Hong Kong Exchange 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 NINE
MONTHS ENDED OCTOBER 31, 2011---

FINANCIAL HIGHLIGHTSGroup’s net revenues were Euro 1,730.4 million recording an
increase of 24.9% compared with the nine months period ended
October 31, 2010
Retail net sales were Euro 1,338 million, up by 35.6% comparedwith the nine months period ended October 31, 2010
the number of Directly Operated Stores reached 365
Retail like-for-like growth was 23% compared with the nine months
period ended October 31, 2010
EBITDA was Euro 486.5 million (representing a margin of 28.1% on
net revenues)
Group’s net income amounted Euro 273.2 million, an increase of
74.5% compared to Euro 156.5 million for the nine months ended
October 31, 2010
Net Financial Debt at Euro 110.1 million
Net operating cash flow for the nine months period was Euro 293
millionConsolidated results for the nine months ended
October 31, 2011
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company”) is
pleased to announce the Consolidated results of the Company and its
subsidiaries (collectively, the “Group”) for the nine months ended October
31, 2011 together with the comparative figures for the nine months ended 31
October 2010.

1

Key financial information
Key Income statement information(amounts in thousands of Euro)Net revenues
Total EBITDA
Total EBIT
Income before tax
Net income of the Group
Average headcount (persons)
EBITDA %EBIT %Key Statement of financial position
information(amounts in thousands of Euro)
Non-current assets
Net operating working capital
Net invested capital
Net financial debt (third parties)
Group shareholders’ equity
Investments
Net operating cash flows

October 31
2010
unaudited

January
31, 2011
audited

October 31
2011
unaudited% changeon
October
2010

1,385,513
330,299
248,811
231,101
156,497
7,094

2,046,651
535,930
418,387
388,229
250,819
7,199

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

24.9%
47.3%
57.7%
62.0%
74.5%
11.1%

23.8%
18.0%

26.2%
20.4%

28.1%
22.7%

October 31
2010
unaudited

January
31, 2011
audited

October 31
2011
unaudited

1,540,470
285,481
1,563,495
428,816
1,132,048
139,104
232,509

1,595,990
320,718
1,585,559
408,604
1,204,350
206,860
367,712

1,698,856
376,357
1,754,647
110,070
1,639,144
178,100
292,966% changeon
January
2011
6.4%
17.3%
10.7%
-73.1%
36.1%

Highlights for the nine months ended October 31, 2011
In the nine months period ended October 31, 2011 PRADA Group recorded net
revenues of Euro 1,730.4 million, a 24.9% increase over Euro 1,385.5 million
posted in the same period of 2010. The retail network was again the key
growth driver. The 39.4% sales increase recorded in the third quarter raised
the nine months retail performance to an increase of 35.6%, up by 33.4%
recorded in the first six months.
EBITDA of the reported period totaled Euro 486.5 million and improved its
incidence on net revenues from 23.8% to 28.1%. The higher profitability was
mainly boosted by channel mix, higher production margins and scale effects.
Increase in operating expenses, as a consequence of the expansion of thebusiness, partially offset the improvement.
Group’s net income amounted to Euro 273.2 million, an increase of 74.5%
compared to Euro 156.5 million posted in the same period of 2010.
On June 24, 2011 the Company’s shares were successfully listed through an
IPO on the Hong Kong Stock Exchange. The new shares issued as part of the
IPO process enabled the Group to raise new funds amounting to Euro 206.6
million, net of the costs directly attributable to the transaction. Thus,
despite a slight reduction due to exchange fluctuations (Euro 7 million) anddividends distributed to Shareholders (Euro 35 million), the Group’s equity
strengthened further to stand at Euro 1,639.1 million at October 31, 2011.
The capital injection and the free cash flows enabled the Group to further
lower its net financial debt (Euro 110.1 million at October 31, 2011) as well2

as to finance the capital expenditure program (Euro 187.8 million in the ninemonths of 2011).

Consolidated Income Statement for the nine months ended
October 31, 2011
nine
monthsended
October
31, 2011
unauditedninemonthsended%
October
31, 2010
unaudited%

1,338,022
368,554
23,803
1,730,379

77.3%
986,704
21.3%
376,454
1.4%
22,355
100% 1,385,513

71.2%
27.2%
1.6%
100%

Cost of goods sold(494,730) -28.6% (457,571)-33.0%

Gross margin

1,235,649

927,94267.0%(843,332) -48.7% (679,131)-49.0%

392,31722.7%

248,81118.0%(17,859)-1.0%(17,710)-1.3%

374,458

21.6%

231,101

16.7%(98,469)-5.7%(73,075)-5.3%

275,98915.9%

158,026

11.4%

2,824

0.2%

1,529

0.1%

Group net income from continuing operations

273,16515.8%

156,497

11.3%

Total Group net income

273,16515.8%

156,497

11.3%

Amortization, Depreciation and Impairment

94,190

5.4%

81,488

5.9%

EBITDA

486,50728.1%

330,29923.8%(amounts in thousands of Euro)

Notes

RetailWholesaleRoyalties
Net revenues

3

Operating expenses

4

EBIT
Interest and other financial expenses, net

5Income before taxation
Taxation

6

Net income from continuing operations
Net income from continuing operations pertaining to
Non-Controlling Interests

Basic earnings per share (in Euro per share)
Diluted earnings per share (in Euro per share)

