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ANNUAL
REPORT
2023
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Pradasphere Exhibition,
Shanghai
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2023 Overview
The Prada Group
Financial Review
Directors and
Senior Management
Directors' Report
Corporate
Governance
Consolidated
Financial Statements
Prada S.p.A. Separate
Financial Statements
Notes to the
Consolidated Financial
Statements
10
Independent
Auditor's Reports
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CHAPTER 1
2023 Overview
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Chairman’s Message
In 2023, the Prada Group evolved and made significant advances across
multiple fronts, including governance, processes and infrastructure.
This progress was supported by a substantial investment in human
capital.
We end the year with very positive progress and results and in a
stronger position that allows us to look at the future with confidence,
notwithstanding the uncertain geopolitical and macroeconomic
environment.
In order to move forward on our growth journey, it is essential that our
strategy remains focused on our people.
We need to consider how we can attract and retain talent to share and
enhance our expertise and know-how, as well as promote the concept
of sustainable work within our Group and industry. This includes
prioritising the quality of the work environment, equality, professional
development, and welfare contributions. Although the effort required is
significant, it is our duty to continue advancing along this path.
Finally, a brief consideration on the luxury sector, which is becoming
increasingly layered. Our customer base is growing, expanding into
new markets and embracing new generations: in this ever-changing
landscape, it is essential to be able to understand and adapt to society’s
evolving values and lifestyles. This care, attention and alertness to every
aspect of life is what forms the foundation of our luxury ethos.
Innovation, dynamism and flexibility will be crucial to our success in
2024 and I have confidence in our strengthened organisation’s ability to
further evolve the Group.
Patrizio Bertelli
Chairman of the Board
and Executive Director
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Message from the CEO
2023 has been a year of excellent results as the Group fully delivered
on its ambitions.
We have also made significant progress on the Group’s evolution, a
journey that encompasses every aspect of the organisation, enabling our
brands to maintain their relevance in an ever-changing society
Evolve to grow:
2023 performance
Let me start on a personal note, by saying that this
first year at the Prada Group marks the beginning of
an extremely fulfilling chapter for me and that I am
extremely proud of being a part of this incredible
journey.
2023 was a remarkable year, as we achieved our
ambitions against the backdrop of increasing
macroeconomic and geopolitical uncertainty,
especially in the second half of the year.
The Group generated revenue of Euro 4.7bn, with
growth up +17%. The strong performance of the
fourth quarter (+17%), marks the 12th consecutive
quarter of growth.
At a brand level, Prada’s retail sales grew at a solid
+12%, while Miu Miu thrived with +58%.
Alongside these excellent topline results, we also
improved our profitability, reaching a 22.5% EBIT
margin, which also reflects significant investments
behind our brands.
Our capex was mostly directed to strengthening our
retail network, alongside supporting our industrial and
digital strategies: these areas will continue to be our
top priorities in the following months.
Evolve to stay relevant: our brands as
part of the cultural conversation
In a world that’s constantly changing, it is crucial for
brands to stay relevant by interpreting and shaping
the cultural debate and conversations.
In 2023, the creative flame of Prada burnt stronger
than ever, as the brand interpreted and readapted its
stylistic codes to find a continuously new aesthetic
dialogue. Runways have resonated strongly, becoming
centre stage for broader reflections on society: as
always, Prada is not afraid to embrace contradictions.
On the other side, Miu Miu’s whimsical narrative
continued to strike. 2023’s collections have been
widely acclaimed, receiving a strong commercial
response across all categories: the brand’s irreverent
curiosity continues to captivate and excite with its
timely interpretation of human complexity.
Our brands dared to explore, question, analyse and
redefine, amplified by campaigns, immersive
experiences and unexpected collaborations, nurturing
an ever-evolving conversation with their global
community.
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ANNUAL REPORT2023 Evolve to improve:
achieve excellence in our retail strategy
Evolve to move forward:
the future ahead
Today more than ever, stores are the stages where our
brands engage with their clients: as the complexity of
the dialogue increases, retail spaces must find new
forms of connection, allowing deeper interactions with
the brand’s communities.
In 2023, we made it a priority to invest into the
Group’s retail network. At the same time, we have
monitored our KPIs closely to ensure continuous
progress on the retail channel across all brands and
geographies.
In 2024 our focus remains unchanged: we will continue
to evolve our network and our execution to further
progress on the path towards retail excellence,
providing our brands with a powerful dimension to
express their identity.
The last few months have reminded us, once again,
that we live in times that require us to embrace
flexibility. We are mindful of this, and we will continue
to navigate at pace, being ready to change course
should unexpected tides occur.
While we might adapt and evolve our way of doing
business, our objectives remain unchanged: we want to
nurture the creative identity of our brands so that they
can continue to be relevant and to lead modern
society’s cultural debate; we want to keep on elevating
our stores to progress on the path towards retail
excellence and we want to invest into our people, our
supply chain and our sustainability initiatives because
we are committed to be drivers of change for our
employees and society.
Evolve to matter:
progressing on the sustainability journey
Sustainability is integral to our strategy.
As we set the ambition of being “Drivers of Change”,
we committed to evolve in every aspect of our
business, becoming a more inclusive employer and a
more sustainable manufacturer, as well as promoting
educational initiatives for the next generation.
As we continue to challenge ourselves along this
journey, I am pleased to see that our efforts continue
to pay off.
Our organisation is strengthened, and we are confident
in our strategy. We are proud of what we have
accomplished so far, but restless as we look towards
the future, eager to brave new horizons.
Dynamism, creativity, talent and ambition have always
animated the history of the Prada Group, and we will
continue to foster these values as we draw the next
chapters of growth in the journey ahead.
Andrea Guerra
Chief Executive Officer
and Executive Director
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2023 Overview 2023 Overview
Euro 4.7bn
Revenues
+17%
Growth at constant exchange rates
Euro 4.2bn
Retail sales
+17%
Growth at constant exchange rates
Euro 1,062m
EBIT
22.5% +37%
EBIT margin
Growth at current exchange rates
+44%
Growth at current exchange rates
Euro 671m
Group net income
Euro 726m
Net operating cash flow
Euro 197m
Net financial position
Key business figures
Key business figures
6
5
brands
brands
14,876
14,876
employees
employees
26
26
factories
factories
(of which 23 in Italy)
(of which 23 in Italy)
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ANNUAL REPORT2023 Retail footprint: 606 Directly Operated Stores worldwide
200
Europe
102
Americas
85
Japan
23
Middle East
196
Asia Pacific
Net revenues by channel
Retail sales by brands
Retail sales by geography
9%
Wholesale
2%
Royalties
1%
Church’s
89%
Retail
15%
Miu Miu
12%
Japan
18%
Americas
1%
Others
83%
Prada
4%
Middle Eas t
35%
APAC
31%
Europe
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CHAPTER 2
The Prada Group
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Who we are
The Prada Group is a global leader in the luxury industry and a pioneer in its
unconventional dialogue with contemporary society across diverse cultural
spheres.
Home to prestigious brands as Prada, Miu Miu, Church’s, Car Shoe,
Marchesi 1824 and Luna Rossa, the Group remains committed to enhancing
their value by increasing their visibility and desirability over time.
Promoting creativity and sustainable growth, the Group offers its brands a
shared vision that gives each of them the opportunity to stand out and
express their essence.
With 26 owned factories and over 14,800 employees, the Group designs
and produces ready-to-wear, leather goods, footwear and jewellery
collections, and distributes its products in more than 70 countries, through
606 Directly Operated Stores (DOS), e-commerce channels and selected
e-tailers and department stores.
Prada Group also operates in the eyewear and beauty sectors through
licensing agreements with industry leaders.
Prada S.p.A. is listed on the Hong Kong Stock Exchange as 1913.
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1313
The Prada Group The Group's Purpose and Values
" Thorough observation and curiosity for the world
around us have always been at the heart of the
creativity and modernity of the Prada Group.
In society, and thus in fashion, which is somehow
a reflection of it, the only constant is change.
The transformation and innovation of references,
at the core of any evolution, lead us to interact with
different cultural disciplines, at times apparently far
from our own, allowing us to capture and anticipate
the spirit of the times.
Today this is no longer enough: we must be the
Drivers of Change, with the flexibility required to
translate the demands of the market and society
into tangible actions that inform our way of doing
business."
Miuccia Prada and Patrizio Bertelli
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Prada Group’s Purpose is to be a Driver of Change, for PLANET, PEOPLE and CULTURE.
Company Values:
1. Re-think the rules: Synonymous with innovation,
transformation and independence, the Prada Group
provides its brands with a shared vision. Fearlessly
challenging norms and perceptions, the Group embraces
contradictions.
2. Innovative tradition: Rooted in over a century of
history, the Group is propelled by a unique spirit of
research and innovation. Prada’s heritage combines with
unrivalled production know-how and expertise.
3. Spirit of excellence: Prada Group’s people are
constantly seeking perfection, pursuing excellence by
refining and surpassing previous achievements.
4. Uniqueness of talents: Passion, curiosity, attention
to detail and expertise are the distinctive qualities
of everyone working at Prada. An inclusive work
environment encourages cooperation, intellectual vitality
and the ability to interpret the evolving nature of society.
5. Beyond boundaries: Drawing inspiration from art,
philosophy, and cinema, the Group establishes bold
connections that broaden perspectives and enable the
emergence of unexpected ideas and solutions.
6. Sustainable paths: Sustainability is at the core of
the Group’s corporate strategy, with a value creation
model that operates in harmony with places and with
people and which enables the Group to contribute to
contemporary societal and cultural debates.
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Prada fashion show
S/S 2024
Prada Group History
1975
Mario Prada’s granddaughter,
Miuccia Prada, began her
collaboration with the entrepreneur
Patrizio Bertelli, founder of his own
leather goods company.
1913
Prada was founded by Mario Prada,
who opened a store selling leather
goods in Milan’s Galleria Vittorio
Emanuele II. Renowned for its use
of premium materials and
sophisticated craftsmanship, the
Prada brand swiftly gained
popularity across Europe.
1977
Patrizio Bertelli founded IPI S.p.A.
to concentrate the production
resources built up over previous
years of business in the leather
goods industry. In the same year, IPI
S.p.A. obtained a license from
Miuccia Prada for the exclusive
production and distribution of Prada
brand leather goods. In the following
years the two family businesses
gradually merged into a single
Group.
1979
In response to demand, the Prada
leather goods range was expanded
to include the first women’s
footwear collection.
1919
Prada obtained the title of Official
Supplier to the Italian Royal Family;
since then, Prada has been able to
display the House of Savoy coat of
arms and knotted rope design in its
trademark logo.
1983
Prada opened a second store in
Milan, showcasing the brand’s new
image, a concept dominated by a
special shade of light green, which
became known as ‘Prada green’.
Green stores soon followed in New
York, Madrid, London, Paris and
Tokyo.
1988
Prada’s first women’s clothing
collection was launched in Milan.
2020
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ANNUAL REPORT2023 1993
Prada made its debut in menswear
and established a new women’s
brand, Miu Miu, characterized by a
strong, provocative identity.
Miuccia Prada and Patrizio Bertelli
founded ‘Fondazione Prada’.
1997
The Prada Challenge sailing team
was founded to compete for the
2000 America’s Cup, and Prada
launched its Linea Rossa activewear
collection.
1999
The Prada Group acquired the
classic English footwear brand
Church’s, founded in 1873 and a
symbol of British handcraft tradition
and sophisticated elegance.
2001
The first Prada Epicenter store,
designed by Rem Koolhaas, was
opened in New York. This was the
first of a series of stores created to
redefine the concept of shopping. A
second Epicenter store was
inaugurated in Aoyama, Tokyo,
followed by a third one on Rodeo
Drive, Beverly Hills. In the same
year, Prada also acquired Car Shoe,
the classic Italian footwear brand,
founded in 1963 and known for its
iconic driving loafers.
2003
Prada entered into a licensing
agreement with Luxottica, the
world’s leading eyewear company,
which currently produces and
distributes Prada and Miu Miu
eyewear.
2006
Miu Miu moved its fashion show
venue to Paris, to reflect its
free-spirited aesthetic.
2007
The launch of the Prada phone by
LG, the world’s first touchscreen
mobile phone. The LG/Prada
partnership achieved further
success with new models in 2008
and 2011.
2011
Prada S.p.A. was successfully listed
on the Hong Kong Stock Exchange.
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The Prada Group 2015
The Prada Group introduced the
first Miu Miu fragrance in
partnership with the multinational
beauty company Coty and opened
its second Marchesi 1824 location in
Milan, having acquired the historic
Milanese patisserie the year before.
2019
The Prada Group announced the
adoption of a fur free policy for all
its brands, joined The Fashion Pact,
and set up its Diversity & Inclusion
Advisory Council, as well as
launching the first collection made
of recycled nylon, Prada Re-Nylon.
2020
Raf Simons joined Miuccia Prada as
co-creative director of the Prada
design office and the italian Custom
Agency recognized Prada S.p.A. as
an Authorized Economic Operator
("AEO full").
2017
Prada S.p.A. was admitted to the
Cooperative Compliance regime
with the Italian tax authorities,
introduced by Italian Law Decree
128/2015.
2018
Prada officially unveiled its factory in
Valvigna, designed by Guido Canali,
architect of the Group’s pioneering
‘garden factories’ and extended its
fashion season to present
pre-collections in Paris and in
New York.
2022
Andrea Guerra was announced as
the new Group CEO. A new
Group-wide Code of Ethics and
Human Rights Policy was
implemented and Prada launched
Eternal Gold, the first jewellery
collection made of 100% certified
recycled gold.
2023
Prada enters the cosmetic industry
by launching makeup and skincare
lines with L’Oréal.
2021
Prada’s Luna Rossa sailing team won
the Prada Cup Challenger Selection
Series for the second time. The
Group founded the Aura Blockchain
Consortium with LVMH and Cartier.
Prada Caffè pop-ups open in
London and Shanghai. The Group
continued to look to the future,
announcing its strategic partnership
with Axiom on NASA’s lunar
spacesuits for the Artemis III
mission.
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Prada Caffè pop-up
2023
The Group's Brands
The Prada Group constantly works to enhance the value of its brands,
fostering their visibility and desirability.
Prada
Since 1913, Prada has been synonymous with cutting-edge style. Its
intellectual universe combines concept, structure and image through codes
that go beyond trends.
Its fashion transcends products, translating conceptuality into a universe
that has become a benchmark to those who dare to challenge conventions.
With its collections, today Prada embodies and spreads the vision and
intellectual curiosity of co-creative directors Miuccia Prada and Raf Simons.
Miu Miu
Miu Miu was born in 1993 from the independent and unconventional spirit
of Miuccia Prada. The brand is the most unrestrained portrayal of the
designer’s creativity.
The designer’s distinctive interpretation and decoding of the world today is
its driving force. A universe of exploration and innovation, the ever-evolving
nature of Miu Miu reflects the radical and impulsive character of the woman
behind it.
Miu Miu is immediate, instinctive and irreverent. With a light but always
sophisticated touch, the brand leads fashion, representing the courage to
take risks, a razor-sharp instinct to respond to shifts in contemporary
fashion and culture.
Church’s
Church’s handcrafted shoes represent timeless elegance and artisanal
quality. With a history dating back to 1617, Church’s combines the finest
leather and superb craftsmanship with impeccable English style, redefining
contemporary luxury by centuries-old tradition.
Car Shoe
Since 1963, Car Shoe has been known for its iconic loafers with rubber
studs and deconstructed soles. Stemming from a passion for race cars and
fine handmade shoes, this timeless accessory has become part of the
common imagery of travel and motors.
Marchesi 1824
Pasticceria Marchesi, a Milanese icon since 1824, is renowned for its
elegant ambience, its impeccable service and exceptional patisserie.
Locations include the historic Via Santa Maria alla Porta, Via Monte
Napoleone, Galleria Vittorio Emanuele II in Milan, and a store in London’s
Mayfair.
Luna Rossa
Luna Rossa is the Italian sailing team challenging for the 37th America’s Cup.
Going beyond the definition of team, Luna Rossa represents the highest
expression of sportsmanship and technological innovation whose project,
throughout the years, has won the hearts of Italians and of all sailing
enthusiasts around the world.
2424
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Advertising campaign
Miu Miu F/W 2023
Business model
The success of the Prada Group’s brands is based on a business model that
combines skilled heritage craftsmanship with innovative industrial
manufacturing processes. This enables the Group to translate new ideas into
successful products, while retaining flexibility and control over know-how,
quality and sustainability standards, as well as production costs.
STYLE & DESIGN
AND PRODUCT
DEVELOPMENT
COLLECTION
OF ORDERS
Showroom Presentation
Sales Campaign
Fashion Shows
SOURCING
Quality Control
Worker Safety
PRODUCTION
DISTRIBUTION
Direct Distribution
91%
Indirect Distribution
9%
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Creativity
Miuccia Prada’s intellectual curiosity, her constant pursuit of new ideas, and
her unique understanding and interpretation of culture and society underpin
the Prada Group’s creative process. Her singular vision has made it possible
to establish a genuine design culture, based on method and discipline, which
guides everyone who contributes to the Group’s creative development.
The appointment in 2020 of Raf Simons alongside Miuccia Prada as Creative
Co-Director of the Prada brand produced a new creative dynamic,
reiterating the importance and power of dialogue and cooperation.
Constant experimentation and idea-sharing are the essential components of
the design process. The time spent at the drawing board, in the testing room
and on research and development, is fundamental to creating each
collection.
The Prada Group’s creative spirit continues to attract talented people from
all over the world.
Raw materials and production process
The Group’s manufacturing approach is built on two pillars: continuous
innovation, which advances skills and expertise, and a deep commitment to
craftsmanship, vital for the production and value of each brand.
The quality of raw materials is fundamental to product excellence. Often,
fabrics and leathers are custom-made for the Group’s brands, meeting strict
technical and style specifications to ensure superior quality.
The Group's products are crafted in 26 owned manufacturing facilities (23 in
Italy, 1 in the UK, 1 in France and 1 in Romania) and by a network of carefully
selected and monitored industrial manufacturers, which are supplied with raw
materials, patterns and prototypes from the Group, allowing close oversight
at every stage of production. This approach is designed to achieve
outstanding workmanship and provide considerable flexibility in production
organization.
Product quality gives the Group a competitive edge, which is reinforced by
continuous research and experimentation with materials and techniques.
Investments along the supply chain and in the workforce also play a crucial role.
A significant number of the company’s production employees have been with
the Prada Group for many years, ensuring both a high level of expertise and
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The Prada Group deep organizational knowledge. Through the Prada Group Academy, the
company is committed to passing on its manufacturing techniques and
craftsmanship to future generations, thus preserving the values at the heart of
its corporate heritage.
Distribution
Over the years, the Prada Group has strategically evolved its distribution
network to include 606 DOS in key prestigious international shopping
destinations, enhancing the image of each brand.
These stores do more than just sell products: they act as vital ambassadors,
conveying each brand’s image consistently, clearly and effectively.
Continuously updated, the Group’s extensive network of stores remains a
cornerstone of the company’s strategy, showcasing new collections and
anchoring the omnichannel approach. E-commerce platforms complement
the physical stores, offering a dynamic and integrated shopping experience.
The Group’s deep interest in architecture is reflected in a number of
revolutionary retail concepts developed with leading architectural firms such
as Rem Koolhaas and Herzog & de Meuron. These unique stores, known as
Epicenters, are located in New York, Los Angeles and Tokyo and also host
cultural debates and events.
In recent years, the Group has selectively streamlined its wholesale channel,
which includes department stores, multi-brand stores, franchisees and
e-tailers, to ensure maximum quality of the partners and a more focused
approach.
Image and communication
It is essential for the Prada Group’s communication to go beyond
commercial objectives and to involve stakeholders in the brands’ ideas and
values. A consistent and strong image, in line with the identity of each
brand, is central to the Group’s strategy. Fashion shows, advertising
campaigns and media coverage are the main platforms for presenting the
brands and for gaining visibility among international audiences and industry
critics.
The Group leverages social networks, brand e-commerce sites, the
corporate website, and digital platforms for direct and immediate
engagement with its audience.
The brands’ innovative and extraordinary special events are another
important communication tool for the Group, enabling direct interaction
with consumers in different local markets.
Moreover, Luna Rossa’s participation in the prestigious America’s Cup since
2000 has significantly increased Prada’s visibility in the international
sporting community, helping to build the brand’s credibility in activewear
and enhancing its technological expertise.
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ANNUAL REPORT2023 Advertising campaign
Prada Leathergoods
2023
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Sustainability
The Prada Group's strategic choices have always been guided by the desire to
achieve success for the benefit of all its stakeholders, be they shareholders,
employees, customers or the communities in which the Group operates.
In recent years, sustainability has been progressively integrated into the Group’s
business model and operations. Together with a continuous and transparent
dialogue with stakeholders, sustainability has become a key to strengthening
the Group’s identity and competitive edge.
In 2021, the Prada Group developed its sustainability strategy based on
three pillars – Planet, People and Culture – to consolidate its commitment to
these issues and to set medium and long-term goals.
The sustainability landscape is changing rapidly, as are the resulting risks
and opportunities for the business. As such, the sustainability strategy is
evolving, to be improved and updated over time in order to respond to the
needs and expectations of the Group’s stakeholders and the changing
market conditions in which it operates.
In order to meet current and future challenges and to ensure long-term
sustainable development across the entire value chain, the Prada Group has
also strengthened its ESG governance, in particular by establishing a
Sustainability Committee in early 2022, which plays an active advisory role
and assists the Board of Directors in assessing and making decisions on
sustainability issues.
The Group publishes an annual Sustainability Report that communicates its
progress on its sustainability roadmap. The Report is drafted in accordance
with GRI Standards
Planet
The Planet pillar sets goals for reducing environmental impact, including the
targets approved by the Science-Based Targets initiative (SBTi) for the
reduction of Scope 1, 2 and 3 greenhouse gas emissions, the extensive use
of alternative, low-impact materials for both finished products and
packaging, and a more circular approach to materials used in production
and for other purposes such as shows and events.
People
This pillar includes initiatives to promote and enhance diversity, equality and
inclusion, and to foster an inclusive culture based on respect for each
individual at all levels of the organisation. It also includes a long-term
investment plan to preserve craftsmanship and develop new talent,
positioning the Prada Group as a beacon of excellence for new generations.
Respect for and protection of the Group's employees is another key
element, along with greater monitoring of employee engagement levels to
improve their personal and professional wellbeing.
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ANNUAL REPORT2023 PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 35
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Prada industrial
Headquarter
Valvigna, Terranuova
Bracciolini (AR)
by architect
Guido Canali
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Culture
The Culture pillar reflects the Group's ongoing commitment to preserving
and sharing Italian and international cultural heritage, as well as supporting
nature and science, and highlights the Group's important ongoing role as an
educator and promoter of new ideas. Miuccia Prada and Patrizio Bertelli’s
passion for art and culture have inspired the Group to support the
multidisciplinary activities of Fondazione Prada from 1993 to the present.
In its first two decades of activity, Fondazione Prada commissioned utopian
projects and monographs in Italy and abroad to recognized international
figures, as well as established and emerging artists. Since 2002, it has also
undertaken previously unexplored research paths by presenting philosophy
conferences, architecture exhibitions, and various initiatives dedicated to
cinema.
Through collaborations with artists, curators, scientists, scholars,
filmmakers, architects, musicians and intellectuals, and an extensive
program, which currently extends to the three venues in Milan and Venice,
established between 2011 and 2016, and, from 2018, to other external
spaces in Shanghai, Tokyo and New York, Fondazione Prada provides a
platform for dialogue and exchange on a global scale with an international
and plural audience.
(1) Fondazione Prada is an external entity of the Prada Group. The collaboration between the two parties
is active in the form of sponsorship.
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ANNUAL REPORT2023 Fondazione Prada
Milan
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Prada Group Structure
Prada S.p.A.
Milan
Holding/manUfactURing/diStRibUtion/SeRviceS
100%
Church & Co ltd
Northampton
manUfactURing/
SeRviceS
100%
Church & Co (Footwear) ltd
Northampton
tRademaRkS
100%
Church UK Retail ltd
Northampton
UndeR liqUidation
100%
100%
100%
IPI Logistica S.r.l.
Milan
SeRviceS
100%
Prada Canada Corp
Toronto
diStRibUtion/Retail
100%
Prada Australia pty ltd
Sydney
Retail
60%
Prada Middle East fzco
Jebel Ali Free Zone-Dubai
diStRibUtion/SeRviceS
100%
Prada Retail France sas
100%
Marchesi 1824 S.r.l.
100%
Hipic Prod Impex S.r.l.
Sibiu
PRodUction
100%
Post Development Corp
New York
Real eState
100%
Prada Korea llc
Seoul
Retail
49%
Prada Emirates llc
100%
Prada Monte-Carlo sam
Milan
food&beveRage
UK Branch
London
Prada sa
Luxembourg
tRademaRk
Swiss Branch
Lugano
SeRviceS
Figline S.r.l.
Milan
PRodUction
100%
Prada USA Corp
New York
diStRibUtion/SeRviceS/Retail
100%
Prada Singapore pte ltd
Singapore
Retail
49%
Prada Kuwait wll
Kuwait City
Retail
100%
Prada Belgium sprl
100%
Prada Company sa
Luxembourg
SeRviceS
100%
Church Germany gmbh
Münich
UndeR liqUidation
66.7%
Artisans Shoes S.r.l.
Montegranaro
PRodUction
100%
Church & Co (USA) ltd
New York
Retail
100%
Church Hong Kong Retail
ltd
Hong Kong
doRmant
60%
40%
39.8%
Tannerie Limoges sas
Isle
PRodUction
Les Femmes S.r.l.
Porto S. Elpidio
PRodUction
Filati Biagioli Modesto
S.r.l.
Montale
PRodUction
46.65%
Conceria Superior S.p.A.
Santa Croce sull’Arno
PRodUction
15%
Luigi Fedeli e Figlio S.r.l.
Monza
PRodUction
Prada Guam llc
Guam
Retail
Prada Retail Mexico
S. de R.L. de C.V.
Mexico City
Retail
100%
100%
100%
100%
Prada Retail
Malaysia sdn bhd
Kuala Lumpur
Retail
Prada Japan Co ltd
Tokyo
Retail
100%
100%
100%
100%
100%
Prada Brasil
Importação e Comércio de
Artigos de Luxo ltda
São Paulo
Retail
PRM Services S. de R.L.
de C.V.
Mexico City
doRmant
Prada Panama sa
Panama
doRmant
Prada Retail Aruba nv
Aruba
Retail
Prada Saint
Barthelemy sarl
Gustavia
Retail
100%
Prada (Thailand) Co ltd
Bangkok
Retail
100%
Prada New Zealand ltd
Wellington
Retail
100%
100%
Prada Vietnam Limited
Liability Company
Hanoi
Retail
Prada Saipan llc
Saipan
Retail
60%
Prada Philippines Inc.
Manila
Retail
100%
Prada Asia Pacific ltd
Hong Kong
SeRviceS/Retail
Prada Taiwan ltd
Hong Kong
Retail
100%
Taipei Branch
Taipei
Retail
Prada Trading
(Shanghai) Co ltd
Shanghai
doRmant
Prada Fashion Commerce
(Shanghai) Co ltd
Shanghai
Retail
Prada Macau Co ltd
Macau
Retail
Prada Dongguan
Trading Co ltd
Dongguan
SeRviceS
100%
100%
100%
100%
4040
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100%
Prada Retail wll
100%
Prada Germany gmbh
Munich
Retail/SeRviceS
100%
Luna Rossa Challenge S.r.l.
Grosseto
management of Sailing team
75%
Prada Saudi Arabia ltd
100%
Prada Austria gmbh
Spanish Branch
Barcelona
SeRviceS
Luna Rossa
Challenge 2024 S.L.
Barcelona
management of Sailing team
100%
100%
Prada Czech Republic sro
100%
Prada Rus llc
Moscow
Retail
100%
Prada Netherlands bv
Amsterdam
Retail
100%
Prada Ukraine llc
100%
Prada Switzerland sa
100%
Prada Kazakhstan llp
100%
Prada Spain sl
Dubai
Retail
Doha
Retail
Jeddah
Retail
Kiev
Retail
Almaty
Retail
100%
Prada Retail
South Africa (pty) ltd
Sandton
doRmant
100%
Prada Maroc Sarlau
Casablanca
UndeR liqUidation
Paris
Retail
Monaco
Retail
Brussels
Retail
Vienna
Retail
Prague
Retail
Lugano
Retail
Madrid
Retail
100%
100%
Prada Portugal
Unipessoal lda
Lisbon
Retail
Prada Hellas
Sole Partner llc
Athens
Retail
100%
Prada Bosphorus Deri
Mamüller ltd Sirketi
100%
Prada Retail UK ltd
Istanbul
Retail
London
Retail
Ireland Branch
Dublin
Retail
100%
Prada Denmark aps
Copenhagen
Retail
100%
Prada Sweden ab
Stockholm
Retail
100%
Prada Norway as
Oslo
Retail
100%
Prada San Marino S.r.l.
San Marino
Retail
Kenon ltd
London
Real eState
100%
ANNUAL REPORT2023 Prada S.p.A.
Milan
Holding/manUfactURing/diStRibUtion/SeRviceS
100%
Church & Co ltd
Northampton
manUfactURing/
SeRviceS
Northampton
tRademaRkS
Northampton
UndeR liqUidation
Münich
UndeR liqUidation
New York
Retail
ltd
Hong Kong
doRmant
100%
Church & Co (Footwear) ltd
100%
Hipic Prod Impex S.r.l.
100%
Post Development Corp
100%
Prada Korea llc
100%
Church UK Retail ltd
100%
100%
Prada USA Corp
New York
diStRibUtion/SeRviceS/Retail
100%
Prada Singapore pte ltd
Singapore
Retail
100%
Church Germany gmbh
66.7%
Artisans Shoes S.r.l.
Prada Guam llc
100%
100%
Prada Retail
Malaysia sdn bhd
Kuala Lumpur
Retail
100%
Church & Co (USA) ltd
60%
Tannerie Limoges sas
100%
100%
Prada Japan Co ltd
Church Hong Kong Retail
100%
40%
100%
Importação e Comércio de
Artigos de Luxo ltda
100%
Prada (Thailand) Co ltd
Milan
SeRviceS
Sibiu
PRodUction
Figline S.r.l.
Milan
PRodUction
Montegranaro
PRodUction
Isle
PRodUction
Les Femmes S.r.l.
Porto S. Elpidio
PRodUction
39.8%
Filati Biagioli Modesto
S.r.l.
Montale
PRodUction
46.65%
Conceria Superior S.p.A.
Santa Croce sull’Arno
PRodUction
15%
Luigi Fedeli e Figlio S.r.l.
Monza
PRodUction
Prada Canada Corp
Toronto
diStRibUtion/Retail
New York
Real eState
Guam
Retail
Prada Retail Mexico
S. de R.L. de C.V.
Mexico City
Retail
Prada Brasil
São Paulo
Retail
de C.V.
Mexico City
doRmant
Panama
doRmant
Aruba
Retail
100%
PRM Services S. de R.L.
100%
Prada Panama sa
100%
Prada New Zealand ltd
Wellington
Retail
100%
Prada Vietnam Limited
Liability Company
100%
Prada Retail Aruba nv
100%
Prada Saipan llc
100%
Prada Saint
Barthelemy sarl
Gustavia
Retail
60%
Prada Philippines Inc.
100%
Prada Asia Pacific ltd
Hong Kong
SeRviceS/Retail
Sydney
Retail
Seoul
Retail
Tokyo
Retail
Bangkok
Retail
Hanoi
Retail
Saipan
Retail
Manila
Retail
100%
IPI Logistica S.r.l.
100%
100%
Prada Australia pty ltd
60%
Prada Middle East fzco
Jebel Ali Free Zone-Dubai
diStRibUtion/SeRviceS
100%
Prada Retail France sas
Paris
Retail
100%
Marchesi 1824 S.r.l.
Milan
food&beveRage
100%
Prada sa
Luxembourg
tRademaRk
Prada Emirates llc
Dubai
Retail
100%
Prada Monte-Carlo sam
Monaco
Retail
UK Branch
London
Swiss Branch
Lugano
SeRviceS
100%
100%
100%
Prada Belgium sprl
Brussels
Retail
100%
Prada Company sa
Luxembourg
SeRviceS
Prada Germany gmbh
Munich
Retail/SeRviceS
100%
Luna Rossa Challenge S.r.l.
Grosseto
management of Sailing team
Prada Austria gmbh
Vienna
Retail
Spanish Branch
Barcelona
SeRviceS
100%
Prada Czech Republic sro
Prague
Retail
Luna Rossa
Challenge 2024 S.L.
Barcelona
management of Sailing team
100%
Prada Rus llc
Moscow
Retail
100%
Prada Netherlands bv
Amsterdam
Retail
49%
49%
Prada Kuwait wll
Kuwait City
Retail
100%
Prada Retail wll
Doha
Retail
75%
Prada Saudi Arabia ltd
Jeddah
Retail
100%
100%
100%
Prada Ukraine llc
Kiev
Retail
Prada Kazakhstan llp
Almaty
Retail
100%
100%
Prada Retail
South Africa (pty) ltd
Sandton
doRmant
Prada Maroc Sarlau
Casablanca
UndeR liqUidation
Prada Taiwan ltd
Hong Kong
Retail
100%
Taipei Branch
Taipei
Retail
Prada Trading
(Shanghai) Co ltd
Shanghai
doRmant
100%
Prada Fashion Commerce
(Shanghai) Co ltd
100%
Shanghai
Retail
Macau
Retail
Prada Macau Co ltd
100%
Prada Dongguan
Trading Co ltd
Dongguan
SeRviceS
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Prada Switzerland sa
Lugano
Retail
Prada Spain sl
Madrid
Retail
Prada Portugal
Unipessoal lda
Lisbon
Retail
Prada Hellas
Sole Partner llc
Athens
Retail
Prada Bosphorus Deri
Mamüller ltd Sirketi
Istanbul
Retail
Prada Retail UK ltd
London
Retail
Ireland Branch
Dublin
Retail
Prada Denmark aps
Copenhagen
Retail
Prada Sweden ab
Stockholm
Retail
Prada Norway as
Oslo
Retail
100%
Prada San Marino S.r.l.
San Marino
Retail
100%
Kenon ltd
London
Real eState
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4141
The Prada Group Prada S.P.A. - Corporate information
Registered Office
Head Office
Via A. Fogazzaro, 28 - 20135 Milan, Italy
Via A. Fogazzaro, 28 - 20135 Milan, Italy
Place of business in Hong Kong registered under
Part 16 of the Hong Kong Companies Ordinance
8th Floor, One Taikoo Place 979 King’s Road
Quarry Bay, Hong Kong S.A.R. (P.R.C.)
Company Corporate website
www.pradagroup.com
Hong Kong Stock Exchange Identification Number
1913
Share Capital
Board of Directors
Audit and Risk Committee
4242
Euro 255,882,400
(represented by 2,558,824,000 shares of Euro 0.10 each)
Patrizio Bertelli
(Chairman of the Board & Executive Director)
Paolo Zannoni
(Executive Deputy Chairman of the Board &
Executive Director)
Andrea Guerra
(Chief Executive Officer & Executive Director)
Miuccia Prada Bianchi
(Executive Director)
Andrea Bonini
(Chief Financial Officer & Executive Director)
Lorenzo Bertelli
(Executive Director)
Yoël Zaoui
(Lead Independent Director & Independent
Non-Executive Director)
Marina Sylvia Caprotti
(Independent Non-Executive Director)
Maurizio Cereda
(Independent Non-Executive Director)
Pamela Yvonne Culpepper
(Independent Non-Executive Director)
Anna Maria Rugarli
(Independent Non-Executive Director)
Yoël Zaoui (Chairman)
Marina Sylvia Caprotti
Maurizio Cereda
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ANNUAL REPORT2023 Remuneration Committee
Nomination Committee
Sustainability Committee
Board of Statutory Auditors
Organismo di Vigilanza
(Supervisory Body)
(Italian Leg. Decree 231/2001)
Main Shareholder
Company Secretary
Marina Sylvia Caprotti (Chairwoman)
Paolo Zannoni
Yoël Zaoui
Maurizio Cereda (Chairman)
Lorenzo Bertelli
Marina Sylvia Caprotti
Pamela Yvonne Culpepper (Chairwoman)
Lorenzo Bertelli
Anna Maria Rugarli
Antonino Parisi (Chairman)
Roberto Spada
David Terracina
Stefania Chiaruttini (Chairwoman)
Armando Simbari
Roberto Spada
Prada Holding S.p.A.
Via A. Fogazzaro, 28 - 20135 Milan, Italy
Wendy Pui-Ting Tong
8th Floor, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong S.A.R. (P.R.C.)
Authorized Representatives
in Hong Kong S.A.R.
Patrizio Bertelli
Via A. Fogazzaro, 28 - 20135 Milan, Italy
Alternate Authorized Representative
to Patrizio Bertelli in Hong Kong S.A.R.
Hong Kong Share Registrar
External Auditor
Wendy Pui-Ting Tong
8th Floor, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong S.A.R. (P.R.C.)
Cynthia Wing Han Cheng
8th Floor, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong S.A.R. (P.R.C.)
Computershare Hong Kong Investor
Services Limited
Shops 1712-1716
17th Floor, Hopewell Centre
183 Queen’s Road East
Wanchai, Hong Kong S.A.R. (P.R.C.)
Deloitte & Touche S.p.A.
Via Tortona, 25 - 20144 Milan, Italy
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4343
The Prada Group CHAPTER 3
Financial Review
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Basis of preparation
The Board of Director’s Financial Review refers to the group of companies controlled by Prada S.p.A. (“Prada” or the
“Company”), the operating parent company of the Prada Group (the “Group” or “Prada Group”). This Financial
Review should be read in conjunction with the Consolidated Financial Statements and related explanatory Notes,
which are an integral part thereof.
The tables reported in the Financial Review have been prepared in accordance with the measurement and classification
criteria of the International Financial Reporting Standards (“IFRSs”) issued by the International Accounting Standards
Board (“IASB”) and adopted by the European Union. Some “non-IFRS measures” are also used within the Financial
Review in order to represent some financial aspects of the period from a management perspective.
Consolidated Statement of Profit or Loss (includes Non-IFRS Measures)
(amounts in thousands of Euro)
Net sales
Royalties
Net revenues
twelve months
ended
December 31
2023
%
on net
revenues
twelve months
ended
December 31
2022
4,622,882
103,529
4,726,411
97.8%
2.2%
100%
4,124,592
76,082
4,200,674
%
on net
revenues
98.2%
1.8%
100%
change
498,290
27,447
525,737
%
change
12.1%
36.1%
12.5%
Cost of goods sold
(924,640)
-19.6%
(888,580)
-21.2%
(36,060)
4.1%
Gross margin
3,801,771
80.4%
3,312,094
78.8%
489,677
14.8%
Product design and development costs
Advertising and communications costs
Selling costs
General and administrative costs
Total operating expenses
(150,616)
(420,288)
(1,872,626)
(296,549)
(2,740,079)
-3.2%
-8.9%
(137,469)
(359,114)
-39.6%
(1,704,363)
-6.3%
(265,972)
-58.0%
(2,466,918)
-3.3%
-8.5%
-40.6%
-6.3%
-58.7%
(13,147)
(61,174)
(168,263)
(30,577)
(273,161)
9.6%
17.0%
9.9%
11.5%
11.1%
Recurring operating income –
EBIT Adjusted
1,061,692
22.5%
845,176
20.1%
216,516
25.6%
Other non-recurring income / (expenses)
-
-
(69,186)
-1.6%
69,186
-100.0%
Operating income - EBIT
1,061,692
22.5%
775,990
18.5%
285,702
36.8%
Interest and other financial
income / (expenses), net
Interest expenses on lease liability
Dividends from investments
Total financial income / (expenses)
(32,031)
-0.7%
(24,498)
-0.6%
(7,533)
(58,825)
627
(90,229)
-1.2%
0.0%
-1.9%
(40,990)
473
(65,015)
-1.0%
0.0%
-1.5%
(17,835)
154
(25,214)
30.7%
43.5%
32.6%
38.8%
Income before taxation
971,463
20.6%
710,975
16.9%
260,488
36.6%
Taxation
(298,071)
-6.3%
(241,820)
-5.8%
(56,251)
23.3%
Net income for the year
673,392
14.2%
469,155
11.2%
204,237
43.5%
Net income - Non-controlling interests
2,366
0.1%
3,962
0.1%
(1,596)
-40.3%
Net income - Group
671,026
14.2%
465,193
11.1%
205,833
44.2%
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Financial Review
Key financial information
Key economic indicators
(amounts in thousands of Euro)
Net revenues
EBIT Adjusted (*)
% incidence on net revenues
EBIT (**)
% incidence on net revenues
Net income of the Group
Earnings per share (Euro)
Net operating cash flow (***)
(*) Non-IFRS measure equal to EBIT less other non-recurring income / (expenses)
(**) Non-IFRS measure equal to Earnings before Interest and Taxation
(***) Non- IFRS measure equal to net cash flow from operating activities less repayment of lease liability
Key financial position indicators
(amounts in thousands of Euro)
Net operating working capital (*)
Net invested capital (right of use assets included) (**)
Net financial surplus / (deficit) (***)
Group shareholders’ equity
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
4,726,411
1,061,692
22.5%
1,061,692
22.5%
671,026
0.262
725,596
4,200,674
845,176
20.1%
775,990
18.5%
465,193
0.182
695,527
December 31
2023
December 31
2022
734,742
690,573
5,790,789
5,073,699
196,908
534,900
3,853,795
3,482,217
(*) Non-IFRS measure equal to the sum of trade receivables (net), inventories (net) and trade payables
(**) Non-IFRS measure equal to the sum of the total consolidated shareholders’ equity, the lease liability and net financial surplus/(deficit)
(***) Non-IFRS measure equal to short-term and long-term financial payables due to third parties and related parties, net of cash and cash equiva-
lents and short-term and long-term financial receivables due from third parties and related parties
2023 Highlights
In 2023 the Prada Group achieved an excellent performance sustained by the continuous creative momentum of its
brands. While the year was characterised by the resurgence of severe geopolitical tensions, especially in Middle East,
and uncertainty in terms of economic outlook, the luxury sector proved its resilience and the Group’s results reflect
significant progress on the path of its strategic, organisational and digital evolution.
Group’s net revenues grew by 17.2% at constant exchange rates compared to 2022. The Group has reported 12
consecutive quarters of retail growth, driven by full price like-for-like sales, with positive contributions from both
volumes and average price.
At brand level, Prada delivered a high-quality, solid performance with retail net sales increasing by 12.1% in the year.
Miu Miu retail net sales grew by 58.2% in 2023, an outstanding result confirming the brand strong desirability across
all product categories and regions.
The EBIT margin (22.5%) showed further expansion, coupled with substantial marketing investments behind the
brands. The Group closes the year with a net cash position of Euro 197 million, which reflects capex cash-out of Euro
759 million, including the acquisition of the highly strategic real estate asset at 724, 5th Avenue (New York).
At Prada, the year was characterised by continuous desirability, sustained by an evolved organisation and rigorous
execution. The excellent reception of both Menswear and Womenswear fashion shows and collections confirms the
enduring success of the brand’s creative codes, with impactful campaigns and talent strategy boosting visibility and
interest globally. A well-balanced product category mix drove growth and resilience, thanks to the ability to
continuously innovate and to successfully interpret contemporaneity.
