CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands of Euro)

Note

December 31
2018

December 31
2017

Assets

Current assets

Cash and cash equivalents

599,821

892,610

Trade receivables, net

321,913

289,973

Inventories, net

631,791

569,929

Derivative financial instruments – current

9,718

13,923

Receivables from, and advance payments to, related parties - current

12,626

6,107

Other current assets

185,741

192,072

Total current assets

1,761,610

1,964,614

Non-current assets

Property, plant and equipment

1,577,352

1,522,782

Intangible assets

920,011

921,458

Investments in equity instruments

99,538

8,416

Deferred tax assets

217,104

209,402

Other non-current assets

102,992

110,698

Derivative financial instruments - non-current

205

2,005

Total non-current assets

2,917,202

2,774,761

Total Assets

4,678,812

4,739,375

Liabilities and Shareholders’ Equity

Current liabilities

Short-term financial payables and bank overdraft

421,481

352,971

Payables to related parties – current

4,477

4,488

Trade payables

315,211

313,697

85,043

68,116

Derivative financial instruments - current

14,220

7,654

Other current liabilities

146,429

157,346

Total current liabilities

986,861

904,272

Non-current liabilities

Long-term financial payables

487,431

638,954

Long-term employee benefits

60,001

61,444

Provision for risks and charges

51,310

61,815

Deferred tax liabilities

30,050

32,012

Other non-current liabilities

159,013

167,595

Derivative financial instruments non-current

7,077

7,112

Total non-current liabilities

794,882

968,932

Total Liabilities

1,781,743

1,873,204

Share capital

255,882

255,882

Total other reserves

2,383,720

2,375,084

Translation reserve

32,941

(4,035)

Net income for the period

205,443

217,721

Net Equity attributable to owners of the Group

2,877,986

2,844,652

Net Equity attributable to Non-controlling interests

19,083

21,519

Total Net Equity

2,897,069

2,866,171

Total Liabilities and Total Net Equity

4,678,812

4,739,375

Net current assets

774,749

1,060,342

Total Assets less current Liabilities

3,691,951

3,835,103

(amounts in thousands of Euro)

Note

twelve months endedDecember 31 2018

%

eleven months ended December 31 2017

%

Net revenues

3,142,148

100.0%

2,741,095

100.0%

Cost of goods sold

(879,554)

-28.0%

(710,399)

-25.9%

Gross margin

2,262,594

72.0%

2,030,696

74.1%

Operating expenses

(1,938,748)

-61.7%

(1,714,818)

-62.6%

EBIT

323,846

10.3%

315,878

11.5%

Interest and other financial income/(expenses), net

(21,940)

-0.7%

(6,731)

-0.2%

Dividends from investments

632

0.0%

670

0.0%

Income before taxation

302,538

9.6%

309,817

11.3%

Taxation

(94,356)

-3.0%

(91,800)

-3.3%

Net income for the period

208,182

6.6%

218,017

8.0%

Net income – Non-controlling interests

2,739

0.1%

296

0.0%

Net income – Group

205,443

6.5%

217,721

7.9%

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

0.080

0.085

(amounts in thousands of Euro)

twelve months ended
December 31
2018

eleven months ended
December 31
2017

Net income for the period – Consolidated

208,182

218,017

A) Items recycled to P&L:

Change in Translation reserve

37,804

(151,016)

Tax impact

-

-

Change in Translation reserve less tax impact

37,804

(151,016)

Change in Cash Flow Hedge reserve

(7,300)

5,729

Tax impact

2,016

(1,105)

Change in Cash Flow Hedge reserve less tax impact

(5,284)

4,624

B) Item not recycled to P&L:

Change in Fair Value Investments in equity instruments reserve

(6,706)

(3,362)

Tax impact

-

(552)

Change in Fair Value Investments in equity instruments reserve less tax impact

(6,706)

(3,914)

Change in Actuarial reserve

(826)

1,921

Tax impact

98

(330)

Change in Actuarial reserve less tax impact

(728)

1,591

Consolidated comprehensive income for the period

233,268

69,302

Comprehensive income for the period – Non-controlling Interests

3,558

(1,907)

Comprehensive income for the period – Group

229,710

71,209

(amounts in thousands of Euro)

twelve months
ended
December 31
2018

eleven months
ended
December 31
2017

Income before taxation

302,538

309,817

Profit or loss adjustments

Depreciation and amortization

219,882

199,000

Impairment of property, plant and equipment and intangible assets

7,475

10,912

Non-monetary financial (income) expenses

38,812

(23,753)

Other non-monetary (income) expenses

(10,407)

12,222

Balance Sheet changes

Other non-current assets and liabilities

(16,796)

(16,597)

Trade receivables, net

(31,724)

(8,444)

Inventories, net

(60,731)

(66,125)