7
7

3

0.108
0.108

71.4%

0.063
0.063

Consolidated Income Statement for the three months ended
October 31, 2011
three
monthsended
October
31, 2011
unaudited(amounts in thousands of Euro)

three
monthsended%
October
31, 2010
unaudited

RetailWholesaleRoyalties
Net revenues

502,650
86,5236,924
596,097

360,526
82,231
6,262
449,019

80.3%
18.3%
1.4%
100%

Cost of goods sold(165,632) -27.8% (134,897)-30.0%

Gross margin

430,465

314,12270.0%

Operating expenses(291,527) -48.9% (237,535)-52.9%

EBIT

138,938

23.3%

76,587

17.1%

Interest and other financial expenses, net(6,258)

-1.0%

1,902

0.4%

Income before taxation

132,680

22.3%

78,48917.5%

Taxation(37,892)-6.4%(24,386)-5.4%

Net income from continuing operations

94,78815.9%

54,10312.0%

Net income from continuing operations pertaining
to Non-Controlling Interests

1,155

0.2%

649

0.1%

Group net income from continuing operations

93,63315.7%

53,454

11.9%

Total Group net income

93,63315.7%

53,454

11.9%

Amortization, Depreciation and Impairment

32,564

5.5%

28,492

6.3%

EBITDA

171,50228.8%

105,079

23.4%

4

84.3%
14.5%
1.2%
100%

%

72.2%

Consolidated Statement of Financial Position
October
31, 2011
unaudited

January
31, 2011
audited280,981
233,331385,038
4,867
5,880
102,363
1,012,460

96,572
274,175
280,409
7,379
36,31770,225
4,948
770,025622,224865,209
1,753
158,367
50,344959
1,698,856

536,717869,119
1,753
141,378
44,8832,140
1,595,990

2,711,316

2,366,015

168,428367
573
242,012111,1393,062
2,391
110,523
638,495

194,240
1,107
581
233,866
107,592
5,279
5,019
111,482
659,166

218,955
1,277
35,74155,79048,674
66,885
85
427,407

303,408
2,509
34,83352,72552,71150,207318
496,711

1,065,902

1,155,877

255,882
1,157,067(46,970)
273,165
1,639,144

250,000
743,543(40,012)250,819
1,204,350

6,270

5,788

Total Liabilities and Shareholders’ Equity

2,711,316

2,366,015

Net current assets
Total assets less current liabilities

373,965
2,072,821

110,859
1,706,849(amounts in thousands of Euro)

Notes

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories
Derivative financial instruments - current
Receivables from parent company and related parties
Other current assets
Assets held for sale
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
10
12

11
11
18
13

Total Assets
Liabilities and Shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans
Payables to parent company and related parties
Other shareholders’ loans
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 debt
Obligations under finance leases - non current
Long term employee benefits
Provisions for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments - non current
Total non-current liabilities

14
15

16

17
18

Total Liabilities
Shareholders’ equity
Share capital
Other reserves
Translation reserve
Net profit for the period
Total Shareholders’ Equity – Group
Shareholders’ Equity – Non Controlling Interests

5Statement of changes in the Group’s Equity(amounts in thousands of Euro, except for number of shares)(amounts inthousandsof Euro)Number ofsharesShare TranslaCash
ActuShare
Otherpremiumtion
Flowarial Net profit
Capitalreserves
reserve reserve
Hedge Reserve

Group’sEquityBalance atJanuary 31, 2010

250,000,000

250,000

209,298(45,671)

100,163

1,047,903

-

-

-

-

100,163-- (100,163)

-

-

-

-

(4)
- (111,000)

-

-

-

(4)
(111,000)

-

-

-

-

1,134

-

-

-

1,134

-

-

-

5,659

-

6,357

3,482

250,819

266,317250,000,000

250,000

209,298(40,012)531,729

3,464

(948)

250,819

1,204,350---

250,819-- (250,819)

-

-

-

-

-

-

-

-

-

5,882

200,749

-

-

-

-

-

206,631--- (35,000)

-

-

-

(35,000)

-

-

-

-

-

-

-

-

-

(6,958)(2,614)(430)

273,165

263,163

255,882

410,047(46,970)

850(1,378)273,165

1,639,144

Allocation of 2009
Net profit
Other movements
Dividends
Transactions with
Non-Controlling
Interests
Comprehensive
Net income
for the period
Balance atJanuary 31, 2011

Allocation of 2010
Net profit
Conversion of theshares par value
2,500,000,000
from Eur 1.0
to Eur 0.1
Issue of new
58,824,000
sharesDividends
Capital injection
in subsidiaries
Comprehensive
Net income
for the period
Balance at
October 31, 2011

2,558,824,000

541,436 (2,893)-

747,548(4,430)Under Italian law, the Company has to allocate a portion of its annual net profits to a
non-distributable reserve and provide further information on the distribution of profits.

6

Statement of Consolidated Comprehensive Income
nine months
ended
October
31, 2011
unauditednine months
ended
October
31, 2010
unaudited

Consolidated Net income for the period

275,989

158,026

Cumulative Translation adjustment
Tax impact
Cumulative Translation adjustment, net of tax impact(6,794)(6,794)

3,828
3,828

Change in Cash Flow Hedge Reserve
Tax impact
Change in Cash Flow Hedge Reserve, net of tax impact(3,505)891(2,614)

5,924(2,169)
3,755

(613)
173
(440)

(1,301)252(1,049)Comprehensive Consolidated Net income for the period

266,141

164,560

Comprehensive Non-Controlling Interests Net income forthe period

2,978

1,547

263,163

163,013(amounts in thousands of Euro)

Change in Actuarial Reserve
Tax impact
Change in Actuarial Reserve, net of tax impact