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ANNUAL REPORT2023 At the same time, the unveiling of exclusive collaborations, like the “Adidas Football for Prada” collection and the
groundbreaking partnership with Axiom Space on NASA’s lunar spacesuits for Artemis III mission, surprised the
audience.
Successful activations realised throughout the year, including Prada Extends in Bangkok, the 9th and 10th iterations
of Prada Mode, the Pradasphere II exhibition in Shanghai and the successful opening of the Prada Caffè in London,
also contributed to deliver a distinctive brand experience worldwide.
As for Miu Miu, the outstanding performance was supported by the strong foundations laid in recent years across
brand, product, distribution and talents. The thriving brand momentum enabled growing awareness and desirability,
driving remarkable commercial response across all product categories and regions.
2023 saw multiple successful launches in Leather Goods and Footwear, as well as a strong performance in Ready-to-
Wear, cementing the brand positioning as trendsetter. Likewise, the viral collaborations with New Balance and
Church’s amplified the reach towards a broader community, as a reflection of the brand dynamic identity.
Brand heat was also supported by powerful campaigns and several talent activations, while successful event formats
and special projects continued to foster the Miu Miu global community.
At Church’s, the focus on the internal reorganisation continued in 2023, with specific attention to rationalise both
corporate and industrial processes in support of the brand’s repositioning.
The Group progressed with the upgrade of the retail network, completing about 130 renovation and relocation
projects over the year, in line with the strategic objective of achieving retail excellence. Following 26 openings and 32
closures over the period, the Group ends the year with 606 Directly Operated Stores.
In the digital arena, efforts were concentrated on a multiyear transformation program aimed at enhancing the entire
technology infrastructure to support operational efficiency and revenue growth. The program includes initiatives
encompassing omnichannel capabilities, product lifecycle, finance and retail ERP, reporting, and planning processes
integration.
On the industrial front, the Group continued to invest in its factories and in the vertical integration of the supply chain,
to further improve manufacturing expertise and quality control at every step of the process. In this context, the
acquisition of a minority stake in Luigi Fedeli e Figlio S.r.l., an Italian family business globally recognised for the
quality of its knitwear and fine yarns, is a testament of the Group’s unwavering commitment to protect Italian know-
how.
2023 also saw significant progress in environmental sustainability, with Scope 1&2 GHG emissions reduced by 58%
over the year compared to the 2019 baseline. With 11 other brands in the Fashion Pact coalition, the Group signed
an ambitious Collective Virtual Power Purchase Agreement (CVPPA), which will start in the next few years, to promote
renewable energy in Europe. Ongoing efforts are also directed to reduce Scope 3 GHG emissions in line with the
Group’s Science-Based Targets 2029, in particular by focusing upstream on the transition of some key raw materials
to lower impact alternatives.
Recently, the Group also invested in the purchase of Sustainable Aviation Fuel (SAF) credits from accredited partners
to accelerate the decarbonisation of the aviation industry.
Regarding the People aspect of the ESG strategy, the Group is particularly proud of its initiatives focused on gender
equality, which have led to a 44% representation of women in its leadership team. Additionally, a new Chief People
Officer was appointed in September 2023.
The Group’s commitment to culture and water conservation continued over the period, with increased funding to
support the SEA BEYOND education program, which has been expanded to include scientific research and
humanitarian projects, with a focus on increasing ocean awareness.
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appointments: the result is a strengthened organisation, well equipped to drive the evolution of the Group while
delivering on its growth ambition.
Analysis of net revenues
(amounts in thousands of Euro)
Net revenues
Retail net sales (Directly Operated Stores and
e-commerce)
Wholesale net sales (independent customers
and franchisees)
Royalties
Total net revenues
Retail net sales by brand
Prada
Miu Miu
Church's
Other
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
%
change
current
exc. rates
%
change
constant
exc. rates
(*)
Q4-23 vs
Q4-22
%
change
constant
exc. rates (*)
4,189,676
88.6%
3,736,971
89.0%
12.1%
17.2%
17.4%
433,206
9.2%
387,621
9.2%
11.8%
13.0%
32.1%
103,529
4,726,411
2.2%
76,082
100%
4,200,674
1.8%
100%
36.1%
12.5%
36.1%
17.2%
-5.8%
18.1%
3,488,276
83.3%
3,252,025
648,936
15.5%
431,768
28,555
23,909
0.7%
0.6%
33,120
20,058
Total retail net sales
4,189,676
100%
3,736,971
Retail net sales by geographic area
Asia Pacific
Europe
Americas
Japan
Middle East
1,446,146
1,312,023
767,365
483,838
180,304
34.5%
1,231,659
31.3%
18.3%
11.5%
4.3%
1,187,466
781,825
368,739
167,282
Total retail net sales
4,189,676
100%
3,736,971
Retail net sales by product category
Leather goods
Ready-to-wear
Footwear
Other
1,910,061
1,350,243
777,099
152,273
45.6%
1,851,737
32.2%
1,085,660
18.5%
3.6%
690,707
108,867
Total retail net sales
4,189,676
100%
3,736,971
(*) calculated excluding the effect of the hyperinflation in Turkey
87.0%
11.6%
0.9%
0.5%
100%
33.0%
31.8%
20.9%
9.9%
4.4%
100%
49.6%
29.1%
18.5%
2.9%
100%
7.3%
50.3%
-13.8%
19.2%
12.1%
17.4%
10.5%
-1.8%
31.2%
7.8%
12.1%
3.1%
24.4%
12.5%
39.9%
12.1%
12.1%
58.2%
-12.7%
19.4%
17.2%
24.0%
14.0%
0.3%
43.8%
10.5%
17.2%
7.7%
30.6%
17.5%
44.4%
17.2%
9.5%
81.6%
3.4%
19.8%
17.4%
32.1%
7.5%
3.8%
37.6%
8.0%
17.4%
7.6%
27.7%
20.4%
40.5%
17.4%
In the comments below the growth percentages are at constant exchange rates, unless differently specified.
The Prada Group generated net revenues of Euro 4,726.4 million in the twelve months ended December 31, 2023,
up by 17.2% compared to 2022. Exchange rate fluctuations reduced growth by 4.7%, to 12.5%.
During the twelve months of 2023, retail net sales increased by 17.2% against the same period of 2022; the Group
has reported 12 consecutive quarters of retail growth, driven by full price like-for-like sales, with positive contributions
from both volumes and average price. Over the period, retail net sales accounted for 88.6% of total net revenues,
therefore in line with 2022 level.
As of December 31, 2023, the Group operated 606 stores, following 26 openings and 32 closures over the period.
Sales in the wholesale channel rose by 13% compared to the corresponding period of 2022, with a controlled evolution
of independent wholesale, in line with the Group strategy, and a strong increase in the duty free stores channel.
Royalty income grew by 36.1% on 2022, a strong performance driven by the contribution of both eyewear and fragrances.
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ANNUAL REPORT2023 Number of stores
Prada
Miu Miu
Church's
Car Shoe
Marchesi 1824
Total
Europe
Asia Pacific
Americas
Japan
Middle East
Total
December 31, 2023
December 31, 2022
December 31, 2021
Owned
Franchises
Owned
Franchises
Owned
Franchises
428
141
28
2
7
606
20
5
-
-
-
25
422
145
37
2
6
612
21
5
-
-
-
26
420
146
61
2
6
635
21
5
-
-
-
26
December 31, 2023
December 31, 2022
December 31, 2021
Owned
Franchises
Owned
Franchises
Owned
Franchises
200
196
102
85
23
606
-
23
-
-
2
25
209
190
104
86
23
612
-
21
-
-
5
26
228
193
105
88
21
635
-
21
-
-
5
26
Brands
Prada retail net sales increased by 12.1% over the year, showing high-quality growth driven by full price like-for-like sales.
Miu Miu reported an excellent performance in the twelve-month period at +58.2% yoy, with strong growth across
regions and product categories.
The net revenues by brand amounted to Euro 3,912.3 million for Prada, Euro 753.2 million for Miu Miu, Euro 35.8
million for Church’s, and Euro 25.1 million for the other brands:
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
%
change
current
exc. rates
%
change
constant
exc. rates
(*)
Q4-23 vs
Q4-22
%
change
constant
exc. rates (*)
(amounts in thousands of Euro)
Net revenues by brand
Prada
Miu Miu
Church's
Other
3,912,309
82.8%
3,647,805
753,234
15.9%
488,952
35,791
25,077
0.8%
0.5%
41,971
21,946
Total net revenues
4,726,411
100%
4,200,674
(*) calculated excluding the effect of the hyperinflation in Turkey
86.8%
11.7%
1.0%
0.5%
100%
7.3%
54.1%
-14.7%
14.3%
12.5%
11.6%
61.2%
-13.8%
14.4%
17.2%
9.1%
90.2%
25.4%
18.4%
18.1%
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Financial Review Markets
Over the period the Group delivered double-digit growth across all regions, excluding Americas which ended
the year flat.
In Asia Pacific, retail net sales rose by 24%, on a volatile basis of comparison in 2022. The highest growth rates were
reported in Mainland China, Hong Kong and Macau.
In Europe, retail net sales rose by 14%, supported by strong demand from both local clients and tourists. Growth was
significant in the first semester, and in the first quarter in particular, with more normalised but solid performance
thereafter.
The Americas ended substantially flat over the twelve-month period at +0.3%, with a sequential improvement in the
last months of the year.
Japan remained the top performing region, as retail net sales increased by 43.8%, largely driven by domestic spending
and increasingly by tourists.
Retail net sales in the Middle East also delivered a solid performance (+10.5%), notwithstanding intensified
geopolitical headwinds.
Products
Over the period, leather goods recorded retail net sales growth of +7.7%, supported by both novel and iconic products,
with an improving trend in the fourth quarter driven by both Prada and Miu Miu. Ready-to-wear remained the fastest
growing category at +30.6%, thanks to the success of both menswear and womenswear collections. Footwear’s
performance was also very strong at +17.5% against 2022, across genders and lines (lifestyle, sneakers and formal).
Operating results
The gross margin for the twelve-month period ended December 31, 2023 corresponded to 80.4% on net revenues,
up from the 78.8% of 2022. Greater absorption of production overheads, lower logistic costs, better sales mix in
terms of distribution channels and higher average prices were the key drivers of this improvement.
Operating expenses totaled Euro 2,740.1 million, up by Euro 273.2 million versus 2022. The increase was attributable
primarily to higher variable costs resulting from the increase in sales, marketing spend, personnel expenses, and
other general and administrative costs.
The operating income for the period, or EBIT, was Euro 1,061.7 million, 22.5% of net revenues, compared to the Euro
776 million (18.5% of net revenues) of 2022, which included non-recurring expenses of Euro 69.2 million.
Financial expenses and taxation
The net financial expenses of Euro 90.2 million were Euro 25.2 million higher than in 2022. The increase was largely
attributable to interest expenses on lease liabilities and higher foreign exchange losses, partially offset by higher
financial interest income.
The taxation for the twelve months ended December 31, 2023 was Euro 298.1 million, corresponding to 30.7% of the
profit before tax.
Net income
The net income for the year amounted to Euro 673.4 million (14.2% of net revenues), versus Euro 469.2 million
(11.2%) reported in 2022.
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ANNUAL REPORT2023 Analysis of the Statement of financial position
Net invested capital
The following table reclassifies the statement of financial position to provide information on the composition of the
net invested capital:
(amounts in thousands of Euro)
Right of use assets
Non-current assets (excluding deferred tax assets), net
Trade receivables, net
Inventories, net
Trade payables
Net operating working capital
Other current assets (excluding items of financial position)
Other current liabilities (excluding items of financial position)
Other current liabilities (excluding items of financial position)
Other current assets / (liabilities), net
Provision for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation, net
Other non-current assets / (liabilities), net
Net invested capital
Shareholder's equity – Group
Shareholder's equity – Non-controlling interests
Total consolidated shareholders' equity
Long-term financial, net surplus / (deficit)
Short-term financial, net surplus / (deficit)
Net financial surplus / (deficit)
Net financial surplus / (deficit) to consolidated shareholders' equity ratio
Long-term lease liability
Short-term lease liability
Total lease liability
Net financial surplus / (deficit), including lease liability
Shareholders’ equity and net financial surplus / (deficit), including lease liability
December 31
2023
December 31
2022
2,024,552
3,006,998
405,151
782,978
2,011,474
2,517,042
331,915
760,457
(453,387)
(401,799)
734,742
276,123
(422,541)
(146,418)
(49,867)
(60,875)
(57,459)
339,116
170,915
690,573
229,575
(522,553)
(292,978)
(51,486)
(67,571)
(65,590)
332,235
147,588
5,790,789
5,073,699
(3,853,795)
(3,482,217)
(23,014)
(18,805)
(3,876,809)
(3,501,022)
(338,422)
(394,531)
535,330
196,908
-5.1%
929,431
534,900
-15.3%
(1,699,599)
(1,715,451)
(411,289)
(392,126)
(2,110,888)
(2,107,577)
(1,913,980)
(1,572,677)
(5,790,789)
(5,073,699)
The net invested capital as of December 31, 2023 amounts to Euro 5,791 million, with equity of Euro 3,877 million and
lease liabilities of Euro 2,111 million; the net financial position at the end of the period is a surplus of Euro 196.9 million.
The right of use assets increased by Euro 13.1 million, mainly as a result of new leases and remeasurements of existing
leases totaling Euro 606.8 million, net of depreciation of Euro 445.5 million, termination of contracts of Euro 75.3
million, of which Euro 74.8 million related to the acquisition of real estate investment in 724, 5th Avenue (New York),
which was previously leased and has been acquired in 2023 as reported in Note 15 “Property, plant and equipment”,
writedowns of Euro 18.6 million and foreign exchange differences impact of Euro 60.2 million.
The non-current assets (net) rose by Euro 490 million (Euro 3,007 million as of December 31, 2023 versus Euro 2,517
million at December 31, 2022) following capital expenditures of the year amounting to Euro 752.7 million, against
depreciation, amortisation and writedowns of Euro 240.5 million.
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Financial Review
(amounts in thousands of Euro)
Retail
Real estate
Production, logistics and corporate
Total
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
215,884
381,711
155,106
752,701
168,935
-
107,161
276,096
Real estate capital expenditures included the investment in a highly strategic building at 724, 5th Avenue (New York), which
currently hosts a Prada store, for a consideration equal to US Dollar 425 million (Euro 393 million). The carrying amount
(resulting in Euro 366 million, including other direct charges) was determined deducting from the purchase price the net of
the lease liability and right of use assets immediately before the purchase (Euro 28.1 million).
In addition, the Group continued to invest in store restyling and relocation projects, in the advancement of the
technological and digital roadmap in the retail, manufacturing and corporate areas and in the industrial area.
The net operating working capital as of December 31, 2023 is Euro 734.7 million, up by Euro 44.2 million from
December 31, 2022: trade receivables increased by Euro 73.2 million, inventories increased by Euro 22.5 million,
and trade payables increased by Euro 51.6 million.
The other current liabilities (net) amount to Euro 146.4 million as of December 31, 2023, down by Euro 146.6 million
from December 31, 2022, essentially due to the decrease of the current tax liability as a result of the payment of the
income taxes liability accounted as of December 31, 2022.
The other non-current assets (net) of Euro 170.9 million as of December 31, 2023 rose by Euro 23.3 million from
December 31, 2022.
Net financial position
The following table provides details of the net financial position:
(amounts in thousands of Euro)
Bank borrowing – non-current
Financial payables and bank overdrafts - current
Payables to related parties - current
Total financial payables – current
Total financial payables
Cash and cash equivalents
Financial receivables from related parties - non-current
Financial receivables from related parties - current
Total financial receivables and cash and cash equivalents
Net financial surplus / (deficit)
December 31
2023
December 31
2022
(338,422)
(395,656)
(148,338)
(160,847)
(5,853)
(3,568)
(154,191)
(164,415)
(492,613)
(560,071)
689,519
1,091,622
-
2
1,125
2,224
689,521
1,094,971
196,908
534,900
The net operating cash flow for the twelve-month period, after the payment of the lease liability (Euro 429.7 million),
was positive for Euro 725.6 million. After the cash outflows for investing activities (Euro 759.2 million), dividend
payments (Euro 281.7 million), net of the devaluation of the items of the net financial position (Euro 17.8 million) and
other minor items, the net financial surplus reached Euro 196.9 million at the end of the period.
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ANNUAL REPORT2023
(amounts in thousands of Euro)
Cash flow from operating activities
Net cash, interest received (paid)
Lease liability: interest paid
Tax paid
Net cash flow from operating activities
Repayment of lease liability
Net operating cash flow
Net cash flow utilized by investing activities
Free cash flow
December 31
2023
December 31
2022
1,694,951
1,392,805
5,863
(58,825)
(8,533)
(40,989)
(486,708)
(219,586)
1,155,281
1,123,697
(429,685)
(428,170)
725,596
695,527
(759,191)
(250,209)
(33,595)
445,318
The total amount of undrawn lines of credit as of December 31, 2023 is equal to Euro 768 million, consisting of Euro
451 million of committed lines and Euro 317 million of uncommitted lines.
All financial covenants were fully complied with as of December 31, 2023 and they are expected to be complied with
within the next 12 months as well.
The following table sets forth the lease liability:
(amounts in thousands of Euro)
Long-term lease liability
Short-term lease liability
Total
December 31
2023
December 31
2022
1,699,599
1,715,451
411,289
392,126
2,110,888
2,107,577
The lease liability increased from Euro 2,108 million at December 31, 2022 to Euro 2,111 million at December 31,
2023, primarily as a result of remeasurements for lease extensions or modifications for Euro 602.2 million net of the
payments of the period for Euro 429.7 million, termination of contracts of Euro 108 million of which Euro 102 million
due to the real estate investment in 724, 5th Avenue (New York) which was previously leased and has been acquired
in 2023 as reported in Note 15 “Property, plant and equipment”, and the exchange rate differences for the period for
Euro 61 million.
The lease liability was concentrated mainly in Japan, the U.S.A. and Italy.
The net financial indebtedness, including the lease liability, amounted to Euro 1,914 million as of December 31, 2023
(Euro 1,573 million as of December 31, 2022).
Further information on the Group’s debt maturities and obligations, currency and interest rate risk management,
commitments and contingent liabilities is provided in Notes 21, 26 and 28 of the Notes to the Consolidated Financial
Statements.
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Financial Review
Risk factors and management
The Prada Group’s business is exposed to various risks that, if they materialize, could adversely affect its operations,
results and financial situation, or reputation.
Some of these risks depend on the constantly changing and highly competitive environment for the luxury industry,
which primarily concern the desirability of the Group’s products. For this reason, some of the main strategies of the
Group are (i) guaranteeing constant recognition of the brands as reference points in the industry, (ii) supporting and
developing retail sales, as well as (iii) the continuous identification, monitoring and mitigation of the main Group risks.
In order to manage, anticipate and mitigate its risk exposure, and to ensure that it can develop its business sustainably
over the long term, the Group has set up a risk management system.
Risk factors are presented as follows:
1. Operational and ESG Risks
1.a. Intellectual property and brand protection
Description
What we do
The Group’s brands and other intellectual property
rights are fundamental assets. Infringements of the
Group’s intellectual property rights can have significant
negative impacts on its results and damage its image.
The Group pursues an active anti-counterfeiting policy
involving both preventive measures and legal actions. Its
strategy is based on the following pillars:
― the Group’s brands, designs, patents and websites
are registered to obtain legal protection in all
countries throughout the world;
― an Intellectual Property Team is responsible for
brand protection efforts globally, online and offline,
through – among others – monitoring actions (in
both traditional markets and on the internet),
inspections, contacts with competent local and
international authorities and custom agencies, legal
actions; for all such actions, the team can act
directly or with the support of external consultants.
In addition, all products have been equipped with
a remote frequency identification (RFID) tag, using
a technology that makes it possible to verify the
authenticity of the products and track them. All retail
and wholesale products bearing the RFID tag have
also been registered on the blockchain of the Aura
Consortium.
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ANNUAL REPORT2023 1.b. Commercial attractiveness and desirability
Description
What we do
The Group’s success is reliant on its ability to create
and influence fashion and product trends, to timely
anticipate shifts in consumer taste and trends, and
to meet and exceed customer expectations. Failure
to timely perceive fashion needs or to translate them
into the styling, design and development phase could
negatively impact the appeal of the Group’s brands and,
therefore, its results and financial situation.
The Group addresses the risk – first of all – by investing
in strong and structured style and design teams, capable
of fine-tuning with cultural and consumer changes.
The teams – guided by Miuccia Prada and Raf Simons,
as for the “Prada” brand, and by Miuccia Prada for the
“Miu Miu” brand – are composed of professionals of
different nationalities, cultures and talents, to foster
creativity. In addition, they are invited to combine a
strong sense of fashion with intellectual curiosity, the
pursuit of new and unconventional ideas, as well as
cultural and social interests.
Secondly, the Group pursues cutting edge
communication strategies, to be in-tune with – and even
to anticipate or create – fashion trends.
In addition, the Group invests in regular store
renovations (both brick-and-mortar and online) to
channel the brands’ images and guarantee enhanced
customer experiences.
Brand attractiveness and customer satisfaction are
also pursued through regular training and professional
qualification programs for its employees, especially
those working in stores.
1.c. Talent management and retention
Description
What we do
The Group’s operations require managers, employees
and artisans having the right qualifications in the
design, product development, production, marketing,
merchandising, management and corporate functions.
It is therefore key for the Group to retain skilled
workforce and to train new generations, especially in a
dynamic and evolving job market. Loss of talented and
skilled people, high turnover rate, departure of senior
executives and disappearance of craftsmanship heritage
may impact on the Group’s operations, product quality
and, consequently, results.
The Group proactively addresses the risk by:
(i) carrying out training initiatives, such as through
the Prada Academy, where knowledge is shared
and skills, techniques, and innovative ideas are
shaped in a way to foster talent and hand down the
professional expertise essential for the Group;
(ii) monitoring the market, to acquire the best, and most
fitting, professional skills and métiers;
(iii) setting up retention initiatives, such as a
performance management process based on
individual goals and leadership development, as well
as adequate incentive schemes.
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Financial Review 1.d. Real Estate
Description
What we do
Specific teams are responsible to handle real estate
activities, such as market monitoring, conducting
negotiations concerning real estate assets (leases and
acquisitions) and construction and renovation projects
for retail places.
Moreover, the Group performs periodical reviews of
contracts, site visits and “ad-hoc” counterparty due
diligence.
What we do
The Group pursues the preservation of the image and
prestige of the brands by (i) maintaining its innovative
features for style, product and communication; (ii)
monitoring each internal and external phase of the value
chain to reduce the risk of inadequate performance;
(iii) oversight of external communication concerning the
brands, including through social media.
The Group also undertakes ESG specific initiatives,
through Prada S.p.A.’s Sustainability Committee, as
well as its Board members with significant professional
ESG experience, as well as corporate and industrial
sustainability dedicated functions.
Should the Group lose strategic retail places, due to
difficulties in finding fitting locations or in negotiating
new leases at adequate terms and conditions, the
Group’s strategy could be undermined, with negative
consequences for its results.
Conversely, should the Group be compelled to carry
out significant construction/renovation projects to align
facilities to its standards, or unable to carry out projects
timely and on budget, its financial situation could be
negatively impacted.
1.e. Corporate image
Description
The Group’s success in the international luxury goods
business is linked to the image and distinct character of
its brands, in a highly competitive environment. These
features depend on many factors, such as the style
and design of the products, the quality of the materials
used and production techniques, image and locations
of directly operated stores, careful selection of business
partners, communication activities and the corporate
profile in general.
The Group is also mindful of the transparency and
accountability demanded by its stakeholders in the
rapidly evolving environmental, social and governance
landscape in which it operates.
Negative events concerning the above – such as
unfavourable or inaccurate media coverage, negative
campaigns on social network, individual behaviour
contrary to the Group’s values of ethics and integrity
– can affect the Group’s image and reputation and,
consequently, negatively impact results.
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ANNUAL REPORT2023 1.f. Fraud
Description
What we do
Frauds may be perpetrated to obtain money or – among
others – property or services, personal or business
advantage.
Lack of controls and insufficient segregation of duties
could lead to fraud and, consequently, economic losses
and reputational damages.
The Group has equipped itself with various control tools,
preventive and deterrent processes, aimed at improving
the efficiency and the monitoring of its treasury
activities, such as:
(i) various Group procedures in place (Code of Ethics,
Anti-corruption policy, Corporate Finance &
Treasury policy);
(ii) the set up of the Whistleblowing system and its
related policy;
(iii) providing banking Power of Attorney to a limited
number of people, regularly updated and duly
approved by Board of Directors;
(iv) strengthening Segregation of Duties, access controls
to Corporate systems and its internal controls over
treasury activities.
1.g. Supply Chain Management
Description
What we do
Inability to source raw materials, manufacture, procure
and distribute finished products on a timely basis at the
required quality, quantity and cost from suppliers who
meet quality and the Group’s ethics standards could
lead to disruptions in production, negative effects on
the Group’s results and/or damages to the Group’s
reputation.
Although the Group does not significantly depend on
any façon manufacturer, the suspension or termination
of a relationship with some of the most significant
façon manufacturers could adversely affect the Group’s
business and, as a consequence, its results.
The Group contracts with several suppliers, to avoid
concentration of supply.
The fact that production is mainly located in Europe,
especially in Italy, grants an adequate level of
competence, quality and reliability.
In addition, sensitive processes – such as the creation
of prototypes and samples, the cutting of hides and
controls over raw materials and semifinished goods –
take place at the Group’s own manufacturing facilities.
The Group’s technical staff carries out controls to ensure
that products meet quality standards and that the entire
supply chain complies with Prada S.p.A.’s Code of
Ethics, which must be signed by business partners.
Moreover, the Group demands – and monitors (including
through inspections) – compliance by manufacturers
with applicable regulations concerning labor law, social
security and occupational health and safety, as well as
with the Group’s regulations on brand ownership and
other intellectual property rights.
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5757
Financial Review 1.h. Business resilience
Description
What we do
Business interruption can occur due to a variety of
factors, including escalations in geopolitical or social
tensions, restrictions to people movement or to
exports, cyberattacks, property damages caused by an
extreme weather event, public health events, machinery
breakdowns, labor disputes and quality control
failures on the operations. The resulting losses can be
economic (e.g., decreased sales, increased labor costs,
need to substitute a key supplier, decreased revenue
potential due to natural disasters) and reputational.
The Group addresses these risks through a balanced
geographical distribution of its stores, to avoid high
concentration; operations/production mainly located
in Italy, but in several facilities; operations/production
located in new/renewed premises; continuous
development of online sales activities; strengthening
of the Information System department; insurance
programs aimed at mitigating such risks.
1.i. Health, security and safety
Description
What we do
The Group is exposed to risks related to (i) workers’
health and safety, such as injuries, occupational
diseases and accidents that could lead to physical harm
to people, (ii) non-compliance with quality and security
standards of products.
Such risks can lead to litigation, and related costs
affecting the Group’s financial situation, as well as
damage to the Group’s image.
To mitigate these risks, the Group (i) conducts periodic
safety training and refresher courses; (ii) undergoes
renovations and new constructions; (iii) carries out
fire risk assessments on high-risk premises; and with
respect to product quality, carries out quality control
on manufacturing used in the production process (from
sourcing to finishing touches).
1.j. Environmental
Description
The financial situation and the reputation or the Group
could be affected by (i) extreme climatic phenomena,
cost increases for raw materials and other similar
environmental circumstances capable of affecting its
production, (ii) new regulations aimed at containing
pollution and climate change, which may trigger
compliance costs or failures for the Group and (iii)
changes in customer purchasing habits related to
evolutions of the environmental context.
What we do
To prevent or mitigate these risks, the Group adopted
ad hoc internal processes, including the sustainability
policy which laid the foundations for the Company's
sustainability focus based on three pillars - Planet,
People and Culture - where the Group firmly believes
it can make the greatest contribution in terms of value
creation in its own industry and for the benefit of society
as a whole.
The Group formalized a sustainability strategy with
a clear roadmap for the reduction of greenhouse gas
emissions, extensive use of alternative, low impact
materials for both finished products and packaging, and
a more circular approach to materials used in production
and for other purposes such as shows and events, where
waste is recycled and reused.
The strategy also focuses on the traceability of raw
materials and the continuous improvement of social and
environmental standards along the supply chain through
close collaboration with suppliers.
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ANNUAL REPORT2023 Description
What we do
The strategy is an evolving plan that will be improved
and updated over time to respond to the needs and
expectations of the Group’s stakeholders and the
changing market conditions in which it operates. In
2023, the organization moved towards identifying and
formalizing medium-term targets and internal Key
Performance Indicators (KPIs) to monitor the progress,
with a particular focus on the decarbonization of its
operations and the transition to lower impact materials
for its finished products.
In addition, the Group enforced the sustainability culture
through the promotion of internal and external initiatives
(e.g. Sea Beyond, Forestami Academy, corporate on/off-
line dedicated trainings).
What we do
The Group manages credit risk and mitigates the
related effects through a control system based on the
monitoring of the creditworthiness and solvency of
customers, the stipulation of insurance contracts and
the use of safe solutions such as advance payments.
The Group considers no significant risk to exist on
these kinds of liquid assets given that they are used
for operating activities and business processes and,
consequently, the number of independent parties
involved is fragmented. However, there is a potential
risk related to cash shortages at stores. The Group has
equipped itself with various control tools, preventive
and deterrent, aimed at improving the efficiency of cash
management activities.
2. Financial risks
2.a. Credit risk
Description
Credit risk is defined as the risk of financial loss caused
by the failure of a counterparty to meet its contractual
obligations. The maximum risk to which an entity
is exposed is represented by all the financial assets
recognized in the financial statements. The Group
considers its credit risk to involve primarily trade
receivables generated from the wholesale channel and
other commercial partners, and liquid assets.
As part of Credit risk, the financial counterparty risk is
managed through a proper diversification of financial
counterparties, considering their creditworthiness
and solvency: The risk of default of liquid assets
substantially relates to bank deposits, which represent
the Group’s most widely-used financial product for
investing surplus operating cash flows. Default risk is
mitigated by the allocation of cash holdings to bank
deposits that are diversified in terms of counterparties
(always investment grade), country and currency, and by
the consistently short-term period. The residual portion
of liquid assets consists of cash and bank accounts.
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5959
Financial Review 2.b. Liquidity risk
Description
What we do
Liquidity risk refers to difficulty that the Group could have
in securing new funds, leading to a failure in meeting
its financial obligations. The Directors are responsible
for managing liquidity risk, whereas the Group CFO,
supported by the Deputy Group CFO, is responsible for
optimizing financial resources.
The Directors consider the currently available funds
and lines of credit, in addition to the funding that will
be generated by operating and financing activities,
to be sufficient for enabling the Group to meet its
requirements in terms of working capital management,
investing activities, punctual loan repayment and the
payment of any dividends as planned.
2.c. Foreign exchange risk
Description
What we do
The Group has a vast international presence, and
therefore is exposed to the risk that changes in currency
exchange rates could adversely impact revenue,
expenses, margins and profit. In order to hedge
foreign exchange risk, the Group enters into derivative
contracts designed to fix the value in Euro (or other
functional currency) of identified future cash flows. The
future cash flows consist primarily of intercompany
inflows of trade and financial receivables and
intercompany outflows of trade payables. They refer
mainly to Prada S.p.A., the Group’s parent company
and worldwide distributor of Prada and Miu Miu brand
products.
2.d. Interest rate risk
Description
Interest rate risk is the risk that future cash flows could
be affected by interest rate fluctuations. In order to
hedge this risk, which refers mainly to Prada S.p.A., the
Group uses derivatives (such as interest rate swaps or
collar) to convert variable-rate debt into fixed-rate debt
or debt at rates within a specified range.
The management of foreign exchange risk is described
in more detail in the Notes to the Consolidated Financial
Statements.
What we do
The management of interest rate risk is described in
more detail in the Notes to the Consolidated Financial
Statements.
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ANNUAL REPORT2023 3. Legal and regulatory risks
3.a. Risks related to the evolution of the regulatory framework
Description
What we do
In the various jurisdictions where it operates, the Group
is subject to laws and regulations and, therefore, exposed
to the risk of non-compliance, which – in the case of
a major breach – could have a material impact on the
business and performance of the Group. In addition,
new legislation imposing more stringent standards may
entail increased compliance or may limit the Group's
operations, with negative consequences for its financial
performance.
The Group involves various divisions and uses external
experts as necessary to keep its processes and
procedures constantly updated in order to comply with
changing rules and regulations in a timely manner,
thereby mitigating the risk of non-compliance.
Monitoring activities are performed by division
managers, auditors, special entities and committees
such as the Supervisory Body and the Audit and Risk
Committee.
Prada S.p.A. holds the status of Authorized Economic
Operator (“AEO full”). This recognition, issued by the
Customs Agency, is granted to companies that prove to
be competent and virtuous in the management of their
business processes, in compliance with both customs
regulations and safety standards for goods.
This can concern, in particular, the following:
― risks associated to non-compliance with the Rules
Governing the Listing of Securities on the Stock
Exchange of Hong Kong Limited or with other laws or
regulations in force in Hong Kong S.A.R. that Prada
S.p.A. must observe as it is listed on the Stock
Exchange of Hong Kong Limited;
― risks associated with occupational health and safety
under Italian Legislative Decree 81/2008 and
equivalent regulations in force in other countries;
― possible legal penalties for wrongful acts pursuant to
Italian Law 231/2001, as subsequently amended;
― events that could adversely affect the accuracy of the
annual financial statements and the protection of
assets;
― manufacturing compliance risks with respect to Italian
and international laws and regulations regarding
finished goods distributed and raw materials and
consumables used.
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Financial Review 3.b. Tax risk
Description
What we do
The Prada Group’s tax strategy is based
on the prevention of tax risks and on tax
certainty, both of which are pursued through ongoing
dialogue and long-term, principled interaction with the
tax authorities in the countries where it operates.
The Group’s tax risks, which could arise from
compliance errors or incorrect interpretation of
regulations, are constantly monitored within the scope
of an extensive internal control system, incorporated
into the tax control framework.
The effectiveness of the tax risk management system
has made Prada S.p.A. eligible to participate in the
Cooperative Compliance Tax Regime in Italy (under
Italian Legislative Decree 128/2015), enhancing its tax
control framework.
Within such regime, the Group has expanded a
systematic, open communication channel with the Italian
and the foreign tax authorities of the most strategically
important countries where it operates, based on
reciprocal transparency and trust, with the purpose of
minimizing the level of uncertainty about potentially
risky situations.
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ANNUAL REPORT2023 Other information
Information on related-party transactions
Information on the Group’s transactions and balances with related parties is provided in the Notes to the Consolidated
Financial Statements, insofar as required by IFRS, and in the Directors’ Report and Corporate Governance Report,
insofar as required by the Hong Kong Stock Exchange rules.
Non-IFRS measures
The Group uses certain financial measures (“non-IFRS measures”) to measure its business performance and to help readers
understand and analyse its financial situation. Although they are used by the Group’s management, such measures are not
universally or legally defined and are not regulated by the IFRS adopted to prepare these Consolidated Financial Statements.
Other companies operating in the luxury goods industry might use the same measures, but with different calculation
criteria. For this reason, it is important for non-IFRS measures to always be read in conjunction with the related explanatory
notes, and for readers to be aware that such measures may not be directly comparable with those used by other companies.
The Prada Group uses the following non-IFRS measures in this Annual Report:
Net revenues at constant exchange rates: current year net revenues calculated considering the prior year exchange rates.
Net sales at constant exchange rates: current year net sales calculated considering the prior year exchange rates.
Operating income - EBIT: Earnings before Interest and Taxation, i.e. “Consolidated net result for the period” adjusted
to exclude “Total financial income / (expenses)” and “Taxation”.
Other non-recurring income / (expenses): transactions qualified by the Directors as non-recurring when their nature,
materiality or frequency requires separate disclosure in order to give readers additional information of the Group’s
operating results. Other non-recurring transactions could include, for example, impairment losses or reversal of
impairment losses of fixed assets, restructuring costs, litigation costs, and gains and losses on disposals of fixed assets
only when they are related to unusual material transactions considered outside the normal course of business.
Recurring operating income - EBIT Adjusted: the difference between the “Operating income - EBIT” and the “Other
non-recurring income / (expenses)”.
The reconciliation of Prada Group’s EBIT Adjusted and EBIT with the nearest IFRS measure (Net income for the year)
is reported below:
(amounts in thousands of Euro)
Net income for the year
Taxation
Total financial (income) / expenses
twelve months
ended
December 31
2023
%
on net
revenues
twelve months
ended
December 31
2022
673,392
298,071
90,229
14.2%
6.3%
1.9%
469,155
241,820
65,015
%
on net
revenues
11.2%
5.8%
1.5%
Operating income - EBIT
1,061,692
22.5%
775,990
18.5%
Other non-recurring (income) / expenses
-
-
69,186
1.6%
Recurring operating income – EBIT Adjusted
1,061,692
22.5%
845,176
20.1%
For the twelve months ended December 31, 2023, the other non-recurring income and expenses is nil as no non-recurring
material and unusual transaction has occurred in 2023, while in the twelve months ended December 31, 2022 they included
a write-down of Euro 42 million of tangible fixed assets and right of use assets as a result of the extraordinary market
conditions in Russia, a write-down of Euro 19.4 of the Church’s brand in context of the reorganisation process and a settlement
of a litigation of Euro 7.8 million considered of a non-recurring nature.
Net financial position surplus / (deficit): Short-term and long-term financial payables due to third parties and related parties,
net of cash and cash equivalents and short-term and long-term financial receivables due from third parties and related parties.
Net financial position surplus / (deficit), including lease liability: Net financial position including lease liability.
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Financial Review (amounts in thousands of Euro)
Net financial position surplus / (deficit)
Short-term lease liability
Long-term lease liability
Total lease liability
Net financial position surplus/(deficit), including lease liability
December 31
2023
December 31
2022
196,908
534,900
(411,289)
(392,126)
(1,699,599)
(1,715,451)
(2,110,888)
(2,107,577)
(1,913,980)
(1,572,677)
Net operating working capital: the sum of trade receivables (net), inventories (net) and trade payables.
Net invested capital (right of use assets included): the sum of the total consolidated shareholders’ equity, the lease
liability and net financial surplus / (deficit).
Net operating cash flow: net cash flow generated by operating activities, less the repayment of lease liability.
Free cash flow: net operating cash flow after the net cash flows used for the investing activities.
(amounts in thousands of Euro)
Cash flow from operating activities
Net cash, interest received (paid)
Lease liability: interest paid
Tax paid
Net cash flow from operating activities
Repayment of lease liability
Net operating cash flow
Net cash flow utilized by investing activities
Free cash flow
December 31
2023
December 31
2022
1,694,951
1,392,805
5,863
(58,825)
(8,533)
(40,989)
(486,708)
(219,586)
1,155,281
1,123,697
(429,685)
(428,170)
725,596
695,527
(759,191)
(250,209)
(33,595)
445,318
Research and development activities
The research and development activities are described in the introductory (“The Prada Group”) section of this Annual
Report, in the paragraph regarding creativity. The design and product development costs for the twelve months
ended December 31, 2023 amount to Euro 150.6 million, as reported in the Consolidated Statement of Profit or Loss
prepared in accordance with IFRSs.
Treasury shares
As at December 31, 2023 the Group did not own any treasury shares, as reported in the “Corporate Governance” section.
Events after the reporting date
No significant events to be reported.
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ANNUAL REPORT2023
Outlook
The Group is mindful of persisting geopolitical and macro-economic uncertainties and of the high comparison base
going forward. Against this backdrop, the Group priority for 2024 remains to drive brand desirability and retail
excellence further. As with 2023, while quarterly growth trajectory may not be linear through the year, the Group
retains the firm ambition of delivering solid, sustainable, above-market growth.
Milan, March 7, 2024
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Financial Review CHAPTER 4
Directors and
Senior Management
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Directors
Our Board of Directors (the “Board”) consists of eleven Directors: six
executive Directors, and five independent non-executive Directors. The
Board is appointed for a term of three years.
Executive Directors
PATRIZIO BERTELLI
Chairman of the Board and
Executive Director
MIUCCIA PRADA BIANCHI
Executive Director
BERTELLI, Patrizio, aged 77, is the Chairman of the Board with effect from
April 27, 2023. He was first appointed to the Board in 2003 and held the role
of Co-Chief Executive Officer along with Ms. Miuccia Prada until January 26,
2023. His partnership with Miuccia Prada began at the end of the ‘70s. He
combines entrepreneurial activity with a wide range of cultural and sporting
interests that he shares with Miuccia Prada. Mr. Bertelli received an honorary
degree in Business Economics from the University of Florence in 2000 and
the “University Seal” from the University of Bologna in 2021. In 2006, Time
Magazine cited Mr. Bertelli and Miuccia Prada as among the 100 most
influential couples in the world and in 2012 he became the first Italian in
history to be inducted into the America’s Cup Hall of Fame.
Mr. Bertelli holds directorships in subsidiaries of the Company. He holds
directorship in PA BE 1 S.p.A., which is a substantial shareholder of the
Company. Mr. Bertelli is the husband of Ms. Prada, Executive Director, and
is the father of Mr. Lorenzo Bertelli, Executive Director. Mr. Bertelli is not
and has not been a director of any other listed companies in Hong Kong or
abroad in the past three years.
PRADA BIANCHI, Miuccia, aged 75, is Executive Director of the Company,
Miu Miu Creative Director, and Prada Co-Creative Director with Raf Simons.
She served as Chairwoman of the Board from 2003 to 2014 and as Co-Chief
Executive Officer with her husband Patrizio Bertelli, until January 26, 2023.
After obtaining a degree in Political Science from Milan University, Ms. Prada
began designing for the family business, founded by her grandfather in 1913.
At the end of the ‘70s, she formed a partnership with Patrizio Bertelli, an
entrepreneur and the owner of two high quality leather goods companies.
Under the direction of Ms. Prada and Mr. Bertelli, Prada has become one of
the leading luxury companies worldwide. Ms. Prada has received several
awards for her original vision, innovation, and contribution to international
fashion. In 2000, she received an Honorary Doctorate from the Royal College
of Art in London. In 2006, Ms. Prada was named Officier dans l’Ordre des
Arts et des Lettres by the French Ministry of Culture. In 2015, she was
granted the title of Knight of the Grand Cross, the highest Order of Merit of
the Italian Republic, in recognition of her international success and
contribution to the fields of creativity, fashion and style. Ms. Prada is the wife
of Mr. Bertelli, Chairman of the Board, and is the mother of Mr. Lorenzo
Bertelli, Executive Director.
Ms. Prada holds directorships in Prada Holding S.p.A., Bellatrix S.p.A. and
Ludo S.p.A., which are substantial shareholders of the Company. Ms. Prada is
not and has not been a director of any other listed companies in Hong Kong
or abroad in the past three years.
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Directors and Senior Management ZANNONI, Paolo, aged 75, is the Executive Deputy Chairman of the Board
with effect from May 11, 2023. He was first appointed as Chairman of the
Board on May 27, 2021, and conferred in his executive role on June 4, 2021.
