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Prada SpA approves Group Results as Of 30 June 2021

2021/07/29

MULTI YEAR BRAND INVESTMENT STRATEGY DELIVERS EXCELLENT RESULTS

 RETAIL SALES WELL ABOVE 2019 LEVELS

EBIT AT 11.1%. STRONG IMPROVEMENT IN NET FINANCIAL POSITION

Milan, 29th July 2021 - The Prada S.p.A. Board of Directors today reviewed and approved the Consolidated Financial Results for the Half Year ended 30 June 2021.  

Key highlights

  • Strong progress in Retail revenues, well above H1-2019 levels, despite continued restrictions
  • Profitable growth driven by full-price sales
  • E-commerce growing by triple-digit percentage for the fifth quarter in a row
  • Increasing store productivity
  • Gross Margin improved at 74.3% of revenues
  • Efficient management of operating expenses and production cycles
  • EBIT above pre-Covid levels
  • Strong cash flow generation and marked improvement in Net Financial Position

Key numbers

  • Total Net Revenues at Euro 1,501 million, up 60% at current exchange rates on H1-2020 and 66% at constant exchange rates
  • Retail sales up 60% versus H1-2020 and up 8% against H1-2019 at constant exchange rates, showing a strong acceleration in the second quarter
  • Wholesale sales down 37% against H1-2019, consistent with our selective approach
  • EBIT at Euro 166 million (11.1% on revenues), ahead of Euro 150 million in H1-2019 (9.6% on revenues)
  • Net Income at Euro 97 million
  • Operating cash flow at Euro 316 million
  • Capex at Euro 75 million
  • Net Working Capital at Euro 622 million, better than FY-2020, thanks to effective inventory management
  • Net Financial Position at Euro -102 million, improving from Euro -311 million at 31 December 2020


Our strategy: increase brand momentum and profitability

Prada Group’s strategy of investment in its brands has delivered profitable growth, with sales well above 2019 levels, despite the ongoing effect of the pandemic. Profitability has been driven by full price sales together with disciplined management of operating costs, resulting in an EBIT at above pre-Covid levels and strong operating cash flow generation.  

A strong commitment to ESG values remains at the core of the company strategy and we will disclose our Sustainability Roadmap to the market in the autumn.  

Retail sales above pre-pandemic levels, despite restrictions 

During the first half of 2021, around 17% on average of the store network was closed. Nevertheless, the retail channel delivered sales of Euro 1,281 million in the period, with trend improving constantly quarter after quarter. In Q2-2021, sales improved over Q2-2019 with double-digit growth. We expect growth to continue. 

Online sales continued to make a strong contribution with triple-digit growth.

By geographies - change in constant currency: 

Sales in Europe were impacted by the high levels of store closures (36% on average), but once stores re-opened, they partially recovered. Robust demand from local customers partially offset the lack of tourists. 

Asia Pacific performed very well, showing strong double-digit growth in both quarters over 2019. Consumer demand was particularly strong in key markets compared with H1-2019: Mainland China (+77%), Taiwan (+74%) and Korea (+108%).   

Americas showed a significant improvement, driven primarily by local consumers, with strong performance across all countries.

In Japan revenues suffered due to restrictions imposed by the government ahead of the Olympic games. 

The Middle East kept on growing, driven mainly by local consumption and a somewhat increased inflow of tourists.

E-commerce delivered an outstanding performance with a sales increase that was once again in triple-digits compared with the same half in the previous year. The channel now accounts for 7% of retail sales. 



Wholesale Sales: selective approach

With the aim to preserve our brands’ positioning, we focused on developing retail sales: the Wholesale sales stood at Euro 196 million, down 37% compared to H1-2019. 


Patrizio Bertelli, Chief Executive Officer of the Prada Group, commented:

“The commitment to our brands and stronger ties with our customers have delivered robust growth in sales across markets and product categories. We improved gross margin as well as the Group’s profitability, despite the uncertain environment. The sales momentum will stay strong in the second half of the year. Our brands have plenty of potential and we will unlock it over the medium term. I look forward to updating the market on this and other topics at a Capital Markets Day that will take place in the autumn”.  

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