Comprehensive Group Net income for the period

Net Invested Capital
The following table contains the Statement of Financial Position adjusted inorder to provide a better picture of the Net Invested Capital.
(amounts in thousands of Euro)

Non current assets
Current assets excluding financial assets
Current liabilities excluding financial liabilities
Net working capital
Assets held for saleLong-term liabilities, including deferred taxation
Post employment benefits
Provisions for risks
Net invested capital
Shareholders’ equity – Group
Shareholders’ equity – Non Controlling Interests
Total consolidated shareholders’ equity
Long term financial payables
Short term financial payables, net of cash and cash
equivalents
Net financial payables
Shareholders’ equity and net financial payables

7

October
31, 2011
unaudited

January
31, 2011
audited

1,698,856
730,069
467,103
262,966
115,644
35,74155,7901,754,647
1,639,144
6,270
1,645,414
220,232

1,595,990
634,462459,047
175,415
4,948
103,236
34,83352,725
1,585,559
1,204,350
5,788
1,210,138
305,917(110,999)

69,504109,233
1,754,647

375,421
1,585,559

Net Financial Debt
(amounts in thousands of Euro)

October
31, 2011
unaudited

January
31, 2011
auditedLong term debt
Obligations under finance leases

218,955
1,277

303,4082,509

Long term financial payables

220,232

305,917

Short term financial payables and bank overdrafts
Payables to parent company and related parties
Receivables from parent company and related parties
Obligations under finance leases
Payables to other shareholders
Cash and cash equivalents

168,428(1,410)2,391
573(280,981)

194,240
281(34,044)5,019
581(96,572)

Short term financial payables, net of cash and cash
equivalents(110,999)

69,504

Net Financial Debt

109,233

375,421

Net Financial Debt, excluding receivables/payables withparent company, related parties and other shareholders (NFP
used to calculate covenants)

110,070

408,604

0.16
27.24

0.76
17.77

NFP/EBITDA ratio
EBITDA/ net financial charges ratio

Summarized Statement of Consolidated Cash Flowsnine months
ended
October
31, 2011
unauditednine months
ended
October
31, 2010
unaudited

Net cash flows from operating activities

292,966

232,509

Cash flows generated/(utilized) by investing activities(187,836)(138,097)

Cash flows generated/(utilized) by financing activities

96,266(44,791)

Change in cash and cash equivalents, net of bank overdrafts

201,396

49,983(amounts in thousands of Euro)

8

Notes to the consolidated results for the nine months
ended October 31, 20111.

Presentation of PRADA GroupPRADA Group is a world leader in the design, production and distribution ofluxury handbags, leather goods, footwear, apparel, accessories, eyewear andfragrances. Through its directly-operated–stores network (DOS) and a selectnumber of wholesalers, the Group operates on all major international
markets.
The Company is a joint-stock company, incorporated 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,
2011 refer to the Group of companies controlled by PRADA spa (the"Company"), holding company of the PRADA Group (the "Group") and it isbased on the consolidated results of the Group at October 31, 2011. The
following financial information, including comparative figures, was preparedon a consistent basis with respect to the Consolidated Financial Statementsof the PRADA Group at July 31, 2011 which, in turns, were prepared inaccordance with the International Financial Reporting Standards (“IFRS”)
issued by the International Accounting Standard Board (“IASB”) as adopted by
the European Union.
The IFRS adopted by the European Union are similar, as applicable to the
PRADA Group, to 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”).
The Group has prepared the Consolidated Statement of Financial Position
classifying separately current and non-current assets and liabilities.
The Consolidated Income Statement is presented by destination.
The Consolidated Financial Statements have been prepared on a going
concern basis and are presented in Euro, which is the functional currency of
the Company.

9

3.

Net revenues analysis

Three months ended October 31, 2011
three months
ended
October
31, 2011
unaudited

three months
ended
October
31, 2010
unaudited

Net sales by geographical area
Italy
EuropeNorth America
Asia PacificJapan
Other countries
Total

104,776
121,925
85,790211,743
61,7283,211
589,173

17.8%
20.7%
14.6%
35.9%
10.5%
0.5%
100.0%

82,29491,753
69,334
146,155
51,5501,671
442,757

18.6%
20.7%
15.7%
33.0%
11.6%
0.4%
100.0%

27.3%
32.9%
23.7%
44.9%
19.7%
92.2%
33.1%

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

467,715
98,474
16,5994,296
2,090
589,173

79.4%
16.7%
2.8%
0.7%
0.4%
100.0%

343,983
77,922
15,3483,908
1,596
442,757

77.7%
17.6%
3.5%
0.9%
0.4%
100.0%

36.0%
26.4%
8.2%
9.9%
31.0%
33.1%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

125,350
341,319
116,327
6,177
589,173

21.3%
57.9%
19.7%
1.1%
100.0%

113,451
224,433
100,759
4,114
442,757

25.6%
50.7%
22.8%
0.9%
100.0%

10.5%
52.1%
15.5%
50.1%
33.1%

502,65085.3%

360,526

81.4%

39.4%

(amounts in thousands of Euro)%changeNet sales by distribution channel
DOS (including outlet stores)
Independent customers, franchises and relatedparties
Total

86,523

14.7%

82,231

18.6%

5.2%

589,173

100.0%

442,757

100.0%

33.1%

Net sales
Royalties

589,173
6,924

98.8%
1.2%

442,757
6,262

98.6%
1.4%

33.1%
10.6%

Total net revenues

596,097

100.0%

449,019100.0%

32.8%

10

Nine months ended October, 31 2011
nine months
ended
October 31
2011
unaudited(amounts in thousands of Euro)nine months
ended
October 31
2010
unaudited%changeNet sales by geographical area
Italy
EuropeNorth America
Asia PacificJapan
Other countries
Total