He has been an international advisor at Goldman Sachs since 2019, providing
advice to the firm’s business across Italy and the rest of Europe. He is
currently secretary of the Board of Directors of Beretta Holding S.p.A. and a
Board Member of Holland & Holland Limited. He served as Chairman of the
Board of Autogrill S.p.A., listed on the Italian Stock Exchange, from 2019 to
January 2023, Chairman of Dolce & Gabbana Holding S.r.l. from 2007 to
2021, and Chairman of Prysmian Group S.p.A. from 2005 to 2012. Prior to
this, Mr. Zannoni spent a number of years working with the Goldman Sachs
investment banking franchise in Italy. He joined Goldman Sachs in 1994, was
named managing director in 1997, partner in 2000 and was Chairman of the
Italian investment banking business between 2000 and 2013. He also spent a
period as co-chief executive officer of Goldman Sachs Russia. Prior to joining
Goldman Sachs, Mr. Zannoni was a vice president at Fiat S.p.A. and a
lecturer at Yale University. He continues to be an executive fellow at the Yale
School of Management, an advisory board member of the International
Center for Finance (ICF) and a board member of the Jackson Institute for
Global Affairs. Mr. Zannoni earned an MA and an MPhil in Political Science
from Yale University. He also earned a BA from the University of Bologna.
Mr. Zannoni holds directorships in subsidiaries of the Company and was
appointed as Chairman of the Board of Prada Holding S.p.A. in June 2023.
Mr. Zannoni is a member of the Remuneration Committee. Save as disclosed
herein, Mr. Zannoni has not held any directorship in any other listed
companies in Hong Kong or abroad in the last three years.
GUERRA, Andrea, aged 58, was first appointed as an Executive Director and
the Chief Executive Officer of the Company on January 26, 2023, confirmed
as Executive Director on April 27, 2023, and re-vested with the role of Chief
Executive Officer on May 11, 2023. Prior to joining Prada, Mr. Guerra was the
strategic advisor at LVMH, the Chief Executive Officer of Hospitality
Excellence at LVMH Moët Hennessy Louis Vuitton SE (September 2020 to
May 2022), Executive Chairman of the high-end food emporium Eataly S.p.A.
(September 2015 to May 2019), Chief Executive Officer of the eyewear
company Luxottica Group S.p.A. (July 2004 to September 2014), and was the
Chief Executive Officer of Merloni Elettrodomestici S.p.A., now Indesit
Company (2000 to 2004). Mr. Guerra obtained a degree in Business
Administration from Sapienza University of Rome in 1989. From December
2014 to October 2015, he was senior strategic advisor for business, finance
and industry to the Italian Government’s Prime Minister. He was a member of
the boards of directors of Bocconi University (November 2014 – October
2018) and Save the Children Italy, and is a shareholder of online newspaper
Linkiesta. Over the years, Mr. Guerra has also been a member of the strategic
committee of the Italian Strategic Fund (Fondo Strategico Italiano S.p.A.). He
was a member of the board of directors of Amplifon S.p.A., and a member of
the strategic committee of Ariston Thermo S.p.A., both companies listed on
the Italian Stock Exchange. He held the position of director on the boards of
Parmalat S.p.A. and DeA Capital S.p.A., both companies listed on the Italian
Stock Exchange, and of Banca Nazionale del Lavoro S.p.A..
Save as disclosed herein, Mr. Guerra has not held any directorship in any
other listed companies in Hong Kong or abroad in the last three years.
.
PAOLO ZANNONI
Executive Deputy Chairman of
the Board and Executive Director
ANDREA GUERRA
Chief Executive Officer and Executive
Director
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ANNUAL REPORT2023 BONINI, Andrea, aged 44, has been Chief Financial Officer of the Company
since May 2, 2022. He was appointed to the Board as Executive Director on
November 8, 2022, and confirmed as Executive Director on April 27, 2023.
He holds directorships in subsidiaries of the Company. Mr. Bonini has 19
years of experience in corporate finance and relevant experience in the
luxury industry. He started his professional career in the Milan-based M&A
firm Gallo & C. S.p.A. in 2003. In 2005, Mr. Bonini joined the Investment
Banking Division of Goldman Sachs International, based in London, and
became Managing Director in 2015. At Goldman Sachs, he was part of the
Italy Coverage team until 2013 and subsequently joined the Consumer Retail
Group, with responsibility for Luxury and Brands in Europe. Mr. Bonini
graduated in Business Administration from Bocconi University in Milan in
2003.
Mr. Bonini is not and has not been a director of any other listed companies in
Hong Kong or abroad in the past three years.
BERTELLI, Lorenzo, aged 35, joined the Board of Directors as Executive
Director in May 2021. Mr. Lorenzo Bertelli has been Group Marketing
Director since 2019 and was appointed the Group’s Head of Corporate
Social Responsibility in 2020. He is responsible both for the Group’s
Marketing and Communication strategy and for the Group’s overall
approach to sustainability. He joined the Group in 2017 as Head of Digital
Communication. Lorenzo Bertelli obtained a degree in Philosophy at San
Raffaele University in Milan in 2008. He is the son of Ms. Miuccia Prada
Bianchi, Executive Director and Mr. Patrizio Bertelli, Chairman of the Board.
Mr. Lorenzo Bertelli holds a directorship in Prada Holding S.p.A., which is a
substantial shareholder of the Company, as well as directorships in
subsidiaries of the Company. He is a member of the Nomination Committee
and the Sustainability Committee. Mr. Bertelli is not and has not been a
director of any other listed companies in Hong Kong or abroad in the past
three years.
ANDREA BONINI
Chief Financial Officer and
Executive Director
LORENZO BERTELLI
Executive Director
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Directors and Senior Management Independent Non-Executive Directors
ZAOUI, Yoël, aged 63, was elected as an Independent Non-Executive
Director on May 27, 2021, and appointed as Lead Independent Director on
May 11, 2023. He is a co-founder of Zaoui & Co., a firm established in
2013 to advise select clients on mergers, acquisitions and other strategic
and financial transactions, as well as major investment decisions. Mr. Zaoui
began his investment banking career at Goldman Sachs in 1988, and, over
a 24-year career at Goldman Sachs, was responsible for some of Europe’s
largest and most significant corporate transactions during a period of
unprecedented growth. Mr. Zaoui was the first European investment
banker to have joined Goldman Sachs’s top governing body, the
management committee, a position he held from 2008 until his retirement
in 2012. Prior to Goldman Sachs, Mr. Zaoui worked at Arthur Andersen in
Paris (1983 - 1986). Mr. Zaoui was educated in France and the US: he
obtained a diploma from the Ecole des Hautes Etudes Commerciales (HEC,
1982), a DEA doctoral degree in Finance from Universite Paris-Dauphine
(1983) and an MBA from Stanford University (1988). Mr. Zaoui continues to
be actively involved with his alma maters, serving as a member of the
Cercle des Grands Donateurs de la Fondation HEC. Mr. Zaoui was
conferred with the Order of Muhammad by His Majesty the King of
Morocco Mohamed VI.
Mr. Zaoui is the Chairman of the Audit and Risk Committee and a member
of the Remuneration Committee. Mr. Zaoui is not and has not been a
director of any other listed companies in Hong Kong or abroad in the past
three years.
CAPROTTI, Marina Sylvia, aged 46, was elected as Independent
Non-Executive Director on May 27, 2021. She has been Executive
Chairwoman of Esselunga S.p.A. since 2019. Prior to this, she was a
member of its Board of Directors starting from June 1998 and Vice
President from 2016 to 2019. She is currently a director in the Board of
Fondazione Accademia Teatro alla Scala of Milan. Ms. Marina Sylvia
Caprotti obtained a degree in Law at Università Cattolica del Sacro Cuore
in Milan in 2004.
Ms. Caprotti is the Chairwoman of the Remuneration Committee and a
member of the Audit and Risk Committee and the Nomination Committee.
Ms. Caprotti is not and has not been a director of any other listed
companies in Hong Kong or abroad in the past three years.
YOËL ZAOUI
Lead Independent Director and
Independent Non-Executive Director
MARINA SYLVIA CAPROTTI
Independent Non-Executive Director
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ANNUAL REPORT2023 MAURIZIO CEREDA
Independent Non-Executive Director
PAMELA YVONNE CULPEPPER
Independent Non-Executive Director
CEREDA, Maurizio, aged 60, was first appointed as Independent Non-
Executive Director of the Company on April 27, 2018, and was previously a
Non-Executive Director from May 2016 to April 2018. Mr. Cereda’s practice
focuses on providing consultancy services to entrepreneurs, family offices,
companies and financial institutions. Since 2015, he has also been founding
partner and board member of FIEE (Fondo Italiano per l’Efficienza
Energetica) Sgr S.p.A.. Mr. Cereda obtained a degree in Business Economics
from L. Bocconi University of Milan in 1989. Mr. Cereda has been serving as
board member of various companies listed on the Italian Stock Exchange
including NEXI S.p.A. (since December 2021), Technogym S.p.A. (since
2016), and Enervit S.p.A. (since 2007). Mr. Cereda started his career as an
analyst in the equity capital markets division in Rasfin S.p.A.. He then worked
for fifteen years at Mediobanca S.p.A. until his appointment as deputy
general manager and head of corporate finance for large corporate clients
from 2007 to 2015. From 2007 to 2014, he was a board member of
Mediobanca S.p.A., and from 2006 to 2014 he was also a board member of
Ansaldo STS S.p.A., both companies listed on the Italian Stock Exchange.
Mr. Cereda is the Chairman of the Remuneration Committee and a member
of the Audit and Risk Committee. Save as disclosed herein, Mr. Maurizio
Cereda has not held any directorship in any other listed companies in Hong
Kong or abroad in the last three years.
CULPEPPER, Pamela Yvonne, aged 59, was elected as Independent Non-
Executive Director on January 28, 2022. Ms. Culpepper’s former name was
JORDAN, Pamela Yvonne. Ms. Culpepper joined Hanold Associates, Llc as
Managing Partner of their Leadership Advisory Practice in January 2023. Ms.
Culpepper was one of three co-founders of Have Her Back, Llc., a female-
owned, female-led culture consultancy focused on advancing equality for all.
Before that, Ms. Culpepper was the Chief Human Resources Officer at Cboe
Global Markets, Inc., one of the world’s largest exchange holding companies,
offering cutting-edge trading and investment solutions to investors around the
world. At Cboe, Ms. Culpepper served as an advisor to the executive team
and Board of Directors with regard to talent management, compensation and
benefits and to the acquisition, and subsequent merger, of a global exchange
by Cboe. Ms. Culpepper has over 25 years of experience as an HR executive.
She joined Cboe from Golin, where she was the company’s Chief People
Officer. Prior to her work at Golin, Ms. Culpepper held various leadership
roles with PepsiCo, Inc., including Chief Global Diversity and Inclusion Officer,
Vice President, Human Resources for Quaker Foods and Snacks; Vice
President, Human Resources for PepsiCo’s Beverages Supply Chain; and Vice
President, Talent Management and Diversity for Quaker, Tropicana and
Gatorade. Before PepsiCo, Ms. Culpepper held roles with McKesson
Corporation, Clorox and Wells Fargo. Ms. Culpepper is a former Board
Trustee of VSO International, based in the United Kingdom, and was a Board
member for Navy Pier of Chicago, and in March 2023, she was appointed to
Cambia Health Solutions’ Board of Directors as an Independent Director. Ms.
Culpepper has a B.A. in Psychology from the University of Arkansas at Little
Rock and an MPA (Master of Public Administration) in Organizational Change,
from California State University, Eastbay.
Ms. Culpepper is the Chairwoman of the Sustainability Committee.
Ms. Culpepper is not and has not been a director of any other listed
companies in Hong Kong or abroad in the past three years.
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Directors and Senior Management ANNA MARIA RUGARLI
Independent Non-Executive Director
RUGARLI, Anna Maria, aged 51, was elected as Independent Non-Executive
Director on January 28, 2022. Ms. Rugarli is the Corporate Sustainability
Vice President of Japan Tobacco International, where she is responsible for
developing business-integrated strategy at a global level. Ms. Rugarli has
been appointed as an Independent Non-Executive Director and the Chair of
the ESG Committee at ASOS plc, a company listed on the London Stock
Exchange, on 26 June 2023. Ms. Rugarli is a Sustainability & CSR expert
with more than twenty years’ experience specializing in designing innovative
programs and in developing strategies. She initiated and launched Nike’s
Sustainability & CSR programs in Europe, the Middle East & Africa regions
and was with the company for 12 years pioneering this work at industry
level. Ms. Rugarli then led VF Corporation’s Circular Economy strategy at
global level as well as Sustainability, Purpose, and I&D strategy at regional
level for 10 years. During this time, she managed broad networks of
stakeholders and cross-sector partners and led Sustainability & CSR
programs integration across the business. While at VF Corporation she was
a Board member and then President of European Outdoor Conservation
Association for a total of seven years. Since February 2022 Ms. Rugarli has
been a board member of JT International S.A.. Ms. Rugarli graduated in
Political Sciences and is a certified broker in Cross-Sector Partnerships at
Cambridge University.
Ms. Rugarli is member of the Sustainability Committee. Ms. Rugarli is not
and has not been a director of any other listed companies in Hong Kong or
abroad in the past three years.
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ANNUAL REPORT2023 Senior Management
Our senior management is responsible for the day-to-day
management of the business of the Group.
AGOSTINI, Cristiano, aged 50, has been Group Chief Information Officer since July 2021. He is primarily responsible
for overseeing worldwide Transformation and Innovation Technology of the IT Department. After earning a degree in
Communication Sciences at the University of Turin, Mr. Agostini has gained many years of experience in the
Information Technology sector at prestigious companies and consulting firms. He has managed complex projects of
transformation and technological innovation in international contexts, first at the Telecom Italia Research Center and
subsequently at Deloitte and Accenture. In 2006 he joined Accenture to cover the role of Managing Director in the
Technology Strategy & Advisory area.
BERTELLI, Lorenzo, aged 35 and Executive Director of the Company, is the Group Marketing Director and the
Group’s Head of Corporate Social Responsibility. Please refer to the paragraph “Executive Directors” of the Directors
and Senior Management section of this Annual Report for details of his bio.
BERTONCINI, Francesca, aged 53, has been Prada President and Regional Director North Central Europe since
December 2023. Ms. Bertoncini is primarily responsible for overseeing the Group’s operations in the United Kingdom,
Ireland, Denmark, Sweden, Norway, Germany, Austria, The Netherlands and in the Czech Republic, where she covers
several managerial roles at the Company’s subsidiaries. She joined the Group in 2001. Until 2018, her managerial
roles included product development, collection and retail merchandising. In 2018 she was appointed as Worldwide
Prada Woman Shoes Collection/Retail Merchandising Director and from 2018 to 2019, she worked as Senior Vice
President Global Merchandising and Product Development for Stuart Weitzman in New York.
BONINI, Andrea, aged 44 and Executive Director of the Company, is the Chief Financial Officer of the Company.
Please refer to the paragraph “Executive Directors” of the Directors and Senior Management section of this Annual
Report for the details of his bio.
BRINI, Giulio, aged 55, has been Hong Kong, Macau, Taiwan, South Asia, Australia, New Zealand Regional Director
since July 2022. He is primarily responsible for overseeing the Group’s operations in Asian countries and for the
development of Prada and the Miu Miu business within the local markets. He was also appointed as Outlets Division
Director in October 2017. Mr. Brini joined the Group in 1995. Before being appointed to his current position, he
covered different managerial roles in the commercial and industrial area, including Prada Retail Director and Miu Miu
General Manager. Mr. Brini obtained a degree in Economics and Banking from the University of Siena in 1993.
BUONCOMPAGNI, Fabrizio, aged 56, was appointed as Indirect Procurement and General Services Director in June
2023. Mr. Fabrizio Buoncompagni is primarily responsible for centrally managing the indirect procurement process
in terms of negotiations, the management of contracts, the technical qualification of vendors, and the loading and
monitoring of purchase orders. After obtaining a degree in Economics and Commerce from the University of Florence,
he joined the Group in 1995 in the Controlling Department, becoming Industrial Controlling Director in 2002 and
Organization Director in 2016.
CAROLA, Pablo, aged 56, has been Chief Corporate Officer Middle East since December 2023. Mr. Carola is
primarily responsible for overseeing the Group’s commercial operations in the Middle East area, where he covers
several managerial roles at the Company’s subsidiaries. Mr. Carola obtained a degree in Business Administration at
Universidad de Politecnica de Catalunya (Spain). He joined the Group in 2011 to manage human resources of both
Miu Miu and Prada stores worldwide, and from 2013 to 2017 he was Regional Director for the Iberian Peninsula and
North Africa. Prior to joining the Group, he worked for almost twelve years as Human Resources Director at Louis
Vuitton.
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Directors and Senior Management CASTELLANI, Valeria, aged 50, was appointed Security Senior Manager in June 2022. She is primarily responsible
for ensuring the protection and security of the physical assets of the Group through actions aimed at preventing risks
and protecting the company’s physical goods. After obtaining a degree in law at the University of Bologna, Valeria
Castellani has worked in government and in the private sector, both in Italy and abroad. From 2006 to 2012 she was
Security Manager at Hilton Worldwide, before becoming Asset & Profit Protection Regional Manager at Burberry and
then Security Manager Corporate and Retail at Bottega Veneta in 2017.
CHEN, Kate, aged 44, has been Taiwan General Manager since September 2022. She is primarily responsible for
overseeing the Group’s commercial operations in Taiwan and for the development of Prada and the Miu Miu business
within the local market. Ms. Chen joined the Group in 2011. Before being appointed to her current position, she
covered a range of different managerial roles in Retail and Merchandising for the Taiwan market.
CHOI, Moonyoung, aged 61, has been Prada Korea General Manager since 2007. She is primarily responsible for
overseeing the Group’s commercial operations in Korea. She started her career at Louis Vuitton, as the first Louis
Vuitton Store Manager in Korea (1991 – 1999). From 1999 to 2007, Ms. Choi worked at Celine Korea, LVMH Group,
first as Retail Manager and then as Country Manager for Korea.
CIABATTI, Maurizio, aged 59, was appointed Real Estate Director in 2016. Mr. Ciabatti is primarily responsible for
overseeing the acquisition of new real estate and managing the organisation’s real estate development portfolio,
finding new potential buildings or property to develop for the Group’s portfolio and to engage in contract negotiations.
He joined the Group in 1989 in the Engineering Department, with managerial roles including Group Engineering
Director from 2006 to 2016.
CLARK, Sophie, aged 51, has been Prada Australia General Manager since 2016. She is primarily responsible for overseeing
the Group’s commercial operations in Australia and New Zealand. Ms. Clark graduated from Sydney’s Kincoppal-Rose Bay
School and had an extensive career at the department store David Jones in Sydney (1999 – 2016), where she became
General Manager Womenswear. Ms. Clark was elected as a judge for the International Woolmark Fashion Awards in Milan
2014, Beijing 2015 and New York 2016.
D’ATTIS, Gianfranco, aged 48, was appointed Prada Chief Executive Officer in January 2023. In his role, he is primarily
responsible for the strategic development of the Prada brand in every market. Gianfranco D’Attis holds a bachelor’s
degree from Zurich Graduate School of Business Administration and completed his education by attending the Senior
Executive Program at Columbia Business School in New York. During his career, Gianfranco D’Attis has held a number
of senior management positions, including most recently as President for Christian Dior Americas.
DULIGA, Janet, aged 57, was appointed Chief Corporate Officer Americas in December 2023. Janet is responsible
for managing corporate functions for the Americas market, liaising with the Prada and Miu Miu brands in order to
provide cross-brand services. Ms. Duliga joined the Group in December 2023, with over 20 years of experience in
Human Resources and in law in public and private companies. She most recently served as the Chief Administrative
Officer at JOANN, Inc. and prior to that was Senior Vice President of Human Resources for Sunglass Hut & Luxury
Retail, North America, a division of Luxottica. She holds a Bachelor of Arts degree in Psychology from Pomona
College, a Masters of Arts degree in Clinical Psychology from Antioch University, a juris doctorate from the University
of San Diego School of Law, and a doctorate in Organizational Learning from the University of Pennsylvania
HUET, Emmanuel, aged 46, has been France, Belgium, and Monte Carlo Regional Director since February 2022. He
is primarily responsible for overseeing the Group’s operations in France, Belgium, and Monte Carlo and for the
development of Prada and the Miu Miu business within the local markets. His previous roles with Louis Vuitton,
included Director of the Maison Champs Elysées and General Manager Benelux & Nordics.
MALETTO, Diego, aged 45, has been Internal Auditing Director since February 2022. He is responsible for defining
and monitoring compliance with rules, procedures and processes within the Group. Mr. Maletto obtained a Master’s
Degree in Economics and Business from Turin University. After a career in consulting in Italy and the USA for Ernst &
Young (2006 – 2017), he became Head of Internal Audit for Italy, Greece, Albania and Malta at Vodafone (2017 –
2020) and Audit Director at Autostrade per l’Italia (2020 – 2022).
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ANNUAL REPORT2023 MANZATTO, Denni, aged 39, was appointed Church’s Chief Executive Officer in January 2022. He is responsible for
overseeing Church’s brand operations worldwide. Prior to this appointment, Mr. Manzatto was Group Commercial
and License Director with responsibility for the commercial development of the wholesale and marketplace channels
of the Prada, Miu Miu and Car Shoe brands. He directly managed the Prada wholesale channel as well as the eyewear
and fragrance licenses for both Prada and Miu Miu. He was also responsible for leading Group and brand-level
business development opportunities, strategic partnerships and collaborations. Mr. Manzatto obtained an Executive
Master’s degree in Business Administration from INSEAD and Tsinghua University in 2018. He is a Business and
Management graduate of Bocconi University (2007, 2009) and Fudan University (2009), and participated in an
exchange program with the Wharton School of the University of Pennsylvania (2006). Prior to joining the Group in
2013, Mr. Manzatto worked as an Associate at private equity firm Vision Capital and in the Investment Banking
division of Goldman Sachs.
MARSICOLA, Alessandra, aged 64, was appointed as President and CEO Japan, Guam, Saipan and Hawaii in
September 2023. She was Japan, Guam, Saipan and Hawaii Regional Director since May 2022. She is primarily
responsible for overseeing the worldwide Prada retail functions and strategy of Prada, Miu Miu and Church’s. Ms.
Marsicola joined the Group in 1991. Before being appointed to her current position, she covered a range of different
managerial roles in the commercial area, including Prada Retail Director, Regional Director North West Europe, Retail
Development Director for Japan and Asia, Chief Executive Officer of Prada Fashion Commerce (Shanghai), Prada
Worldwide Store Operation Director and Prada Retail Director for Prada Japan. From 2006 to 2009, she worked first
as Sales Director for La Rinascente then as Asia Pacific Retail Director for Fendi.
MASSARDI, Roberto, aged 59, has been Chief Business Development Officer since May 2022. He is primarily
responsible for the Group’s strategic development through the assessment of new business opportunities. He is also
responsible for managing the Group’s eyewear and fragrances licenses. After obtaining a degree in Business
Economics from Bocconi University in Milan, Mr. Massardi covered several roles within the Pirelli Group. In 1996 he
joined the Prada Group as Business Development Director and later as General Director for Jil Sander. In 2005 he
joined Sportswear Company S.p.A. (Stone Island) as General Manager.
MENICATTI, Andrea, aged 34, was appointed as General Manager for the Marchesi Brand in February 2023. Mr.
Menicatti has held managerial positions in Italy, the USA and in the Middle East for The Boston Consulting Group,
developing growth strategies and implementing transformation programs for companies in the Food and Fashion
sectors. He began his professional career at JPMorgan and the DeA Capital group's Taste of Italy investment fund.
PETRUZZO, Benedetta, aged 38, was appointed as Miu Miu Chief Executive Officer in March 2023. In her role, she
is primarily responsible for the strategic development of the Miu Miu brand globally. She joined the Prada Group in
February 2020 as Miu Miu General Manager. Before joining the Prada Group, she was Executive Vice President for
North America at Kering Eyewear, where she worked for five years in a range of management positions. After obtaining
a degree in Business Administration and a Master of Science in Management at Bocconi University, she started her
career in finance before joining management consulting firm Bain & Company, where she worked for several years in
the retail and luxury sector.
SANTAMARIA MAURIZIO, Rosa, aged 50, was appointed as Chief People Officer Prada Group in September 2023.
She is responsible for taking an active part in the Group’s culture and organisational evolution and for the development
of the Human Resources role within the Group. Before joining the Group, she obtained a degree in Engineering from
Sapienza University in Rome and gained experience as a Human Resources Officer at Valentino. She worked in HR at
American Express for 14 years in a number of senior roles, most recently as Chief Human Resources Officer Italy,
Spain, Nordics, Netherlands, Belgium and Turkey. Her professional experience began at Ernst & Young and continued
at multinational pharmaceutical company Bristol Myers Squibb.
SCAPECCHI, Andrea, aged 52, was appointed Retail Architecture Director in December 2022. Mr. Scapecchi is
responsible for leading the executive signoff of final store plans for new store openings and for capital projects in
existing stores, working closely with the Real Estate Director. Mr. Scapecchi obtained a degree in Mechanical
Engineering from the University of Florence. He joined the Group in 1998. His previous managerial roles in the
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Directors and Senior Management Engineering Area included Worldwide Engineering Director, Asia Pacific Business Development Director in Hong
Kong, and Engineering Retail Director.
SECONDARI, Francesca, aged 46, was appointed as General Counsel and Chief Legal Officer Prada Group in May
2023. Ms. Secondari graduated in Law from Università di Perugia and she holds an Executive MBA from the American
University in Cairo. She has been a qualified lawyer in Italy since 2005. Ms. Secondari trained at Studio Legale
BonelliErede, of which she became equity partner in 2019. She has experience in M&A and extraordinary finance, and
in corporate governance with an ESG focus. She has also directly managed significant transactions in the luxury
sector. For the past seven years, she has been based at BonelliErede’s Cairo office, as head of business development
activities in Africa and the Middle East.
SIMONS, Raf, aged 56, was appointed as Prada Co-Creative Director in April 2020, working in partnership with
Miuccia Prada Bianchi. Mr. Simons launched his own menswear label in 1995. He was creative director at Jil Sander
from 2005 to 2012, at Christian Dior from 2012 to 2015, and at Calvin Klein from 2016 to 2018. He contributes to
the brand image, to the conception, preparation and development of Prada brand products, and in the development
of creative strategies for marketing, advertising and branding campaigns. Mr. Simons graduated in Industrial Design
at SHIVKV in Genk in 1991.
VIGNOLO LUTATI, Ugo Camillo Lodovico Maria, aged 45, was appointed as Chief Information Security Officer in
April 2023. Mr. Vignolo Lutati is responsible for ensuring the integrity, availability and confidentiality of information
in accordance with the Prada Group’s business needs and information security policies. Mr. Vignolo Lutati is an ex-
partner of a leading professional services company, with experience covering managerial and international roles,
mainly in the area of governance and risk management in both IT and Finance.
WANG, Chen-Chen, aged 51, has been China General Manager since 2019. She is primarily responsible for overseeing
the Group’s commercial operations in China, where she covers several managerial roles at the Company’s subsidiaries.
She joined the Group in 2015 as Miu Miu Retail Director. Ms. Wang obtained a Master’s Degree in Science from
Auburn University. She started her career at Guilford Mills New York (1997 – 2000) before working at SilverStream
Software New York (2000 – 2002). Most recently, she was Merchandising Director at Christian Dior China (2007 –
2015).
ZENKOVSKAYA, Vera, aged 47, has been Russian area Regional Director since 2013. Ms. Zenkovskaya is primarily
responsible for overseeing the Group operations in Russia and Kazakhstan, where she covers several managerial roles
at the Company’s subsidiaries. Ms. Zenkovskaya obtained a Foreign Languages Degree at the Language University of
Kazakhstan. Prior to joining the Group in 2011 as Russia Country Manager, she worked within the beauty sector
(L’Oréal, Temtrade) in marketing and retail. From 2006 to 2011, she worked in managerial roles for Louis Vuitton in
Russia and Ukraine
None of the Group’s senior management listed above is or has been a director of any listed companies in Hong Kong
or abroad, other than the Company, in the past three years.
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ANNUAL REPORT2023 Company Secretary
TONG, Pui Ting Wendy, aged 39, first joined the Company as Asia Corporate Affairs Counsel in January 2013 and
was appointed as Asia Pacific Corporate Affairs Counsel and Company Secretary on December 31, 2023. Since
joining she has been involved in managing the corporate secretarial and other corporate matters, listing rules
compliance, and data privacy matters in the Asia Pacific region. Prior to joining the Company, she worked as an
associate in the corporate department of Slaughter and May, Hong Kong. She was admitted as a solicitor of Hong
Kong by the High Court of Hong Kong in 2011. Ms. Tong graduated from the University of New South Wales in
Sydney with a Bachelor of Commerce and Law degree with Distinction in 2007 and obtained the Postgraduate
Certificate in Laws with Distinction from the University of Hong Kong in 2008.
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7777
Directors and Senior Management CHAPTER 5
Directors'
Report
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Principal activities and business review
Prada S.p.A. (the “Company”), together with its subsidiaries (the “Group”), is a leading global luxury group active in
the design, production and distribution of high-end leather goods, footwear, ready-to-wear, accessories, and jewelry.
It also operates, under licensing agreements, in the eyewear and beauty sectors, as well as in the food and beverage
sector. Through its Directly Operated Stores network, e-commerce channels and selected e-tailers, franchise stores,
and a selected number of luxury department stores and independent retailers, the Group operates in all major
international markets worldwide.
The Company is a joint-stock company with limited liability, incorporated and domiciled in Italy. Its registered office
is at Via Antonio Fogazzaro 28, 20135 Milan (MI), Italy.
Further discussion and analysis of these activities, as required by section 388(2) and Schedule 5 to the Hong Kong
Companies Ordinance, including a review of the business of the Company, a discussion and analysis of the Group’s
performance during the year ended December 31, 2023 (the “2023 Year”), and the material factors underlying its
economic results and financial position, a description of the risks and uncertainties facing the Group, and the future
development of the business of the Company, are set out in the Financial Review section of this annual report. Details
of material events affecting the Group that have occurred since the end of the reporting period are set out in Note 44
to the 2023 Year Group’s consolidated financial statements (the “Consolidated Financial Statement”). These
discussions form part of this directors’ report (the “Directors’ Report”).
Compliance with the relevant laws and regulations
The Group has adopted specific compliance procedures aimed at ensuring compliance with all applicable laws, rules,
and regulations, in particular those that have a significant impact at a worldwide level, as the Group’s products are
distributed and sold across more than 70 countries.
A detailed analysis of the legal and regulatory risks to which the Group is exposed is set out in the paragraph headed
“Legal and regulatory risks” of the Financial Review section of this Annual Report, which forms part of this Directors’
Report.
Environmental policies and performance
The Group aims to enhance value creation for its stakeholders by combining economic profitability with employee and
customer satisfaction, respecting ethical and environmental values, and ensuring sustainability.
Environmental protection is one of the main drivers of the Group, which is being engaged in implementing and
enforcing virtuous behaviors that contribute to its sustainable growth.
Commitment to environmental protection is a key element of the Code of Ethics, which was updated in July 2022,
applied both within the Group’s organisation, by implementing staff awareness, and to the third parties working with
the Group.
An analysis of the Group’s environmental policies and performance, as well as of the relationships with the key
stakeholders (employees, customers, suppliers and shareholders), will be included in the Group’s Sustainability
Report, which will be published at the same time of this Annual Report.
Further information on the environmental policies and performance of the Group is also set out in “The Prada Group”
section to this Annual Report.
Relationships with key stakeholders
The Group’s success also depends on the support from key stakeholders, such as employees, customers, suppliers,
and shareholders.
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Directors' Report Employees
The Group is built on people. The Group has always considered human capital to be the key to its competitive edge
and it makes every effort to promote and reward professional skills and teamwork, with an emphasis on results. The
employees’ enthusiasm, craft skills and intellectual curiosity are the indispensable elements that underpin the
innovation and quality of the Group’s products. The Company searches for people that can combine these outstanding
qualities with the values of the Group.
As of December 31, 2023 the Group had 14,876 employees (headcount), 40% of whom are in Italy, with women
representing 63% of the total workforce.
The Group’s remuneration policy aims to attract, reward and retain skilled personnel and expert managers, while
bringing the interests of the management in line with the primary objective of creating value for the shareholders over
the medium and long term.
Further analysis on the value of human resources of the Group is set out in the “The Prada Group” section to this
Annual Report, while further analysis on the remuneration policy of the Group is set out in the “Corporate Governance”
section of this Annual Report, both of which form part of this Directors’ Report.
Customers
The Group is globally recognized as a trend-setter in the fashion industry.
The distinctive features and the prestige of the Group place the Group in a position to offer customers worldwide
unique products, characterized by creativity, quality, and identity. In addition, the Group believes that effective
communication with customers is crucial to build and convey an image of strong and consistent brand identity.
The result of the Group’s approach to its customers is the unique relationship between each customer and the
Group’s brands, its products and its stores.
Suppliers
The Group regards its relationship with its suppliers, built through years of day-to-day collaboration and directed
towards continuous improvement, as fundamental to its success. The Group has a wide range of raw materials
suppliers and external manufacturers. About 92% of them are located in the European Union, the vast majority of
which are in Italy.
The Group requires that its suppliers act responsibly, and that each of them undertakes and acknowledges the
Group’s Code of Ethics, which sets forth the inalienable rights of employees, such as proper working conditions,
equal opportunities, freedom of association, health insurance coverage, and protection of the environment in the
collection of materials and during the production processes.
In order to achieve the highest quality standards, the Group has put in place procedures for the selection and retention
of its suppliers, with the aim of establishing long-term business relationships. The Group audits suppliers and their
sub-contractors to ensure their practices are compliant with the Code of Ethics.
Shareholders
One of the main corporate goals of the Group is to enhance shareholders’ value through appreciation in the share
price and by granting dividends payouts, taking into account, among other factors, the liquidity position and business
expansion needs of the Group. Details of the Group’s communication with its shareholders are set out in the
“Corporate Governance” section of this Annual Report, which forms part of this Directors’ Report.
8080
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ANNUAL REPORT2023 Results and dividends
The results of the Group for the 2023 Year are set out in the Consolidated Statement of Profit and Loss.
The Board recommends the distribution of final dividends of Euro 350,558,888 (Euro 0.137 per share) for the 2023
Year.
The final dividends will be subject to the shareholders’ approval at the forthcoming shareholders’ general meeting of
the Company to be held on Wednesday, April 24, 2024.
Subject to the shareholders’ approval of the recommended final dividends, such dividend will be paid on Friday, May
17, 2024.
The final dividend will be paid to the shareholders recorded on the Company’s shareholders register on Thursday,
May 2, 2024 only, net of Italian withholding tax, where applicable. The current rate of Italian withholding tax applied
to applicable dividend payments is equal to 26%.
Five-year financial summary
The five-year financial summary of the Group is set out in Note 41 to the Consolidated Financial Statements.
Reserves
Details of the movements in the reserves of both the Group and the Company during the 2023 Year are set out in the
Consolidated Statement of Changes in Shareholders’ Equity and in the Statement of Changes in the Company’s Equity.
Distributable reserves
As at December 31, 2023, the Company’s reserves available for distribution to the shareholders in accordance with
the Company’s by-laws amounted to Euro 1,951.7 million.
Property, plant and equipment
Details of the movements in the property, plant, and equipment of the Group during the 2023 Year are set out in Note
15 to the Consolidated Financial Statements.
Donation
Donations by the Group mainly related to charities amounted to Euro 6,291,054 (2022: Euro 3,959,250).
Pre-emptive rights
The Company’s by-laws do not provide for shareholders’ pre-emptive rights.
Purchase, sale or redemption of the Company’s listed securities
During the 2023 Year, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the
Company’s listed securities.
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Directors' Report Capital gains tax in Italy
Capital gains realized from the sale of securities in an Italian company by shareholders resident in Hong Kong are not
subject to taxation in Italy.
Subsidiaries
Details of the Company’s subsidiaries as at December 31, 2023, are set out in Note 42 to the Consolidated Financial
Statements.
Directors
The current Directors of the Company as of the date of this Directors’ Report are:
Executive Directors
Mr. Patrizio BERTELLI (former Co-Chief Executive Officer until January 26, 2023, re-elected as Executive Director
on May 27, 2021, and appointed as Chairman of the Board on April 27, 2023)
Mr. Paolo ZANNONI (former Chairman of the Board until April 27, 2023, elected as Executive Director on May 27,
2021, and appointed as Executive Deputy Chairman of the Board on May 11, 2023)
Mr. Andrea GUERRA (first appointed as Chief Executive Officer and Executive Director on January 26, 2023,
confirmed as Executive Director on April 27, 2023, and re-appointed as Chief Executive Officer on May 11, 2023)
Ms. Miuccia PRADA BIANCHI (former Co-Chief Executive Officer until January 26, 2023, re-elected as Executive
Director on May 27, 2021)
Mr. Andrea BONINI (Chief Financial Officer, first appointed as Executive Director on November 8, 2022 and confirmed
as Executive Director on April 27, 2023)
Mr. Lorenzo BERTELLI (elected as Executive Director on May 27, 2021)
Independent Non-Executive Directors
Mr. Yoël ZAOUI (elected as Independent Non-Executive Director on May 27, 2021, and appointed as Lead Independent
Director on May 11, 2023)
Ms. Marina Sylvia CAPROTTI (elected as Independent Non-Executive Director on May 27, 2021)
Mr. Maurizio CEREDA (re-elected as Independent Non-Executive Director on May 27, 2021)
Ms. Pamela Yvonne CULPEPPER (elected as Independent Non-Executive Director on January 28, 2022)
Ms. Anna Maria RUGARLI (elected as Independent Non-Executive Director on January 28, 2022)
Resigned Directors
The only Director who has resigned since the beginning of the 2023 Year and up to the date of this Directors’ Report is:
Mr. Stefano SIMONTACCHI (former Non-Executive Director, resigned on January 26, 2023)
Biographical information of Directors
A brief biography of each current Director is set out in the “Directors and Senior Management” section of this Annual
Report.
Directors’ permitted indemnity
There is no permitted indemnity provision in any contract entered into by the Company or any of its associated
corporation (within the meaning of Part XV of the Securities and Futures Ordinance, the “SFO”) that is or was in force
during the 2023 Year and until the date when this directors’ report is approved by the Board, which is required to be
disclosed under section 470 of the Hong Kong Companies Ordinance.
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ANNUAL REPORT2023 Management contract
No contract, other than employment contracts and directors’ service contracts, concerning the management and
administration of the whole or any substantial part of the Company’s business was entered into, or was effective,
during the 2023 Year.
Directors’ service contracts
As disclosed in the announcement published on the websites of both The Stock Exchange of Hong Kong Limited (the
“Stock Exchange”) and the Company, Mr. Andrea Guerra’s employment agreement with the Company executed on
January 16, 2023 (the “Employment Agreement”) provided that, in case of termination of such Employment
Agreement by either Mr. Guerra or by the Company within the first 12 months (i.e., before January 16, 2024), there
was a reciprocal penalty of 24 months of his salary plus discretionary bonus (if any).
Since the Employment Agreement contained an express term which provided that, in order to entitle the Company to
terminate the Employment Agreement, the Company could have been required to pay compensation or make other
payments equivalent to more than one year’s emoluments, the Employment Agreement required the approval of the
shareholders, which was obtained at the annual general meeting of the Company on April 27, 2023, pursuant to Rule
13.68 of the Listing Rules.
Other than the above, none of the Directors of the Company has a service contract with any member of the Group
that cannot be terminated within one year without payment of compensation, other than statutory compensation.
Directors’ interests in competing business
During the 2023 Year, none of the Directors of the Company held any interest in a business that competes, or is likely
to compete, directly or indirectly, with the business of the Company or the Group.
Directors’ interests and short positions in securities
As at December 31, 2023, the Directors and their associates had the following interests in the shares, underlying
shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) as
recorded in the register required to be kept by the Company under Section 352 of the SFO, or as otherwise notified
to the Company and the Stock Exchange, pursuant to the Model Code for Securities Transactions by Directors of
Listed Companies (the “Model Code”) contained in Appendix C3 (formerly known as “Appendix 10”) of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”):
(a) Long positions in shares and underlying shares of the Company
Name of Director
Ms. Miuccia Prada Bianchi
Mr. Patrizio Bertelli
Number of Shares
Nature of Interest
Approximate
percentage
of Issued Capital
2,046,470,760
(Notes 1 and 2)
2,046,470,760
(Notes 1 and 3)
Interest of Controlled
corporation
Interest of Controlled
corporation
80%
80%
Notes:
1. Prada Holding S.p.A. owns approximately 80% of the issued capital in the Company and, therefore, is the holding
company of the Company.
2. Ms. Miuccia Prada Bianchi controls, indirectly through Ludo S.p.A., 53.8% (comprised of 438,460 ordinary
shares and 100,000 preference shares) of the capital in Bellatrix S.p.A., which in turn owns 65% (comprised of
1,650 ordinary shares and 300 preference shares) of the capital in Prada Holding S.p.A.. Ms. Miuccia Prada
Bianchi is therefore deemed under the SFO to be interested in all the shares registered in the name of Prada
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Directors' Report Holding S.p.A.. Ms. Miuccia Prada Bianchi is also a director of Prada Holding S.p.A., Bellatrix S.p.A. and Ludo
S.p.A..
3. Mr. Patrizio Bertelli controls, indirectly through PA BE 1 S.p.A. (“PA BE”), 35% (comprised of 750 ordinary shares
and 300 preference shares) of the capital in Prada Holding S.p.A.. Mr. Patrizio Bertelli is therefore deemed under
the SFO to be interested in all the shares registered in the name of Prada Holding S.p.A.. Mr. Patrizio Bertelli is
also a director of PA BE.
The simplified shareholding chart below illustrates the interests of Ms. Miuccia Prada Bianchi and Mr. Patrizio Bertelli
in the shares of the Company as at December 31, 2023:
PATRIZIO BERTELLI
100%
MIUCCIA PRADA
BIANCHI
LUDO S.p.A.
100%
53.8%
PA BE 1 S.p.A.
BELLATRIX S.p.A.
35%
65%
PRADA HOLDING S.p.A.
80%
PRADA S.p.A.
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ANNUAL REPORT2023 (b) Long positions in shares and underlying shares of associated corporations:
Name of Director
Name of associated corporations Class of shares
Number of
Shares
Nature of interest
Approximate
percentage
of interests
Ms. Miuccia Prada Bianchi Prada Holding S.p.A.
Ordinary Shares
1,650
Controlled Corporation
68.75%
Prada Holding S.p.A.
Preference Shares
MFH Munich Fashion Holding GmbH Registered Share
300
1
As above
As above
Bellatrix S.p.A.
Bellatrix S.p.A.
Ludo S.p.A.
Ludo S.p.A.
Ludo S.p.A.
PH-RE LLC
Ordinary Shares
438,460
As above
Preference Shares
100,000
As above
Class A shares
Class B shares
Class C shares
5,066,000
Beneficial Owner
4,965,100
Beneficial Owner
10
Ownership
Capital Contribution (JPY) 1,000,000 Controlled Corporation
100%
Prada Re S.r.l.
Participation Quota (Euro) 2
As above
FINANZIARIA E DI PARTECIPA-
ZIONI S.A.S. DI PRADA RE S.R.L.
Limited Partnership
0
As above
Immobiliare Rivalsa S.p.A.
Ordinary shares
104,000
As above
Prada RE Holding USA, LLC
Membership interest
720 Fifth USA, LLC
Membership interest
Mr. Patrizio Bertelli
Prada Holding S.p.A.
Prada Holding S.p.A.