Trade payables

571

64,281

Other current assets and liabilities

(14,750)

986

Cash flows from operating activities

434,870

482,299

Interest paid, net – third parties

(7,566)

(8,796)

Taxes paid

(62,196)

(26,986)

Net cash flows from operating activities

365,108

446,517

Purchases of property, plant and equipment and intangible assets

(282,135)

(212,653)

Disposals of property, plant and equipment and intangible assets

2,807

1,649

Dividends from investments

632

670

Acquisition of additional shares from Non-Controlling Interests

(2,570)

(1,275)

Financial investments

(98,155)

-

Net cash flow utilized by investing activities

(379,421)

(211,609)

Dividends paid to shareholders of PRADA spa

(191,912)

(307,059)

Dividends paid to non-controlling shareholders

(5,729)

(1,014)

Repayment of Notes (130,000) -

Repayment of short-term portion of long-term borrowings - third parties

(144,877)

(46,830)

Arrangement of long-term borrowings – third parties

119,865

343,268

Change in short-term borrowings – third parties

63,480

11,870

Share capital increases by non-controlling shareholders of subsidiaries

345

89

Cash flows generated/(utilized) by financing activities

(288,828)

324

Change in cash and cash equivalents, net of bank overdrafts

(303,141)

235,232

Foreign exchange differences

10,352

(64,836)

Opening cash and cash equivalents, net of bank overdraft

892,610

722,214

Closing cash and cash equivalents, net of bank overdraft

599,821

892,610

Cash and cash equivalents, net of bank overdraft

599,821

892,610

Closing cash and cash equivalents, net of bank overdraft

599,821

892,610

(amounts in thousands of Euro)

Number of
shares

Share
Capital

Translation
reserve

Share
premium
reserve

Cash flow hedge reserve

Actuarial reserve

Fair Value Investments in equity instruments Reserve

Other reserves

Total other reserves

Net income for period

Equity

Net Equity attributable to owners of the Group

Net Equity attributable Non-controlling interests

Total Net Equity

Balance at

January 31, 2017

2,558,824,000

255,882

144,791

410,047

(7,897)

(5,707)

(1,656)

2,006,713

2,401,500

278,329

3,080,502

24,028

3,104,530

Allocation of 2016 net income

-

-

-

-

-

-

-

278,329

278,329

(278,329)

-

-

-

Dividends

-

-

-

-

-

-

-

(307,059)

(307,059)

-

(307,059)

(1,014)

(308,073)

Share capital increase

-

-

-

-

-

-

-

-

-

-

-

89

89

Transactions with Non-controlling shareholders

-

-

-

-

-

-

-

-

-

-

-

323

323

Comprehensive income for the period (recyclable to P&L)

-

-

(148,826)

-

4,624

-

(3,914)

-

710

217,721

69,605

(1,894)

67,711

Comprehensive income for the

period (not recyclable to P&L)

-

-

-

-

-

1,604

-

-

1,604

-

1,604

(13)

1,591

Balance at

December 31, 2017

2,558,824,000

255,882

(4,035)

410,047

(3,273)

(4,103)

(5,570)

1,977,983

2,375,084

217,721

2,844,652

21,519

2,866,171

First Time Adoption IFRS 15 – Allowance for return assets

-

-

-

-

-

-

-

(2,740)

(2,740)

-

(2,740)

-

(2,740)

First Time Adoption IFRS 9 – Allowance for bad and doubtful debts

-

-

-

-

-

-

-

(1,724)

(1,724)

-

(1,724)

(33)

(1,757)

First Time Adoption IFRS 9 – Derivatives

-

-

-

-

(2,063)

-

-

2,063

-

-

-

-

-

Balance at January 1, 2018

2,558,824,000

255,882

(4,035)

410,047

(5,336)

(4,103)

(5,570)

1,975,582

2,370,620

217,721

2,840,188

21,486

2,861,674

Allocation of 2017 net income

-

-

-

-

-

-

-

217,721

217,721

(217,721)

-

-

-

Dividends

-

-

-

-

-

-

-

(191,912)

(191,912)

-

(191,912)

(5,729)

(197,641)

Share capital increase

-

-

-

-

-

-

-

-

-

-

-

345

345

Transactions with Non-controlling shareholders

-

-

-

-

-

-

-

-

-

-

-

(577)

(577)

Comprehensive income for the period (recyclable to P&L)

-

-

36,976

-

(5,284)

-

-

-

(5,284)

205,443

237,135

3,567

240,702

Comprehensive income for the period (not recyclable to P&L)

-

-

-

-

-

(719)

(6,706)

-

(7,425)

-

(7,425)

(9)

(7,434)

Balance at December 31, 2018

2,558,824,000

255,882

32,941

410,047

(10,620)

(4,822)

(12,276)

2,001,391

2,383,720

205,443

2,877,986

19,083

2,897,069