318,221372,589
257,643579,737
168,9219,465
1,706,576

18.6% 266,595
21.8% 303,548
15.1% 216,951
34.0% 417,858
9.9% 150,657
0.6%
7,549
100.0% 1,363,158

19.6%
22.3%
15.9%
30.7%
11.1%
0.5%
100.0%

19.4%
22.7%
18.8%
38.7%
12.1%
25.4%
25.2%

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

1,346,098
297,345
43,602
14,007
5,524
1,706,576

78.9% 1,068,317
17.4% 237,142
2.6%
38,7880.8%
13,7190.3%
5,192
100.0% 1,363,158

78.4%
17.4%
2.8%
1.0%
0.4%
100.0%

26.0%
25.4%
12.4%
2.1%
6.4%
25.2%

Net sales by product line
Clothing
Leather goods
Footwear
Other
Total

337,721957,907391,376
19,572
1,706,576

19.8% 327,457
56.1% 680,074
22.9% 343,414
1.2%
12,213100.0% 1,363,158

24.0%
49.9%
25.2%
0.9%
100.0%

3.1%
40.9%
14.0%
60.3%
25.2%

Net sales by distribution channel
DOS (including outlet stores)
1,338,022
Independent customers, franchises and related
368,554
parties
Total
1,706,576
Net sales
Royalties
Total net revenues

78.4%

986,704

72.4%

35.6%

21.6%

376,454

27.6%

-2.1%

100.0% 1,363,158

100.0%

25.2%

1,706,576
23,803

98.6% 1,363,158
1.4%
22,355

98.4%
1.6%

25.2%
6.5%

1,730,379

100.0% 1,385,513

100.0%

24.9%

11

Number of stores
October 31
2011
DOS
franchises

January 31
2011
DOS
franchises

October 31
2010
DOS
franchises

Prada
Miu Miu
Church’s
Car Shoe

230
89
41
5

19
5
-

207
71
36
5

27
6
-

200
69
36
5

29
7
-

Total

365

24

319

33

310

36

October 31
2011
DOS
franchises

January 31
2011
DOS
franchises

October 31
2010
DOS
franchises

ItalyEuropeNorth America
Far East
Japan
Middle East

42
107
40
110
64
2

5
6
13
-

37
88
39
99
56
-

5
13
13
2

38
83
35
97
57
-

5
13
16
2

Total

365

24

319

33

310

36

12

A list of stores opened and closed during the period is provided below.
Prada

OpenedMiu Miu

OpenedChurch’sOpenedPrada

ClosedMiu Miu

Closed27 DOS opened from February 1 to October 31, 2011
Leccio (Italy)
Marcianise (Italy)
Forte dei Marmi Men (Italy)
Corte Ingles, Madrid (Spain)
Berlin (Germany)
Parndorf (Austria)
Avenue Montaigne Men, Paris (France)
Le Bon Marché Bags & Accessories, Paris (France)
Tsum Bags & Accessories, Moscow (Russia)
Tsum Women Ready-to-Wear, Moscow (Russia)
Tsum Men Ready-to-Wear, Moscow (Russia)
Barvika, Moscow (Russia)
Umeda Diamaru, Osaka (Japan)
Ikebukuru Seibu Bags & Accessories, Tokyo (Japan)
Matsuzakaya, Nagoya (Japan)
Sanda (Japan)
Yurakucho Hankyu Men Leather Goods, Tokyo (Japan)
Yurakucho Hankyu Men Ready-to-Wear & Shoes, Tokyo
Shinsagae Centum, Incheon (South Korea)
Hyundai, Ulsan (South Korea)
Galleria, Daejeon (South Korea)
Wuqing (China)
Fortune, Wenzhou (China)
Charter, Harbin (China)
Taikoo Hui, Guangzhou (China)
Westfield, Sydney (Australia)
Burjuman Saks Fifth Avenue, Dubai (U.A.E.)
19 DOS opened from February 1 to October 31, 2011
Capri (Italy)
Corte Ingles, Madrid (Spain)
Barcelona (Spain)
Harrods Ready-to-Wear, London (United Kingdom)
Harrods Bags & Accessories, London (United Kingdom)
Stoleshnikov, Moscow (Russia)
Tsum Bags & Accessories, Moscow (Russia)
Short Hills (United States)
Umeda Diamaru, Osaka (Japan)
Nagoya (Japan)
Okinawa (Japan)
Takashimaya, Nagoya (Japan)
Ikebukuro Seibu, Tokyo (Japan)
Apku Hyundai Main, Seoul (South Korea)
Gyeonggi Shinsagae, Youngin (South Korea)
Sogo (Hong Kong)
Taikoo Hui, Guangzhou (China)
Westfield, Sydney (Australia)
Burjuman Saks Fifth Avenue, Dubai (U.A.E.)
5 DOS opened from February 1 to October 31, 2011
Marcianise (Italy)
Printemps, Paris (France)
Printemps Parly, Paris (France)
Roermond (The Netherlands)
New Bond St. Women, London (United Kingdom)
4 DOS closed from February 1 to October 31, 2011
Renhe, Chengdu (China)
Martin Place, Sydney (Australia)
Ikebukuro Tobu, Tokyo (Japan)
Mitsukoshi, Nagoya (Japan)
1 DOS closed from February 1 to October 31, 2011
Mitsukoshi, Nagoya (Japan)

13

4.