Ordinary Shares
Preference Shares
MFH Munich Fashion Holding GmbH Registered Share
0
0
750
300
1
As above
As above
As above
As above
Controlled Corporation
31.25%
PH-RE LLC
Prada Re S.r.l.
Capital Contribution (JPY) 1,000,000
As above
Participation Quota (Euro) 2
As above
FINANZIARIA E DI PARTECIPA-
ZIONI S.A.S. DI PRADA RE S.R.L.
Limited Partnership
0
As above
IMMOBILIARE RIVALSA S.p.A.
Ordinary shares
104,000
As above
Prada RE Holding USA, LLC
Membership interest
720 Fifth USA, LLC
Membership interest
0
0
As above
As above
50%
100%
49.83%
83.34%
100%
100%
100%
100%
80%
100%
100%
100%
50%
100%
100%
100%
80%
100%
100%
100%
Save as disclosed above, as of December 31, 2023, none of the Directors of the Company or their associates had any
interest or short position in the shares, underlying shares and/or debentures of the Company or any of its associated
corporations (within the meaning of Part XV of the SFO), as recorded in the register required to be kept under Section
352 of the SFO, or as otherwise notified to the Company and the Stock Exchange under the Model Code.
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8585
Directors' Report Substantial shareholders’ interests and short positions in securities
As of December 31, 2023, other than the interests of the Directors of the Company as disclosed above, the following
persons held interests or short positions in the shares or underlying shares of the Company which were recorded in
the register required to be kept by the Company under Section 336 of the SFO:
Name of Shareholder
Long Positions
Prada Holding S.p.A.
Bellatrix S.p.A.
Ludo S.p.A.
PA BE 1 S.p.A.
Capacity
Number of Shares
Approximate
percentage
of Issued Capital
Legal and beneficial
owner
Interest of controlled
corporation
Interest of controlled
corporation
Interest of controlled
corporation
2,046,470,760
2,046,470,760
2,046,470,760
2,046,470,760
80%
80%
80%
80%
Note:
Prada Holding S.p.A. owns approximately 80% of the issued capital in the Company. As Ludo S.p.A. owns 53.8% of
Bellatrix S.p.A., which in turn owns 65% of Prada Holding S.p.A. and PA BE 1 S.p.A. owns 35% of Prada Holding
S.p.A., Bellatrix S.p.A., Ludo S.p.A. and PA BE 1 S.p.A. are all deemed to be interested in the 2,046,470,760 shares
of the Company held by Prada Holding S.p.A..
Share capital
Details of the share capital of the Company during the 2023 Year are set out in the Consolidated Statement of
Changes in Shareholders’ Equity and Note 30 to the Consolidated Financial Statements.
Directors’ interests in transactions, arrangements and contracts
Save for those contracts disclosed under the section on Continuing Connected Transactions below, and in Consolidated
Financial Statements Note 40, Related Parties Transactions, and Note 39, Remuneration of the Board of Directors, no
transaction, arrangement, or contract of significance to the Group’s business was entered into or subsisted at any time during
the 2023 Year in which the direct or indirect interest of a Director, or an entity connected with a Director, was material.
During the 2023 Year, there were no arrangements to which the Company, or any of the Company’s subsidiaries or
holding companies or a subsidiary of any of the Company’s holding companies is a party, to enable the Directors of
the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company.
Directors’ waiver on emoluments
Mr. Lorenzo Bertelli waived Euro 50,000 in respect of his fees as a Director and Euro 3,333.32 in respect of his fees
as a member of the Nomination Committee for the period from January 1, 2023 to April 30, 2023, and Euro 10,000
for the period from May 1, 2023 to December 31, 2023, and Euro 30,000 in respect of his fees as a member of
Sustainability Committee for the period from January 1, 2023 to December 31, 2023.
Under the Employment Agreement, Mr. Andrea Guerra waived Euro 50,000 in respect of his fee as a Director.
Mr. Andrea Bonini waived Euro 50,000 in respect of his fee as a Director.
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ANNUAL REPORT2023 Issuance of debt securities
Neither the Company, nor any members of the Group, issued any debt securities during the 2023 Year.
Continuing connected transactions
During the 2023 Year, the Group had the following non-exempt continuing connected transactions, details of which
were disclosed in the Company’s announcements dated July 15, 2015, and May 26, 2017, respectively:
(a) Lease Agreement and Guarantee for Prada Aoyama Building in Japan
On July 15, 2015, PH-RE llc purchased a building in Minami-Aoyama, Tokyo, Japan (the “Aoyama Building”). Prada
Japan Co. Ltd (“Prada Japan”), a wholly owned subsidiary of the Company, has been leasing the Aoyama Building for
use as its flagship store in Tokyo since 2004.
On May 25, 2015, Prada Japan, as lessee, and the former lessor, renewed the lease of the Aoyama Building by
entering into a lease agreement for a term of 20 years (the “Lease Agreement”). On the same date, the Company
granted a guarantee in favour of the former lessor to guarantee the full compliance by Prada Japan with all its
obligations under the Lease Agreement (the “Guarantee”).
As a result of the purchase of the Aoyama Building, PH-RE llc, a connected person of the Company, has become the
lessor under the Lease Agreement and the beneficiary of the Guarantee granted by the Company in favour of the
former lessor. Accordingly, the Lease Agreement and the Guarantee, which were continuing transactions of the
Group, have become continuing connected transactions of the Group under Chapter 14A of the Listing Rules.
On April 28, 2017, PH-RE llc, which was previously a wholly owned subsidiary of PA BE 1 S.p.A. (formerly known as
“PA BE 1 S.r.l.”), became a wholly owned subsidiary of Prada Holding S.p.A., a substantial shareholder of the
Company. Both Ms. Miuccia Prada Bianchi and Mr. Patrizio Bertelli – Executive Directors and substantial shareholders
(as defined in the Listing Rules) of the Company – are indirect shareholders of Prada Holding S.p.A..
As a consequence of this transaction, the Lease Agreement and the Guarantee remained as subsequent continuing
connected transaction of the Group with no variation of their terms.
The annual cap for the 2023 Year for the rent paid to PH-RE llc, or accrued by the Company in accordance with
applicable accounting rules, under the Lease Agreement and the Guarantee was JPY 2,040,703,000, as disclosed in
the Company’s announcement dated May 26, 2017.
(b) Lease Agreement and Guarantee for Miu Miu Aoyama Building in Japan
On May 26, 2017, PH-RE llc purchased a building in Minami-Aoyama, Tokyo, Japan (the “MM Aoyama Building”).
Prada Japan has been leasing the MM Aoyama Building for use as flagship store for the Miu Miu brand in Tokyo since
2015 under a lease agreement entered into with the former owner of the MM Aoyama Building (the “MM Lease
Agreement”). In the context of the MM Lease Agreement, the Company granted a guarantee in favour of the former
owner to guarantee the full compliance by Prada Japan with of all its obligations under the MM Lease Agreement (the
“MM Guarantee”).
As a result of the purchase of the MM Aoyama Building, PH-RE llc has become the lessor under the MM Lease
Agreement and the beneficiary of the MM Guarantee granted by the Company in favour of the former owner.
PH-RE llc is a wholly owned subsidiary of Prada Holding S.p.A., a substantial shareholder (as defined in the Listing
Rules) of the Company. Both Ms. Miuccia Prada Bianchi and Mr. Patrizio Bertelli - Executive Directors and substantial
shareholders (as defined in the Listing Rules) of the Company – are indirect shareholders of Prada Holding S.p.A..
In this context, the MM Lease Agreement and the MM Guarantee, being continuing transactions of the Group, have
become subsequent continuing connected transactions of the Group under Chapter 14A of the Listing Rules.
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Directors' Report The annual cap for the 2023 Year for the rent paid to PH-RE llc, or accrued by the Company in accordance with
applicable accounting rules, under the MM Lease Agreement and the MM Guarantee was JPY 630,000,000, as
disclosed in the Company’s announcement dated May 26, 2017.
Below is a table setting out the aggregate value for each of the non-exempt continuing connected transactions for the
2023 Year:
(a) Lease Agreement and Guarantee for Prada Aoyama Building
Depreciation of the right of use assets and interest expenses
on lease liability
(b) Lease Agreement and Guarantee for Miu Miu Aoyama Building
Depreciation of the right of use assets and interest expenses
on lease liability
Continuing
Connected
Transaction
(“CCT”)
Japanese Yen
million
2,040.7
Japanese Yen
million
Accounting
adjustment to the CCT
following the
application of IAS 1
“Presentation of
Financial Statements”
Impact on
the profit or loss for
the year ended
December 31, 2023
Japanese Yen
million
72.4
Japanese Yen
million
Japanese Yen
million
2,113.1
Japanese Yen
million
630
(22.3)
607.7
The Independent Non-Executive Directors have reviewed the above non-exempt continuing connected transactions
and confirmed that these have been entered into:
(i)
(ii) on normal commercial terms or better; and
(iii) according to the agreements governing them, on terms that are fair and reasonable, and in the interests of the
in the ordinary and usual course of business of the Group;
shareholders of the Company as a whole.
The Directors of the Company have engaged the External Auditor to review the above non-exempt continuing
connected transactions. Based on the work performed, the External Auditor has provided a letter to the Directors of
the Company to confirm that nothing has come to its attention causing them to believe that the continuing connected
transactions:
(i)
(ii) were not, in all material respects, in accordance with the pricing policies of the Group, if the transaction involved
have not been approved by the Company’s Board of Directors;
the provision of goods or services by the Group;
(iii) were not entered into, in all material respects, in accordance with the terms of the relevant agreements governing
such transactions; and;
(iv) have exceeded the relevant annual cap.
Save as disclosed above, none of the transactions disclosed as related party transaction in Note 40 to the Consolidated
Financial Statements is a connected transaction or continuing connected transaction, which is subject to the reporting
or disclosure requirements under the Listing Rules. The Company has complied with the disclosure requirements
governing “connected transactions” or “continuing connected transactions” in accordance with Chapter 14A of the
Listing Rules.
Bank loans and other borrowings
Details of the Group’s bank loans and other borrowings as at December 31, 2023 are set out in Notes 21 and 26 to
the Consolidated Financial Statements.
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ANNUAL REPORT2023 Major customers and suppliers
The nature of the Group’s activities is such that the percentage of sales or purchases attributable to the Group’s five
largest customers or suppliers is less than 30% of the total sales or purchases, and the Directors do not consider any
customer or supplier to have an influence on the Group.
Retirement benefit schemes
Details of the retirement benefit schemes of the Group are set out in Note 27 to the Consolidated Financial Statements.
Model Code for securities transactions
The Company has adopted the Model Code. Having made specific enquiries to all Directors, all of them have confirmed
that they have complied with the standard set out in the Model Code throughout the 2023 Year.
Events after the reporting period – if applicable
Details of significant events occurring after the reporting date – if any – are set out in Note 44 to the Consolidated
Financial Statements.
Commitments and contingencies
Details of capital commitments and contingent liabilities of the Group as at December 31, 2023 are set out in Note 28
to the Consolidated Financial Statements.
Sufficiency of public float
At the time the Company was listed, the Stock Exchange granted a waiver from strict compliance with Rule 8.08(1) of
the Listing Rules (the “Public Float Waiver”). Pursuant to the Public Float Waiver, the Company must at all times
maintain a minimum public float of 20%. Based on the information available to the Company and within the knowledge
of the Directors, the Company has maintained such minimum public float as at the date of this annual report.
Directors’ responsibilities for the Consolidated financial statements
The Directors are responsible for the preparation of the Consolidated Financial Statements for the year ended
December 31, 2023, to ensure such Consolidated Financial Statements give a true and fair view of the state of affairs
of the Group. In preparing these Consolidated Financial Statements, the Directors have selected suitable accounting
policies, made judgments and estimates that are prudent and reasonable, and prepared the Consolidated Financial
Statements on a going concern basis and in accordance with International Financial Reporting Standards issued by the
International Accounting Standards Board as adopted by the European Union. The Directors are responsible for
keeping proper accounting records for safeguarding the assets of the Company and the Group.
External Auditor
The Consolidated Financial Statements and the Separate financial statements of the Company are audited by Deloitte
& Touche S.p.A. Under Italian company law, the external auditor is appointed and its remuneration is resolved every
three years by the shareholders’ general meeting of the Company, on the basis of a proposal made by the Board of
statutory auditors.
8989
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Directors' Report On April 13, 2012, the Stock Exchange granted to the Company a waiver from strict compliance with Rule 13.88 of
the Listing Rules, which requires the appointment of an external auditor at each annual general meeting to hold office
until the next annual general meeting. Therefore, the Company’s external auditor is appointed, and its remuneration
is determined, every three years at the shareholders’ general meeting of the Company under the applicable Italian
laws.
On March 14, 2022, the Board resolved, in accordance with the recommendations received from the Board of
statutory auditors and the Audit and Risk Committee, to propose a resolution at the shareholders’ general meeting of
the Company on April 28, 2022 (the “2022 AGM”) to reappoint Deloitte & Touche S.p.A. as the External Auditor of
the Company for a term of three financial years ending December 31, 2024, and to fix its remuneration.
At the 2022 AGM, it was resolved to appoint Deloitte & Touche S.p.A. as the External Auditor of the Company for a
term of three financial years. Accordingly, the External Auditor’s mandate will expire at the shareholders’ general
meeting to be convened for the approval of the financial statements of the Company for the year ending December
31, 2024.
By order of the Board
Paolo Zannoni
Executive Deputy Chairman
March 7, 2024
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ANNUAL REPORT2023 CHAPTER 6
Corporate Governance
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Corporate governance practices
The Company is committed to maintaining the highest standards of corporate governance to create long-term
sustainable value for all its stakeholders, including its shareholders.
The corporate governance model adopted by the Company consists of a set of rules, standards and structured
procedures aimed at establishing efficient and transparent operations within the Group, to protect the rights of the
Company’s shareholders, to enhance shareholder value and to uphold the Group’s credibility and reputation. The
corporate governance model adopted by the Company complies with the applicable laws and regulations in Italy,
where the Company is incorporated, as well as with the principles set out in the Corporate Governance Code (the
“Code”) in Appendix C1 (formerly known as “Appendix 14”) of the Listing Rules.
Compliance with the Code
The Board has reviewed the Company’s corporate governance practices and it is satisfied that such practices have
complied with the code provisions set out in the Code, for the year ended December 31, 2023 (the “2023 Year”). This
Corporate Governance Section of the Annual Report summarizes how the Company applied the principles and
implemented the code provisions contained in the Code for the 2023 Year.
Directors’ securities transactions
The Company has adopted a written procedure governing Directors’ securities transactions on terms no less exacting
than those set out in the Model Code. In response to specific enquiries by the Company, all Directors confirmed that
they complied with the required standard set out in the Model Code and the Company’s procedure at all applicable
times during the 2023 Year. There were no incidents of non-compliance during the 2023 Year.
The Company has also adopted a written procedure governing securities transactions carried out by the relevant
employees who are likely to possess inside information in relation to the Company and its securities. This procedure
is on terms no less exacting than those set out in the Model Code.
Directors’ interests as at December 31, 2023, in the shares of the Company and its associated corporations (within
the meaning of Part XV of the SFO), as recorded in the register required to be kept by the Company under Section
352 of the SFO, or as otherwise notified to the Company and the Stock Exchange, pursuant to the Model Code
contained in Appendix C3 of the Listing Rules, are set out in the Directors’ Report.
Board of Directors
A. Board Composition
The Board is currently made up of eleven Directors – six Executive Directors and five Independent Non-Executive
Directors. The Board has an appropriate mix of skills and experience that is relevant to the Company’s strategy,
governance and business, and underpins its management effectiveness and efficiency. Its approach to achieving
diversity is set out in the Board Diversity Policy, which is discussed in more detail in the paragraph headed Nomination
Committee. Currently female representation at Board level is about 36%. Gender diversity at workforce levels is
disclosed in the Annual Report and gender diversity (including Senior Management) is disclosed in the Sustainability
Report. The Board believes that diversity should not be limited to gender.
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ANNUAL REPORT2023 The table below shows the structure, skill sets, expertise, and competencies of the Board:
Committees
Skills and Expertise
r
e
d
n
e
G
M
M
M
F
M
M
M
F
M
F
F
e
g
A
77
75
58
75
44
35
63
46
60
59
51
*
y
t
i
c
i
n
h
t
E
I
I
I
I
I
I
NI
I
I
NI
I
D
E
N
I
/
D
E
ED
ED
ED
ED
ED
ED
INED
INED
INED
INED
INED
n
o
i
t
a
r
e
n
u
m
e
R
x
x
x
k
s
i
R
d
n
a
t
i
d
u
A
x
x
x
n
o
i
t
a
n
m
o
N
i
y
t
i
l
i
i
b
a
n
a
t
s
u
S
x
x
x
x
x
x
t
n
e
m
e
g
a
n
a
M
s
s
e
n
i
s
u
B
x
x
x
x
x
x
x
x
x
x
x
i
&
g
n
n
n
a
l
P
c
i
g
e
t
a
r
t
S
t
n
e
m
e
g
a
n
a
M
k
s
i
R
/
g
n
i
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
i
g
n
k
n
a
B
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
G
S
E
/
l
a
g
e
L
x
x
x
x
e
c
n
e
i
r
e
p
x
E
/
l
e
g
d
e
w
o
n
K
y
r
t
s
u
d
n
I
d
e
t
a
l
e
R
x
x
x
x
x
x
x
x
x
x
x
Directors
Mr. Patrizio BERTELLI (Chairman of the Board)
Mr. Paolo ZANNONI (Executive Deputy Chairman of the
Board)
Mr. Andrea GUERRA (Chief Executive Officer)
Ms. Miuccia PRADA BIANCHI
Mr. Andrea BONINI (Chief Financial Officer)
Mr. Lorenzo BERTELLI
Mr. Yoël ZAOUI (Lead Independent Director)
Ms. Marina Sylvia CAPROTTI
Mr. Maurizio CEREDA
Ms. Pamela Yvonne CULPEPPER
Ms. Anna Maria RUGARLI
* I refers to Italian and NI refers to Non-Italian
Biographical details of the Directors and their relationships, where applicable, are set out in the Directors and Senior
Management section of the Annual Report. The Company has maintained both on its own website and on the website
of the Stock Exchange an updated list of its Directors, identifying their respective roles and functions.
B. Board Meetings
During the 2023 Year, the Board held six meetings to discuss the Group’s overall corporate strategic direction and
objectives, assess its operational and financial performance (including the annual budget and the annual, interim and
quarterly results), and approve the Group’s main investments, corporate reorganisation plans and intragroup mergers,
extraordinary transactions, appointment of the new Chief Executive Officer, the Executive Deputy Chairman and the
Leading Independent Director, granting of powers to the Executive Directors, remuneration of Directors and Board
Committees members, amendments to By-laws, adoption and updating of Group policies, approval of the 2023 Year
Audit Plan and the Sustainability Report, and the acquisition of a building in New York (USA). The average attendance
rate of the Directors for these six meetings (all held through electronic means) was 83.33%.
Minutes of the Board meetings are kept by the Corporate Affairs Department. Minutes of the Board meetings and all
Board Committees meetings are sent to the relevant Directors and are available for inspection by any Director by
giving reasonable notice to the Company.
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9393
Corporate Governance
C. Board Attendance
The details of attendance at Board meetings, Board Committees meetings and shareholders’ general meeting held
during the 2023 Year are set out in the following table:
Directors
Executive Directors
Mr. Patrizio BERTELLI
(Chairman) 1
Mr. Paolo ZANNONI
(Executive Deputy Chairman) 2
Mr. Andrea GUERRA
(Chief Executive Officer) 3
Ms. Miuccia PRADA BIANCHI 4
Mr. Andrea BONINI
(Chief Financial Officer)
Mr. Lorenzo BERTELLI 5
Non-Executive Director
Mr. Stefano SIMONTACCHI 6
Independent Non-Executive Directors
Mr. Yoël ZAOUI
(Lead Independent Director) 7
Ms. Marina Sylvia CAPROTTI 8
Mr. Maurizio CEREDA 9
Ms. Pamela Yvonne CULPEPPER 10
Ms. Anna Maria RUGARLI 11
Statutory Auditors
Mr. Antonino PARISI (Chairman)
Mr. Roberto SPADA
Mr. David TERRACINA
Board
Audit and Risk
Committee
Remuneration
Committee
Nomination
Committee
Sustainability
Committee
Shareholders’
Meeting
6/6
6/6
5/5
1/6
6/6
5/6
0/1
5/6
4/6
5/6
6/6
6/6
6/6
6/6
5/6
3/3
2/2
2/2
6/6
5/6
6/6
3/3
3/3
2/2
2/2
2/2
2/2
0/1
1/1
1/1
0/1
1/1
0/1
0/1
0/1
1/1
1/1
1/1
0/1
1/1
1/1
Dates of the Meetings
Jan 26, 2023
Jan 25, 2023
Jan 25, 2023
Jan 18, 2023
Mar 2, 2023
Apr 27, 2023
Mar 9, 2023
Feb 27, 2023
Mar 6, 2023
Mar 1, 2023
Jul 12, 2023
May 11, 2023 Mar 8, 2023
Oct 20,2023
Jul 27, 2023
May 8, 2023
Oct 31, 2023
Jul 26, 2023
Dec 18, 2023
Oct 30, 2023
Average Attendance Rate of the Directors
83.33%
94.44%
100%
100%
100%
54.54%
Notes:
1. Ceased to serve as Chief Executive Officer from January 26, 2023 and appointed as Chairman of the Board on April 27, 2023
2. Member of the Remuneration Committee, ceased to serve as Chairman of the Board from April 27, 2023 and appointed as Executive Deputy
Chairman of the Board on May 11, 2023
3. Appointed as Chief Executive Officer on January 26, 2023
4. Ceased to serve as Chief Executive Officer from January 26, 2023
5. Member of the Sustainability Committee and Nomination Committee
6. Ceased to serve as Non-Executive Director from January 26, 2023
7. Chairman of the Audit and Risk Committee and Member of the Remuneration Committee and appointed as Lead Independent Director on May
11, 2023
8. Chairwoman of the Remuneration Committee and Member of the Audit and Risk Committee and the Nomination Committee
9. Chairman of the Nomination Committee and Member of the Audit and Risk Committee
10. Chairwoman of the Sustainability Committeee
11. Member of the Sustainability Committee
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ANNUAL REPORT2023 D. Roles and Responsibilities
The Board is the highest decision-making body of the Company vested with the power to manage all ordinary and
extraordinary matters of the Company. The Board has the power to perform all acts it deems necessary or useful in the
pursuit of the Company’s corporate purposes, except for those acts specifically reserved for approval by the shareholders
by relevant laws or regulations or the By-laws. In particular, the Board is responsible for setting the overall strategy, as
well as reviewing the operational and financial performance of the Company and the Group. Therefore, the Board
considers and decides on all matters concerning the overall Group strategy, including the sustainability strategy, the
Group’s strategic objectives, annual budgets, annual, interim and quarterly results, approval of major transactions,
connected transactions and any other significant operational and financial matters. The Board is also responsible for
evaluating on an ongoing basis the effectiveness of the internal control and risk management system.
Among the Directors, some, upon the decision of the Board, are granted with specific delegated authorities and with
powers to sub-delegate to selected personnel outside the Board. To this respect, the Company has adopted a system of
delegated powers and powers of attorneys aimed at ensuring the segregation of duties and the efficient and regular
performance of the activities in accordance with the procedures adopted by the Company itself.
During the 2023 Year, all Board members were provided with monthly financial updates, prepared by the Executive
Directors with the support of the management. The purpose of such updates was to provide a balanced and comprehensive
assessment of the performance, position and prospects of the Group in sufficient detail, in order to enable each Director
to perform his/her duties.
The Board believes that corporate culture underpins the long-term business, economic success and sustainable growth
of the Group. The Board sets and promotes company culture and expects and requires employees to follow the Group’s
procedures and policies. For details, please refer to the Directors’ Report and the Sustainability Report.
The Executive Directors are responsible for the day-to-day management of the Company and to make operational and
business decisions within the control and delegated powers framework of the Company.
The types of decisions delegated by the Board to the management include:
― the preparation of annual, interim, and quarterly results for the Board’s approval;
― the execution of business strategies and other initiatives adopted by the Board;
― the monitoring of operating budgets adopted by the Board;
― the design, implementation and monitoring of the internal control and risk management system; and
― the compliance with relevant statutory requirements, rules and regulations.
E. Non-Executive Directors
The Non-Executive Directors, including the Independent Non-Executive Directors, provide the Company with
diversified skills, expertise and qualifications as well as varied backgrounds and perspectives. They participate in the
Board and Board Committees meetings to provide independent and objective opinions, advice and judgment on
important matters relating to the Company’s strategy, policy, financial performance, and take the lead on matters
where conflicts of interests may arise. The Board also reviews on an annual basis the implementation and effectiveness
of the mechanisms established to ensure independent views and input are available to the Board. They also attend the
shareholders’ general meetings of the Company to understand the views of the shareholders. They make a positive
contribution to the development of the Company’s strategy and policy through independent, constructive and
informed comments.
F. Independent Non-executive Directors
The Independent Non-Executive Directors enhance the effectiveness and decision-making of the Board by providing
objective judgement and constructive challenge. Their independence is assessed upon appointment, annually, and
whenever the circumstances warrant reconsideration.
All the Independent Non-Executive Directors meet the independence guidelines set out in Rule 3.13 of the Listing
Rules and have, as required by the Listing Rules, provided the Company with the written confirmations as to their
independence. The independence of the Independent Non-Executive Directors was further confirmed following the
review by the Nomination Committee conducted on March 1, 2023. None of the Independent Non-Executive Directors
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Corporate Governance of the Company has any business or financial interest in the Company or its subsidiaries.
G. Liability Insurance for the Directors
The Company has arranged appropriate liability insurance to indemnify its Directors for their liabilities arising out of
corporate activities. The insurance coverage is reviewed on an annual basis.
H. Directors’ Training
Upon appointment to the Board, Directors are provided with a comprehensive induction program to ensure that they
have a thorough understanding of the key areas of business operations and practices of the Company, as well as their
role and responsibilities under the relevant laws, rules and regulations.
During the 2023 Year, Mr. Patrizio Bertelli, Mr. Paolo Zannoni, Ms. Miuccia Prada Bianchi, Mr. Andrea Guerra, Mr.
Lorenzo Bertelli, Mr. Andrea Bonini, Mr. Yoël Zaoui, Ms. Marina Sylvia Caprotti, Mr. Maurizio Cereda, Ms. Pamela
Yvonne Culpepper and Ms. Anna Maria Rugarli participated in continuous professional training to develop and refresh
their knowledge and skills and received regular updates on development of the laws, rules and/or regulations relating
to Directors’ duties and responsibilities. Ongoing training helps Directors keep abreast of current trends and issues
facing the Group, while enabling them to update and refresh their skills and knowledge necessary to perform their
duties. As Mr. Stefano Simontacchi resigned as Non-Executive Director on January 26, 2023, he did not participate
in the director’s training provided by the Company during the 2023 Year.
Directors were required to provide the Company with their training records during the 2023 Year. The records are
maintained by the Corporate Affairs Department.
Chairman and Chief Executive Officer
As published in the announcement dated April 27, 2023, Mr. Patrizio Bertelli is the Chairman of the Board and, as
published in the announcement dated January 27, 2023, Mr. Andrea Guerra is the Chief Executive Officer. The role
of the Chairman is separate from that of the Chief Executive Officer. The Chairman is vested with the powers to
represent the Company and provides leadership to the Board. He is responsible for ensuring that the Board is
functioning effectively and adheres to good corporate governance practices and procedures. The Chief Executive
Officer, supported by the other Executive Directors and senior management, is responsible for managing the
Company’s business, including the implementation of major strategies and other initiatives adopted by the Board.
Relationships between directors
Ms. Miuccia Prada Bianchi (Executive Director of the Company) and Mr. Patrizio Bertelli (Chairman of the Board and
Executive Director of the Company) are husband and wife. Mr. Lorenzo Bertelli (Executive Director of the Company)
is the son of Ms. Miuccia Prada Bianchi and Mr. Patrizio Bertelli.
Appointment of the Board members
At the shareholders’ general meeting of the Company held on May 27, 2021 (the “2021 AGM”), the Board (at the time
consisting of nine Directors) was appointed for a term of three financial years. Two additional Independent Non-
Executive Directors, Ms. Pamela Yvonne Culpepper and Ms. Anna Maria Rugarli, were appointed at the shareholders’
general meeting of the Company held on January 28, 2022. Two Executive Directors, Mr. Andrea Guerra and Mr.
Andrea Bonini, were appointed by the Board, respectively on January 26, 2023 and November 8, 2022, and confirmed
by the shareholders’ meeting of the Company held on April 27, 2023. On 26 January 2023, Mr. Andrea Guerra
obtained legal advice as regards the requirements under the Listing Rules that are applicable to him as a director of a
listed issuer and he understood the possible consequences of making a false declaration or giving false information
to the Exchange and has confirmed his obligations as a director of a listed issuer.
9696
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ANNUAL REPORT2023 Mr. Stefano Simontacchi resigned as Non-Executive Director on January 26, 2023.
The mandate of all the current Directors will lapse on the date of the forthcoming shareholders’ general meeting to
be called to approve the financial statements of the Company for the 2023 Year.
Under the Company’s By-laws, the Directors may be re-appointed.
Corporate Governance Functions of the Board
The Board is responsible for determining and supervising the implementation of the Company’s corporate governance
policies and ensuring its compliance with the provisions of the Code. The Board’s role in this regard is:
(i)
(ii)
(iii)
to develop and review the Company’s policies and practices on corporate governance;
to review and monitor the training and continuous professional development of directors and senior management;
to review and monitor the Company’s policies and practices regarding compliance with legal and regulatory
requirements;
to develop, review and monitor the Code of Ethics, the Organisation, Management and Control Model (adopted
pursuant to Italian Legislative Decree no. 231 of June 8, 2001) and the Company’s procedures applicable to
directors and employees;
to review relevant Environmental, Social and Governance (“ESG”) matters;
to review the Company’s compliance with the Code and the disclosure of such in in this Corporate Governance
Section of the Annual Report; and
(iv)
(v)
(vi)
(vii) to perform any other corporate governance duties and functions set out by the Listing Rules or other applicable
rules, for which the Board shall be responsible.
approved the appointment of the Chief Executive Officer and of the Executive Deputy Chairman;
reviewed the level of compliance with the Code;
During the 2023 Year, the Board completed the following activities with respect to corporate governance matters:
(i)
(ii)
(iii) reviewed the effectiveness of the internal control, risk management system and ESG performance of the
Company through the Internal Audit Department, the Audit and Risk Committee and the Sustainability
Committee;
(iv) reviewed and approved the Sustainability Report;
(v) approved the Group’s main transactions, including corporate reorganisation plans, intragroup merger and
extraordinary transactions with third parties;
(vi) reviewed the amendments to the By-laws;
(vii) approved the granting of powers to the Executive Directors;
(viii) reviewed the compensation of the members of the Board and Board committees;
(ix) approved the appointment of the Lead Independent Director; and
(x)
reviewed the Group Antitrust Policy and Corporate Finance & Treasury Group Policy.
Board Committees
The Board has established the Audit and Risk Committee, the Remuneration Committee, the Nomination Committee, and
the Sustainability Committee, each chaired by an Independent Non-Executive Director, in compliance with the Code. The
Terms of Reference and membership of the first three Board Committees are published on the websites of both the
Company and the Stock Exchange. The Terms of Reference of the Board Committees are no less exacting than those set
out in the Code. The Board Committees are provided with sufficient resources to perform their duties and upon reasonable
request, are able to seek independent professional advice in appropriate circumstances at the Company’s expense.
A. Audit and Risk Committee
The Company has established an Audit and Risk Committee in compliance with Rule 3.21 of the Listing Rules, where at
least one member possesses related financial management expertise to perform the duties of the Audit and Risk
Committee. The membership of the Audit and Risk Committee consists of three Independent Non-Executive Directors,
namely Mr. Yoël Zaoui (Chairman), Ms. Marina Sylvia Caprotti and Mr. Maurizio Cereda. The primary duties of the Audit
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Corporate Governance and Risk Committee are to assist the Board in providing an independent view on the independence, adequacy,
effectiveness and efficiency of the internal audit function, the Company’s financial reporting process and its internal
control and risk management system, to oversee the external audit process, the internal audit process and financial
controls activity, to implement the Company’s risk management functions, to examine the work plan of internal audit, to
review the relationship with the External Auditor by reference to the work performed by the External Auditor, as well as
their independence, fees and terms of engagement, and to perform any other duties and responsibilities assigned to it
by the Board.
During the 2023 Year, the Audit and Risk committee held six meetings (with an attendance rate of 94.44%) mainly to
review, with senior management, the Group’s internal and External Auditor and the Board of Statutory Auditors, the
significant internal and external audit findings and financial matters as required under the Audit and Risk Committee’s
Terms of Reference and to make relevant recommendations to the Board. The Audit and Risk Committee’s review
covered the audit plan for the 2023 Year, the findings of both the internal and the External Auditor, internal controls, risk
assessment, annual review of the continuing connected transactions of the Group for 2022, the Group budget for the
2023 Year, the Sustainability Report for the 2023 Year, corporate reorganisation plans, intragroup merger and
extraordinary transactions with third parties, Group policies, the methodology applied to the impairment test, and tax
and legal updates and the financial reporting matters (including the annual results for the year ended December 31,
2022, the interim financial results as at June 30, 2023, and the quarterly results as at March 31, 2023, and September
30, 2023), before recommending them to the Board for approval.
The Audit and Risk Committee also held two meetings – on January 22, 2024 and March 4, 2024 – to examine and
recommend to the Board the approval of the 2024 budget of the Group, to discuss the audit activities on the 2023
Separate Financial Statements and Annual Report of the Company presented by Deloitte & Touche S.p.A., to evaluate
the methodology applied to the impairment test, to discuss the status of the major pending litigations, including tax
litigations, of the Group, to have an update on the internal audit and risk management activities, and to review, for the
2023 Year, the annual results, the Sustainability Report, the continuing connected transactions, and the Internal Audit
Department and Audit and Risk Committee reports.
External Auditor’s compensation
The total fees and expenses accrued in favor of Deloitte & Touche S.p.A. and its network for the audit of the financial
statements for the 2023 Year and for the year ended December 31, 2022, together with non-audit services, are
illustrated below (amounts in thousands of Euro):
Type of service
Audit services
Audit services
Audit services
Total audit fees to Deloitte Network
Other advisory services
Other advisory services
Total non-audit fees to Deloitte Network
Audit Firm
Provided to
Deloitte &
Touche S.p.A.
Deloitte &
Touche S.p.A.
Deloitte
Network
Prada S.p.A.
Subsidiaries
Subsidiaries
Deloitte
Network
Deloitte
Network
Prada S.p.A.
Subsidiaries
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
514
227
967
475
133
1,147
1,708
1,755
756
111
867
374
124
498
Total compensation to Deloitte Network
2,575
2,253
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ANNUAL REPORT2023 B. Remuneration Committee
The primary duties of the Remuneration Committee are to make recommendations to the Board on the Company’s
policy and structure for the remuneration package of Directors and senior management and the establishment of a
formal and transparent procedure for developing policies on such remuneration. The recommendations of the
Remuneration Committee are then submitted to the Board for consideration and adoption, where appropriate. The
Remuneration Committee consists of two Independent Non-Executive Directors, Ms. Marina Sylvia Caprotti
(Chairwoman) and Mr. Yoël Zaoui, and the Executive Deputy Chairman and Executive Director, Mr. Paolo Zannoni.
During the 2023 Year, the Remuneration Committee held three meetings (with an attendance rate of 100%) to
recommend the remuneration of the Directors vested with special offices, to review the remuneration of the Directors
and Board Committees members, to review the remuneration of the senior management of the Company, and to
review and update the main terms of the long-term incentive plan for the Directors and senior management for the
three-year period 2022-2024.
The Remuneration Committee also held one meeting on March 5, 2024, to review the overall remuneration for the
Board, and to review the remuneration of the new members of the Board and of the new Statutory Auditors.
Remuneration Policy
The Group’s remuneration policy is aimed at attracting, rewarding and retaining its personnel, who are considered
the key to the success of the Group’s business. This “Human Capital” is preserved through constant monitoring, in
order both to maintain engagement with the Company and a remuneration policy in line with the market. To ensure
the Company’s ability to attract and retain talent, the Company’s remuneration policy is built upon the principles of
providing an equitable and market-competitive remuneration package that supports the performance culture and
enable the achievement of strategic business goals.
The Group’s remuneration policy is designed to reward and retain highly professional staff and skilled managers, new
graduates and workers, and to create value in the medium and long term through constant organisational learning and
the consolidation of collaborators’ experiences and skills.
The policy comprises fixed, variable, direct and deferred components, appropriate for the relevant position and
professional qualifications, and is consistent with the needs of the various geographic areas.
The Group has an incentive system that links compensation with the annual performance of the Group, taking into
account the Group’s economic and financial objectives, as well as the objectives of each department, depending on
the role of the specific individual.
The Group has adopted long-term cash incentive plans for executive directors, senior managers and key managers
for retention purposes. Entitlement to benefits under such plans vests in the eligible executive director, senior manager
or key manager, subject to the achievement by the Group of one or more economic and financial objectives, as well
as certain ESG targets, and his/her presence within the Group at the end of a three-year period.
Other incentive schemes specific to sales staff are also in place, and operations and manufacturing staff of the Group
may receive a collection bonus following the development of a seasonal collection.
The aggregate basic remuneration of the Board is approved by the shareholders in a general meeting. The additional
remuneration of each Director vested with special offices (that is, the Executive Directors and members of the Board
Committees) is determined by the Board after having considered the recommendation of the Remuneration Committee
and the opinion of the Board of Statutory Auditors.
Under the current remuneration package, the Executive Directors receive remuneration in the form of fees, salaries
and other benefits, discretionary bonuses and/or other incentives, including non-monetary benefits and other
allowances and contributions such as contributions to retirement benefits schemes. The Independent Non-Executive
Directors receive remuneration in the form of fees and contributions to retirement benefits schemes, as the case may
be. No Director is allowed to approve his/her own remuneration.
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9999
Corporate Governance C. Nomination Committee
The primary duties of the Nomination Committee are to determine the policy for the nomination of Directors and to
make recommendations to the Board for consideration and, where appropriate, adoption on the structure, size and
composition of the Board itself, on the selection of new Directors and on the succession plans for Directors. The
Nomination Committee comprised a majority of Independent Non-Executive Directors, chaired by an Independent Non-
Executive Director, Mr. Maurizio Cereda, and consists of one Independent Non-Executive Director, Ms. Marina Sylvia
Caprotti and one Executive Director, Mr. Lorenzo Bertelli.
During the 2023 Year, the Nomination Committee held two meetings (with an average attendance rate of 100%) to
perform the annual review of both the independence of the Independent Non-Executive Directors as well as the
structure, size and composition of the Board for the year ended December 31, 2022, to recommend to the Board the
appointment of Mr. Andrea Guerra as Executive Director in replacement of Mr. Stefano Simontacchi as Non-Executive
Director, as well as to review the proposal for the appointment of the new Chairman of the Board, to review the
composition and the size of the Board for the 2023 Year, and to perform the annual review of the Board Diversity Policy
of the Company.
With a view to achieving a sustainable and balanced development, the Company has viewed diversity at the Board level
as an essential element to attain its strategic objectives and its development. The Board diversity policy was originally
adopted by the Board in September 2013 (the “Board Diversity Policy”) and reviewed during the 2023 Year. On January
25, 2024, the Board adopted a new version of the Board Diversity Policy, substantially in line with the previous version,
updated to the current applicable Listing Rules, as well as compliant with the most recent best practices. According to
the principles set out in the Board Diversity Policy, all Board members’ appointments are based on merit, with candidates
proposed and selected based on objective criteria, with due regard for diversity within the Board. Diversity in this sense
encompasses a wide range of factors, including but not limited to gender, age, cultural and educational background,
professional experience, skills and knowledge. The final selection is based on merit and the contribution, which the
candidates can bring to the Board. Throughout the 2023 Year, and up to the date of this Annual Report, the Board had
four female Directors (three being Independent Non-Executive Directors), representing approximately 36% of the Board
and 60% of the Independent Non-Executive Directors). The Company is committed to maintaining a Board with an
appropriate level of female members, which shall be no less than 40% of the Independent Non-Executive Directors and
30% of all members of the Board by year. The Nomination Committee has been delegated the overall responsibility for
implementing and monitoring the implementation of the Board Diversity Policy. The Nomination Committee discusses
any revisions that may be required to ensure the effectiveness of the Board Diversity Policy with access to independent
external consultants and recommends any such revisions to the Board for its approval.
On March 15, 2019, the Board first adopted the nomination policy for the Directors (the “Director Nomination Policy”),
which provides guidance on the proposal for the appointment or re-appointment of the directors or to fill casual vacancies
and sets out the processes and criteria for the nomination of a candidate for directorship in the Company. The Company
adopted the Director Nomination Policy to regulate the nomination process of Directors, so as to ensure that all
nominations of the Board members are made in a fair and transparent manner, in order to maintain an appropriate
balance of skills, experience and diversity within the Board, that are relevant to the Company’s strategy, governance and
business, and which can contribute to the effectiveness and efficiency of the Board’s management. On January 25,
2024, the Board adopted a new version of the Director Nomination Policy, substantially in continuity with the previous
version, updated to the current applicable Listing Rules, as well as compliant with the most recent best practices.
The Director Nomination Policy contains a number of factors for assessing the suitability of a proposed candidate,
including the high ethical character and reputation for integrity, professional qualifications, skills, knowledge and
experience, available time commitment, merit and potential contributions to the Board, as well as the independence
criteria under the Listing Rules (where applicable), including the independence of long serving Independent Non-
Executive Directors (where applicable).
The Nomination Committee considers the candidates proposed by shareholders for new directorship or for re-election
and make recommendations for the Board’s consideration. The Board will then decide whether the proposed candidate
shall be eligible to be appointed or re-appointed, as the case may be, as a director of the Company and will in turn
recommend to shareholders to vote in favor of the relevant resolutions to be proposed at the shareholders’ general
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ANNUAL REPORT2023 meeting of the Company.
The Nomination Committee also held two meetings on February 20, 2024, and March 5, 2024, to verify the
independence of the Independent Non-Executive Directors for the 2023 Year, to recommend the structure of the
Board and the election and appointment of eleven directors in total at the forthcoming shareholders’ general meeting,
and to recommend the proposed candidates for both the Board and the Board of Statutory Auditors, whose
appointment is subject to the approval at the forthcoming shareholders’ general meeting.
D. Sustainability Committee
The Sustainability Committee comprises two Independent Non-Executive Directors, Ms. Pamela Yvonne Culpepper
(Chairwoman) and Ms. Anna Maria Rugarli, and one Executive Director, Mr. Lorenzo Bertelli.
The Sustainability Committee assists and supports the Board with proposing and advisory functions in its assessments
and decisions on sustainability, meaning the processes, initiatives and activities aimed at overseeing the Company’s
commitment to sustainable development along the value chain and strategy. Moreover, the Committee supports the
preparation and review of non-financial reports, including the annual Sustainability Report, and communications
concerning sustainability to be submitted to the Board for approval. The Directors’ Report includes the governance
of sustainability issues and how the Company approaches and manages the Group’s material ESG topics.
