 15.3 million in the corporate area.

Outlook
The Group remains confident that the strategies and the actions in place willcontinue to bring positive results even in the present still challenging global
economic environment.

27

Corporate Governance Practices
Audit Committee
The Audit Committee, which comprises three independent non-executive
directors, on December 4, 2012, has reviewed the unaudited consolidated
results of the Company and its subsidiaries for the nine months ended
October 31, 2012.

Compliance with the Corporate Governance Code of the Listing
Rules
The Board has reviewed the Company’s corporate governance practices andis satisfied that the Company has complied with the applicable codeprovisions set out in the Corporate Governance Code contained in Appendix
14 of the Listing Rules during the three months ended October 31, 2012.
Co

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 three months
ended October 31, 2012.

Publication of Announcement on consolidated results for thenine months ended October 31, 2012
This announcement on the consolidated results for the nine months ended
October 31, 2012 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.

By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Deputy Chairman
Milan (Italy), December 6, 2012
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.

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