Operating Expenses
nine
nine
monthsmonthsended % of net
ended % of net
October revenues October revenues
31, 2011
31, 2010
unauditedunaudited(amounts in thousands of Euro)

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

72,94690,544
556,592
123,250

4.2%
5.2%
32.2%
7.1%

70,693
61,886447,772
98,780

5.1%
4.5%
32.3%
7.1%

Total

843,332

48.7%

679,13149.0%

5.

Interest and other financial expenses, net
nine months
ended
October
31, 2011
unauditednine months
ended
October
31, 2010
unaudited

Interests expenses on borrowings
Interest income
Exchange gains / (losses) - realized
Exchange gains/ (losses) – unrealized
Other financial income / (expenses)
Revaluations and write-down of investments(13,078)
1,394(2,628)(603)(2,944)-(12,232)
1,089(6,352)
1,697(2,570)658

Total(17,859)(17,710)nine months
ended
October
31, 2011
unauditednine months
ended
October
31, 2010
unaudited

Current taxation
Deferred taxation

117,305(18,836)

82,470(9,395)

Total

98,46973,075(amounts in thousands of Euro)

6.

Taxation(amounts in thousands of Euro)

14

7.

Earnings and dividends per share

Basic earnings per share are calculated by dividing the net profit attributable
to equity owners of PRADA spa by the weighted average number of ordinary
shares in issue during the period.
nine months
ended
October
31, 2011
unauditednine months
ended
October
31, 2010
unaudited

273,164,791
2,528,011,429

156,496,791
2,500,000,000

Basic earnings per share (in Euro per share)

0.108

0.063

Diluted earnings per share (in Euro per share)

0.108

0.063

Group’s net result in Euro
Weighted average number of ordinary outstanding shares

On May 26, 2011, the Shareholders of PRADA spa resolved to change the parvalue of the Company shares from Euro 1 to Euro 0.1 each. In accordancewith IAS 33, the new number of shares - some 2,500,000,000 - has beenadjusted retrospectively for the purposes of the calculation of earnings per
share.
During the nine months ended October 31, 2011 the Company distributed
dividends for Euro 35 million, or Euro 0.14 per share, as approved by the
Shareholders’ meeting held on March 28, 2011 in respect of the Financial
Statements ended January 31, 2011. These dividends were offset against
receivables due from controlling Shareholder PRADA Holding bv for an
amount of Euro 32.5 million with the remaining amount being paid.
During the year ended January 31, 2011 the Shareholders’ meeting held on
April 28, 2010 approved a distribution of Euro 0.32 per share, representing a
total dividend of Euro 80 million. This dividend was paid on July 27, 2010 for
an amount of Euro 27.9 million and, on the same date, an amount of Euro52.1 million was offset against the receivable due from our controlling
Shareholder. Furthermore, the Shareholders’ meeting held on January 27,
2011 approved a distribution of Euro 0.124 per share, representing a total
dividend of Euro 31 million which was paid in full on the same date.

8.

Inventories
October
31, 2011
unaudited

January
31, 2011
auditedRaw materials
Work in progress
Finished products
Allowance for obsolete and slow moving inventories

79,33623,330348,790(66,418)

63,672
17,186263,341(63,790)

Total

385,038

280,409(amounts in thousands of Euro)

The increase in inventories of finished products was consistent with thehigher volume of production necessary to supply the expanded DOS network.

15

9.

Trade receivables, net

Trade receivables are detailed as follows:
October
31, 2011
unaudited

January
31, 2011
audited

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

224,728
18,781(10,178)

266,376
1,924
16,412(10,537)

Total

233,331

274,175(amounts in thousands of Euro)Net trade receivables decreased at October 31, 2011 mainly because of thecollection of the wholesale deliveries and a low seasonality of the wholesale
business in the third quarter of the year.

10. Receivables from parent companies and related parties
Receivables from parent companies and related companies are detailed
below:(amounts in thousands of Euro)

October
31, 2011
unaudited

January
31, 2011
audited-32,558Financial receivables – PRADA Holding bv
Financial receivables – other companies controlled by
PRADA Holding bv
Financial receivables – other related parties
Other receivables – PRADA Holding bv
Other receivables – other related parties
Other receivables – other companies controlled by
PRADA Holding bv
Other receivables – associated companies

-

77

1,410
653
3,790

1,409
767
1,329

27

172

-

5

Total

5,880

36,31716

11. Capital expenditure
Changes in the net book value of “Property, plant and equipment” in the
period ended October 31, 2011 are as follows:(amounts in thousandsof Euro)Land Producti
Leaseand on plant
holdbuilding and ma- improves chinery
ments

Furniture &fittings

Other
Assets inequipprogress
ment

Total net
book
value

Balance at January 31,
2011 audited

145,602

15,042

220,112

72,10924,69559,157536,717Additions
Depreciation
Disposals
Exchange differences
Other movements
Impairment and write off

39,037(3,720)
(801)
284
-

4,670
45,393(4,903) (44,945)
(3)
(5)
(11)
(701)
14,354(708)

8,702(13,528)
(135)
(207)
4,235
(258)

14,597(4,220)
(59)
(10)
2,657
(1)

46,944(15)
1,149(21,098)(1,187)

159,343(71,316)
(217)
(581)
432
(2,154)

Balance at October 31,
2011 unaudited

180,402

14,79570,91837,65984,950622,224

233,500

Changes in the net book value of “Intangible assets” in the period ended
October 31, 2011 are as follows:(amounts in thousands ofEuro)

Trademarks

Goodwill

Store
Lease
Acquis.