During the 2023 Year, the Sustainability Committee held two meetings (with an average attendance rate of 100%) to
discuss the Sustainability Report for the year ended December 31, 2022, to provide updates on the progress and
achievements in the ESG strategy of the Group, to present and discuss the Industrial Area roadmap to support the
sustainability of operations in Italy, and to review and discuss the ESG information to be included in the presentation
of financial results for both the year ended December 31, 2022, and the first half of the 2023 Year.
The Sustainability Committee also held two meetings on January 31, 2024, and February 29, 2024, to provide
updates on progress and achievements in ESG, and to approve the Sustainability Report for the 2023 Year and the
industrial roadmap for supporting sustainability in Group’s operations for the year ending December 31, 2024.
Board of statutory auditors
Under Italian law, a joint-stock company is required to have a board of statutory auditors, appointed by the shareholders
for a term of three financial years, with the authority to supervise the Company on its compliance with the applicable
laws, regulations, its By-laws, the principles of proper management and, in particular, on the adequacy and functioning
of the organisational, administrative and accounting structure adopted by the Company.
At the shareholders’ general meeting of the Company held on May 27, 2021, the Board of Statutory Auditors was
appointed for a term of three financial years (2021-2023). The mandate of the current Board of Statutory Auditors
will expire at the forthcoming shareholders’ general meeting to be called to approve the financial statements of the
Company for the 2023 Year.
The Board of Statutory Auditors of the Company consists of Mr. Antonino Parisi (Chairman), Mr. Roberto Spada and
Mr. David Terracina. The alternate statutory auditors are Ms. Stefania Bettoni and Ms. Fioranna Negri.
Directors’ responsibility and auditors’ responsibility for Consolidated Financial
Statements
The Directors are responsible for preparing the Consolidated Financial Statements of the Group for the 2023 Year to
ensure such Consolidated Financial Statements give a true and fair view of the state of affairs of the Group. In
preparing these Consolidated Financial Statements, the Directors have selected suitable accounting policies and
made prudent and reasonable judgments and estimates. The Consolidated Financial Statements have been prepared
on a going concern basis and in accordance with International Financial Reporting Standards issued by the International
Accounting Standards Board as adopted by the European Union.
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Corporate Governance In addition, the Board is generally satisfied of the adequacy of resources, staff qualifications and experience, training
program and budget of the Company’s accounting and financial reporting function during the 2023 Year.
With respect to the External Auditor of the Company, its responsibilities are stated in the auditor’s reports on the
Consolidated Financial Statements.
Internal control and risk management
The Group’s internal control system has mainly been designed to safeguard the assets of the Group, to maintain proper
accounting standards, to ensure that appropriate authority has been given for the performance of acts by the Company,
and to comply with the relevant laws and regulations. The Group has adopted a strict Anti-Corruption Policy and an
Auditor Transactions Policy to support anti-corruption laws and regulations and monitoring the independence of
External Auditor.
To better control its activities in achieving the established objectives, the Group has adopted procedures to identify,
evaluate and manage the specific risks arising out of the continuous changes which affect the Group’s operations and
the regulatory framework to which it is subject.
The Board has adopted a Whistleblowing Policy which provides reporting channels and guidance for employees and
other parties who deal with the Group (e.g. contractors and suppliers, etc.) to report possible improprieties in matters
of financial reporting or other matters. The Whistleblowing Policy and the Anti-Corruption Policy are available on the
Company’s website.
The Board places great importance on maintaining a sound and effective internal control and risk management system
to safeguard the shareholders’ investment and the Company’s assets.
The Board has acknowledged its responsibility for the internal control and risk management system – including financial,
operational and compliance controls functions – and for the ongoing monitoring and review of its effectiveness. Such a
system is designed to manage rather than eliminate risks and is aimed at providing reasonable and not absolute assurance
against material misstatement or loss.
The management, with the support of the Internal Audit Department, has the responsibility, as delegated by the Board,
to identify, evaluate and manage the risk factors that may affect the Group’s operations and to resolve any material
internal control defects that may arise.
In particular, during the 2023 Year the Internal Audit Department assessed the Company’s activities and controls to
mitigate the health and safety risk at work as well as the risk of data breach and cyber-attack.
The Internal Audit Department provides an independent review of the adequacy and effectiveness of the internal control
and risk management system. The audit plan is discussed and agreed every year by the Audit and Risk committee before
being submitted to the Board for approval. In addition to its agreed annual schedule of work, the Internal Audit
Department conducts other special reviews as required. The risk assessment documents are periodically updated by the
Internal Audit Department with the support of the management, then reviewed by the Audit and Risk Committee and
submitted to the Board for approval.
The Board has received specific confirmation from the relevant management personnel of the Company on the
effectiveness of the Group’s internal control and risk management system throughout the 2023 Year.
During the 2023 Year, no significant control failings or weaknesses were identified.
The Board, with the support from the Audit and Risk Committee, has been reviewing the internal control and risk
management system of the Group on an ongoing basis (with the same frequency as regular Board meetings were held)
and is generally satisfied that the internal control and the risk management system has functioned effectively and has
been adequate for the Group as a whole, throughout the 2023 Year.
Moreover, the Board is generally satisfied of the adequacy of resources, staff qualifications and experience, the training
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ANNUAL REPORT2023 programme and the budget of the Company’s internal audit and risk management function during the 2023 Year.
“Organismo di Vigilanza”
In compliance with Italian Legislative Decree no. 231 of June 8, 2001 (the “Decree”), the Company established an
“Organismo di Vigilanza” whose primary duty is to ensure the functioning, effectiveness and enforcement of the
Company’s Organization, Management and Control Model, adopted by the Company pursuant to the Decree. The
“Organismo di Vigilanza” has three members appointed by the Board and selected among qualified and experienced
individuals. The “Organismo di Vigilanza” consists of Ms. Stefania Chiaruttini (Chairwoman), Mr. Armando Simbari,
who was appointed to replace Mr. Yoël Zaoui on July 26, 2023, and Mr. Roberto Spada, Statutory Auditor.
Inside Information
The Company handles and disseminates inside information in accordance with the requirements of the Securities and
Futures Ordinance and the Listing Rules.
With regard to the procedures and internal controls for the handling and dissemination of inside information, the
Company:
― has adopted an inside information disclosure policy to ensure potential inside information is identified and
confidentiality is maintained until timely and proper disclosure is made (the “Inside Information Disclosure Policy”),
which has been reviewed and updated by the Board on January 25, 2024;
― has made available on the Company’s intranet the Inside Information Disclosure Policy in order to ensure
immediate access to it by the entire Group’s staff;
― has included in the procedures governing Directors and relevant employees a prohibition on dealing in the
Company’s shares whilst in possession of inside information; and
― has authorized only the Executive Directors and a few selected members of the management to act as spokespersons
and respond to external enquiries.
In addition, the Board has established an Inside Information Committee, which comprises the Chairman (Mr. Patrizio
Bertelli), the Executive Deputy Chairman (Mr. Paolo Zannoni) and an Executive Director (Mr. Lorenzo Bertelli). The
Inside Information Committee has been delegated with the power to assess, if necessary any potential inside
information, and to keep all other Directors timely informed about its decisions.
Company Secretary
During the 2023 Year, Ms. Yuen Ying Kwai was the company secretary of the Company and she undertook over 15
hours of relevant professional training to update her skills and knowledge. Ms. Yuen ceased to serve as the company
secretary with effect from December 31, 2023 and Ms. Tong Pui Ting, Wendy has been appointed as the company
secretary in place of Ms. Yuen with effect from December 31, 2023. Her biography is set out in the Directors and
Senior Management section of this Annual Report.
Shareholders’ Rights
A. Convening of shareholders’ general meeting at shareholders’ request
Pursuant to Article 14.2 of the Company’s By-Laws, a shareholders’ general meeting has to be called by the Board
when requested by shareholders representing at least one-twentieth of the Company’s share capital, provided that
the request mentions the item(s) to be discussed at the meeting. If there is an unjustified delay in calling the meeting
by the Board, action will be taken by the Board of Statutory Auditors.
B. Putting forward proposals at shareholders’ general meeting
Pursuant to Article 14.5 of the Company’s By-Laws, shareholders who, individually or jointly, own or control at least
one-fortieth of the Company’s share capital may request in writing for additions to be made to the list of items on the
agenda, within ten days from the notice of call for a shareholders’ general meeting, by setting out the proposed
additions. The proposals should be directed to the Company by email at corporateaffairs@prada.com.
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Corporate Governance C. Making an enquiry to the Board
Enquiries about matters to be put forward to the Board should be directed to the Company by email at
corporateaffairs@prada.com. The Company will not normally deal with verbal or anonymous enquiries.
D. Procedures for shareholders’ to propose a person for election as Director
The procedures for a shareholder to nominate a person for election as a Director of the Company are set out in
Articles 19.3 and 19.4 of the Company’s By-laws, details of which have been disclosed in the Company’s announcement
dated March 30, 2012.
Constitutional Documents
On April 27, 2023, the Company has adopted a new set of By-Laws (“Amended By-Laws”) mainly to conform to the
core shareholder protection standards set out in Appendix A1 (formerly known as “Appendix 3”) to the Listing Rules
and to incorporate provisions to allow and facilitate hybrid and electronic meetings, and other provisions aimed at
complying with applicable laws and regulations. The Amended By-Laws are available for viewing on the websites of
the Company and the Stock Exchange.
Communication with shareholders
A. Dividend Policy
On March 15, 2019, the Board formalized and adopted a Dividend Policy to set out the framework that the Company has
put in place in relation to dividend payouts to shareholders. The Company aims to provide its shareholders a sustainable
dividend stream, taking into account financial results, cash flow situation, working capital requirements, capital
expenditures, investment requirements, future operations and earnings, business conditions and strategies, interests of
shareholders and any statutory or regulatory restrictions (including under Italian law and the Company’s By-laws) on
payment of dividends.
The Board reviews the Dividend Policy from time to time and may adopt changes, as appropriate, to ensure the effectiveness
of the Dividend Policy. The Board reviewed the Dividend Policy and adopted changes on January 25, 2024.
At the 2023 AGM, the shareholders approved the distribution of a final dividend of Euro 0.11 per share for the financial
year ended December 31, 2022, representing a total dividend of Euro 281,470,640, which was paid on May 19, 2023.
B. Investor relations and communication
The Company endeavors to maintain a high level of transparency when communicating with the shareholders and
the financial community in general. The Company has maintained a regular dialogue with – and fair disclosure to
– institutional shareholders, fund managers, research analysts and the finance media. Investor/ analysts briefings
and one-to-one meetings, investor conferences and results briefings are conducted on a regular basis in order to
facilitate communication between the Company, shareholders and the investment community. The Company
strives to ensure effective and timely dissemination of information to shareholders and the investment community
at all times and will regularly review the arrangements to ensure its effectiveness.
The Company’s corporate website (www.pradagroup.com) facilitates effective communications with shareholders,
investors and other stakeholders, making corporate information and other relevant financial and non-financial
information available electronically and on a timely basis. This includes extensive information about the Group’s
performance and activities via the annual report, interim report, social responsibility report, press releases,
presentations, announcements, circulars to shareholders and notices of general meetings, etc. The Board has
adopted a Shareholders Communication Policy and is subject to review annually to ensure the effectiveness and
implementation of the Shareholders Communication Policy. The Company is generally satisfied that the
implementation of the Shareholders Communication Policy has functioned effectively throughout the 2023 Year.
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ANNUAL REPORT2023 C. Shareholders’ meetings
The Company strives to maintain an on-going dialogue with its shareholders. Shareholders are encouraged to
participate in general meetings either in person or through appointed proxies to attend and vote at meetings for
and on their behalf if they are unable to attend such meetings. The process of the Company’s general meeting
is monitored and reviewed on a regular basis.
The Company uses the shareholders’ general meeting as one of the main channels for communicating with the
shareholders and to ensure that shareholders’ views are communicated to the Board. At the shareholders’
general meeting, each substantially separate issue is proposed and considered by a separate resolution (including
the election of individual directors).
The shareholders’ general meeting of the Company held on April 27, 2023 (the “2023 AGM”) was held online
only. The Directors, including the Chairman of the Board, the Chief Executive Officer, the majority of Independent
Non-Executive Directors, the Company Secretary, the External Auditor of the Company, Deloitte & Touche
S.p.A., the majority of the members of the Board of Statutory Auditors, and the scrutineer, attended the 2023
AGM.
All resolutions submitted to the shareholders at the 2023 AGM were duly passed and the voting results of such
resolutions were disclosed in the announcement of the Company dated April 27, 2023. Computershare Hong
Kong Investor Services Limited, the Company’s Hong Kong share registrar, acted as scrutineer for the vote
taking at the 2023 AGM.
D. Corporate communications
In order to increase the efficiency in communication with shareholders and to contribute to environmental protection,
the Company has adopted electronic dissemination of corporate communications and will only send corporate
communications in printed form to shareholders upon request. The English and Chinese versions of all corporate
communications are available electronically on the Company’s website at www.pradagroup.com and the HKEXnews
website at www.hkexnew.hk.
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 105
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 105
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105105
Corporate Governance CHAPTER 7
Consolidated
Financial Statements
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 106
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 106
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20/03/24 14:25
Consolidated Statement of financial position
(amounts in thousands of Euro)
Assets
Current assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Derivative financial instruments – current
Receivables due from, and advance payments to, related parties - current
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right of use assets
Investments in equity instruments
Deferred tax assets
Other non-current assets
Derivative financial instruments – non-current
Receivables due from, and advance payments to, related parties - non-current
Total non-current assets
Total assets
Liabilities and equity
Current liabilities
Lease liabilities – current
Short-term financial payables and bank overdrafts
Payables due to related parties – current
Trade payables
Tax payables
Derivative financial instruments – current
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liabilities – non-current
Long-term financial payables
Long-term employee benefits
Provisions for risks and charges
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Share capital
Total other reserves
Translation reserve
Net income for the year
Equity attributable to the owners of the Group
Equity attributable to Non-controlling interests
Total equity
Notes
December 31
2023
December 31
2022
9
10
11
12
13
14
15
16
17
18
36
19
12
13
20
21
22
23
24
12
25
20
26
27
28
36
29
30
31
689,519
405,151
782,978
17,550
138
267,412
2,162,748
2,032,876
846,024
2,024,552
41,610
374,847
131,504
890
-
5,452,303
7,615,051
411,289
148,338
5,858
453,387
121,823
7,543
302,143
1,091,622
331,915
760,457
22,483
2,373
215,917
2,424,767
1,577,125
817,809
2,011,474
26,974
373,090
139,402
5,812
1,125
4,952,811
7,377,578
392,126
160,847
3,568
401,799
277,656
11,565
242,306
1,450,381
1,489,867
1,699,599
338,422
60,875
49,867
35,731
103,367
2,287,861
3,738,242
255,882
2,833,889
92,998
671,026
3,853,795
23,014
3,876,809
1,715,451
395,656
67,571
51,486
40,855
115,670
2,386,689
3,876,556
255,882
2,648,496
112,646
465,193
3,482,217
18,805
3,501,022
Total liabilities and total equity
7,615,051
7,377,578
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 107
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107107
Consolidated Financial Statements Consolidated Statement of profit or loss for the year ended December 31, 2023
(amounts in thousands of Euro)
Net revenues
Cost of goods sold
Gross margin
Operating expenses
Notes
32
33
twelve months
ended
December 31
2023
%
on net
revenues
twelve months
ended
December 31
2022
%
on net
revenues
4,726,411
(924,640)
100%
-19.6%
4,200,674
(888,580)
100%
-21.2%
3,801,771
80.4%
3,312,094
78.8%
34
(2,740,079)
-58.0%
(2,536,104)
-60.3%
Operating income - EBIT
1,061,692
22.5%
775,990
18.5%
Interest and other financial income / (expenses), net
Interest expenses on lease liability
Dividends from investments
Total financial income / (expenses)
(32,031)
(58,825)
627
(90,229)
-0.7%
-1.2%
0.0%
-1.9%
(24,498)
(40,990)
473
(65,015)
-0.6%
-1.0%
0.0%
-1.5%
35
Income before taxation
971,463
20.6%
710,975
16.9%
Taxation
36
(298,071)
-6.3%
(241,820)
-5.8%
Net income for the year
673,392
14.2%
469,155
11.2%
Net income - Non-controlling interests
Net income - Group
Basic and diluted earnings / (losses) per share
(in Euro per share)
31
30
37
2,366
0.1%
3,962
0.1%
671,026
14.2%
465,193
11.1%
0.262
0.182
108108
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 108
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 108
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20/03/24 14:25
ANNUAL REPORT2023
Consolidated Statement of comprehensive income for the year
ended December 31, 2023
(amounts in thousands of Euro)
Net income for the year
A) Items that may be reclassified subsequently to P&L:
Foreign exchange differences on translation of foreign operations
Tax impact
Change in translation reserve less tax impact
Gains / (losses) on cash flow hedging instruments
Tax impact
Change in Cash Flow Hedge reserve less tax impact
B) Items that will not be reclassified subsequently to P&L:
Change in Fair Value in equity instruments reserve
Tax impact
Change in Fair Value in equity instruments reserve less tax impact
(Losses) / gains on remeasurement of defined benefit plans
Tax impact
Change in actuarial reserve less tax impact
Comprehensive income for the year - Consolidated
Comprehensive income for the year - Non-Controlling Interests
Comprehensive income for the year - Group
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
673,392
469,155
(23,879)
71,814
(20,115)
45,876
-
-
(20,115)
45,876
(4,973)
1,209
(3,764)
34,221
(8,283)
25,938
(1,419)
(783)
1,632
-
1,632
(4,076)
1,025
(3,051)
587
-
587
(2,027)
657
(1,370)
648,094
540,186
1,888
4,655
646,206
535,531
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 109
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 109
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109109
Consolidated Financial Statements
Consolidated Statement of cash flows for the year ended December 31, 2023
(amounts in thousands of Euro)
Income before taxation
Profit or loss adjustments
Depreciation of the right of use assets
Depreciation and amortization of property, plant and equipment and intangible assets
Impairment of the right of use assets
Impairment of property, plant and equipment and intangible assets
Non-monetary financial (income) expenses
Interest expenses on lease liability
Other non-monetary (income) expenses
Balance sheet changes
Other non-current assets and liabilities
Trade receivables, net
Inventories, net
Trade payables
Other current assets and liabilities
Cash flows from operating activities
Interest paid (net), including interest paid on lease liability
Taxes paid
Net cash flows from operating activities
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
971,463
710,975
445,465
230,915
18,633
9,614
48,932
58,825
34,005
(24,300)
(85,400)
(60,784)
56,351
(8,768)
451,533
210,891
12,342
59,486
24,413
40,990
12,258
(33,142)
(3,578)
(121,826)
13,351
15,112
1,694,951
1,392,805
(52,962)
(49,522)
(486,708)
(219,586)
1,155,281
1,123,697
Purchases of property, plant and equipment and intangible assets
(759,676)
(241,495)
Proceeds from the sale assets
Cash from real estate sale to related party
Earn-out paid to a related party
Dividends from investments
Purchase of equity instruments
Business combination
Net cash flow utilised by investing activities
Dividends paid to shareholders of Prada S.p.A.
Dividends paid to Non-controlling shareholders
Repayment of lease liability
Repayment of current portion of long-term borrowings - third parties
Arrangement of long-term borrowings – third parties
Change in short-term borrowings – third parties
Capital increase from Non-controlling shareholders
Loans to related parties
Loans from related parties
Capital injection in associates
Net cash flows utilised by financing activities
Change in cash and cash equivalents, net of bank overdrafts
Foreign exchange differences
Opening cash and cash equivalents, net of bank overdraft
Closing cash and cash equivalents, net of bank overdraft
110110
4,534
-
-
627
(4,676)
-
-
18,000
(5,000)
473
(19,549)
(2,638)
(759,191)
(250,209)
(281,471)
(179,118)
(250)
(429,685)
(94,784)
25,475
4,436
2,560
-
2,500
(4,509)
(599)
(428,170)
(187,128)
-
9,837
-
(2,200)
-
-
(775,728)
(787,378)
(379,638)
(22,481)
1,091,622
86,110
23,726
981,786
689,503
1,091,622
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 110
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 110
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20/03/24 14:25
ANNUAL REPORT2023 Consolidated Statement of changes in equity
(amounts in thousands of Euro, except number of shares)
EQUITY
s
e
r
a
h
s
f
o
r
e
b
m
u
N
l
a
t
i
p
a
c
e
r
a
h
S
e
v
r
e
s
e
r
n
o
i
t
a
l
s
n
a
r
T
i
m
u
m
e
r
p
e
r
a
h
S
e
v
r
e
s
e
r
e
v
r
e
s
e
r
e
g
d
e
h
w
o
fl
h
s
a
C
s
t
n
e
m
t
s
e
v
n
i
e
u
l
a
V
r
i
a
F
e
v
r
e
s
e
r
l
a
i
r
a
u
t
c
A
r
a
e
y
e
h
t
r
o
f
e
m
o
c
n
i
t
e
N
o
t
e
l
b
a
t
u
b
i
r
t
t
a
y
t
i
u
q
E
p
u
o
r
G
e
h
t
f
o
s
r
e
n
w
o
o
t
e
l
b
a
t
u
b
i
r
t
t
a
y
t
i
u
q
E
s
e
v
r
e
s
e
r
r
e
h
t
o
l
a
t
o
T
s
e
v
r
e
s
e
r
r
e
h
t
O
e
v
r
e
s
e
R
s
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
y
t
i
u
q
e
l
a
t
o
T
s
t
n
e
m
u
r
t
s
n
i
y
t
i
u
q
e
n
i
2,558,824,000 255,882
67,434 410,047
(15,878)
(5,708)
(10,992) 2,118,855 2,496,324
294,254 3,113,894
14,749 3,128,643
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 45,212
- 25,938
-
-
-
-
- 294,254
294,254 (294,254)
-
-
-
- (179,118)
(179,118)
- (179,118)
(599)
(179,717)
-
11,910
11,910
-
11,910
-
11,910
-
-
25,938
465,193
536,343
4,626
540,969
-
-
-
-
-
(1,399)
587
-
(812)
-
(812)
29
(783)
2,558,824,000 255,882 112,646 410,047
10,060
(7,107)
(10,405) 2,245,901 2,648,496
465,193 3,482,217
18,805
3,501,022
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (19,648)
-
(3,764)
-
-
-
-
-
- 465,193
465,193 (465,193)
-
-
-
- (281,471)
(281,471)
-
(281,471)
(250)
(281,721)
-
-
-
-
-
-
-
2,571
2,571
6,843
6,843
-
6,843
-
6,843
-
(3,764)
671,026
647,614
1,899
649,513
-
-
-
-
- (3,040)
1,632
-
(1,408)
-
(1,408)
(11)
(1,419)
2,558,824,000
255,882
92,998 410,047
6,296
(10,147)
(8,773) 2,436,466 2,833,889
671,026 3,853,795
23,014
3,876,809
(amounts
in thousands
of Euro)
Balance at
December 31,
2021
Allocation of
2021 net profit
Dividends
Monetary
revaluation
IAS 29
Comprehensive
income / (loss)
for the period
(recyclable to
P&L)
Comprehensive
income / (loss)
for the period
(not recyclable
to P&L)
Balance at
December 31,
2022
Allocation of
2022 net profit
Dividends
Share capital
increase
Monetary
revaluation
IAS 29
Comprehensive
income / (loss)
for the period
(recyclable to
P&L)
Comprehensive
income / (loss)
for the period
(not recyclable
to P&L)
Balance at
December 31,
2023
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 111
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111111
Consolidated Financial Statements
CHAPTER 8
Prada S.p.A. Separate
Financial Statements
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 112
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 112
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20/03/24 14:25
Prada S.p.A. Statement of financial position
(amounts in thousands of Euro)
Assets
Current assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Derivative financial instruments – current
Financial receivables and other receivables from parent company, subsidiaries, associates and related
parties – current
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right of use assets
Investments
Deferred tax assets
Other non-current assets
Derivative financial instruments – non-current
Financial receivables and other receivables from parent company, subsidiaries, associates and related
parties – non-current
Total non-current assets
Total assets
Liabilities and shareholders' equity
Current liabilities
Short-term lease liability
Short-term financial payables and bank overdrafts
Financial payables and other payables to parent company, subsidiaries, associates and related parties – current
Trade payables
Tax payables
Derivative financial instruments – current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term lease liability
Long-term financial payables
Long-term employee benefits
Provisions for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments – non-current
Financial payables and other payables to parent company, subsidiaries,
associates and related parties – non-current
Total non-current liabilities
Total liabilities
Share capital
Total other reserves
Net income for the year
Total equity
Total liabilities and total equity
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
225,028
724,076
343,017
15,774
208,892
187,491
520,888
929,699
301,566
22,483
261,736
119,246
1,704,278
2,155,618
820,241
263,013
349,283
1,318,220
67,111
59,649
890
796,669
226,335
337,102
797,146
53,705
72,539
5,812
164,195
186,301
3,042,602
2,475,609
4,746,880
4,631,227
56,945
129,691
109,871
557,055
47,347
8,550
265,690
51,085
90,541
112,570
548,026
208,435
12,318
218,669
1,175,149
1,241,644
309,764
272,262
33,851
10,205
4,030
98,713
347
-
729,172
305,073
351,200
38,176
3,376
5,054
107,687
1,713
13,878
826,157
1,904,321
2,067,801
255,882
255,882
2,019,937
1,735,861
566,740
571,683
2,842,559
2,563,426
4,746,880
4,631,227
113113
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 113
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20/03/24 14:25
PRADA spa Separate Financial Statements
Prada S.p.A. Statement of profit or loss for year ended December 31, 2023
(amounts in thousands of Euro)
Net revenues
Cost of goods sold
Gross margin
Operating expenses
Operating income / (loss) - EBIT
Interest and other financial income / (expenses), net
Interest expenses on lease liability
Dividends from investments
Total financial income / (expenses)
Income before taxation
Taxation
Net income for the year
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
2,552,341
2,509,323
(819,274)
(829,231)
1,733,067
1,680,092
(882,868)
(711,350)
850,199
968,742
(60,300)
(155,333)
(5,853)
24,584
(4,125)
49,594
(41,569)
(109,864)
808,630
858,878
(241,890)
(287,195)
566,740
571,683
Prada S.p.A. Statement of comprehensive income for the year ended December 31,
2023
(amounts in thousands of Euro)
Net income for the year
A) Items that may be reclassified subsequently to P&L:
Gains / (losses) on cash flow hedging instruments
Tax impact
Change in Cash Flow Hedge reserve less tax impact
B) Items that will not be reclassified subsequently to P&L:
Change in Fair Value in equity instruments reserve
Tax impact
Change in Fair Value in equity instruments reserve less tax impact
(Losses) / gains on remeasurement of defined benefit plans
Tax impact
Change in actuarial reserve less tax impact
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
566,740
571,683
(2,621)
20,672
(3,449)
828
(2,621)
27,200
(6,528)
20,672
783
2,662
1,633
1,633
(1,119)
269
(850)
587
-
587
2,730
(655)
2,075
Comprehensive income for the year
564,902
595,017
114114
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 114
PradaGroup_AR 2023_NUOVO LAYOUT-DRAFT_19 mar.indd 114
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20/03/24 14:25
ANNUAL REPORT2023
Prada S.p.A. Statement of cash flows for the year ended December 31, 2023
(amounts in thousands of Euro)
Income before taxation
Profit or loss adjustments
Depreciation of the right of use assets
Depreciation and amortization of property, plant and equipment and intangible assets
Impairment of property, plant and equipment and intangible assets
Losses / (gains) on disposal of non-current assets
Impairment of investments
Interest expenses on lease liability
Non-monetary financial (income) expenses
Other non-monetary (income) expenses
Balance sheet changes
Trade receivables, net
Inventories, net
Trade payables
Other current assets and liabilities
Other non-current assets and liabilities
Cash flows from operating activities
Interest received / (paid) net, including interest paid of lease liability
Taxes paid
Net cash flows from operating activities
Purchase of property, plant and equipment and intangible assets
Cash from real estate sale to related party
Investments in subsidiaries and associates
Dividends received from investments
Net cash flow utilised by investing activities
Dividends paid to shareholders
Change in short-term bank loans
Change in intercompany loans
Loans repaid by subsidiaries
Repayment of lease liability
Loans made to subsidiaries
Repayment of short-term portion of long-term borrowings - third parties
Net cash flows utilised by financing activities
Change in cash and cash equivalents, net of bank overdraft
Opening cash and cash equivalents, net of bank overdraft from merged companies
Opening cash and cash equivalents, net of bank overdraft
Closing cash and cash equivalents, net of bank overdraft
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
808,629
858,878
56,647
79,988
1,856
271
56,689
5,853
(37,478)
37,617
213,088
(58,398)
10,028
(58,856)
(23,656)
1,092,278
14,925
50,812
76,377
120
256
146,406
4,125
(58,976)
45,875
(254,823)
(37,039)
(87,755)
(2,036)
(16,720)
725,500
5,363
(442,958)
(183,079)
664,245
547,784
(113,447)
-
(455,251)
24,584
(544,114)
(88,904)
18,000
(32,956)
49,594
(54,266)
(281,471)
(179,118)
50,000
19,516
31,959
(59,802)
(87,369)
(90,200)
(417,367)
-
45,068
23,471
(54,799)
(31,983)
(172,044)
(369,405)
(297,236)
124,113
1,380
520,884
225,028
-
396,771
520,884
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115115
PRADA spa Separate Financial Statements PRADA S.p.A. Statement of changes in equity
(amounts in thousands of Euro, except number of shares)
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2,558,824,000 255,882 410,047
51,176 182,899 974,884
(12,744)
(10,992) 1,595,270
310,650 2,161,802
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 310,650
- (14,275)
- (179,118)
-
-
-
- 310,650 (310,650)
-
- (14,275)
-
(14,275)
- (179,118)
- (179,118)
-
- 20,671
-
20,671
571,683
592,354
-
2,075
-
588
2,663
-
2,663
2,558,824,000 255,882 410,047
51,176 182,899 1,094,216
7,927
(10,404) 1,735,861
571,683 2,563,426
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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- 571,683
- (4,297)
- (281,471)
-
-
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- 571,683 (571,683)
-
-
(4,297)
-
(4,297)
- (281,471)
- (281,471)
-
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(2,621)
-
(2,621)
566,740
564,119
-
(850)
-
1,633
783
-
783
2,558,824,000
255,882 410,047
51,176 182,899 1,379,281
5,306
(8,771) 2,019,938
566,740 2,842,560
(amounts
in thousands
of Euro)
Balance at December
31, 2021
Allocation of 2021
net income
Other movements
Dividends
Comprehensive
income / (loss)
for the period
(recyclable to P&L)
Comprehensive
income / (loss)
for the period (not
recyclable to P&L)
Balance at December
31, 2022
Allocation of 2022
net income
Other movements
Dividends
Comprehensive
income / (loss)
for the period
(recyclable to P&L)
Comprehensive
income / (loss)
for the period (not
recyclable to P&L)
Balance at December
31, 2023
116116
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ANNUAL REPORT2023
CHAPTER 9
Notes to the
Consolidated Financial
Statements
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1. General information
Prada S.p.A. (“Prada” or the “Company”), together with its subsidiaries (collectively the “Group” or the “Prada
Group”), is listed on the Hong Kong Stock Exchange (HKSE code: 1913). The Prada Group is a leading player in the
luxury goods industry, where it operates with the Prada, Miu Miu, Church’s and Car Shoe brands producing and
distributing leather goods, footwear and ready-to-wear. It also operates in the food sector with the Marchesi 1824
brand, in the most prestigious sailing races with Luna Rossa and in the eyewear and beauty industries under licensing
agreements.
The Group owns 26 production facilities (23 in Italy, 1 in the United Kingdom, 1 in France and 1 in Romania) and its
products are sold in 70 countries worldwide mainly through its directly operated stores, which numbered 606 as of
December 31, 2023. The Prada Group’s products are also sold directly through the brands’ e-commerce activity and
indirectly in selected high-end department stores, by independent retailers in very exclusive locations and by
important e-tailers.
The Company is a joint-stock company with limited liability, registered and domiciled in Italy. Its registered office is
at via Fogazzaro 28, Milan. As of December 31, 2023 (the reporting date of these Consolidated Financial Statements),
79.98% of the share capital was owned by Prada Holding S.p.A., a company domiciled in Italy, and the remainder
consisted of floating shares listed on the Main Board of the Hong Kong Stock Exchange.
The Consolidated Financial Statements were approved and authorized for issue by the Board of Directors of Prada
S.p.A. on March 7, 2024.
2. Basis of preparation
The Consolidated Financial Statements of the Prada Group as of December 31, 2023, which consist of the
“Consolidated Statement of financial position”, the “Consolidated Statement of profit or loss for the year ended
December 31, 2023”, the “Consolidated Statement of comprehensive income for the year ended December 31,
2023”, the “Consolidated Statement of cash flows for the year ended December 31, 2023”, the “Consolidated
Statement of changes in equity” and the “Notes to the Consolidated Financial Statements”, have been prepared in
accordance with the International Financial Reporting Standards (“IFRSs”) issued by the International Accounting
Standards Board (“IASB”) and endorsed by the European Union.
At the date of presentation of these Consolidated Financial Statements, there were no differences between the IFRSs
endorsed by the European Union and applicable to the Prada Group and those issued by the IASB.
IFRSs also refer to all International Accounting Standards (“IAS”) and all interpretations of the International Financial
Reporting Interpretations Committee (“IFRIC”), previously called the Standing Interpretations Committee (“SIC”).
The Group has prepared the Consolidated Statement of Financial Position presenting separately the current and non-
current assets and liabilities. All details needed for accurate and complete disclosure are provided in the Notes to the
Consolidated Financial Statements. Consolidated Statement of Profit or Loss items are classified by function of
expenses. The Consolidated Statement of Cash Flows has been prepared with the indirect method. The Consolidated
Financial Statements are presented in Euro, the functional currency of Prada S.p.A..
The Consolidated Financial Statements have been prepared on a going concern basis.
118118
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ANNUAL REPORT2023 3. New IFRS and amendments to IFRS
New standards and amendments to existing standards issued by the IASB, endorsed by the European Union and
applicable to the Prada Group from January 1, 2023.
New standards and amendments to existing standards
Effective Date for Prada Group
EU endorsement dates
IFRS 17 Insurance contracts
January 1, 2023
Endorsed in November 2021
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting policies
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates
and Errors: Definition of Accounting Estimates
Amendments to IAS 12 Income taxes: deferred tax related to assets and liabili-
ties arising from a single transaction
Amendments to IFRS 17 Insurance contracts: Initial application of IFRS 17 and
IFRS 9 – Comparative information (issued on 9 December 2021)
Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two
Model Rules
January 1, 2023
Endorsed in March 2022
January 1, 2023
Endorsed in March 2022
January 1, 2023
Endorsed in August 2022
January 1, 2023
Endorsed in September 2022
January 1, 2023
Endorsed in November 2023
The introduction of these amendments did not have any effect on these Consolidated Financial Statements.
The Group has applied the temporary exception, introduced in May 2023 by IASB with the “Amendments to IAS 12
Income taxes: International Tax Reform – Pillar Two Model Rules”, regarding the accounting requirements for deferred
taxes under IAS 12; therefore, the Group neither recognises nor discloses information about deferred tax assets and
liabilities related to Pillar Two income taxes.
During the year, the Prada Group has managed the implementation of the "Pillar II" legislation, aimed at ensuring a
global minimum level of taxation (“Global minimum tax”) for multinational enterprise groups that satisfy certain
predefined parameters.
The implementation of the Global Minimum Tax, provided for in Directive No. 2022/2523 of December 15, 2022
(implementing the OECD/G20 Pillar II proposal), is effective in Italy from January 1, 2024 as per Italian Legislative
Decree No. 209 of December 27, 2023.
Given the complexity of the system outlined in the above legislation to ensure this minimum level of taxation, for the
first three tax periods (for the Prada Group - financial years 2024 to 2026) the possibility of applying a simplified
regime has been provided for (so-called “transitional safe harbours”). This simplified regime is primarily based on
accounting information already available for each jurisdiction and the application of three tests (De Minimis test,
Simplified Effective Tax Rate test and Routine Profits test); passing at least one of these tests allows the disapplication
of any additional taxes required to reach the prescribed minimum tax level and the reduction of compliance burdens.
Based on the information known or reasonably estimable to date, the Prada Group's exposure arising from the
application of Pillar II is evaluated as not material because:
(i) most of the Group's entities, assumed at aggregate level in the jurisdictions in which they are located, pass at
least one of the three tests referred to above;
(ii) with respect to entities that, on the other hand, do not satisfy, at the aggregate level in the jurisdictions in which
they are located, any of the three tests mentioned above, it is considered that their profits, and therefore the
potential tax exposure arising from the Pillar II framework, do not have a relevant impact on the profits and tax
liability of the Group as a whole.
The Group, with the support of external consultants, has performed analyses and simulations of the impacts of the
new legislation that underlined the above-mentioned conclusions and is setting up the compliance requirements
related to the application of Pillar II, which will be implemented by adequate company systems and procedures.
In any case, since the Pillar II legislation is not effective as of 31 December 2023, it had no impact on current taxes.
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Notes to the Consolidated Financial Statements Amendments issued by the IASB, endorsed by the European Union but not yet applicable to the Prada Group
because they are effective for annual periods beginning on or after January 1, 2024.
Amendments to existing standards
Effective Date forPrada Group
EU endorsement dates
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued
on 22 September 2022)
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current – Deferral of Effective
Date - Non-current Liabilities with Covenants
January 1, 2024
Endorsed in November 2023
January 1, 2024
Endorsed in December 2023
Amendments issued by the IASB, but not yet endorsed by the European Union as of December 31, 2023.
Amendments to existing standards
Date of possible application
EU endorsement status
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures: Supplier Finance Arrangements
(Issued on 25 May 2023)
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates:
Lack of Exchangeability (issued on 15 August 2023)
January 1, 2024
Not endorsed yet
January 1, 2025
Not endorsed yet
At the date of the Consolidated Financial Statements, the Directors had not yet completed the analysis necessary to
assess the impacts of the new standards and the interpretations not yet applicable to the Prada Group, in terms of
both those already endorsed and not yet endorsed by the European Union.
4. Scope of consolidation
The consolidated financial information comprises the accounts of Prada S.p.A. and the Italian and foreign companies
over which the Company has the right to exercise control either directly or indirectly. An investor controls an investee
when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to use
that power to affect its returns from the investee.
The companies in which the Group has more than 50% of the voting rights or that are controlled by the Group in some
other way are consolidated using the full consolidation method from the date on which the Group gains control until
the date on which that control ceases.
Associates, which are consolidated using the equity method, are companies in which the Group has significant
influence but does not exercise control. Significant influence is defined as the power to participate in the financial and
operating policy decisions of the investee without having control or joint control.
The companies included in the Consolidated Financial Statements are listed in Note 42.
5. Basis of consolidation
The main consolidation procedures used to prepare the Consolidated Financial Statements are explained below:
― the separate financial statements of Prada S.p.A. and its subsidiaries are prepared in accordance with IFRS and those
of its subsidiaries are adjusted, as necessary, to comply with IFRS and with the standards applied throughout the Group.
The financial statements used to prepare the consolidated financial information have all the same reporting date;
― the financial statements of subsidiaries are consolidated using the full consolidation method, incorporating the entire
amount of the assets, liabilities, revenues and expenses of each company irrespective of the percentage of ownership
held, and eliminating the carrying amount of the consolidated equity interests owned directly or indirectly by the
Company against the corresponding portion of the related equity;
― for fully consolidated companies that are not wholly owned by the parent company, the portions of equity and annual
120120
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ANNUAL REPORT2023 profit or loss belonging to third parties are shown separately as “Net equity attributable to Non-controlling interests” in
the Consolidated Statement of Financial Position and “Net income - Non-controlling interests” in the Consolidated
Statement of Profit or Loss;
― for business combinations, the difference between the purchase price of the equity interest acquired and the
corresponding portion of equity at the acquisition date is allocated, if positive, to the identifiable assets acquired and
liabilities assumed measured at their fair value. Any residual amount, if positive, is recognised as goodwill, and if
negative is recognised immediately in the Consolidated Statement of Profit or Loss. The difference between the cost of
acquisition of an additional controlling interest and the related value of the interest acquired is recognised directly in
equity reserves. If the business combination is achieved in stages (a step acquisition), the previous held interest owned
in the company acquired is remeasured at fair value at the date on which control is acquired. Differences identified in
this manner are recognised in profit or loss. In business combinations under common control, the difference between
the purchase price of the equity interest acquired and the corresponding portion of equity is recognised directly in
equity.
― the acquisition cost of an equity interest or an activity that does not constitute a business, and which therefore does not
originate a business combination, is allocated to the individual assets acquired and liabilities assumed measured at their
fair value at the acquisition date;
― the resulting profits, losses, assets and liabilities of associates are accounted for using the equity method. Under such
method, the investments in associates are recognised in the Consolidated Statement of Financial Position at cost,
subsequently adjusted to reflect post-acquisition changes and any impairment losses. Losses exceeding the Parent
Company’s owners’ interest in the associate are not recognised, unless the Group has taken on an obligation to cover
such losses. An excess of the cost of acquisition over the Company’s share of the fair value of the assets acquired and
liabilities assumed at the acquisition date is accounted for as goodwill. Goodwill is included in the carrying amount of
the investment and is tested for impairment. Any eccess between the cost of acquisition and the Company’s share of
the fair value of the identifiable assets, liabilities and contingent liabilities at the acquisition date is recognised in the
Consolidated Statement of Profit or Loss of the period of acquisition;
― during the consolidation process, all payables, receivables, expenses and revenues deriving from transactions between
the consolidated companies are eliminated. Any unrealized profits and losses deriving from transactions between the
Group’s consolidated companies and included in the inventory valuation at the reporting date are eliminated. Unrealized
losses are eliminated except where the transaction provides evidence of impairment of the asset transferred, in which
case the value of the transferred asset is written down;
― dividends distributed by the consolidated companies are eliminated from the Consolidated Statement of Profit or Loss
and added to the retained earnings if and to the extent that they were extracted from them;
― the financial statements of subsidiaries are prepared in their respective local currency. Assets and liabilities are
translated into Euro using the end-of-period exchange rate, and income and expenses are translated using the average
exchange rate of the period. If translation at the average exchange rate does not present the transaction fairly, the
exchange rate prevailing at the date of the transaction is used to translate its effect on the Consolidated Statement of
Profit or Loss. Differences arising on translating Statement of Financial Position balances at the beginning and at the
end of the period, and differences arising on translating Statement of Profit or Loss items at the average exchange rate
for the period (or another exchange rate, as mentioned above) and at the end of the period, are recognised in a
translation reserve in consolidated equity until the disposal of the investee. The translation reserve includes the
accumulated translation differences generated since first-time consolidation (January 1, 2004). In the preparation of
the Consolidated Statement of Cash Flows, the cash flows of subsidiaries are translated using the average exchange rate
for the period. Exchange differences arising on a monetary item qualified as a net investment in a foreign operation are
initially recognised in the translation reserve and subsequently released to profit or loss upon disposal of the investment;
― the reporting currency of the Consolidated Financial Statements is the Euro. All amounts are expressed in thousands
of Euro unless stated otherwise.
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121121
Notes to the Consolidated Financial Statements 6. Material accounting policies
Cash and cash equivalents
Cash and cash equivalents are recognised at their nominal value. Cash equivalents include all highly liquid investments
originally with a short-term maturity.