SoftwareBalance at January 31,
2011 audited

312,460 503,946

36,087

6,385

7,869

2,372

869,119

Additions
Amortization
Disposals
Exchange differences
Other movements
Impairment and write off

129(8,247)(807)-

13,828
1,647(6,221) (2,177)
(1)
(69)
217
873
(1)

1,257
(4,062)
(1)
(2)
-

1,896
2
(2,034)(14)

18,757(20,707)
(2)
(999)
(944)
(15)

Balance at October 31,
2011 unaudited

303,535 503,823

43,842

5,061

2,222

865,209

(123)
-

6,726

DevelopAssets in
ment
progress
costs

Total net
book
value

12. Other current assets
Other current assets are detailed as follows:
October
31, 2011
unaudited

January
31, 2011
auditedVAT
Income tax and other tax receivables
Other current assets
Prepayments and accrued income
Deposits

28,999
9,427
20,26041,948
1,729

19,2499,794
7,783
31,842
1,557

Total

102,363

70,225(amounts in thousands of Euro)17

13. Other non-current assets
Other non-current assets are detailed as follows:
October
31, 2011
unaudited

January
31, 2011
auditedGuarantee deposits
Deferred rental income
Other receivables

43,2292,074
5,041

37,945
1,981
4,957

Total

50,34444,883(amounts in thousands of Euro)

14. Payables to parent companies and related parties
Payables to parent companies and related parties are detailed as follows:
October
31, 2011
unaudited

January
31, 2011
audited

-

40

-

241

23
340

30
786

4

10

367

1,107

October
31, 2011
unaudited

January
31, 2011
audited

Trade payables – third parties
Trade payables – related parties
Trade payables – associated companies

236,049
5,963-

232,143
1,701
22

Total

242,012233,866

October
31, 2011
unaudited

January
31, 2011
auditedPayables for capital expenditure
Accrued expenses and deferred income
Other payables

21,54423,24765,732

41,134
23,42346,925

Total

110,523

111,482(amounts in thousands of Euro)

Financial payables – PRADA Holding bv
Financial payables – other companies controlled by
PRADA Holding bv
Other payables – PRADA Holding bv
Other payables – other related parties
Other payables – other companies controlled by
PRADA Holding bv
Total

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

16. Other current liabilities
Other current liabilities are detailed as follows:(amounts in thousands of Euro)18

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

Provision fortax disputes

Other
provisions

Total

Opening balance

846

40,091

11,78852,725

Exchange differences
Reversals
Utilized
Increases

(47)
263

381
(1,233)
(192)
3,081

(149)
(55)
(892)
1,908

232
(1,335)(1,084)
5,252

1,062

42,12812,60055,790(amounts in thousands of Euro)

Closing balance

Provisions for risks and charges represent the Directors’ best estimate of
maximum contingent liabilities. In the Directors’ opinion, and based on theinformation available to them, the total amount provided for risks andcharges was reasonable considering the contingent liabilities that mightarise.

18. Deferred tax assets and liabilities
Deferred tax assets and liabilities are detailed by nature as follows:(amounts in thousands of Euro)

October
31, 2011
unaudited
DeferredDeferredtax
tax
assetsliabilities

January
31, 2011
auditedDeferred Deferredtax
tax
assets liabilities

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

72,578573

1,500

62,284415

1,515

50,748

13,83453,8696,273

16,06910,122
3,143
4,593
541

29,253
267
658
354
1,851
957

10,790
5,893
3,129
303
4,533
162

39,548
267
1,134
1,455
1,943
576

Total

158,367

48,674

141,378

52,71119

Management Discussion and Analysis for the threemonths ended October 31, 2011
Net revenues
Consolidated net revenues for the third quarter ended October 31, 2011
amounted to Euro 596.1 million, a 32.8% increase over the same quarter of2010. On an overall basis, this third quarter further strengthened the alreadyexcellent growth recorded up to July 2011.
The retail network showed an outstanding performance with a 39.4% growth,
showing an even better trend compared to first and second quarter of
2011.The wholesale channel, notwithstanding lower deliveries typical of thistime of the year, showing an increase of 5.2% in respect of the 4.1% declineof the first half 2011.
From a geographical point of view, all markets recorded double digit pace ofgrowth. It is worth mentioning the remarkable 44.9% increase in the Asia
Pacific and the encouraging 19.7% in Japan.
Leather goods, recording a brilliant performance with an increase of 52.1%
compared to the third quarter of 2010, remained as the leading segment
contributing 57.9% of Group’s net sales.

Operating results
The EBITDA of the three months ended October 31, 2011 amounted to Euro
171.5 million, up by 63.2% compared to the same quarter of 2010. Its
incidence on net revenues increased from 23.4% to 28.8%. The growth, bothmarginal and absolute, was achieved mainly as a result of the higher
contribution of the retail channel (from 81.4% to 85.3%), the improvements
achieved in unit margins and scale effects.
The Group’s net result amounted to Euro 94.8 million, an increase of 75.2%
compared to Euro 54.1 million gained in the third quarter of 2010. The
relevant incidence on net revenues increased from 11.9% to 15.7% thanks tohigher operating profitability and a lower tax rate.

20

Management Discussion and Analysis for the ninemonths ended October 31, 2011
Net revenues
Consolidated net revenues for the nine months ended October 31, 2011
amounted to Euro 1,730.4 million, recording an excellent 24.9% increase
compared to the same period of 2010. At constant exchange rates, theincrease would have been equal to 27.5%.