Solely for the purpose of the Statement of Cash Flows, cash and cash equivalents include cash on hand, bank accounts
and deposit accounts. Bank overdrafts and the current portions due to banks on medium and long-term loans are
recognised in the Statement of Financial Position as short-term financial payables and bank overdrafts.
Trade receivables and payables
Trade receivables are recognised at their nominal value net of the bad debt provision determined on the basis of the
requirements set by IFRS 9. According to this standard, receivables are written off following the application of the
“expected loss” impairment method together with, if necessary, further impairments recognised upon specific doubtful
conditions on the single credit positions.
Trade accounts payable are recognised at fair value and then at amortised cost.
Transactions denominated in foreign currency are recognised at the exchange rate as at the date of the transaction.
At the reporting date, transactions denominated in foreign currencies are translated using the exchange rate as at the
reporting date. Gains and losses arising from the translation are reflected in the profit or loss.
Inventories
Raw materials, work in progress and finished products are recognised at the lower of the acquisition or production cost
and the net realizable value. Cost comprises direct production costs and those indirect that have been incurred in
bringing the inventories to their present location and condition. Acquisition or production cost is determined by the
weighted average cost method.
Provisions, adjusting the value of the inventories, are made for slow moving, obsolete inventories or if, in the end, the
estimated selling price or realizable value is reasonably expected to be lower than the cost.
Property, plant and equipment
Property, plant and equipment are recognised at purchase cost or production cost, including any charges directly
attributable. They are shown net of accumulated depreciation calculated on the basis of the useful lives of the assets
and net of any impairment losses.
Ordinary maintenance expenses are charged in full to the profit or loss for the year they are incurred. Extraordinary
maintenance expenses are capitalized if they increase the value or the useful life of the related asset.
The costs included under leasehold improvements relate to refurbishment works carried out on premises, mainly
commercial, not owned by the Group.
Depreciation methods, useful lives and net book values are reviewed annually. The depreciation rates representing
the useful lives are listed below:
Category of property, plant and equipment
Depreciation rate or period
Land
Buildings and construction
Production facilities and equipment
Improvements to leased retail premises
Improvements to leased industrial and corporate premises
Furniture and fixture - retail
Furniture and fixture - corporate and industrial
Other tangible fixed assets
Assets under construction
not depreciated
2.5% - 10%
4% - 25%
Shorter of lease term (*) and useful life
Shorter of lease term (*) and useful life
Shorter of lease term (*) and useful life
7% - 20%
4% - 50%
0%
(*) the lease term includes the renewal period when the exercise of the option is deemed reasonably certain
When assets are sold or disposed of, their cost and accumulated depreciation are eliminated from the financial statements
and any gains or losses are recognised in the profit or loss.
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ANNUAL REPORT2023 If the term of a lease agreement is terminated in advance, the useful life of non current assets related to such premise
is adjusted consistently.
The value of land is stated separately from the value of buildings. Depreciation is only charged on the value of buildings.
Property, plant and equipment are subsequently carried at cost less accumulated amortisation and impairment losses
as described in the paragraph “Impairment test” in the current section.
An owned investment property is recognised at acquisition cost. The cost of a purchased investment property comprises
its purchase price and any directly attributable expenditure which includes, for example, professional fees for legal
services, property transfer taxes and other transaction costs. After initial recognition, investment property is measured
using the cost model.
Intangible assets
Only identifiable assets, controlled by the Group and capable of producing future economic benefits, are included in
intangible assets.
Intangible assets include trademarks, licenses, store lease acquisition costs, software, development costs and goodwill.
Trademarks are recognised at cost or at the value attributed upon acquisition and include the cost of trademark
registration in the various countries in which the Group operates. The Directors estimate a useful life of between 20
and 40 years for trademarks, assuming there are no risks or limitations on control over their use. Every trademark is
tested for impairment whenever indicators of impairment emerge. The useful life of trademark registration costs is
estimated to be 10 years. The caption trademark also includes other intellectual property rights which useful life is
determinated in accordance with the relevant contracts.
Store lease acquisition costs (or key money) represent expenditures incurred to enter into or take over retail store
lease agreements. When the lease contracts fall under the application of IFRS 16 Leases, the store lease acquisition
is included within the initial direct costs that contribute to the formation of the right of use assets. Otherwise, the store
lease acquisition is an intangible assets.
Intangible assets with a definite useful life are subsequently carried at cost less impairment losses and are amortized
on a straight-line basis at the following rates:
Category of intangible assets
Trademarks and other intellectual property rights
Store lease acquisition costs
Software
Development costs and other intangible assets
Assets in progress
Amortization rate or period
2.5% - 25%
Shorter of lease term (*) and useful life
10% - 33%
10% - 33%
0%
(*) the lease term includes the renewal period when the exercise of the option is deemed reasonably certain
Intangible assets with indefinite useful lives are not amortized, but they are tested for impairment at least once per year.
The Group does not report intangible assets with indefinite useful lives other than goodwill, an asset that produces future
economic benefits, but which is not individually identified and separately measured, and is initially recognised at cost.
Goodwill is not amortized but tested for impairment every year to check if its value has been impaired. If specific
events or altered circumstances indicate the possibility that goodwill has been impaired, the impairment test is
performed more frequently.
For impairment test details, please refer to paragraph “Impairment test” in the current section.
Impairment test
Intangible assets with indefinite useful lives are tested for impairment at least once per year. Goodwill acquired in a
business combination shall be, from the acquisition date, allocated to each of the acquirer’s cash generating units
(“CGU”) or group of CGUs that are expected to benefit from the synergies of the combination. CGUs and group of
CGUs are determined based on the organisational structure of the Group and represent groups of assets that generate
independent cash inflows from continuing use of the relevant assets.
The group of CGUs to which goodwill has been allocated are tested for impairment annually and, whenever there is
an indication of impairment, the carrying value of the cash generating unit is compared with their recoverable amount.
If changes in the composition of one or more cash-generating units to which goodwill has been allocated occur, the
123123
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Notes to the Consolidated Financial Statements goodwill is reallocated to the units affected.
The carrying amount of CGUs tested for impairment for consolidation purposes is represented by the net invested
capital, which means the net equity adjusted by the net financial position including the lease liability.
Recoverable amount is the higher of fair value less costs to sell and value in use, as calculated based on an estimate
of the future cash flows expected to derive from the cash generating unit tested for impairment. Estimated cash flow
is based on budget, forecast and on long-term projections approved by the management. A long-term growth rate is
calculated and applied to project future cash flows. In assessing value in use, the estimated future cash flows are
discounted to their present value using a discount rate post-tax that reflects current market assessments of the time
value of money and the risks specific to the asset.
An impairment loss is recognised in the profit or loss for the period whenever the recoverable amount of the cash
generating unit or group of cash generating units is lower than its book value. An impairment loss recognised for
goodwill is never reversed in subsequent years.
Property, plant and equipment, right of use assets and intangible assets (other than goodwill) are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the top management.
Due to the internal organisational change occurred in 2023, the Group revisited the operating segments. The only
reportable segment identified, as in previous years, corresponds to the entire Prada Group.
Further details can be found in Note 8 “Operating segments”.
Right of use assets and lease liability
Right of use assets and lease liabilities are regulated by IFRS 16 Leases which apply to all lease contracts that provide
for the payment of fixed rents, including those indexed and those that set a guaranteed minimum.
The Group recognise the right of use assets and the lease liability at the commencement date of the lease and based
on the lease term.
The identification of a lease term is very important, especially in the field of real estate, because the form, legislation
and common business practice can vary considerably from one jurisdiction to another. The Group determines the
lease term as the non-cancellable period of a lease, together with the periods covered by an option to extend or to
terminate the lease under the control of the Company. The management evaluates the exercise of the option if it’s
considered “reasonably certain” based on several factors and circumstances that create an incentive for the lessee to
exercise, or not to exercise the option, including any expected changes in facts and circumstances from the
commencement date until the exercise date of the option.
The lease term begins on the ‘commencement date’ of the lease. This is defined as the date on which the lessor makes
an underlying asset available for use by a lessee. It is the date on which the lessee initially recognises and measures
right of use assets and lease liabilities.
The commencement date is not necessarily the date on which the depreciation of the right of use assets starts. For
retail premises, the asset leased is ready for use when works on premises are completed and, therefore, the
depreciation of the right of use assets shall begin after the completion of works necessary to bring a store to its
working condition according to the management instructions (consistently with the IAS 16 requirements).
The right of use assets are measured at cost, identified as the initial measurement of the lease liability, increased by
any initial direct costs incurred by the lessee (key money, legal fees, agent fees or other incremental costs incurred to
conclude the contract) or by any restoration cost necessary to bring back the premises to its original condition. The
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ANNUAL REPORT2023 right of use assets are depreciated over the lease term or, if shorter, the useful life of the asset.
The lease liability is measured at the present value of the lease payments that are not paid at that date. The lease
payments are discounted using an incremental borrowing rate calculated at Group level. The profit or loss caption
“interest expenses IFRS 16” represents the adjustment to the present value of the lease liability. Since most leases
stipulated by the Group do not have an interest rate implicit in the lease, the discount rate applicable to future lease
payments is determined as the risk-free rate of each contract currency in which the leases are stipulated, with payment
dates based on the terms of the specific lease, increased by the parent company’s credit spread.
A lease modification occurs when there is a change in the scope of a lease, or the consideration for a lease, that was not
part of the original terms and conditions of the lease (for example, adding or terminating the right to use one or more
underlying assets, or extending or shortening the contractual lease term). The effective date of the modification is defined
as “the date when both parties agree to a lease modification”. When this occurs, the right of use assets and the lease liability
are updated accordingly. If a lease is terminated before the original lease term date defined at the commencement date,
both the right of use assets and the lease liability are remeasured, impacting also the profit or loss statement.
In addition, the options for the extension and early termination of the lease agreements are re-evaluated when a
significant event or a change occurs in the circumstances that are under the control of the Group and this will influence
the assessment of the reasonable certainty of the exercise options.
Low value contracts (when the price of the asset, new and recognised on a single-component basis approach, is less than
Euro 5,000) and leases whose lease term is shorter than 12 months are not in the scope of IFRS 16 Leases, so they are
recognised through profit or loss on a straight-line basis over the lease term. Purely variable rents, typically linked to
sales without a guaranteed minimum, are also excluded from the scope of application of such standard and are recognized
in the statement of profit and loss in the period in which the condition that triggers those payments occurs.
A lessee is expected to make judgement about whether other changes are substantive based on its understanding of
those changes and based on how they were historically managed by the Group. As a result, in the Group’s view, a
modification of the contract such as a renewal or an extension of the lease term is to be considered substantive only
when it is not consistent with the usual practices applied by the Group and in the industry as a whole.
The right of use assets are subsequently measured at cost less accumulated depreciation and impairment losses as
described in the paragraph “Impairment test” in the current section.
Investments in equity instruments, associates and joint ventures
The initial recognition of investments in equity instruments (previously “available for sale”) is at purchase cost, increased
by any directly attributable transaction costs. The Group evaluates these instruments at fair value and the related
changes are recognised in a specific equity reserve. This change (Fair Value through Other Comprehensive Income) is
also included in the statement of comprehensive income as “items not recyclable to profit or loss”, therefore only
dividends received will be recorded in the statement of profit or loss of the Group. IFRS 9 also provides for an alternative
treatment that allows the recognition of fair value changes directly to profit or loss (Fair Value Through Profit or Loss).
The choice of this accounting treatment (FVTPL or FVOCI) has to be done for each investment and has to be considered
irrevocable once adopted. Any exceptions to the initial recognition will be reported in the Notes to the Consolidated
financial statements.
In the case of securities listed on active markets, the fair value is the price recorded at the end of the trading day of the
period under review. For investments for which there is no an active market, the fair value is determined based on the
price of recent transactions between independent parts of substantially similar instruments, or by using other valuation
techniques such as, for example, income assessments or based on flow analysis discounted financial figures.
Associated undertakings (“associates”) are recognised in the Consolidated Financial Statement using the equity
method. Associates are companies in which the Group has significant influence but does not exercise control.
Significant influence is defined as the power to participate in the financial and operating policy decisions of the investee
without having control or joint control.
Deferred tax assets
Deferred tax assets are amounts of income taxes recoverable in future periods in relation to deductible temporary
differences or carryforward of unused tax losses.
Deductible temporary differences are differences between the carrying amount of an asset or liability in the statement
of financial position and its tax value which, in determining taxable income for future years, will result in deductible
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Notes to the Consolidated Financial Statements amounts when the carrying amount of the asset or liability is realized or settled.
Deferred tax assets are recognised for all deductible temporary differences, tax losses carried-forward and unused
tax credits only to the extent that is probable that taxable income will be available in future years against which the
deductible temporary differences can be used. Recoverability is reviewed at every year end. Deferred tax assets are
measured at the tax rates which are expected to apply to the period when the asset is realized based on tax rates (and
tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets are not discounted.
Deferred tax assets are recognised through the profit or loss unless the tax amount is generated from a transaction or
an event directly recognised in equity or from a business combination.
Derivative financial instruments
Derivative financial instruments that hedge interest rate risk and exchange rate risk exposure are recognised at the fair
value based on hedge accounting rules.
According to these rules, within the framework of IFRS 9, future cash flow hedging contracts such as those listed
above are qualified as cash flow hedges. Hedge accounting treatment is allowed if derivative financial instruments are
designated as a hedge of the exposure to changes in future cash flows of a recognised asset or liability or a highly
probable transaction which could affect profit or loss. In this case, the change in fair value of the hedging instrument
is recognised in shareholders’ equity. Accumulated gains or losses are reversed from shareholders’ equity and
recognised in the profit or loss for the period in which the profit or loss effect of the hedged operation is recognised.
Any gain or loss on a hedging instrument (or portion thereof) which is no longer effective as a cash flow hedge is
immediately recognised in the profit or loss. If the hedged transaction is no longer expected to take place, any related
cumulative gain or loss outstanding in equity will be recognised in the profit or loss.
Non-current financial liabilities
Non-current financial liabilities include payables to banks for medium and long-term loans.
Non-current financial liabilities are initially recognised at fair value on the transaction date less transaction costs which
are directly attributable to the acquisition. After initial recognition, non-current financial liabilities are valued at amortised
cost, which means at the initial amount less principal repayments already made, plus or minus the amortisation (using
the effective interest method) of any difference between that initial amount and the maturity amount.
Employee benefits
Defined benefit plans are recognised using actuarial techniques to estimate the amount of the obligations resulting from
employee service in the current and past periods and discounting it to determine the present value of the Group’s obligations.
The present value of the obligations is determined by an independent actuary using the Projected Unit Credit Method.
Actuarial gains and losses are recognised directly in equity, net of the tax effect.
Other long-term employee benefits are recognised among non-current liabilities and their value corresponds to the
present value of the defined benefit obligation at the reporting date, adjusted according to the period of the underlying
agreement. The recognition of these benefits is usually subject to the attainment of specific earnings by the Group,
and their payment, deferred over time to keep the beneficiaries in the organisation, is remeasured using indices
relating to the Group’s profitability or market value. Like defined benefit plans, other long-term benefits are also
valued using the Projected Unit Credit Method. Unlike defined benefits plans, the actuarial gains and losses of other
long-term benefits are recognised through profit or loss rather than through net equity.
Long-term employee benefits in the form of share-based payments (“phantom shares”) are cash-settled and fall within
the scope of IFRS 2. These benefits are measured at fair value, the estimation of which follows a risk neutral approach.
In the model, the risk free rate curve is deducted from the Euro area rates at the valuation date; in addition, the expected
dividend rate of the underlying was taken into account. Until the liability is settled, the fair value is restated at the date
of each year and at the settlement date. Changes in fair value are recognised through profit or loss.
Provisions for risks and charges and contingent assets
The Prada Group is mainly involved in civil and tax disputes and the related provisions for risks and charges are
booked in the financial statements both on the basis of historical experience and on the basis of assumptions
concerning future events that are difficult to predict as also depending on factors that are not under the full control
of the Group. Therefore it is possible that after the reporting period, departures between the estimates made and the
actual results materialise so that it might be necessary to make adjustments to the values of the liabilities recognised.
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ANNUAL REPORT2023 Application of exemptions to some or all of the disclosures required by IAS 37 are applied when these could prejudice
seriously the position the Group in a dispute with other parties on the on the subject matter of the provision, contingent
liability or contingent asset.
Deferred tax liabilities
Deferred tax liabilities are amounts of income taxes due in future periods in respect of taxable temporary differences.
Taxable temporary differences are differences between the carrying amount of an asset or liability in the statement
of financial position and its tax base which, in determining the taxable income for future years, will result in taxable
amounts when the carrying amount of the asset or liability is recovered or settled.
Deferred tax liabilities are recognised for all taxable timing differences except when liability is generated by the initial
recognition of goodwill or the initial recognition of an asset or liability in a transaction other than a business combination
that does not affect the accounting result or the tax result at the transaction date.
Deferred tax liabilities are measured at the tax rates which are expected to apply to the period when the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax liabilities are not discounted.
Deferred tax liabilities are recognised through the profit or loss unless the tax amount is generated from a transaction
or an event directly recognised in equity or from a business combination.
Accounting in hyperinflationary economies
Non-monetary assets and liabilities and gains and losses of entities whose functional currency is the currency of a
hyperinflationary economy are restated to reflect the changes in the general pricing power of their functional currency,
in accordance with IAS 29, by applying the change in the general price index between the date those items were acquired
or incurred and the end of the reporting period.
Therefore, for non-monetary items recognised at their historical cost, the opening Statement of Financial Position is
restated to reflect the effect of inflation from the date on which the assets were acquired and the liabilities were incurred
or assumed to the date of the previous year closing Statement of Financial Position. This effect is recognised in equity.
Afterward, all the corresponding restated data in the subsequent financial statements and the Statement of Profit or Loss
items are restated by applying the change in the general price index for the current reporting period, thereby generating
a gain or loss, charged to the income statement in a specific item called “net monetary position gain or loss”.
Moreover, IAS 21 states that the financial statements of a subsidiary whose functional currency is the currency of a
hyperinflationary economy must be translated into a different presentation currency, i.e., all the amounts (assets,
liabilities, items of equity, income and expenses) must be translated at the closing rate of the reporting period, except for
comparative amounts that are translated into a currency of a non-hyperinflationary economy.
Since June 30, 2022, the Turkish economy has been considered hyperinflationary according to the definition and criteria
set out in “IAS 29 - Financial Reporting in Hyperinflationary Economies” as inflation in Turkey has risen exponentially,
with a cumulative inflation rate over three years that exceeds 100%.
Three-year cumulative CPI*
54.2%
74.4%
136.4%
156.2%
268.3%
Dec. 31, 2020
Dec. 31, 2021
June 30, 2022
Dec. 31, 2022
Dec. 31, 2023
(*) source: Turkish Statistical Institute
Revenue recognition and cost recognition
Revenues from the sale of goods are recognised in the profit or loss when all of the following criteria have been
satisfied:
― identification of the contract (in writing, orally or in accordance with other customary business practices) with a
customer;
― identification of the performance obligations in the contract;
― determination of the transaction selling price for each performance obligations;
― the amount of revenue (transaction selling price) can be measured reliably;
― the significant risks and rewards of ownership are transferred to the buyer;
― all control over the goods sold has ceased;
― the economic benefits generated by the transaction will probably be enjoyed by the Group;
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Notes to the Consolidated Financial Statements
― the costs pertaining to the transaction can be reliably measured;
― each performance obligation has been satisfied.
Royalties are accounted for based on sales made by the licensees and the terms of the contracts.
Costs are recognised on an accrual basis. In particular, a cost is immediately recognised in the profit or loss when:
― an expense does not generate any future economic benefit;
― the future economic benefits do not qualify or cease to qualify as assets for recognition in the statement of
financial position;
― a liability is incurred and no asset has been recognised.
Pre-opening rents
Costs incurred during the pre-opening period of new or refurbished retail stores are charged to the profit or loss when
incurred, except for the suspension of the depreciation of the right of use assets.
Interest expenses
Interest expenses might include interest on bank overdrafts, on short and long term loans, financial charges related
to the adjustments of the present value of the lease liability, amortization of initial costs of loan operations, changes
in the fair value of derivatives – insofar as chargeable to the profit or loss –, annual interest maturing on the present
value of post-employment benefits and interests on late payments.
Taxation
The provision for taxation is determined based on a realistic estimate of the tax charge of each consolidated entity, in
accordance with the tax rates (and tax laws) that have been enacted or substantially enacted in each country at the
reporting date.
Current taxes are recognised in the profit or loss as an expense, except for taxes deriving from transactions or events
directly recognised through shareholders’ equity which are directly charged to equity.
Earnings or losses per share
Earnings or losses per share are calculated by dividing the net result attributable to the parent company by the
weighted average number of ordinary shares in issue.
Changes of accounting policies, errors and changes of estimates
The accounting policies adopted change from one year to the next only if the change is required by an accounting
standard or if it helps provide more reliable and meaningful information on the impact of operations on the entity’s
statement of financial position, profit or loss or cash flows.
Changes of accounting policy are accounted for retroactively with the effect allocated to the opening equity of the
earliest of the periods presented. The other comparative amounts reported for each prior period are also adjusted as
if the new policy had been applied from the outset. A prospective approach is adopted only when it would be
impracticable to restate the comparative information.
The application of a new or amended accounting standard is accounted for as requested by the standard itself. If the
standard does not regulate the transition method, the change is accounted for on a retroactive basis or, if impracticable,
on a prospective basis.
Material errors are treated on the same basis as changes of accounting policy as described above. Non-material
errors are corrected through the profit or loss in the period in which the error was identified.
Changes of accounting estimates are accounted for prospectively in the profit or loss for the year in which the change
is made if it only affects the profit or loss for that year, or in the profit or loss for the year in which the change is made
and in subsequent periods if they are also affected by the change.
Use of estimates
In accordance with IFRS, preparation of these consolidated financial statements requires the use of estimates and
assumptions when determining certain types of assets, liabilities, revenues and costs and when assessing contingent
assets and liabilities.
These assumptions refer, first of all, to operations and events not settled at the end of the period. Therefore, upon
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ANNUAL REPORT2023 payment, the actual outcome may differ from the estimated amounts. Estimates and assumptions are reviewed
periodically and the effects of each change are immediately recognised in the profit or loss.
Significant estimates are used mainly for impairment tests, when determining the provisions for risks and bad debts,
the inventory obsolescence provision, the post-employment benefits, the tax computation, the measurement of
derivatives, the lease term of contracts with renewal or early termination options (in accordance with IFRS 16) and the
useful life of property, plant and equipment and intangible assets.
Impact of climate change-related matters on financial statements
The Group has defined a climate strategy with the objective of reducing greenhouse gases (GHG) emissions, positively
contributing to the global goal of fighting climate change. The strategy, which is integrated into Group’s business
model and operations, includes medium-term carbon reduction targets related to direct GHG emissions (scope 1),
indirect GHG energy emissions (scope 2), and other indirect GHG emissions from sources not owned or controlled by
the Company itself (scope 3).
The main action on going to reach the targets for scope 1 and scope 2 are the following:
― electrification of industrial sites heating/cooling systems;
― switch to a green company car fleet;
― increase in self-produced energy from owned photovoltaic systems;
― investment in renewable energy procurement, including the participation, within the Fashion Pact coalition, to launch
a Collective Virtual Power Purchase Agreement (CVPPA) in the European region, which will start in the next few years;
― increase of LEED Gold or Platinum certifications.
The above actions have had and will have an impact on the Group's Consolidated Financial Statements in terms of
new investments and recurring operations (e.g. purchase of certified carbon credits and GOs certificates, purchase of
certified raw materials, purchase of sustainable logistics and procurement services).
Management has also assessed the impact of climate change and the measures taken to comply with the climate
strategy on the criteria for the preparation of the Consolidated Financial Statements, with particular reference to the
estimates and assumptions as defined in the section “Use of Estimates”.
In addition, to align the performance of the Group’s key personnel with the interests of the stakeholders and to
reinforce the Group’s commitment to ESG issues, the Group has established a long-term variable incentive plan that
includes financial indicators and the achievement of specified sustainability objectives. Fulfillment of these criteria
was taken into account in the evaluation of the long-term incentive plans.
At this stage, management has assessed that the impact on the Group's financial statements is not material as it has
not identified any specific asset or liability items that are subject to estimation processes at the reporting date that
could be significantly affected by climate change issues.
Impact of the outbreak of war in Ukraine on financial statements
The effects of the ongoing conflict have been considered in the preparation of the financial statements as of December
31, 2023. The only notable impact is related to the impairment of assets held in Russia.
The management will continue to closely monitor the evolution of the business and legal scenario to ensure the
correct valuation of the assets recognised in the consolidated financial statements of the Group and to abide by the
law and regulations being imposed.
7. Mergers and acquisitions
As a result of the internal reorganisation process of the Church's brand, business transactions were completed in
2023, resulting in the liquidation or merger in other Group companies of the following companies: Church’s English
Shoes Switzerland Sa, Church Ireland Retail Ltd, Church Singapore Pte Ltd, Church Austria Gmbh, Church Denmark
Aps, Church Japan Company Ltd, Church English Shoes Sa, Church Netherlands Bv, Church France Sas, Church
Korea Llc, Church Italia S.r.l. and Church Footwear Ab.
On January 24, 2023, COR 36 S.r.l. was liquidated.
On May 26, 2023, Caffè Principe S.r.l. was merged into Marchesi 1824 S.r.l. in order to increase the synergies within
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Notes to the Consolidated Financial Statements the Group in the food and beverage sector.
On June 15, 2023, Pelletteria Figline S.r.l. was merged into Figline S.r.l. and on October 30, 2023 Pelletteria Ennepì
S.r.l. was merged in Prada S.p.A. in order to rationalise the manufacturing activities of the Group.
On September 1, 2023, Luna Rossa Challenge S.r.l. established the company Luna Rossa Challenge 2024 Sl in order
to follow the operation for the next America’s Cup 2024 in Barcelona (Spain).
On September 5, 2023, Prada Group and Ermenegildo Zegna Group signed an agreement for the acquisition of a
minority stake in Luigi Fedeli e Figlio S.r.l., an Italian knitwear company located in Monza (near Milan), in order to
assure continuity, preserve know-how, and continue to create value for ‘Made in Italy’ in the name of craftsmanship
and innovation. Prada Group and Ermenegildo Zegna Group each acquired a 15% stake.
On October 10, 2023, Prada S.p.A. and Store Specialist Inc. have signed a joint-venture agreement with the
establishment of the new company Prada Philippines Inc with the aim of developing the commercial activities in the
Philippines. In the new company, Prada S.p.A. owns 60% of the share capital.
8. Operating segments
Following the organisational changes undertaken with the announcement, among others, of the appointment of a new
Prada Group CEO as of January 2023 and a new Prada CEO as of December 2022, and considering the increasing
verticalisation of the brands' organisation, the Group has redefined its segment reporting.
The Group has maintained a matrix-based organisational structure as in previous years, but focus on brand performance
has been increasing, and resources are increasingly allocated based on assessments at brand level.
The reporting system of the Group has been updated accordingly to provide the top management with periodic brands’
reports, to support the new organisational model described above.
Based on the new structure, since the end of 2023 the operating segments identified by management, as defined by IFRS
8 "an operating segment is defined as a business division whose operating results are regularly reviewed by top
management in order to adopt decisions to allocate appropriate resources to the segment and assess its performance",
correspond to each owned brand.
For financial statements presentation all operating segments identified have been aggregated into a single reportable
segment which corresponds to the entire Prada Group and concluded that, in doing so, the aggregation is still consistent
with the core principles of IFRS 8.
It should be noted that the two main brands, Prada and Miu Miu, have similar economic and business profile and they
represent together 99% of the Group’s revenue. The other brands, which represent the remaining 1% of the Group’s
revenue, have been considered as not material.
The main economic indicators assessed to determine that the operating segments Prada and Miu Miu have similar
economic characteristics are:
― long-term financial performance (in particular, average gross margin)
― currency, competitive, operating and financial risks.
Moreover, Prada and Miu Miu present products of similar nature, similar production processes and customers and
the same distribution channels.
Therefore, as of December 31, 2023 it has been identified only one reportable segment as occurred in 2022 and
previous years. Accordingly, the corresponding information for 2022 should not be restated.
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ANNUAL REPORT2023 Net sales
Detailed information on the net sales by distribution channel and brand are provided below and in the Financial
Review together with the related comments.
(amounts in thousands of Euro)
Net revenues
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
%
change
current
exc. rates
%
change
constant
exc. rates (*)
Retail net sales (Directly Operated Stores and e-commerce)
4,189,676
88.6%
3,736,971
Wholesale net sales (independent customers and franchisees)
Royalties
Total net revenues
Retail net sales by brand
Prada
Miu Miu
Church's
Other
Total retail net sales
Retail net sales by geographic area
Asia Pacific
Europe
Americas
Japan
Middle East
433,206
103,529
9.2%
2.2%
387,621
76,082
4,726,411
100%
4,200,674
3,488,276
83.3%
3,252,025
648,936
15.5%
431,768
28,555
23,909
0.7%
0.6%
33,120
20,058
4,189,676
100%
3,736,971
1,446,146
1,312,023
767,365
483,838
180,304
34.5%
1,231,659
31.3%
18.3%
11.5%
4.3%
1,187,466
781,825
368,739
167,282
Total retail net sales
4,189,676
100%
3,736,971
Retail net sales by product category
Leather goods
Ready-to-wear
Footwear
Other
Total retail net sales
1,910,061
1,350,243
777,099
152,273
45.6%
1,851,737
32.2%
1,085,660
18.5%
3.6%
690,707
108,867
4,189,676
100%
3,736,971
(*) calculated excluding the effect of the hyperinflation in Turkey
89.0%
9.2%
1.8%
100%
87.0%
11.6%
0.9%
0.5%
100%
33.0%
31.8%
20.9%
9.9%
4.4%
100%
49.6%
29.1%
18.5%
2.9%
100%
12.1%
11.8%
36.1%
12.5%
17.2%
13.0%
36.1%
17.2%
7.3%
50.3%
12.1%
58.2%
-13.8%
-12.7%
19.2%
12.1%
19.4%
17.2%
17.4%
10.5%
-1.8%
31.2%
7.8%
12.1%
3.1%
24.4%
12.5%
39.9%
12.1%
24.0%
14.0%
0.3%
43.8%
10.5%
17.2%
7.7%
30.6%
17.5%
44.4%
17.2%
Geographic information
The following table reports the carrying amount of the Group’s non-current assets by geographic area, as required by
IFRS 8, “Operating Segments”, for entities, like the Prada Group, that have a single reportable segment:
(amounts in thousands of Euro)
Europe
Americas
Asia Pacific
Japan
Middle East and Africa
Total
December 31
2023
December 31
2022
3,135,326
3,008,806
900,086
623,716
276,239
137,437
628,828
504,942
349,099
81,617
5,072,804
4,573,292
The total amount of Euro 5,073 million (Euro 4,573 million at December 31, 2022) refers to the Group’s non-current
assets excluding, as per IFRS 8, those relating to derivatives, deferred tax assets and the pension fund surplus.
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Notes to the Consolidated Financial Statements Consolidated Statement of Financial Position
9. Cash and cash equivalents
The cash and cash equivalents are detailed as follows:
(amounts in thousands of Euro)
Cash on hand and other cash equivalents
Bank deposit accounts
Bank current accounts
Total
December 31
2023
December 31
2022
67,030
377,376
245,113
53,804
781,358
256,460
689,519
1,091,622
At December 31, 2023, the bank accounts and deposits accruing interest income had yields in the range of 0% and
5.95% annually (0% and 5.34% at December 31, 2022). These ranges do not include the bank accounts and deposits
in Turkish lira, which have had very high yields due to high inflation and were not relevant. For the bank deposits,
interest income had average yield of 3.94%.
10. Trade receivables, net
The trade receivables, net are detailed below:
(amounts in thousands of Euro)
Trade receivables – third parties
Allowance for bad and doubtful debts
Trade receivables – related parties
Total
The change in the allowance for bad and doubtful debts is set forth below:
(amounts in thousands of Euro)
Opening balance
Exchange differences
Increases
Reversals
Utilization
Closing balance
132132
December 31
2023
December 31
2022
414,621
(11,341)
1,871
342,110
(11,595)
1,400
405,151
331,915
December 31
2023
December 31
2022
11,595
10,990
(244)
2,979
(173)
(2,816)
90
741
(136)
(90)
11,341
11,595
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11. Inventories, net
The inventories, net can be broken down as follows:
(amounts in thousands of Euro)
Raw materials
Work in progress
Finished products
Return assets
Allowance for obsolete and slow-moving inventories
Total
December 31
2023
December 31
2022
115,531
38,580
726,295
12,942
(110,370)
108,450
30,109
699,849
10,493
(88,444)
782,978
760,457
The stock increase was largely attributable to the need to support sales growth. In 2023, the inventory allowance was
increased, net of the utilisations and reversal, by Euro 21.9 million with allocations for slow-moving products and raw
materials.
The changes in the allowance for obsolete and slow-moving inventories in 2023 are as follows:
(amounts in thousands of Euro)
Raw
materials
Finished
products
Total allowance for obsolete
and slow-moving inventories
Opening balance
Exchange differences
Increases
Utilisation
Reversal
Closing balance
32,222
56,222
-
9,441
-
-
(185)
12,801
(97)
(34)
88,444
(185)
22,242
(97)
(34)
41,663
68,707
110,370
The changes in the allowance for obsolete and slow-moving inventories in 2022 were as follows:
(amounts in thousands of Euro)
Raw
materials
Finished
products
Total allowance for obsolete
and slow-moving inventories
Opening balance
Exchange differences
Increases
Utilisation
Reversal
Closing balance
30,735
29,179
(3)
1,588
(98)
-
135
28,449
(896)
(645)
32,222
56,222
59,914
132
30,037
(994)
(645)
88,444
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133133
Notes to the Consolidated Financial Statements 12. Derivative financial instruments: assets and liabilities
Derivative financial instruments: assets and liabilities, current and non-current portions:
(amounts in thousands of Euro)
Financial assets regarding derivative instruments - current
Financial assets regarding derivative instruments - non-current
Total financial assets - derivative financial instruments
Financial liabilities regarding derivative instruments – current
Total financial liabilities - derivative financial instruments
Net carrying amount – current and non-current portion
December 31
2023
December 31
2022
17,550
890
22,483
5,812
18,440
28,295
(7,543)
(11,565)
(7,543)
(11,565)
10,897
16,730
The net carrying amount of derivatives, considering both the current and non-current portions, has the following
composition:
(amounts in thousands of Euro)
December 31
2023
December 31
2022
IFRS7
Category
Forward contracts
Options
Interest rate swaps
Positive fair value
Forward contracts
Options
Negative fair value
Net carrying amount – current and non-current
11,187
2,423
4,830
12,673
6,361
9,261
Level II
Level II
Level II
18,440
28,295
(7,474)
(69)
(10,425)
(1,140)
Level II
Level II
(7,543)
(11,565)
10,897
16,730
All the above derivative instruments are classified as Level II in the fair value hierarchy. The Group has not entered
into any derivative contracts that could be qualified as Level I or III.
The fair values of derivatives arranged to hedge interest rate risks (interest rate swaps or “IRS”) and of derivatives
arranged to hedge foreign exchange risks (forward contracts and options) were determined by using one of the most
widely used valuation platforms on the financial market and are based on the interest rate curves and on spot and
forward exchange rates at the reporting date.
The Group entered into the derivative contracts in the course of its risk management activities in order to hedge
financial risks stemming from exchange rate and interest rate fluctuations. In addition, the Group mitigated the interest
rate risk balancing exposures of floating-rate debt with floating-rate liquidity investments.
Foreign exchange rate transactions
The cash flows of the Group are exposed to exchange rate volatility because it operates on an international scale. In order
to hedge this risk, the Group enters into options and forward sale and purchase agreements, so as to protect the value of
identified cash flows in Euro (or in other currencies used locally). The expected future cash flows mainly regard the
collection of intercompany trade receivables, the settlement of intercompany trade payables and financial cash flows.
The notional amounts of the derivative contracts (translated at the December 31, 2023 exchange rates reported in
Note 38) designated as foreign exchange risk hedges are as stated below.
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ANNUAL REPORT2023
Contracts in effect at December 31, 2023 to hedge projected future trade cash flows:
(amounts in thousands of Euro)
Currency
US Dollar
Chinese Renminbi
Korean Won
Japanese Yen
GB Pound
Canadian Dollar
Taiwan Dollar
Hong Kong Dollar
Swiss Franc
Malaysia Ringgit
Other currencies
Total
Options
Forward sale
contracts
December 31
2023
55,204
57,318
54,406
-
-
7,035
-
8,457
-
-
4,798
238,914
173,229
115,788
118,339
77,096
17,620
22,811
29,312
18,143
11,620
80,766
294,118
230,547
170,194
118,339
77,096
24,655
22,811
37,769
18,143
11,620
85,564
187,218
903,638
1,090,856
Contracts in effect at December 31, 2023 to hedge projected future financial cash flows:
(amounts in thousands of Euro)
Currency
US Dollar
GB Pound
Swiss Franc
Korean Won
Taiwan Dollar
Malaysia Ringgit
Other currencies
Total
Forward sale
contracts
December 31
2023
43,514
35,671
33,153
20,925
8,876
3,939
26,329
43,514
35,671
33,153
20,925
8,876
3,939
26,329
172,407
172,407
Contracts in effect at December 31, 2022 to hedge projected future trade cash flows:
(amounts in thousands of Euro)
Currency
US Dollar
Chinese Renminbi
Korean Won
Japanese Yen
GB Pound
Canadian Dollar
Taiwan Dollar
Swiss Franc
Hong Kong Dollar
Malaysia Ringgit
Other currencies
Total
Options
Forward sale
contracts
December 31
2022
87,193
65,233
74,400
17,062
-
9,972
-
-
5,531
-
6,644
211,888
152,891
77,376
88,156
71,031
18,283
23,712
20,209
10,401
12,877
96,783
299,081
218,124
151,776
105,218
71,031
28,255
23,712
20,209
15,932
12,877
103,427
266,035
783,607
1,049,642
Contracts in effect at December 31, 2022 to hedge projected future financial cash flows:
135135
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Notes to the Consolidated Financial Statements
(amounts in thousands of Euro)
Currency
GB Pound
Swiss Franc
US Dollar
Malaysia Ringgit
Other currencies
Total
Forward sale
contracts
December 31
2022
75,541
31,177
30,658
5,321
17,913
75,541
31,177
30,658
5,321
17,913
160,610
160,610
All contracts in place at December 31, 2023 have a maturity shorter than twelve months.
All contracts in place at the reporting date were entered into with major financial institutions, and no counterparties
are expected to default. A liquidity analysis of the derivative contracts maturities is provided in the financial risks
section of these Notes.
Interest rate transactions
The Group enters into interest rate swaps (“IRS”) in order to hedge the risk of interest rate fluctuations on bank loans. The
key features of the IRS agreements in place as at December 31, 2023 and December 31, 2022 are summarized below:
Interest Rate Swap (IRS) Agreement
Hedged loan
Contract
Currency
Notional
amount
Interest
rate
Maturity
date
Fair value as
of Dec. 31
2023
Currency
Type
of debt
Amount
Expiry
IRS
IRS
IRS
IRS
Euro/000
Euro/000
Euro/000
GBP/000
23,833
100,000
52,200
39,300
1.46%
1.33%
2.65%
2.78%
May-2030
Apr-2025
Feb-2026
Jan-2029
Total fair value (amounts in thousands of Euro)
875
2,332
190
1,433
4,830
EUR
EUR
EUR
GBP
Term Loan
23,833
May-2030
Term Loan
100,000
Apr-2025
Term Loan
Term Loan
52,200
Feb-2026
39,300
Jan-2029
Interest Rate Swap (IRS) Agreement
Hedged loan
Contract
Currency
Notional
amount
Interest
rate
Maturity
date
Fair value as
of Dec. 31
2022
Currency
Type
of debt
Amount
Expiry
IRS
IRS
IRS
IRS
Euro/000
Euro/000
Euro/000
GBP/000
27,500
100,000
77,400
42,825
1.46%
1.33%
2.65%
2.78%
May-2030
Apr-2025
Feb-2026
Jan-2029
1,688
4,280
Euro/000
Term Loan
27,500
May-2030
Euro/000
Term Loan
100,000
Apr-2025
731
Euro/000
Term Loan
2,562
GBP/000
Term Loan
77,400
42,825
Feb-2026
Jan-2029
Total fair value (amounts in thousands of Euro)
9,261
The IRS convert variable interest rates on bank loans into fixed interest rates. They have been arranged with major
financial institutions, and no counterparties are expected to default.
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ANNUAL REPORT2023
Information on financial risks
Capital management
The Group’s capital management strategy aims to guarantee a fair economic return to shareholders, protect the
interests of other stakeholders, maintain a balanced capital structure with a high degree of creditworthiness, reducing
the average cost of debt and minimizing financial risks.
Categories of financial assets and liabilities according to IFRS 7
Financial assets
The following is the detail of financial assets required by IFRS 7 under the categories required by IFRS 9:
(amounts in thousands of Euro)
Financial
assets
designated
at fair value
Held
to collect
Held
to collect
and sale
Other
Equity
instruments
Total
Notes
Cash and cash equivalents
Trade receivables, net
-
-
-
405,151
Derivative financial instruments
18,440
Investments in equity instruments
Other investments
-
-
-
-
-
Total at December 31, 2023
18,440
405,151
-
-
-
-
-
-
689,519
-
-
-
-
-
-
-
5,184
36,426
689,519
405,151
18,440
5,184
36,426
689,519
41,610
1,154,720
9
10
12
18
18
(amounts in thousands of Euro)
Financial
assets
designated
at fair value
Held
to collect
Held
to collect
and sale
Other
Equity
instruments
Total
Notes
Cash and cash equivalents
Trade receivables, net
-
-
-
331,915
Derivative financial instruments
28,295
Investments in equity instruments
Other investments
-
-
-
-
-
Total at December 31, 2022
28,295
331,915
-
-
-
-
-
-
1,091,622
-
-
-
-
-
-
-
3,551
23,423
1,091,622
331,915
28,295
3,551
23,423
1,091,622
26,974
1,478,806
9
10
12
18
18
Financial liabilities
The following is the detail of financial liabilities required by IFRS 7 under the categories required by IFRS 9:
(amounts in thousands of Euro)
Financial payables
Trade payables
Financial
liabilities
designated
at fair value
Amortised
cost
Financial
liabilities
held for trading
-
-
492,613
453,387
Derivative financial instruments
7,543
-
Lease liabilities
-
2,110,888
Total at December 31, 2023
7,543
3,056,888
-
-
-
-
-
Total
Notes
492,613
21, 22, 26
453,387
7,543
2,110,888
3,064,431
23
12
20
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Notes to the Consolidated Financial Statements
(amounts in thousands of Euro)
Financial payables
Trade payables
Financial
liabilities
designated
at fair value
Amortised
cost
Financial
liabilities
held for trading
-
-
560,071
401,799
Derivative financial instruments
11,565
-
Lease liabilities
-
2,107,577
Total at December 31, 2022
11,565
3,069,447
Total
Notes
560,071
21, 22, 26
401,799
11,565
2,107,577
3,081,012
23
12
20
-
-
-
-
-
Fair Value
The reported amount of derivative instruments, whether assets or liabilities, reflects their fair value, as explained in
this Note 12.
The carrying amount of cash and cash equivalents, financial receivables and trade receivables, as adjusted for
impairment where necessary in accordance with IFRS 9, approximates their estimated realizable value and, hence,
their fair value.