Distribution channels
Retail net sales totaled Euro 1,338 million, up by 35.6% (38.6% at constantexchange rates) compared to Euro 986.7 million posted in the nine months
ended October 31, 2010. The remarkable growth delivered by the channel
came as a result of the like-for-like growth, which was equal to 23%, the fullcontribution of the 54 shops opened in 2010 full year and the contribution ofa net of new 46 shops opened in the last nine months (51 opened and 5
closed). In the nine months period ended October 31, 2011 the retail
expansion strategy has been realized through the extension of the Group’s
presence in countries with a high growth rate in the luxury industry as well as
in areas where the Group’s brands are still under represented.
For the nine months ended October 31, 2011, the 365 stores operated by theGroup contributed 78.4% of its net sales (72.4% in the same period of 2010).
The wholesale business, consistently with the Group’s distribution strategy,
remained stable compared with the same period of last year (-0.3% atconstant exchange rates) and, reaching Euro 368.6 million, accounted for
21.6% of Group’s net sales.

Markets
The exceptional momentum of the Asia Pacific markets consolidated further
in the third quarter raising the increase over the nine months ended October
31, 2010 to 38.7% (43.5% at constant exchange rates). The like-for-like
performance drove the growth with 34% increase while the contribution of
the DOS network expansion made the rest (a net of 11 new locations wereinaugurated in 2011 up to October). Out of these excellent trends it is worth
mentioning the Greater China market, whose pace of growth reached 40% on
a like-for-like basis, 42.2% on reported rates and 50.4% at constant exchange
rates.
In Europe, net sales increased by 22.7% (23.5% at constant exchange rates) to
stand at Euro 372.6 million in 2011 from Euro 303.5 million in the ninemonths ended October 31, 2010. The sales improvement, driven by the retailchannel with its 17% like-for-like growth and the contribution of the DOS
opened (19 in 2011 and 15 in 2010 full year), was partially offset by a drop in
the wholesale channel (down by 7.6% compared to the nine months ended
October 31, 2010). It has to be noted that, as part of a major DOS expansion

21

in Russia, a number of 5 independent stores (4 Prada, 1 Miu Miu) wereinaugurated in Moscow in the last months of the period under examination.
The Italian market posted net sales of Euro 318.2 million for the nine months
ended October 31, 2011, posting a 19.4% increase over the same period of2010. The overall growth was driven by the retail channel thanks to thecontribution of the 29% like-for-like growth and to the new DOS opened (5 in2011 and 6 in 2010 full year). The net sales trend of this market was partially
offset by a slight decline of the wholesale business (decrease of 5.9%
compared to the nine months period ended October 31, 2010).
The North American market recorded an 18.8% increase compared to thenine months ended October 31, 2010 (27.1% at constant exchange rates). The
growth was achieved thanks to the performances of both the retail and thewholesale channels. DOS sales, driven by a like-for-like growth of 15% and
DOS opened (1 in 2011 and 13 in 2010 full year), increased by 22.6%. Thanks
to deliveries to the US department stores and to the general recovery of theconsumer market, the wholesale channel performed well with a 12.1%
increase compared to October 31, 2010.
After being hit by the dramatic events in March 2011, the Japanese market
remained solid for the Group’s brands as net sales increased by 12.1% (9.4%
at constant exchange rates). There have been 8 net new stores opened in2011, 3 in 2010 full year and like-for-like growth was flat.
After a rationalization of the distribution network in the Middle East
operated in the 2010, and the opening on August 29, 2011 of the first Pradaand Miu Miu independent DOS in the department store Saks Fifth Avenue in
Dubai, the net sales of this area increased by 25.4% to stand at Euro 9.5
million up to October 31, 2011.

Products
The out-performance of leather goods, which grew by 40.9% (43.9% atconstant exchange rates) in the nine months ended October 31, 2011, wasmainly driven by the change in the geographical and channel mix. With thebest pace of growth in terms of net sales by products, the leather goods
raised their contribution to Group’s net sales from 49.9% at October 31, 2010
to 56.1% at October 31, 2011. Ready-to-Wear, thanks to the contribution of
the third quarter, turned into a positive trend of growth with a 3.1% increaseover the nine months ended October 31, 2010.

BrandsThe Prada brand accounts for 78.9% of Group’s net sales (78.4% in the same
period of 2010) and its sales performance was broadly in line with thecomments made above which apply to the entire Group.
The Miu Miu brand, with the highest incidence of the retail and leather goods
sales, delivered the best pace of growth in terms of net sales in Europe(27.7% at reported rates, 28.9% at constant exchange rates) and in America(25.2% at reported rates, 34.3% at constant exchange rates).

22

The Church’s brand confirmed its double-digit rate of growth with a 12.4%
increase compared to the nine months ended October 31, 2010 (13.8% atconstant exchange rates).
Car Shoe net sales showed a slight recovery resulting in an overall 2.1%
increase.

Royalties
The licensed products business contributed net revenues of Euro 23.8 million(Euro 22.4 million in the nine months ended October 31, 2010), including
royalties of Euro 18.3 million on sales of eyewear (Euro 18.4 million in thesame period of 2010), Euro 3.6 million on sales of perfume (Euro 2.7 million
in the same period of 2010) and Euro 0.8 million from a new license with
Hyundai, the Korean automaker, for the launch of a special limited edition
luxury version of their Genesis car. Overall, royalties income increase by
6.5% compared to the same period of 2010.