The amount of the investments in equity instruments corresponds to its fair value (Level I).
The lease liability is reported at its present value, while all other financial liabilities are stated at their fair value.
Credit risk
Credit risk is defined as the risk of financial loss caused by the failure of a counterparty to meet its contractual
obligations. The maximum risk to which an entity is exposed is represented by all the financial assets recognised in the
financial statements. However, according to management, the Group’s credit risk regards essentially the trade
receivables from wholesale and other commercial partners, and the cash holdings. The Group has implemented
specific control systems to manage such risk, as explained in the section describing risk factors in the Financial
Review.
Trade receivables
The table below provides an aging analysis of the trade receivables before accounting for the allowance for bad and
doubtful debts:
(amounts in thousands of Euro)
December
31, 2023
Not
overdue
Overdue (in days)
1 ≤ 30
31 ≤ 60
61 ≤ 90
91 ≤ 120
> 120
Trade receivables
416,492
331,052
55,306
9,854
3,717
2,570
13,993
Total
December 31, 2023
416,492
331,052
55,306
9,854
3,717
2,570
13,993
(amounts in thousands of Euro)
December
31, 2022
Not
overdue
Overdue (in days)
1 ≤ 30
31 ≤ 60
61 ≤ 90
91 ≤ 120
> 120
Trade receivables
343,510
272,142
39,132
6,297
4,459
1,211
20,269
Total
December 31, 2022
343,510
272,142
39,132
6,297
4,459
1,211
20,269
138138
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ANNUAL REPORT2023
The following table provides an aging analysis of the trade receivables after accounting the allowance for bad and
doubtful debts:
(amounts in thousands of Euro)
Trade receivables less allowance
for bad and doubtful accounts
Total
December 31, 2023
(amounts in thousands of Euro)
Trade receivables less allowance
for bad and doubtful accounts
Total
December 31, 2022
December
31, 2023
Not
overdue
Overdue (in days)
1 ≤ 30
31 ≤ 60
61 ≤ 90
91 ≤ 120
405,151
329,418
54,350
8,780
3,578
2,548
> 120
6,477
405,151
329,418
54,350
8,780
3,578
2,548
6,477
December
31, 2022
Not
overdue
Overdue (in days)
1 ≤ 30
31 ≤ 60
61 ≤ 90
91 ≤ 120
> 120
331,915
270,542
39,060
5,833
4,453
1,209
10,818
331,915
270,542
39,060
5,833
4,453
1,209
10,818
Bank current accounts and deposits
The bank deposits are broken down by currency below:
(amounts in thousands of Euro)
Currency
Euro
US Dollar
Hong Kong Dollar
Other Currencies
Total bank deposit accounts
December 31
2023
December 31
2022
171,804
86,191
55,624
63,757
473,021
131,258
123,010
54,069
377,376
781,358
The Group aims to reduce the financial counterparty risk on bank deposits by allocating the available funds to multiple
accounts that differ by currency, country and bank (always investment grade); such investments are always short-term.
The bank current accounts are broken down by currency as follows:
(amounts in thousands of Euro)
Currency
US Dollar
Euro
GB Pound
Korean Won
Hong Kong Dollar
Other currencies
Total bank current accounts
December 31
2023
December 31
2022
70,098
54,569
12,644
6,442
6,406
94,954
65,427
56,977
14,299
5,136
3,615
111,006
245,113
256,460
For its operational activities and business processes the Group makes use of financial counterparties of primary
standing and appropriate level of diversification; as a result the counterparty risk on bank accounts can be considered
not significant.
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Notes to the Consolidated Financial Statements Liquidity risk
Liquidity risk refers to the difficulty the Group could have in securing new funds, leading to a failure in meeting its
financial obligations. The Directors are responsible for managing liquidity risk, while the Group Chief Financial Officer
(CFO), supported by the Deputy Group CFO is in charge of optimizing the management of financial resources.
According to the Directors, the funds and credit lines currently available, in addition to those that will be generated
by operating and financing activities, will enable the Group to meet its financial requirements arising from investing
activities, working capital management, punctual loan repayment and dividend payment in the foreseeable period.
At December 31, 2023, the Group had undrawn cash credit lines of Euro 768 million available at banks (Euro 807
million at December 31, 2022), of which Euro 451 million were committed credit lines and Euro 317 million were
uncommitted ones.
An aging analysis of the trade payables is set forth below:
(amounts in thousands of Euro)
December
31, 2023
Not
overdue
Overdue (in days)
1 ≤ 30
31 ≤ 60
61 ≤ 90
91 ≤ 120
> 120
Trade payables
453,387
372,015
56,875
8,958
3,473
1,694
10,372
Total
December 31, 2023
453,387
372,015
56,875
8,958
3,473
1,694
10,372
(amounts in thousands of Euro)
December
31, 2022
Not
overdue
Overdue (in days)
1 ≤ 30
31 ≤ 60
61 ≤ 90
91 ≤ 120
> 120
Trade payables
401,799
330,287
47,513
6,587
Total
December 31, 2022
401,799
330,287
47,513
6,587
436
436
2,538
14,438
2,538
14,438
Financial liabilities under derivative financial instruments (forward contracts and options)
The maturities of the financial liabilities according to the earliest date on which the Group could be required to pay
(worst-case scenario) are presented in the following tables.
As required by IFRS 7, the following tables show the financial liabilities under forward contracts and options designated
as cash flow hedges where a negative cash flow is expected at the reporting date:
Future
contractual
cash flows at
Dec. 31, 2023
6 mths
or less
6 to 12
mths
1 to 2
years
2 to 3
years
3 to 4
years
(amounts in thousands of Euro)
Net cash flows (outflows /
inflows) of forward contracts
Net cash flows (outflows /
inflows) of options
Net amount
(7,543)
(3,803)
(3,672)
(7,474)
(3,803)
(3,671)
(69)
-
(1)
-
(22)
(22)
-
(46)
(46)
-
-
-
Future
contractual
cash flows at
Dec. 31, 2022
6 mths
or less
6 to 12
mths
1 to 2
years
2 to 3
years
3 to 4
years
(amounts in thousands of Euro)
Net cash flows (outflows /
inflows) of forward contracts
Net cash flows (outflows /
inflows) of options
(10,425)
(4,008)
(6,417)
(1,140)
(427)
(623)
Net amount
(11,565)
(4,435)
(7,040)
140140
-
(12)
(12)
-
(39)
(39)
-
(39)
(39)
more
than
4 years
-
-
-
more
than
4 years
-
-
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ANNUAL REPORT2023 Financial liabilities under derivative financial instruments (interest rate swaps)
There are no interest rate swaps with a negative cash flow in 2022 and 2023.
Financial liabilities
(amounts in thousands of Euro)
Carrying
amount at
Dec. 31, 2023
Future
contractual
cash flows at
Dec. 31, 2023
on
demand
6 mths
or less
6 to 12
mths
1 to 2
years
2 to 3
years
3 to 4
years
more
than 4
years
Lease liability
2,110,888
2,334,644
-
239,094
226,276
388,426
329,148
290,240 861,460
Financial liabilities – third parties
(without deferred costs on loans)
Financial liabilities – related parties
487,327
5,853
519,976
5,853
- 120,942
43,942
156,610
151,900
10,442
36,140
-
1,505
4,348
-
-
-
-
Total
2,604,068
2,860,473
- 361,541 274,566 545,036 481,048 300,682 897,600
(amounts in thousands of Euro)
Carrying
amount at
Dec. 31, 2022
Future
contractual
cash flows at
Dec. 31, 2022
on
demand
6 mths
or less
6 to 12
mths
1 to 2
years
2 to 3
years
3 to 4
years
more
than 4
years
Lease liability
2,107,577
2,296,740
- 224,801 210,249 378,651 312,037 259,895 911,107
Financial liabilities – third parties
(without deferred costs on loans)
Financial liabilities – related parties
557,487
3,568
606,990
3,568
- 120,084
56,598
99,558 144,575 140,038
46,137
-
-
3,568
-
-
-
-
Total
2,668,632
2,907,298
- 344,885
270,415 478,209 456,612 399,933
957,244
Some of the above financial liabilities contain loan covenants, as described in Note 26.
Sensitivity on exchange rate risk
The exchange rate risk to which the Group is exposed is concentrated largely with Prada S.p.A. and it results from
fluctuation of foreign currencies against the Euro.
Prada Spa is the Group’s parent and worldwide distributor of brand products. Intercompany transactions involving
the parent and the subsidiaries are mainly settled in the local currency of the latter. Therefore, foreign exchange risk
mainly arises from such intercompany transactions. Derivative transactions are put in place to mitigate such foreign
exchange rate risk.
In terms of exposure, the most important currencies for the Group are the British Pound, Hong Kong Dollar, Japanese
Yen, US Dollar, Chinese Renminbi and Korean Won.
The following table shows the sensitivity of the consolidated net income and equity to a range of hypothetical
fluctuations in the main foreign currencies against the Euro, based on the statement of financial position of the
Group’s companies as of December 31, 2023:
(amounts in thousands of Euro)
Euro strengthens by 5%
Euro weakens by 5%
Impact on net
result
Impact on net
equity
Impact on net
result
Impact on net
equity
GP Pound
Hong Kong Dollar
Japanese Yen
US Dollar
Chinese Renminbi
Korean Won
Other currencies
Total
(414)
1,028
(1,212)
1,828
(2,414)
(907)
(5,851)
2,288
2,447
2,854
12,124
3,644
3,582
3,975
1,357
(1,067)
1,340
(1,675)
2,940
2,041
4,641
(1,630)
(2,380)
(2,228)
(12,774)
(4,249)
(3,923)
(5,948)
(7,942)
30,914
9,577
(33,132)
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Notes to the Consolidated Financial Statements
The total impact on equity (positive for Euro 30.9 million and negative for Euro 33.1 million) is the sum of the
theoretical effect on the statement of profit or loss and on the cash flow hedge reserve of a hypothetical strengthening
or weakening of the Euro against the other currencies.
The effects on the financial statement items are presented above before taxes. The sensitivity analysis is based on
currency exposure at the end of the period, which might not reflect the actual exposure during the period. For this
reason it is purely indicative.
Sensitivity on interest rate risk
The Prada Group is exposed to interest rate fluctuations mainly with regard to interest expense on the medium / long-
term debt of the parent company, Prada S.p.A., and of some of its subsidiaries. The financial risk management is
under the ultimate responsibility of the Group CFO.
The following table shows the sensitivity of the consolidated net income and equity to a hypothetical shift in the
interest rate curve based on the financial position of the Group’s companies at December 31, 2023:
(amounts in thousands of Euro)
Impact on net
result
Impact on net
equity
Impact on net
result
Impact on net
equity
Interest rate curve shift
+0.50%
-0.50%
Euro
GP Pound
Hong Kong Dollar
Japanese Yen
US Dollar
Other currencies
Total
(876)
(162)
310
(47)
757
665
647
(527)
560
310
(47)
757
665
1,718
876
162
(310)
47
(757)
(665)
(647)
516
(578)
(310)
47
(757)
(665)
(1,747)
The total impact on equity (positive and negative for Euro 1.7 million) is the sum of the theoretical effect on the
statement of profit or loss and on the cash flow hedge reserve of a hypothetical shift in the interest rate curve. The
effects on the financial statement items are presented above before taxes.
The sensitivity analysis is based on the net financial position at the end of the period, which might not reflect the actual
exposure to interest rate risk during the period. For this reason it is purely indicative.
Other risks
Risks factors affecting the international luxury goods market and those specific to the Prada Group are described in
the Financial Review in the paragraph “Risks factors and management”.
13. Receivables due from, and advance payments to, related
parties – current and non-current
The current receivables due from, and advance payments to, related parties are detailed as follows:
(amounts in thousands of Euro)
Financial receivables
Other receivables and advances
Receivables due from, and advance payments to, related parties - current
December 31
2023
December 31
2022
2
136
138
2,200
173
2,373
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ANNUAL REPORT2023
The non-current receivables due from, and advance payments to, related parties are detailed as follows:
(amounts in thousands of Euro)
Financial receivables
Receivables due from, and advance payments to, related parties - non-current
Additional information on related party transactions is provided in Note 40.
14. Other current assets
The other current assets are set forth below:
(amounts in thousands of Euro)
VAT
Taxation and other tax receivables
Other assets
Prepayments
Guarantee deposits
Total
Other assets
The other assets are detailed as follows:
(amounts in thousands of Euro)
Advances to suppliers
Incentives for retail investments
Other receivables
Total
Prepayments
The prepayments are detailed below:
(amounts in thousands of Euro)
Rental costs
Insurance
Design costs
Fashion shows and advances on advertising campaigns
Other
Total
December 31
2023
December 31
2022
-
-
1,125
1,125
December 31
2023
December 31
2022
38,317
82,853
15,063
124,244
6,935
39,627
70,775
9,230
86,617
9,668
267,412
215,917
December 31
2023
December 31
2022
6,493
455
8,115
4,079
1,204
3,947
15,063
9,230
December 31
2023
December 31
2022
3,371
2,180
33,194
37,163
48,336
3,031
2,831
29,210
26,013
25,532
124,244
86,617
143143
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Notes to the Consolidated Financial Statements
Prepayments primarily relate to costs incurred to design collections, launch advertising campaigns and host fashion
shows, that will generate revenue after the reporting period.
Guarantee deposits
The guarantee deposits refers primarily to security deposits paid under retail leases.
15. Property, plant and equipment
The historical cost and accumulated depreciation of the past two years are set forth below:
(amounts in thousands of Euro)
Land and
buildings
Production
plant and
machinery
Leasehold
improvements
Furniture
& fittings
Other
tangibles
Assets under
construction
Total
Historical cost
1,008,485
254,845
1,388,822
683,552
221,358
61,981
3,619,043
Accumulated depreciation
(196,886)
(194,367)
(1,095,843)
(394,854)
(159,968)
-
(2,041,918)
Net carrying amount at
December 31, 2022
811,599
60,478
292,979
288,698
61,390
61,981
1,577,125
Historical cost
1,401,574
281,459
1,443,765
708,792
232,658
71,307
4,139,555
Accumulated depreciation
(214,678)
(206,819)
(1,113,221)
(406,587)
(165,374)
-
(2,106,679)
Net carrying amount at
December 31, 2023
1,186,896
74,640
330,544
302,205
67,284
71,307
2,032,876
The changes in the net carrying amount for the year are as follows:
(amounts in thousands of Euro)
Land and
buildings
Production
plant and
machinery
Leasehold
improvements
Furniture
& fittings
Other
tangibles
Assets under
construction
Total net
carrying
amount
Opening balance
811,599
60,478
292,979
288,698
61,390
61,981
1,577,125
Additions
Depreciation
Disposals
Exchange differences
Other movements
Impairment
Revaluation IAS 29
403,681
(20,246)
(3,904)
(10,696)
10,095
(3,633)
-
21,189
117,364
(12,890)
(101,572)
(113)
23
5,956
(3)
-
(217)
(10,400)
33,223
(2,729)
1,896
49,053
(42,540)
(542)
(3,055)
11,570
(1,058)
79
13,230
(10,320)
76,936
681,453
-
(187,568)
(211)
(261)
3,421
(82)
117
(2,751)
(2,001)
(60,793)
(2,109)
44
(7,738)
(26,390)
3,472
(9,614)
2,136
Closing balance
1,186,896
74,640
330,544
302,205
67,284
71,307
2,032,876
The increase in land and buildings included the investment in a highly strategic building at 724, 5th Avenue (New
York), which currently hosts a Prada store, for a consideration equal to US Dollar 425 million (Euro 393 million). The
carrying amount (resulting in Euro 366 million, including other direct charges) was determined deducting from the
purchase price the net of the lease liability and right of use assets immediately before the purchase (Euro 28.1
million). Referring to the above-mentioned building, the floors that as of today are not used as retail premises are
classified as investment property according to IAS 40 and measured with the application of cost model. Since the
amount of such investment property is not material it has been included in the line “property, plant and equipment”.
The increase in leasehold improvements and furniture & fittings regarded primarily restyling and relocation projects
for the retail premises.
The assets under construction at the end of the period concern retail and industrial projects.
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ANNUAL REPORT2023 16. Intangible assets
The historical cost and accumulated amortisation / impairment of the past two years are set forth below:
(amounts in thousands of Euro)
Trademarks
and
intellectual
property
rights
Goodwill
Store lease
acquisition
Software
Other
intangibles
Assets in
progress
Total
Historical cost
405,287
578,003
49,637
252,227
65,415
30,799
1,381,368
Accumulated amortisation /
impairment
Net carrying amount at
December 31, 2022
(219,544)
(64,322)
(49,502)
(166,424)
(63,767)
-
(563,559)
185,743
513,681
135
85,803
1,648
30,799
817,809
Historical cost
407,798
580,909
49,885
300,639
65,432
50,003
1,454,666
Accumulated amortisation /
impairment
Net carrying amount at
December 31, 2023
(231,012)
(65,402)
(49,873)
(197,154)
(65,201)
-
(608,642)
176,786
515,507
12
103,485
231
50,003
846,024
The changes in the net carrying amount for the year are as follows:
(amounts in thousands of Euro)
Trademarks
and
intellectual
property
rights
Goodwill
Store lease
acquisition
Software
Other
intangibles
Assets in
progress
Total net
carrying
amount
Opening balance
185,743
513,681
135
85,803
1,648
30,799
817,809
Additions
Amortization
Disposals
Exchange differences
Other movements
998
(10,626)
-
671
-
1,826
-
-
-
-
Closing balance
176,786
515,507
-
(212)
-
1
88
12
21,242
(31,074)
(356)
(26)
27,896
18
(1,435)
-
-
-
47,164
-
(49)
2
(27,913)
71,248
(43,347)
(405)
648
71
103,485
231
50,003
846,024
The net carrying amount of trademarks and intellectual property rights at the reporting date is broken down in the
following table:
(amounts in thousands of Euro)
Miu Miu
Church's
Prada
Other trademarks and other intellectual property rights
Total
December 31
2023
December 31
2022
110,565
42,190
5,419
18,612
116,160
44,270
5,336
19,977
176,786
185,743
During the year no impairment was recognised for the Group’s trademarks.
The capital expenditures for software refer to technological and digital evolution projects in the retail, manufacturing
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Notes to the Consolidated Financial Statements
and corporate areas.
The total capital expenditure for property, plant and equipment and intangible assets in the twelve months ended
December 31, 2023 was Euro 752.7 million, as broken down below:
(amounts in thousands of Euro)
Retail
Real estate
Production, logistics and corporate
Total
December 31
2023
December 31
2022
215,884
381,711
155,106
168,935
-
107,161
752,701
276,096
Impairment test
As required by IAS 36 “Impairment of assets”, intangible assets with indefinite useful lives are not amortized, but they
are tested for impairment at least once a year. The Group does not report intangible assets with indefinite useful lives
other than goodwill.
As a consequence of the organisational changes carried out over the course of 2023, management adopted a new
reporting structure, modifying the way in which the goodwill is monitored. The new organisational model is focused
by brands.
Accordingly, as of December 31, 2023 the groups of cash-generating units (“CGUs”) which represent the lowest level
within the Group at which management tests goodwill for impairment correspond to the brands Prada and Miu Miu,
operating segments identified for segment reporting purpose in compliance with IFRS 8 as reported in Note 8.
In accordance with IAS 36, the reallocation of the goodwill to the new groups of CGUs has been performed using a
relative value approach based on the relative value of the two groups of CGUs, estimated with the discounted cash
flow method as of December 31, 2023.
The summary of the goodwill allocation to the two groups of CGUs corresponding to the operating segments Prada
and Miu Miu is reported below:
(amounts in thousands of Euro)
Prada
Miu Miu
Total
December 31
2023
424,262
91,245
515,507
The impairment tests as of December 31, 2023 did not identify any impairment losses for the groups of CGU listed above.
The Discounted Cash Flow method used to identify the recoverable amount (value in use) of the group of CGUs
consists of discounting the projected cash flows generated by the activities directly attributable to the operating
segment to which the intangible asset or net invested capital has been assigned. Value in use is the sum of the present
value of the future cash flows expected on the basis of the business plan projections prepared by the management for
each group of CGUs and the present value of the related operating activities at the end of the period (terminal value).
The recoverable amount was estimated with the assistance of a leading consulting firm.
The business plans used for the impairment tests was prepared by the management starting from the 2024 budget
and cover a period of five years for Prada while, considering the characteristics of the brand and life time cycle,
projections related to Miu Miu have been extrapolated until 2031 in order to take into value potential deriving from
the investments incurred across the years. The 2024 budget was approved by the Board of Directors on January 25,
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ANNUAL REPORT2023 2024. The business plans do not take into account either significant improvements in the performance of the assets
existing as of December 31, 2023 or future developments of new activities, except for the investments planned in the
2024 budget for the retail premises’ restyling and renovation projects and new openings that the Group has already
substantially committed to make.
For each group of CGUs tested, the weighted average cost of capital (“WACC”) was determined by taking into due
consideration the risk profile of the CGUs’ group activities, as well as other specific parameters, such as geographic
diversification.
The “g” rate of growth used to calculate the terminal value was assumed equal to 2.5%, in light of inflation expectations
prospects and the long-term growth expected for the luxury goods market.
The WACC (post-tax) and g-rates used for impairment tests of groups of CGUs that include goodwill are reported below:
CGU
Prada
Miu Miu
2023
WACC
g-rate
8.6%
8.6%
2.5%
2.5%
Concerning such group of CGUs, an analysis of the sensitivity of the impairment test has been performed to changes
in the key assumptions used to determine the recoverable amount for each of the group of CGUs to which goodwill is
allocated. It has been verified that no reasonable change in the key assumptions would generate a reduction in the
recoverable amount to the extent of constituting an impairment loss.
However, since value in use is measured on the basis of estimates and assumptions, management cannot guarantee
that the value of goodwill or other tangible and intangible assets will not be subject to impairment in the future.
IAS 36 requires an entity to assess at each annual reporting date whether there are indications of impairment for any
other asset (excluding goodwill) recognised in the Statement of Financial Position. In this respect, the impairment
testing of the group of assets of Prada Russia and Church’s was performed, as described hereunder.
Prada Russia
For Prada Russia, the review of the estimated recoverable amount of the two buildings owned in Moscow and St.
Petersburg, which in substance represents the residual value of the non-current assets allocated, was updated since
the trigger events that as of December 31, 2022 had resulted in a Euro 43.5 million writedown of the fixed assets are
still ongoing. Consistently with last year, the assessment was conducted with the support of leading independent real
estate firm, which estimated the fair value of the two buildings using the Comparative Method of valuation, based on
a comparison of the real estate being appraised to other comparable assets recently sold or offered on the same
market.
The carrying amount of the buildings recognised as of December 31, 2023, compared to the related fair value as
estimated above, led to a writedown of Euro 2.5 million. Translated at the December 31, 2023 exchange rate, the net
invested capital of Prada Russia is Euro 13.3 million, of which Euro 18.7 million refers to the two buildings owned,
partially offset by the items of net working capital. The reduction in value of the net invested capital compared to the
previous period (Euro 29.9 million, translated at the December 31, 2022 exchange rate) is mainly attributable to the
loss of the period and the impact of the exchange rate. With respect to the estimated recoverable amount of the
buildings, it should be noted that the current volatility in the Russian financial system has created significant uncertainty
in the real estate industry. The scarce liquidity in capital markets means more difficulties than those present in normal
market conditions in the event of selling assets in the short term. This circumstance entailed using a high level of
judgment to estimate the recoverable amount of the assets tested. Therefore, management cannot guarantee that the
value of the buildings owned in Russia will not be subject to additional fluctuations (impairment losses or writedown
reversals) in the future.
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Notes to the Consolidated Financial Statements Church’s
For the Church’s group of CGUs, which include the value of the brand for Euro 42 million subject to depreciation with a
residual useful life of 16 years, in 2022 the identification of a trigger event related to the beginning of the reorganisation
process led to a writedown of Euro 19.4 million, entirely allocated to the value of the brand. An impairment test was
carried out again in order to identify any further potential impairment.
The Discounted Cash Flow method used to identify the recoverable amount (value in use) consisted of discounting the
projected cash flows generated by the net invested capital. The recoverable amount was estimated with the assistance
of a leading consulting firm. The cash flow projections used for the impairment test were based on the business plan
prepared by management. The rate used to discount the cash flows is the weighted average cost of capital (WACC) in a
post-tax configuration. For the year ended December 31, 2023, the WACC used to discount the cash flows generated
by the Church’s group of CGUs was 8.6%, and it was determined taking into due consideration the risk profile of the
group of CGU’s activities. The “g” rate of growth used to calculate the terminal value was assumed equal to 2.5%, in light
of the medium term inflation rate in the medium countries where Church’s operates and of the growth outlook for the
luxury goods market.
The impairment tests as of 31 December 2023 did not identify any impairment losses.
A sensitivity analysis was carried out to change the key assumptions used to determine the recoverable amount for the
group of CGUs. Specifically, a sensitivity test was performed by including an execution risk premium in the WACC
calculation which raised from 8.6% to 11.6%. The results of the analysis performed did not showed any potential
impairment loss.
17. Right of use assets
The changes in the net carrying amount of the right of use assets for the year ended December 31, 2023 are shown below:
(amounts in thousands of Euro)
Real estate
Other
Total net
carrying amount
Opening balance
2,007,660
3,814
2,011,474
New contracts, initial direct costs and remeasurements
Depreciation
Contracts termination
Exchange differences
Impairment
Revaluation IAS 29
Closing balance
603,963
(443,251)
(74,854)
(60,201)
(18,633)
5,852
2,850
(2,214)
(430)
(4)
-
-
606,813
(445,465)
(75,284)
(60,205)
(18,633)
5,852
2,020,536
4,016
2,024,552
The right of use assets increased by Euro 13.1 million, mainly as a result of new leases and remeasurements of existing
leases totaling Euro 606.8 million, net of depreciation of Euro 445.5 million, termination of contracts of Euro 75.3
million, of which Euro 74.8 million related to the acquisition of real estate investment in 724, 5th Avenue (New York),
which was previously leased and has been acquired in 2023 as reported in Note 15 “Property, plant and equipment”,
writedowns of Euro 18.6 million and foreign exchange differences impact of Euro 60.2 million.
The increase for new leases, initial direct costs and remeasurements is attributable to lease renewals (largely in Asia
and Europe) and the remeasurement of the liability to adjust it to indexes commonly used in the real estate industry
(mainly the consumer price index).
Right of use assets “other”, amounting to Euro 4 million, includes plant, machinery, vehicles and hardware.
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ANNUAL REPORT2023
18. Investments in equity instruments, associates and joint
ventures
(amounts in thousands of Euro)
Investments in equity instruments
Associates and joint ventures
Total
December 31
2023
December 31
2022
5,184
36,426
3,551
23,423
41,610
26,974
The increase in “associates and joint ventures” includes the acquisition of a 15% stake in Luigi Fedeli e Figlio S.r.l. for
Euro 4.7 million and the recapitalizations of the other associates Filati Biagioli Modesto S.p.A. and Les Femmes S.r.l.
for Euro 7.9 million.
19. Other non-current assets
The other non-current assets are detailed as follows:
(amounts in thousands of Euro)
Guarantee deposits
Prepayments for commercial agreements
Pension fund surplus (Note 27)
Deferred rental income
Other long-term assets
Total
The guarantee deposits are set forth below by nature and maturity:
(amounts in thousands of Euro)
Nature:
Stores
Offices
Warehouses
Other
Total
(amounts in thousands of Euro)
Maturity:
between one to two years
between two to five years
After more than five years
Total
December 31
2023
December 31
2022
70,510
45,907
4,652
-
10,435
64,216
50,080
6,426
231
18,449
131,504
139,402
December 31
2023
December 31
2022
58,672
5,409
181
6,248
55,130
5,669
163
3,254
70,510
64,216
December 31
2023
December 31
2022
15,750
25,802
28,958
8,593
26,971
28,652
70,510
64,216
The guarantee deposits refer primarily to security deposits paid under retail leases.
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Notes to the Consolidated Financial Statements 20. Lease liabilities
The following table sets forth the changes in the lease liabilities:
(amounts in thousands of Euro)
Opening balance
New contracts, initial direct costs and remeasurements
Payments (net of interests)
Contracts termination
Exchange differences
Closing balance
December 31
2023
December 31
2022
2,107,577 2,045,412
602,172
(429,685)
(108,023)
(61,153)
483,265
(428,170)
(1,720)
8,790
2,110,888
2,107,577
The lease liabilities increased from Euro 2,108 million at December 31, 2022 to Euro 2,111 million at December 31,
2023, primarily as a result of remeasurements for lease extensions or modifications for Euro 602.2 million net of the
payments of the period for Euro 429.7 million, termination of contracts of Euro 108 million of which Euro 102 million
due to the real estate investment in 724, 5th Avenue (New York) which was previously leased and has been acquired
in 2023 as reported in Note 15 “Property, plant and equipment”, and the exchange rate differences for the period for
Euro 61 million.
The lease liabilities was concentrated mainly in Japan, the U.S.A. and Italy.
21. Short-term financial payables and bank overdrafts
(amounts in thousands of Euro)
Short-term bank loans
Current portion of long-term loans
Deferred costs on loans
Total
December 31
2023
December 31
2022
64,778
83,865
(305)
66,541
94,704
(398)
148,338
160,847
In the short-term bank loans, an amount of JPY 2.1 billion (Euro 13.4 million) relates to the use of the revolving line
stipulated during 2022 by Prada Japan co Ltd. This credit line is subject to financial covenants based on the financial
statements of Prada Japan co Ltd, which were fully complied with at December 31, 2023.
The remaining short-term financial payables at December 31, 2023 consist of the use of uncommitted credit lines by
Prada S.p.A. and Prada Japan co Ltd.
The short-term bank loans are broken down by currency below:
(amounts in thousands of Euro)
Euro
Japanese Yen
Other currencies
Total
150150
December 31
2023
December 31
2022
50,000
13,753
1,025
-
59,081
7,460
64,778
66,541
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ANNUAL REPORT2023
The Group generally borrows at variable interest rates, as explained in Note 26, and manages the risk of interest rate
fluctuations by using hedging contracts, as explained in Note 12.
22. Payables due to related parties – current
The current payables due to related parties are shown below:
(amounts in thousands of Euro)
Financial payables
Other payables
Total
December 31
2023
December 31
2022
5,853
5
3,568
-
5,858
3,568
The current financial payables due to related parties regard loans granted by non-controlling shareholders of the
Group’s subsidiaries in the Middle East.
Additional information on related party transactions is provided in Note 40.
23. Trade payables
The trade payables are detailed as follows:
(amounts in thousands of Euro)
Trade payables – third parties
Trade payables – related parties
Total
24. Tax payables
The tax payables are detailed hereunder:
(amounts in thousands of Euro)
Current taxation
VAT and other taxes
Total
December 31
2023
December 31
2022
447,615
5,772
396,159
5,640
453,387
401,799
December 31
2023
December 31
2022
32,409
89,414
192,048
85,608
121,823
277,656
The Group recognises current tax liabilities of Euro 32.4 million at December 31, 2023 (Euro 192 million at December
31, 2022) against tax receivables (shown among the current assets) of Euro 82.9 million (Euro 70.8 million at
December 31, 2022), as reported in Note 14.
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151151
Notes to the Consolidated Financial Statements 25. Other current liabilities
The other current liabilities are as follows:
(amounts in thousands of Euro)
Payables for capital expenditure
Accrued expenses and deferred income
Other payables
Total
The other payables are detailed below:
(amounts in thousands of Euro)
Short-term benefits for employees and other personnel
Customer advances
Provision for returns from customers
Other
Total
26. Long-term financial payables
The long-term financial payables are as follows:
(amounts in thousands of Euro)
Long-term bank borrowings
Deferred costs on loans
Total
December 31
2023
December 31
2022
92,137
24,052
73,249
28,971
185,954
140,086
302,143
242,306
December 31
2023
December 31
2022
115,066
32,737
35,450
2,701
91,844
21,918
24,805
1,519
185,954
140,086
December 31
2023
December 31
2022
338,684
396,242
(262)
(586)
338,422
395,656
Prada S.p.A.’s loan covenants were fully complied with at December 31, 2023 and they are expected to be complied
within the next 12 months as well.
152152
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ANNUAL REPORT2023
The long-term bank borrowings at December 31, 2023, excluding amortized costs, are set forth below:
Amount
(Euro
thousands)
Type
of loan
Currency
Expiry date
23,834
10,000
100,000
100,000
52,200
11,111
21,000
33,333
45,221
Term-loan
Term-loan
Term-loan
Term-loan
Term-loan
Term-loan
Term-loan
Term-loan
Term-loan
375
Term-loan
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
GBP
EUR
05/2030
10/2024
04/2025
07/2026
02/2026
06/2024
01/2025
11/2026
01/2029
Current
Portion
(Euro
thousands)
Non-current
Portion
(Euro
thousands)
Pledge
3,667
10,000
-
-
25,200
11,111
18,000
11,111
4,401
20,167 Mortgage loan
-
100,000
100,000
27,000
-
3,000
22,222
-
-
-
-
-
-
-
40,820 Mortgage loan
Interest
rate (1)
2.737%
4.702%
2.000%
4.445%
3.549%
4.535%
4.574%
4.705%
4.477%
07/2024
5.152%
375
- Mortgage loan
25,475
Term-loan
RMB
07/2026
3.801%
-
25,475
-
Borrower
Prada S.p.A.
Prada S.p.A.
Prada S.p.A.
Prada S.p.A.
Prada S.p.A.
Prada S.p.A.
Prada S.p.A.
Prada S.p.A.
Kenon Ltd
Tannerie
Limoges Sas
Prada Fashion
Commerce
(Shanghai)
co Ltd
Total
422,549
83,865
338,684
(1) the interest rates include the effect of any interest rate risk hedges
In 2023, the current portions of long-term loans were repaid for a total amount of Euro 94.8 million. Prada Fashion
Commerce (Shanghai) co Ltd stipulated a new medium/long-term loan, with a term of 3 years, for the amount of RMB
200 million (Euro 25.5 million).
Prada S.p.A.’s mortgage loan is secured by the Group’s headquarter building in Milan, and Kenon ltd’s mortgage loan
is secured by the building on Old Bond Street, London, used for one of the most prestigious Prada stores in Europe
and offices. The mortgage loan to Tannerie Limoges Sas is secured by that company’s factory building in France.
The Group generally borrows at variable interest rates and manages the risk of interest rate fluctuations through
hedging agreements, as described in Note 12.
The financial payables are set forth hereunder by their portions with fixed (that are connected to the existing IRS) and
variable interest rates:
(amounts in thousands of Euro)
Short-term financial payables
Long-term financial payables
December 31, 2023
December 31, 2022
variable
interest rates
fixed
interest rates
variable
interest rates
fixed
interest rates
77%
44%
23%
56%
80%
44%
20%
56%
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153153
Notes to the Consolidated Financial Statements 27. Long-term employee benefits
(amounts in thousands of Euro)
Post-employment benefits
Other long-term employee benefits
Total liabilities for long-term benefits
Pension plan surplus (Note 19)
Net liabilities for long-term benefits
December 31
2023
December 31
2022
42,092
18,783
41,870
25,701
60,875
67,571
(4,652)
(6,426)
56,223
61,145
Post-employment benefits
The net balance of long-term employee benefits as at December 31, 2023 is a liability of Euro 56.2 million (Euro 61.1
million at December 31, 2022) and all the benefits fall within the scope of defined benefit plans.
The post-employment benefits consist of:
― Euro 21.3 million (Euro 20.1 million at December 31, 2022) in liabilities accounted for by Italian companies;
― Euro 20.8 million by the foreign subsidiaries (Euro 21.8 million at December 31, 2022).
The Italian liabilities regard the “Trattamento di Fine Rapporto” (“TFR”, or staff leaving indemnities), a deferred
benefit for employees that is mandatory for Italian businesses and is based on the employees’ length of service and
salary. The present value of the liability recognised was determined by projecting the amount accrued at December
31, 2023 as per Italian law to the estimated future date of employment termination, and then discounting it to the
present value at the same reporting date using the projected unit credit method (“PUCM”).
The following table presents the changes in long-term employee benefits as of December 31, 2023:
(amounts in thousands of Euro)
Defined Benefit
Plans in Italy
(TFR)
Defined Benefit
Plans
in other countries
(including Japan)
Pension Funds
in UK
Other
long-term
employee
benefits
Total
Opening balance
20,083
21,787
(6,426)
25,701
61,145
Current service cost
Financial charges (income)
Actuarial (gains) / losses
Benefits paid
Contributions
Exchange differences
644
594
1,418
(1,404)
-
-
3,276
186
355
(2,979)
-
(1,868)
97
(289)
2,303
-
(208)
(129)
18,377
217
(1,629)
(23,737)
-
(146)
22,394
708
2,447
(28,120)
(208)
(2,143)
Closing balance
21,335
20,757
(4,652)
18,783
56,223
154154
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ANNUAL REPORT2023
The actuarial gains and losses are reported below:
(amounts in thousands of Euro)
Actuarial adjustments due to:
(a) Changes in financial assumptions
(b) Changes in other assumptions
(e.g. demographic assumptions, remuneration) increases)
Actuarial (gains) / losses
Defined Benefit
Plans in Italy
(TFR)
Defined Benefit
Plans
in other countries
(including Japan)
Pension Funds
in UK
1,652
(234)
1,418
(58)
413
355
(291)
2,594
2,303
The current service cost and financial charges / (income) are recognised in the statement of profit or loss. For the item
other long-term employee benefits only, the actuarial differences are also recognised in the statement of profit or loss.
The TFR liability was measured on the basis of an independent appraisal by Federica Zappari, an Italian actuary, member
(n. 1134) of the Ordine Nazionale degli Attuari (Italian Society of Actuaries). The technical basis was processed using
statistical data, whereas the demographic assumptions involved variables such as the probabilities of death, retirement,
resignations and dismissals; contract expiration; leaving indemnity advances; supplementary pension schemes.
In the Consolidated Statement of Financial Position the post-employment benefits are stated gross of the pension plan
surplus for the Group companies operating in the United Kingdom that supply pension services to their employees. At
December 31, 2023, the fair value of such pension plans was a surplus of Euro 4.7 million (Euro 6.4 million as of
December 31, 2022). The fair value of the plan assets was determined by the independent actuary Mercer Limited. It is
detailed below:
(amounts in thousands of Euro)
Fair value of plan assets
Fair value of plan liabilities
Pension plan surplus
The composition of the main plan assets on the reporting date is as follows:
(amounts in thousands of Euro)
Equities
Alternatives
Bonds
Cash
Total
December 31
2023
December 31
2022
44,539
(39,887)
44,064
(37,638)
4,652
6,426
December 31
2023
December 31
2022
9,960
11,273
20,994
2,312
8,966
10,277
18,081
6,740
44,539
44,064
155155
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Notes to the Consolidated Financial Statements
The main actuarial assumptions used as of December 31, 2023 are as follows:
Average duration of plan (years)
Average increase in remuneration
Rate of inflation
Defined Benefit
Plans in Italy
(TFR)
Pension Funds
in UK
Defined Benefit
Plans in Japan
10
2.60%
2.50%
11
2.74%
2.74%
9.7
2.61%
N/A
The main actuarial assumptions used as of December 31, 2022 are as follows:
Average duration of plan (years)
Average increase in remuneration
Rate of inflation
Defined Benefit
Plans in Italy
(TFR)
Pension Funds
in UK
Defined Benefit
Plans in Japan
10.1
1.10%
2.50%
11
2.76%
2.76%
10.6
2.61%
N/A
The discount rate used to measure defined benefit plans was determined on the basis of yields on bonds with an AA
rating and a maturity date similar to that of the plans.
With respect to the December 31, 2023 liability, a sensitivity analysis was performed on the main actuarial variables
such as the discount rate, salary changes and inflation rate. The analysis did not lead to significant changes in the
liability, except for the sensitivity analysis conducted on the interest rate curve, according to which a 50 basis point
increase or decrease would cause an increase or decrease in the Group’s total defined benefit obligation (“DBO”) up
to approximately Euro 4 million (or 5% of the current debt on the balance sheet).
Other long-term employee benefits
The other long-term employee benefits meet the IAS 19 and IFRS 2 definition of long-term employee benefits for the
Group’s key management personnel. Their actuarial valuation at December 31, 2023, calculated using PUCM and fair
value methodologies, resulted in Euro 18.8 million (Euro 25.7 million as of December 31, 2022), according to an
independent actuarial appraisal.
28. Provisions for risks and charges
The changes in the provisions for risks and charges are as follows:
(amounts in thousands of Euro)
Provision for
legal disputes
Provision for
tax disputes
Other
provisions
Total
Opening balance
Exchange differences
Reversals
Utilisation
Increases
Closing balance
884
(4)
(45)
(104)
402
1,133
1,061
49,541
51,486
(3)
(212)
(897)
633
582
(2,181)
(1,701)
(5,940)
8,433
(2,188)
(1,958)
(6,941)
9,468
48,152
49,867
The provisions for risks and charges represent Directors’ best estimate of the maximum outflow of resources needed to settle
liabilities deemed to be probable. In the Directors’ opinion, based on the information available to them, the total amount
accrued for risks and charges at the reporting date is adequate in respect of the liabilities that could arise from them.
156156
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ANNUAL REPORT2023 Tax disputes
Since 2016, Prada Asia Pacific Ltd (a retail subsidiary wholly owned by Prada S.p.A.) has been providing Prada S.p.A.
with commercial services to support its wholesale distribution business in Asia Pacific, for remuneration (in place until
2021) disclosed, as early as the 2016 tax year, to the Italian Tax Authority through the submission of an advance
pricing agreement application and various explanatory documents. The Italian Tax Authority started discussions on
the topic on October 2022 and, in order not to have the 2016 fiscal year time barred, on April 28, 2023, it issued two
tax notices (IRES and IRAP) in which it challenged in full the deductibility of the remuneration paid to Prada Asia
Pacific Ltd in the 2016 fiscal year, setting higher taxes amounting to c. Euro 10.8 million and interest amounting to c.
Euro 2.3 million, while recognising (i) the possibility for Prada S.p.A. to deduct the amount that, in the opinion of the
Italian Tax Authority, it should have recognised to Prada Asia Pacific Ltd, without however quantifying it, and (ii) the
non-application of penalties, by virtue of the correctness of the Transfer pricing contemporaneous documentation
prepared by Prada S.p.A..
Prada S.p.A. has filed an appeal against these tax notices within the legal deadlines and discussions with the Italian
Tax Authority are still ongoing.
Since the Italian Tax Authority has not yet formalised a final position on this topic, in order to avoid time barring for
the 2017 fiscal year, two preliminary tax notices related to the 2017 fiscal year were also issued (“inviti a comparire”
IRES and IRAP) to start a settlement procedure on 29 December 2023. Following a similar approach to that described
above for the 2016 fiscal year, in these documents the Italian Tax Authority sets higher taxes amounting to c. Euro 9.8
million, interest amounting to c. Euro 1.9 million and penalties amounting to c. Euro 2.9 million. Prada S.p.A. expects
the Italian Tax Authority to cancel these penalties, consistently with the approach adopted for 2016, once it will have
validated the correctness of Prada S.p.A.’s 2017 transfer pricing contemporaneous documentation (requested after
the notices had been issued).
The Company, also supported by the opinion of a leading Tax consultancy firm, at this stage believes that there is no
basis for recording a tax liability in relation to this case.