Operating results
Operating profitability recorded by the Group surged 47.3% compared to thesame period of 2010. EBITDA of the period ended October 31, 2011 amounted
to Euro 486.5 million, rising from 23.8% on net revenues to 28.1%. The
improvement has been achieved mainly as a result of the action taken to
improve gross margin as a percentage of net revenues and it rose from 67% in
the nine months ended October 31, 2010 to 71.4%. The higher incidence ofretail channel sales, the increase in unit margins and a more favorable ratioof full price sales to sales at promotional prices led to the strong
improvement notwithstanding the negative impact of currencies.
Operating expenses increased in absolute terms from Euro 679.1 million in
the period ended October 31, 2010 to Euro 843.3 million in the period ended
October 31, 2011 slightly reducing their incidence on net revenues from 49%
to 48.7%. At constant exchange rates, operating expenses would haveincreased by 26% rather than by 24.2%. The expansion of the retail networkand the business in general contributed to the higher level of selling, generaland administrative expenses, while the increased spending for media boosted
the advertising and communication costs, mainly in the third quarter and inline with the strategy announced for this year. Product design anddevelopment costs, being mainly fixed, reduced their incidence on net
revenues from 5.1% to 4.2%.
The EBIT, despite the huge investments in tangible assets incurred inprevious years and current period, improved even more than the EBITDA
raising its profitability in terms of incidence on net revenues from 18% to22.7% (EBITDA from 23.8% to 28.1%). The increase over the nine months
ended October 31, 2010 was 57.7%.
Interest expenses on borrowings slightly increased compared to 2010 up to
October. The benefit of lower average bank borrowing was approximately
offset by the rising in the cost of funding as the bank debt profile became
more long term. The funds raised with the IPO allowed the Group to account23

for more interest income as a result of temporary low risk short-term bankdeposits.
Despite the higher level of income generated, the tax charge decreased from
31.6% in the period ended October 31, 2010 to 26.3%, essentially because of
the change in the geographical mix of taxable income, as a result of thechange in the geographical mix of sales with slightly more favorable tax
rates, and provisions made in 2010 for ongoing tax disputes.
The Group’s net income was Euro 273.2 million, or 15.8% of net revenues, a
74.5% increase compared to net income of Euro 156.5 million reported at
October 31, 2010.

Net Invested Capital
Net invested capital at October 31, 2011 increased as a consequence of theinvestments and a higher level of the net operating working capital.
Group Shareholder’s equity strengthened further compared to January 31,
2011 mainly because of the capital injection resulting from the IPO (Euro206.6 million) and the net income for the nine months period (Euro 273.2
million), as partially offset by dividends distributed (Euro 35 million) and thenegative impact of exchange rate fluctuation on net assets not denominatedin Euro (Euro 7 million).

Analysis of net operating working capital
The increase in the net operating working capital compared to January 31,
2011 was mainly affected by the higher level of stock in line with the
expansion of the retail network and sales.

Net Financial Debt
At October 31, 2011, the Group’s Net Financial Debt amounted to Euro 110.1
million, with a Euro 298.5 million reduction compared to January 31, 2011.
As shown in the Summarized Statement of Consolidated Cash Flows, thecapital injection resulting from the IPO (Euro 205.2 million included in theline “Cash flows generated by financing activities”) and net cash flows fromoperating activities (Euro 293 million) enabled the Group to fund its capital
expenditure for the period (Euro 187.8 million), to pay dividends (Euro 6.4
million), to reduce its bank borrowing by Euro 103.9 million and to increase
its cash and cash equivalent by Euro 201.4 million at October 31, 2011.
Dividends distributed to Shareholders totaling Euro 35 million were settled asfollows: Euro 32.5 million offset against receivables from parent company
PRADA Holding bv and Euro 2.5 million paid in cash.

Analysis of capital expenditure
Taken together, Property, plant and equipment and Intangible assets showeda net increase of Euro 81.6 million. Investments incurred during the periodamounted to Euro 178.1 million and were distributed as follows: Euro 111.0
million in the retail area, Euro 47.1 million in the industrial and logistics area24and Euro 20.0 million in the corporate area. Depreciation charges for theperiod totaled Euro 92 million and write-downs amounted to Euro 2.2 million.

OutlookThe strong results achieved also in this quarter confirm the Group’s ability tosustain high-growth rates while improving operating margins.
The Group remains confident in the luxury market potential, especially infast-growing countries, and will continue to pursue its long-term growthstrategy focused on the expansion of its DOS network, leveraging thestrength of its brands and the high quality of its products.
Nevertheless, given the present level of uncertainty on global markets, themanagement will continue to monitor local and global trends in order topromptly react as in the past.

Corporate Governance Practices
Audit Committee
The Audit Committee, which comprises three independent non-executive
directors, on November 29, 2011 has reviewed the unaudited consolidated
results of the Company and its subsidiaries for the nine months ended
October 31, 2011.

Compliance with the Code on Corporate Governance Practicesof the Listing Rules
The Board has reviewed the Company’s corporate governance practices andis satisfied that the Company has complied with the code provisions set out
in the Code on Corporate Governance Practices contained in Appendix 14 of
the Listing Rules during the three months ended October 31, 2011.
Coe CoPurchase, 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, 2011.

25

Publication of Announcement on consolidated results for thenine months ended October 31, 2011
This announcement on the consolidated results for the nine months ended
October 31, 2011 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), November 29, 2011
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 nonexecutive directors are Mr. Gian Franco Oliviero MATTEI, Mr. Giancarlo
FORESTIERI and Mr. Sing Cheong LIU.

26