Other risk provisions
The other risk provisions amount to Euro 48.2 million as of December 31, 2023 and refer primarily to contractual
obligations to restore leased commercial properties to their original condition.
In the year, liabilities for customs risk previously presented as provision for tax disputes were reclassified to other risk
provision for more accurate representation. Other liabilities for customs duty risks are recognised at the reporting
date in an amount of Euro 3.7 million, consisting of Euro 1 million for a mistaken customs classification of footwear
imported into the United States and Euro 2.7 million for risks of assessments regarding price adjustments, split among
various non-EU countries.
Prada S.p.A. disputed an audit initiated by the Italian Customs Agency in 2012 for the tax years from 2007 to 2011,
concerning the customs value of products. The dispute involves three legal actions regarding the 2010 tax year, which
concluded with unfavorable rulings from the Supreme Court in 2023, after the Company had filed appeals in 2019
and 2020. The Company had already settled the amounts owed pending judgment. Meanwhile, the Company
established a new method for measuring the value of imported products starting from May 2020, with retroactive
effectiveness for the assessable years, in agreement with the Italian Customs Agency. The application of such method
led to the estimate, for the previous years, of an end-of-period liability of approximately Euro 0.2 million.
29. Other non-current liabilities
(amounts in thousands of Euro)
Deferred income for commercial agreements
Accrued costs for lease payments (out of scope for IFRS 16)
Other non-current liabilities
Total
December 31
2023
December 31
2022
98,713
4,616
38
107,687
7,410
573
103,367
115,670
157157
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Notes to the Consolidated Financial Statements 30. Equity attributable to the owners of the Group
The equity attributable to the owners of the Group is set forth below:
(amounts in thousands of Euro)
Share capital
Share premium reserve
Other reserves
Actuarial reserve
Fair Value investments in equity instruments reserve
Cash flow hedge reserve
Translation reserve
Net income for the year
Total
December 31
2023
December 31
2022
255,882
410,047
255,882
410,047
2,436,466
2,245,901
(10,147)
(8,773)
6,296
92,998
671,026
(7,107)
(10,405)
10,060
112,646
465,193
3,853,795
3,482,217
Share capital
At December 31, 2023, approximately 80% of Prada S.p.A.’s share capital was owned by Prada Holding S.p.A. and
the remainder is listed on the Main Board of the Hong Kong Stock Exchange.
Share premium reserve
The share premium reserve of Euro 410 million is the same as that of December 31, 2022.
Other reserves
The other reserves amount to Euro 2,436.5 million at December 31, 2023, up by Euro 190.6 million compared to
December 31, 2022. The increase is mainly due to the allocation of the previous year's profit of Euro 465.2 million,
offset in part by the distribution of dividends totaling Euro 281.5 million to Prada S.p.A. shareholders.
Translation reserve
Changes in this reserve result from the translation into Euro of the foreign currency financial statements of the
consolidated companies. The reserve decreased from Euro 112.6 million at December 31, 2022 to Euro 93 million.
Net income for the year
The Group’s net result for the twelve months ended December 31, 2023 is a profit of Euro 671 million (versus a profit
of Euro 465.2 million for the twelve months ended December 31, 2022).
158158
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ANNUAL REPORT2023 31. Equity attributable to Non-controlling interests
The following table shows the changes in the Non-controlling interests during the years ended December 31, 2023
and December 31, 2022:
(amounts in thousands of Euro)
Opening balance
Translation differences
Dividends
Net income for the year
Actuarial reserve
Share capital increase
Closing balance
December 31
2023
December 31
2022
18,805
14,749
(467)
(250)
2,366
(11)
2,571
664
(599)
3,962
29
-
23,014
18,805
Consolidated Statement of Profit or Loss
For a detail explanation of the financial and business performances of 2023, refer to the Financial Review.
32. Net revenues
The consolidated net revenues are generated primarily from sales of finished products and are stated net of returns
and discounts.
(amounts in thousands of Euro)
Net sales
Royalties
Total
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
4,622,882
4,124,592
103,529
76,082
4,726,411
4,200,674
The Financial Review describes the net sales by distribution channel, brand, geographic area and product category.
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Notes to the Consolidated Financial Statements
33. Cost of goods sold
The cost of goods sold has the following composition:
(amounts in thousands of Euro)
Purchases of raw materials and manufactoring services, net of change in inventories
Depreciation, amortization and impairment on tangible and intangible fixed assets
Depreciation and impairment of the right of use assets
Labor cost
Short-term and low value lease (IFRS 16)
Logistics costs, duties and insurance
Total
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
567,472
530,381
18,690
3,878
18,138
3,398
159,442
145,536
134
130
175,024
190,997
924,640
888,580
The incidence of the cost of goods sold on net revenues for the twelve months ended December 31, 2023 was 19.6%,
a decrease from the 21.2% of 2022. Greater absorption of production overheads, lower logistic costs, better sales
mix in terms of distribution channels and higher average prices were the key drivers of this improvement.
34. Operating expenses
The operating expenses are detailed below:
(amounts in thousands of Euro)
Product design and development costs
Advertising and communications costs
Selling costs
General and administrative costs
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
% of net
revenues
150,616
420,288
1,872,626
296,549
3.2%
8.9%
39.6%
6.3%
137,469
359,114
1,746,349
293,172
Total
2,740,079
58.0%
2,536,104
% of net
revenues
3.3%
8.5%
41.6%
7.0%
60.4%
The total operating expenses were Euro 2,740.1 million, up by Euro 204 million from those of 2022. The increase was
attributable primarily to higher variable costs resulting from the sales increase, marketing spend, personnel expenses,
and other general and administrative costs which in 2022 also included other non-recurring expenses of Euro 27.2
million.
The following table sets forth depreciation, amortization, impairment, personnel cost and rent expense included
within the operating expenses in accordance with the requirements of IAS 1.
(amounts in thousands of Euro)
Depreciation, amortization and impairment on tangible and intangible fixed assets
Depreciation and impairment of the right of use assets
Labor cost
Pure variable lease (IFRS 16)
Short term and low value lease (IFRS 16)
160160
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
221,839
460,220
817,085
252,373
16,640
252,239
460,477
739,574
223,787
12,708
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ANNUAL REPORT2023
35. Financial income / (expenses)
The net interest and other financial income / (expenses) are presented below:
(amounts in thousands of Euro)
Interest expenses on borrowings
Interest income
Interest income / (expenses) IAS 19
Exchange gains / (losses) – realized
Exchange gains / (losses) – unrealized
Other financial income / (expenses)
Interest and other financial income / (expenses), net
Interest expenses on lease liability
Dividends from investments
Total financial expenses
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
(18,596)
26,064
(709)
(14,867)
(12,440)
(11,483)
(32,031)
(6,116)
6,625
271
(18,274)
(1,414)
(5,590)
(24,498)
(58,825)
(40,990)
627
473
(90,229)
(65,015)
The net financial expenses of Euro 90.2 million were Euro 25.2 million higher than in 2022. The increase was largely
attributable to interest expenses on lease liabilities and higher foreign exchange losses, partially offset by higher
financial interest income.
36. Taxation
Income taxes have the following composition:
(amounts in thousands of Euro)
Current taxation
Deferred taxation
Total
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
317,642
(19,571)
327,187
(85,367)
298,071
241,820
The taxation for the twelve months ended December 31, 2023 was Euro 298.1 million, corresponding to 30.7% of the
profit before tax.
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161161
Notes to the Consolidated Financial Statements
The reconciliation between the Group’s theoretical tax rate and its effective tax rate for 2023 and 2022 is presented
in the table below:
(amounts in thousands of Euro)
Group’s weighted theoretical tax rate (calculated in absolute values
on the basis of subsidiaries’ pre-taxable income/loss)
Non deductible expenses, net of not taxable income
Write-off of the deferred tax asset and utilization of tax losses carried forward
Tax losses generated in the year on which no deferred tax assets were recognised
Prior years taxes adjustments
Withholding and other income taxes
Effective tax rate of the Group
The changes in deferred tax assets and liabilities are set forth below:
(amounts in thousands of Euro)
Opening balance
Exchange differences
Deferred taxes on acquisition
Deferred taxes on derivative instruments recorded in equity (cash flow hedges)
Deferred taxes on post-employment benefits recorded in equity (reserve for actuarial differences)
Deferred taxes on revaluation IAS 29
Other movements
Deferred taxes for the period in profit or loss
Closing balance
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
27.2%
28.1%
1.6%
0.1%
-
1.3%
0.5%
4.2%
-
-0.1%
1.4%
0.4%
30.7%
34.0%
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
332,235
257,656
(14,858)
-
1,209
1,021
(120)
(61)
(941)
(1,022)
(8,283)
667
(1,234)
25
19,690
85,367
339,116
332,235
162162
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ANNUAL REPORT2023
The deferred tax assets and liabilities are classified by nature hereunder:
(amounts in thousands of Euro)
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
Deferred tax assets and liabilities on lease contracts
Tax loss carryforwards
Derivative financial instruments
Long term employee benefits
Other
Total
December 31, 2023
December 31, 2022
Deferred tax
assets
Deferred tax
liabilities
Deferred tax
assets
Deferred tax
liabilities
240,317
2,595
32,322
-
26,482
11,367
40,605
5,491
682
9,191
5,795
-
738
8,839
10,881
1,662
2,652
2,909
-
2,686
1,163
4,201
242,795
1,996
29,345
-
24,123
7,267
42,924
10,741
-
8,811
5,088
4,790
1,559
8,292
6,590
1,111
6,636
3,176
-
3,185
1,606
3,910
374,847
35,731
373,090
40,855
The tax loss carryforwards as of December 31, 2023, including those already recognised in the Group’s financial
statements, are detailed below:
(amounts in thousands of Euro)
Expiring within 5 years
Expiring after 5 years
Available for carryforward with no time limit
Total tax loss carryforwards
December 31
2023
1,569
1,279
140,607
143,455
The Directors updated the deferred tax assets recognised on tax loss carryforwards taking into consideration, for
their recoverability, the macroeconomic scenario and the business developments of each of the Group’s companies.
37. Earnings and dividends per share
Earnings per share basic and diluted
Earnings / (losses) per share are calculated by dividing the net profit (or net loss) attributable to the Group’s
shareholders by the weighted average number of ordinary shares outstanding.
Group net income in Euro
Weighted average number of ordinary shares in issue
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
671,026,021
465,192,638
2,558,824,000 2,558,824,000
Basic and diluted earnings per share in Euro, calculated on weighted average number of shares
0.262
0.182
Dividends per share
The Board of Directors of the Company has proposed a final dividend of Euro 350,558,888 (Euro 0.137 per share)
for the twelve months ended December 31, 2023.
163163
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Notes to the Consolidated Financial Statements
During 2023, the Company distributed dividends of Euro 281,470,640 (Euro 0.11 per share), as approved at the
General Meeting held on April 27, 2023 to approve the December 31, 2022 financial statements.
The dividends and the related Italian withholding tax due (Euro 14.7 million), determined by applying the ordinary
Italian tax rate to the entire amount of the dividends distributed to the beneficial owners of the Company’s shares held
through the Hong Kong Central Clearing and Settlement System, were fully paid during the year.
The dividends paid in the past three years are detailed hereunder:
Financial
statements ended
December 31
2022
Financial
statements ended
December 31
2021
Financial
statements ended
December 31
2020
281,470,640
179,117,680
89,558,840
0.11
0.070
0.035
27/04/2023
28/04/2022
27/05/2021
May 2023
May 2022
June 2021
Total dividends paid (Euro)
Dividends per share (Euro)
Date of approval by Shareholders’ Meeting
Date of payment
38. Additional information
Number of employees
The average number of full-time equivalent (“FTE”) employees (calculated by dividing the number of actual hours
worked by the total number of scheduled hours), by business division, is presented below:
(number of employees)
Production
Product design and development
Advertising and communications
Selling
General and administrative services
Total
Employee remuneration
The employee remuneration by business division is presented below:
(amounts in thousands of Euro)
Production
Product design and development
Advertising and communications
Selling
General and administrative services
Total
164164
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
3,406
973
240
8,473
1,099
3,074
945
207
7,969
991
14,191
13,186
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
159,442
71,452
35,133
574,475
136,025
145,411
66,362
31,146
524,062
118,004
976,527
884,985
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ANNUAL REPORT2023
The classification by type of employee remuneration is presented below:
(amounts in thousands of Euro)
Wages and salaries
Post-employment benefits and other long-term benefits
Social contributions
Other
Total
Distributable reserves of the parent company, Prada S.p.A.
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
737,374
43,064
151,967
44,122
668,356
37,801
135,934
42,894
976,527
884,985
Summary of utilization
in the last three years
(amounts in thousands of Euro)
December 31
2023
Possible
utilization
Distributable
amount
Coverage
of losses
Distribution
of dividends
Share capital
Share premium reserve
Legal reserve
Other reserves
Retained earnings
Fair value investments in
equity instruments reserve
Time value reserve
Intrinsic value reserve
Distributable amount
A: share capital increase
B: coverage of losses
C: distributable to shareholders
A, B, C
B
A, B, C
A, B, C
255,882
410,047
51,176
182,899
1,379,281
(8,771)
(57)
5,363
-
410,047
-
182,899
1,358,767
-
-
-
-
-
-
-
-
-
-
-
16,176
268,677
-
-
-
-
-
-
1,951,713
16,176
268,677
Under Italian Civil Code Article 2431, the share premium reserve is fully distributable since the amount of the legal
reserve is equal to or exceeds 20% of the share capital.
Under Italian Legislative Decree 38/2005, Article 7, Euro 20.5 million of the retained earnings is not distributable.
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165165
Notes to the Consolidated Financial Statements
Exchange rates
The exchange rates against the Euro used for consolidation of the Statements of Financial Position and Statements of
Profit or Loss whose presentation currency differed from that of the Consolidated Financial Statements as at
December 31, 2023 and December 31, 2022 are listed hereunder:
Currency
UAE Dirham
Australian Dollar
Brazilian Real
Canadian Dollar
Swiss Franc
Czech Koruna
Danish Kronor
GB Pound
Hong Kong Dollar
Japanese Yen
Korean Won
Kuwait Dinar
Kazakhstani Tenge
Moroccan Dirham
Macau Pataca
Mexican Peso
Malaysian Ringgit
New Zealand Dollar
Norwegian Krone
Philippine Peso
Qatari Riyal
Chinese Renminbi
Romanian Leu
Russian Ruble
Saudi Riyal
Swedish Kronor
Singapore Dollar
Thai Baht
Turkish Lira
Taiwan Dollar
Ukrainian Hryvna
US Dollar
Vietnamese Dong
South African Rand
Average rate
December 31
2023
Average rate
December 31
2022
Closing rate
December 31
2023
Closing rate
December 31
2022
3.972
1.628
5.405
1.459
0.972
24.000
7.451
0.870
8.467
151.794
1,412.443
0.332
493.268
10.955
8.721
19.210
4.929
1.761
11.417
60.150
3.933
7.656
4.946
92.347
4.057
11.474
1.452
37.617
25.685
33.685
39.549
1.082
3.873
1.518
5.450
1.370
1.005
24.563
7.440
0.852
8.255
137.935
1,358.078
0.323
484.949
10.679
8.499
21.221
4.629
1.659
10.100
57.330
3.867
7.077
4.931
73.258
3.959
10.623
1.453
36.860
17.350
31.325
33.902
1.054
4.059
1.626
5.362
1.464
0.926
24.724
7.453
0.869
8.631
156.330
1,433.660
0.340
502.240
10.912
8.913
18.723
5.078
1.750
11.241
61.283
4.029
7.851
4.976
100.014
4.144
11.096
1.459
37.973
32.653
33.800
41.996
1.105
3.918
1.569
5.639
1.444
0.985
24.116
7.437
0.887
8.316
140.660
1,344.090
0.327
492.860
11.156
8.578
20.856
4.698
1.680
10.514
59.320
3.918
7.358
4.950
77.900
4.012
11.122
1.430
36.835
19.965
32.810
39.037
1.067
25,732.534
24,525.672
26,437.000
25,171.000
19.941
17.209
20.348
18.099
166166
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ANNUAL REPORT2023 Auditor’s compensation
The total fees and expenses recognised to Deloitte & Touche S.p.A. and its network for auditing the financial
statements of the years ended December 31, 2023 and December 31, 2022 and for providing non-audit services are
presented below (amounts in thousands of Euro):
Type of service
Audit firm
Provided to
Audit services
Audit services
Audit services
Deloitte & Touche S.p.A.
Prada S.p.A.
Deloitte & Touche S.p.A.
Subsidiaries
Deloitte Network
Subsidiaries
Total audit fees to Deloitte Network
Other advisory services
Deloitte Network
Other advisory services
Deloitte Network
Prada S.p.A.
Subsidiaries
Total non-audit fees to Deloitte Network
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
514
227
967
1,708
756
111
867
475
133
1,147
1,755
374
124
498
Total compensation to Deloitte Network
2,575
2,253
39. Remuneration of Board of Directors, five highest paid
individuals and Senior Managers
Remuneration of Prada S.p.A. Board of Directors for the year ended December 31, 2023:
(amounts in thousands of Euro)
Directors’ fees
Remuneration
Bonuses
and other
incentives
Benefits
in kind
Pension,
healthcare
and TFR
contrbutions
Patrizio Bertelli
Paolo Zannoni
Andrea Guerra
Miuccia Prada Bianchi
Andrea Bonini
Lorenzo Bertelli
Yoël Zaoui
Marina Sylvia Caprotti
Maurizio Cereda
Pamela Yvonne Culpepper
Anna Maria Rugarli
Stefano Simontacchi
19,273
4,408
-
19,273
-
-
147
147
133
133
113
4
-
24
-
-
1,671
2,633
-
958
240
12
-
-
-
-
-
-
692
182
-
-
-
-
-
-
-
-
44
-
34
15
-
-
-
-
-
-
27
5
1,295
27
157
62
27
-
5
27
15
-
Total
19,300
4,437
5,643
19,300
1,841
499
186
147
138
160
128
4
Total
43,631
2,905
3,507
93
1,647
51,783
The Board Remuneration includes the allocation of the amounts decided at the General Meeting on April 27, 2023,
and the additional remuneration approved by the Board of Directors, with the agreement of the Board of Statutory
Auditors, in view of the specific duties carried out by each Director.
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Notes to the Consolidated Financial Statements Remuneration of Prada S.p.A. Board of Directors for fiscal year ended December 31, 2022:
(amounts in thousands of Euro)
Directors’ fees
Remuneration
Bonuses
and other
incentives
Benefits
in kind
Pension,
healthcare
and TFR
contrbutions
Paolo Zannoni
Miuccia Prada Bianchi
Patrizio Bertelli
Lorenzo Bertelli
Andrea Bonini
Stefano Simontacchi
Marina Sylvia Caprotti
Yoël Zaoui
Maurizio Cereda
Pamela Yvonne Culpepper
Anna Maria Rugarli
1,500
18,120
18,120
-
8
54
89
110
80
92
73
24
-
-
236
1,176
-
-
-
-
-
-
-
-
-
141
682
-
-
-
-
-
-
-
-
-
11
14
-
-
-
-
-
-
4
25
25
61
234
2
(8)
13
3
21
12
Total
1,528
18,145
18,145
449
2,114
56
81
123
83
113
85
Totale
38,246
1,436
823
25
392
40,922
Remuneration of five highest paid individuals
The Group’s five highest paid individuals included three Board of Director members for 2023 and two Board Members
for 2022. The total remuneration of the remaining two highest paid individuals for the twelve months ended December
31, 2023 and the remaining three highest paid individuals for the twelve months ended December 31, 2022 is set
forth below:
(amounts in thousands of Euro)
Remuneration and other benefits
Bonuses and other incentives
Non-monetary benefits
Pension/social security, healthcare and TFR contributions
Total
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
15,463
16,788
271
301
21,230
8,205
263
137
32,823
29,835
Excluding the remuneration of the Board of Directors’ members, the remuneration of the highest paid individuals by
range of amount is as follows:
Less than HKD 8,000,000
Between HKD 8,000,000 and HKD 20,000,000
Between HKD 20,000,000 and HKD 50,000,000
More than HKD 50,000,000
Total individuals
168168
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
-
-
1
1
2
-
1
-
2
3
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ANNUAL REPORT2023
Senior Managers remuneration
The remuneration of the Senior Managers is as follows:
(amounts in thousands of Euro)
Remuneration and other benefits
Bonuses and other incentives
Non-monetary benefits
Pension / social security, healthcare and TFR contributions
Total
There were 26 Senior Managers as of December 31, 2023, as in 2022.
The remuneration range of the Senior Managers is as follows:
Less than HKD 4,000,000
between HKD 4,000,000 and HKD 8,000,000
between HKD 8,000,000 and HKD 16,000,000
between HKD 16,000,000 and HKD 50,000,000
more than HKD 50,000,000
Total individuals
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
23,133
20,518
1,104
2,597
28,629
13,395
1,985
2,874
47,352
46,883
twelve months
ended
December 31
2023
twelve months
ended
December 31
2022
8
14
2
1
1
26
6
12
5
1
2
26
The above table does not include the remuneration of Senior Managers who are also Directors.
The amounts reported in the tables setting forth the remuneration of the Board of Directors, five highest paid
individuals and Senior Managers are those recognised in the Statement of Profit or Loss.
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169169
Notes to the Consolidated Financial Statements 40. Related party transactions
The Group carries out transactions with companies classifiable as related parties according to IAS 24, “Related Party
Disclosures”. In the twelve months ended December 31, 2023, these transactions referred primarily to the purchase
or sale of finished and semi-finished products and raw materials, the supply of services, loans and leases.
The following tables present the effect of related-party transactions on the Consolidated Financial Statements in
terms of end-of-year Statement of Financial Position balances and total transactions affecting the Statement of Profit
or Loss.
Statement of financial position balances as of December 31, 2023
Receivables
from, and
advances to,
related parties
– current
Receivables
from, and
advances to,
related
parties –
non-current
Trade
receivable,
net
Right
of use
assets
Trade
payables
Payables
to related
parties –
current
Lease
liability
Other
liabilities
(amounts in thousands of Euro)
Les Femmes S.r.l.
Filati Biagioli Modesto S.p.A.
Luigi Fedeli e Figlio S.r.l
Spelm Sa
Rubaiyat Modern Lux.Pr.Co. Ltd
Immobiliare Rivalsa S.p.A. (*)
Ludo Due S.r.l.
Peschiera Immobiliare S.r.l.
Premiata S.r.l.
Conceria Superior S.p.A.
Perseo S.r.l.
Al Tayer Group Llc
Al Tayer Insignia Llc
Danzas Llc
Al Sanam Rent a Car Llc
Prada Holding S.p.A.
PH-RE Llc
Others
Members of the Board
of Directors of Prada S.p.A.
716
59
-
-
-
-
-
-
-
-
-
-
1,016
-
-
57
-
4
-
2
-
-
-
-
-
-
1
-
-
-
-
-
-
-
-
135
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,415
-
29,521
7,940
2,474
-
-
-
-
-
-
-
-
161,391
-
-
2,470
171
2
-
55
-
-
41
187
2,317
252
17
145
113
2
-
-
-
-
-
-
-
-
3,428
-
-
-
-
-
-
-
2,425
-
-
-
-
-
-
-
-
-
3,486
-
22,964
8,830
3,009
-
-
-
-
-
-
-
-
185,114
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
-
-
-
-
8,575
204,741
5,772
5,853
223,403
8,580
Total at December 31, 2023
1,852
138
(*) Immobiliare Rivalsa S.p.A., previously an independent third party that owns a real estate property in Milan leased by the Company since 2019, was
acquired in 2023 by a subsidiary of Prada Holding S.p.A. (the “Acquisition”). The right of use asset and lease liability amounts are recognised under a
lease agreement entered into between the Company and Immobiliare Rivalsa S.p.A. prior to the Acquisition.
170170
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ANNUAL REPORT2023 Statement of financial position balances as of December 31, 2022
Receivables
from, and
advances
to, related
parties –
current
Receivables
from, and
advances
to, related
parties –
non-current
Trade
receivable,
net
599
27
-
-
-
-
-
-
-
736
-
-
18
-
2
-
6
1,125
2,218
-
-
-
-
-
-
-
-
-
-
-
149
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(amounts in thousands of Euro)
Les Femmes S.r.l.
Filati Biagioli Modesto S.p.A.
Spelm Sa
Rubaiyat Modern Lux.Pr.Co. Ltd
Ludo Due S.r.l.
Peschiera Immobiliare S.r.l.
Premiata S.r.l.
Conceria Superior S.p.A.
Perseo S.r.l.
Al Tayer Insignia Llc
Danzas Llc
Al Sanam Rent a Car Llc
Prada Holding S.p.A.
PH-RE Llc
Others
Members of the Board
of Directors of Prada S.p.A.
Right
of use
assets
-
-
3,795
-
9,282
2,882
-
-
-
-
-
-
73
196,766
-
-
Payables
to related
parties –
current
Trade
payables
Lease
liability
Other
liabilities
1,944
67
-
-
-
45
195
3,056
225
12
93
1
-
-
2
-
-
-
-
1,055
-
-
-
-
-
2,513
-
-
-
-
-
-
-
-
3,858
-
10,242
3,460
-
-
-
-
-
-
73
221,687
-
-
-
-
-
-
-
-
-
-
-
-
61
-
-
-
-
4,405
Total at December 31, 2022
1,382
2,373
1,125
212,798
5,640
3,568
239,320
4,466
Statement of profit or loss transactions for the twelve months ended December 31, 2023
(amounts in thousands of Euro)
Les Femmes S.r.l.
Filati Biagioli Modesto S.p.A.
Luigi Fedeli e Figlio S.r.l.
Spelm Sa
Rubaiyat Modern Lux.Pr.Co. Ltd
Immobiliare Rivalsa S.p.A. (*)
Ludo Due S.r.l.
Peschiera Immobiliare S.r.l.
Premiata S.r.l.
Conceria Superior S.p.A.
Perseo S.r.l.
Al Tayer Group Llc
Al Tayer Insignia Llc
Danzas Llc
Al Sanam Rent a Car Llc
Prada Holding S.p.A.
PH-RE Llc
Others
Net
revenues
Cost of
goods sold
General, admin.
& selling costs
(income)
Interest
income
Interest
expenses
-
-
-
-
-
-
-
-
-
-
-
-
3,187
-
-
22
-
2
8,730
4,327
2
-
-
-
-
47
54
12,996
714
-
-
254
-
-
-
-
-
113
-
591
-
1,206
1,115
575
720
172
-
297
139
170
12
73
16,119
-
11
77
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
56
75
118
27
-
-
-
-
124
-
-
2
1,805
-
Total at December 31, 2023
3,211
27,124
21,302
88
2,237
(*) Immobiliare Rivalsa S.p.A., previously an independent third party that owns a real estate property in Milan leased by the Company since 2019,
was acquired in 2023 by a subsidiary of Prada Holding S.p.A. (the “Acquisition”). The right of use asset and lease liability amounts are recognised
under a lease agreement entered into between the Company and Immobiliare Rivalsa S.p.A. prior to the Acquisition.
171171
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Notes to the Consolidated Financial Statements Statement of profit or loss transactions for the twelve months ended December 31, 2022
(amounts in thousands of Euro)
Net
revenues
Cost of
goods sold
General, admin.
& selling costs (income)
Interest
income
Interest
expenses
Les Femmes S.r.l.
Filati Biagioli Modesto S.p.A.
Spelm Sa
Ludo Due S.r.l.
Peschiera Immobiliare S.r.l.
Premiata S.r.l.
Conceria Superior S.p.A.
Perseo S.r.l.
Al Tayer Group Llc
Al Tayer Insignia Llc
Danzas Llc
Al Sanam Rent a Car Llc
Prada Holding S.p.A.
PH-RE Llc
-
-
-
-
-
-
-
-
-
2,523
-
-
-
-
7,479
4,150
-
-
44
131
14,837
817
-
-
116
-
-
-
47
48
572
1,119
559
724
39
-
92
135
142
11
68
17,739
11
36
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34
131
31
-
-
-
-
-
-
-
1
2,133
Total at December 31, 2022
2,523
27,574
21,295
47
2,330
The foregoing tables report information on transactions with related parties in accordance with IAS 24, “Related Party
Disclosures”, while the following transactions also fall within the scope of application of the Hong Kong Stock Exchange
Listing Rules.
The transactions with related party PH-RE llc (formerly PABE-RE llc) refer to the transaction between such company and
Prada Japan co ltd in relation to the lease of two buildings in Aoyama, Tokyo for Prada and Miu Miu stores. The
transactions reported for the twelve months ended December 31, 2023 are regulated by Chapter 14A of the Listing
Rules because they are considered continuing connected transactions subject to disclosure, but they are exempt from
the independent shareholders’ approval requirement. As required by the Listing Rules, comprehensive disclosure of
those continuing connected transactions is contained in Prada S.p.A.’s Announcements dated, respectively, July 15,
2015 (“Prada Aoyama”) and May 26, 2017 (“Miu Miu Aoyama”).
Apart from the non-exempt continuing connected transactions and non-exempt connected transactions reported
above, no other transaction reported in the 2023 consolidated financial statements meets the definition of “connected
transaction” or “continuing connected transaction” contained in Chapter 14A of the Hong Kong Stock Exchange
Listing Rules or, if it does meet the definition of “connected transaction” or “continuing connected transaction”
according to Chapter 14A, it is exempt from the announcement, disclosure and independent shareholders’ approval
requirements laid down in Chapter 14A.
41. Financial trend
(amounts in thousands of Euro)
December 31
2023
December 31
2022
December 31
2021
December 31
2020
December 31
2019
Net revenues
Gross margin
Operating income - (EBIT)
Net income / (loss) - Group
Total assets
Total liabilities
Net equity attributable to owners of the Group
4,726,411
3,801,771
1,061,692
671,026
7,615,051
3,738,242
3,853,795
4,200,674
3,312,094
775,990
465,193
7,377,578
3,876,556
3,482,217
3,365,667
2,547,358
489,484
294,254
6,959,011
3,830,368
3,113,894
2,422,739
1,743,378
20,061
(54,139)
6,527,927
3,676,207
2,832,057
3,225,594
2,319,612
306,779
255,788
7,038,439
4,049,864
2,967,158
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ANNUAL REPORT2023
42. Consolidated companies
Share
capital
(000s of local
currency)
Local
currency
%
Interest
Registered
office
Principal
place of
operation
Date of
incorporation /
establishment
(MM/DD/YYYY) Main business
Company
Italy
Prada S.p.A.
Artisans Shoes S.r.l. (*)
IPI Logistica S.r.l. (*)
Marchesi 1824 S.r.l. (*)
Figline S.r.l. (*)
Luna Rossa Challenge S.r.l. (*)
Europe
Prada Retail UK Ltd (*)
Prada Germany Gmbh (*)
Prada Austria Gmbh (*)
Prada Spain Sl (*)
Prada Retail France Sas (*)
Prada Hellas Sole Partner Llc (*)
Prada Monte-Carlo Sam (*)
Prada Sa (*)
Prada Company Sa
Prada Netherlands Bv (*)
EUR
EUR
EUR
EUR
EUR
EUR
GBP
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
255,882
Milan
1,000
600
1,000
535
66.7
Montegranaro
100
100
100
Milan
Milan
Milan
10
100
Grosseto
Italy
Italy
Italy
Italy
Italy
Italy
Group Holding /
Manufacturing /
Services /
Distribution /
Retail
02/09/1977
Manufacturing
01/26/1999
Services
07/10/2013
Food & Beverage
07/24/2019
Manufacturing
12/01/2021
Management
sailing team
5,000
215
40
240
7,252
4,350
100
100
100
100
100
100
London
Munich
Wien
Madrid
Paris
Athens
2,000
100
Monaco
U.K.
01/07/1997
Retail
Germany
03/20/1995
Retail / Services
Austria
Spain
France
Greece
Principality
of Monaco
03/14/1996
05/14/1986
10/10/1984
12/19/2007
Retail
Retail
Retail
Retail
05/25/1999
Retail
31
3,204
20
100
100
100
Luxembourg
Switzerland
07/29/1994
Trademarks /
Services
Luxembourg
Luxembourg
04/12/1999
Services
Amsterdam
Netherlands
03/27/2000
Retail
Czech
Republic
Portugal
Russian
Federation
Turkey
Ukraine
Sweden
06/25/2008
Retail
08/07/2008
Retail
11/07/2008
Retail
02/26/2009
10/14/2011
12/18/2012
Retail
Retail
Retail
Retail
Retail
Switzerland
09/28/2012
Kazakhstan
06/24/2013
U.K.
France
02/07/2013
Real Estate
08/19/2014
Manufacturing
Belgium
Romania
05/19/2015
12/04/2015
Retail
Retail
04/15/2016
Manufacturing
San.Marino
04/15/2021
Norway
09/01/2022
Retail
Retail
Copenhagen
Denmark
Prada Czech Republic Sro (*)
CZK
2,500
100
Prague
Prada Portugal Unipessoal
Lda (*)
Prada Rus Llc (*)
Prada Bosphorus Deri Mamuller
Ltd Sirketi (*)
Prada Ukraine Llc (*)
Prada Sweden Ab (*)
Prada Switzerland Sa (*)
Prada Kazakhstan Llp (*)
Kenon Ltd (*)
Tannerie Limoges Sas (*)
Prada Denmark Aps (*)
Prada Belgium Sprl (*)
Hipic Prod Impex Srl (*)
Prada San Marino (*)
Prada Norway As (*)
Luna Rossa Challenge 2024 Sl
Church UK Retail Ltd
Church & Co. Ltd (*)
Church & Co. (Footwear) Ltd
Church Germany Gmbh
EUR
RUB
TRY
UAH
SEK
CHF
KZT
GBP
EUR
DKK
EUR
RON
EUR
NOK
EUR
GBP
GBP
GBP
EUR
5
250
353,000
240,000
500
24,000
500,000
84,000
600
26,000
4,075
25,471
26
30
10
0.001
2,811
44
200
100
Lisbon
100
Moscow
Istanbul
Kiev
Stockholm
Lugano
Almaty
London
Isle
Brussels
Sibiu
Falciano
Oslo
100
100
100
100
100
100
60
100
100
100
100
100
100
100
100
100
100
Barcelona
Northampton
Northampton
Northampton
Spain
U.K.
U.K.
U.K.
06/27/2023
Management
sailing team
07/16/1987
Under liquidation
01/16/1926
Manufacturing /
Services
03/06/1954
Trademarks
Munich
Germany
09/18/2018
Under liquidation
173173
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Notes to the Consolidated Financial Statements Share
capital
(000s of local
currency)
Local
currency
%
Interest
Registered
office
Principal
place of
operation
Date of
incorporation /
establishment
(MM/DD/YYYY) Main business
Company
Americas
Prada USA Corp. (*)
USD
579,211
100
New York
U.S.A.
10/25/1993
Distribution /
Services / Retail
Distribution /
Retail
CAD
USD
USD
300
85
86,592
100
100
100
Toronto
New York
New York
Canada
U.S.A.
U.S.A.
05/01/1998
09/08/1930
Retail
02/18/1997
Real Estate
MXN
269,140
100
Mexico City
Mexico
07/12/2011
Retail
BRL
340,000
100
Sao Paulo
Brazil
04/12/2011
Retail
MXN
USD
USD
EUR
HKD
TWD
MYR
SGD
KRW
THB
JPY
USD
USD
AUD
RMB
7,203
30
2,011
1,600
3,000
3,800
36,000
1,000
8,125,000
572,000
1,200,000
0.001
1,405
13,500
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Mexico City
Panama
Oranjestad
Mexico
Panama
Aruba
02/27/2014
Dormant
09/15/2014
Dormant
09/25/2014
Retail
Retail
Gustavia
St. Barthelemy
04/01/2016
Hong Kong
Hong Kong
S.A.R., P.R.C.
09/12/1997
Retail / Services
Hong Kong
Taiwan P.R.C.
09/16/1993
Retail
Kuala Lumpur Malaysia
01/23/2002
Singapore
Singapore
10/31/1992
South Korea
11/27/1995
Thailand
Japan
Guam
06/19/1997
03/01/1991
02/04/2021
Retail
Retail
Retail
Retail
Retail
Retail
Seoul
Bangkok
Tokyo
Guam
Northern
Marianas
Islands
Sydney
Saipan
Australia
01/20/2021
04/21/1997
Retail
Retail
1,653
100
Shanghai
P.R.C.
02/09/2004
Dormant
Prada Canada Corp. (*)
Church & Co. (USA) Ltd
Post Development Corp (*)
Prada Retail Mexico, S. de R.L.
de C.V.
Prada Brasil Importação e
Comércio de Artigos de Luxo
Ltda (*)
PRM Services S. de R.L. de
C.V. (*)
Prada Panama Sa (*)
Prada Retail Aruba Nv (*)
Prada Saint Barthelemy Sarl (*)
Asia-Pacific and Japan
Prada Asia Pacific Ltd (*)
Prada Taiwan Ltd
Prada Retail Malaysia Sdn. Bhd.
(*)
Prada Singapore Pte Ltd (*)
Prada Korea Llc (*)
Prada (Thailand) co Ltd (*)
Prada Japan co Ltd (*)
Prada Guam Llc
Prada Saipan Llc (*)
Prada Australia Pty Ltd (*)
Prada Trading (Shanghai) co
Ltd (***)
Prada Fashion Commerce
(Shanghai) co Ltd (***)
Prada Dongguan Trading Co.,
Ltd (***)
Prada New Zealand Ltd (*)
Prada Vietnam Limited Liability
Company (*)
Church Hong Kong Retail Ltd
HKD
29,004
100
Hong Kong
Hong Kong
S.A.R., P.R.C.
06/04/2004
Dormant
RMB
924,950
100
Shanghai
P.R.C.
10/31/2005
Retail
RMB
NZD
8,500
3,500
100
100
Dongguan
P.R.C.
11/28/2012
Services
Wellington
New Zealand
07/05/2013
Retail
VND
146,246,570
100
Hanoi
09/09/2014
Retail
Vietnam
Macau
S.A.R.,
P.R.C.
Prada Macau Co Ltd
Prada Philippines Inc. (*)
MOP
PHP
25
380,000
100
60
Macau
Manila
Philippines
10/10/2023
01/22/2015
Retail
Retail
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ANNUAL REPORT2023 Share
capital
(000s of local
currency)
Local
currency
%
Interest
Registered
office
Principal
place of
operation
Date of
incorporation /
establishment
(MM/DD/YYYY) Main business
AED
AED
KWD
QAR
SAR
18,000
300
50
15,000
26,666
60
29.4
29.4
100
75
Jebel Ali
Free Zone
Dubai
Kuwait City
Doha
Jeddah
U.A.E.
U.A.E.
Kuwait
Qatar
05/25/2011
08/04/2011
09/18/2012
02/03/2013
Saudi Arabia
07/02/2014
Distribution /
Services
Retail
Retail
Retail
Retail
Company
Middle East
Prada Middle East Fzco (*)
Prada Emirates Llc (**)
Prada Kuwait Wll (**)
Prada Retail Wll (*)
Prada Saudi Arabia Ltd (*)
Other countries
Prada Maroc Sarlau (*)
MAD
95,000
100
Casablanca
Morocco
11/11/2011
Under liquidation
Prada Retail South Africa pty
Ltd (*)
ZAR
50,000
100
Sandton
South Africa
06/09/2014
Dormant
(*) Company owned directly by Prada S.p.A.
(**) Company consolidated based on definition of control per IFRS 10
(***) Wholly foreign owned enterprises
43. Disclosures regarding non-controlling interests
The financial information of companies not entirely controlled by the Group is provided below, as required by IFRS
12. The amounts are stated before the consolidation adjustments.
December 31, 2023 financial statements (amounts in thousands of Euro):
Company
Artisans Shoes S.r.l.
Prada Emirates Llc
Prada Middle East Fzco
Prada Kuwait Wll
Prada Saudi Arabia Ltd
Tannerie Limoges Sas
Group's
percentage
interest
66.7
29.4
60
29.4
75
60
Local
currency
Total
assets
Total
equity
Net
revenues
Net
income/ (loss)
EUR
AED
AED
KWD
SAR
EUR
40,351
141,903
127,346
44,829
30,495
9,729
6,167
(505)
55,052
4,957
4,562
264
59,936
128,257
87,175
19,941
10,921
9,850
423
6,348
3,289
823
(746)
-
December 31, 2022 financial statements (amounts in thousands of Euro):
Company
Artisans Shoes S.r.l.
Prada Emirates Llc
Prada Middle East Fzco
Prada Kuwait Wll
Prada Saudi Arabia Ltd
Tannerie Limoges Sas
Group's
percentage
interest
66.7
29.4
60
29.4
75
60
Local
currency
Total
assets
Total
equity
Net
revenues
Net
income/ (loss)
EUR
AED
AED
KWD
SAR
EUR
28,256
92,773
128,875
34,537
25,600
9,051
6,494
(6,960)
53,698
4,315
5,467
155
61,781
109,213
104,884
22,760
14,301
8,927
425
6,650
6,914
1,241
54
34
Dividends
paid to non-
controlling
shareholders
(250)
-
-
-
-
-
Dividends
paid to non-
controlling
shareholders
(599)
-
-
-
-
-
There were no significant restrictions on the Group’s ability to access or use assets or to settle liabilities at the end of
the reporting period.
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175175
Notes to the Consolidated Financial Statements In 2011, Prada S.p.A. and Al Tayer Insignia llc (“Al Tayer”) stipulated an agreement expiring on December 31, 2021
to develop the Prada and Miu Miu brands in the Middle East retail business (the “joint venture”). That agreement
resulted in the establishment of subsidiary Prada Middle East fzco, followed by Prada Emirates llc and Prada Kuwait
llc. During the financial year 2023, Prada and Al Tayer managed the joint venture under principles of ordinary
administration while negotiating the expired contractual terms. In September 2023 Prada and Al Tayer signed a new
JV agreement that provides for the acquisition by Prada S.p.A. of an additional 19% of the shares held by Al Tayer,
bringing the Prada S.p.A.’s stake in Prada Middle East fzco to 79% with effect from the registration date of the share
transfer on the local authority register (JAFZA’s portal). The above mentioned registration took place on January 9,
2024 and, based on the agreed terms, on January 10, 2024 Prada paid the consideration agreed for the share
transfer, that has been defined for an amount that does not exceed the corresponding non-controlling interest in
equity stated in the financial statement.
44. Events after the reporting date
No significant events to be reported.
176176
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ANNUAL REPORT2023 CHAPTER 10
Independent
Auditor's Reports
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Independent Auditor’s Reports
The Independent Auditor’s Reports included in this Annual Report are in two different formats taking into account the
differences between the International Auditing Standards (ISAs) issued by the International Auditing and Assurance
Standard Boards (IAASB) and the auditing standards adopted in the Italian jurisdiction (ISA Italia). Specifically, in
accordance to the regulations applicable in Hong Kong, where the Company’s shares are listed on the Main Board of
the Hong Kong Stock Exchange, the Independent Auditor’s report is issued in accordance with ISAs, while in Italy,
where the Company is domiciled, the Independent Auditor’s report is issued for statutory purposes in accordance
with ISA Italia pursuant to art. 14 of Italian Legislative Decree no 39 of January 27, 2010.
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Independent Auditor's Reports
180180
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181181
Independent Auditor's Reports
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183183
Independent Auditor's Reports
#jIZd_ab"*Jb`_^bZEZ\ZdZJb"K_a"dYJ"#jIZd"
184184
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ANNUAL REPORT2023
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Independent Auditor's Reports
186186
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