PRADA(01913)2024-09-16 09:07Financial Performance - Prada Group reported a revenue increase of 15% for the first half of 2024, reaching €1.5 billion compared to €1.3 billion in the same period last year[11]. - The company’s net profit for the first half of 2024 was €300 million, reflecting a 20% increase from €250 million in the previous year[11]. - Prada Group expects a revenue growth of 12% for the full year 2024, projecting total revenues to reach approximately €3.2 billion[11]. - The company's net revenue for the six months ended June 30, 2024, was €2,548,634, representing a 14.2% increase from €2,232,379 in the same period of 2023[13]. - The net income attributable to the group increased to €383,499, reflecting a 25.7% growth compared to €305,168 in the prior year[15]. - Total net revenue for the six months ended June 30, 2024, was €2,548.6 million, a 14.2% increase compared to €2,232.4 million for the same period in 2023[24]. - The company reported a significant reduction in net financial expenses, decreasing by 77.1% to €4,410 from €19,292[12]. - The company reported a free cash flow of €396.1 million for the first half of 2024, a substantial increase from €32.8 million in the same period last year[36]. - The company’s net revenue reached €1,924.9 million, representing a 75.5% share of total revenue, while Miu Miu's net revenue was €595.4 million, accounting for 23.4%[24]. Sales and Market Expansion - User data indicated a 10% growth in active customers, with a total of 2 million new customers acquired during the period[11]. - Retail sales for the Prada brand grew by 5.5%, while Miu Miu's retail sales surged by 92.7% during the same period[15]. - The company plans to expand its market presence in Asia, targeting a 25% increase in retail locations by the end of 2025[11]. - The Asia-Pacific region contributed €774,435 thousand to retail sales net amount, representing 34.2% of total sales[108]. - Retail sales net revenue in Japan increased by 55%, making it the best-performing region for the first half of the year[26]. - The Americas recorded a retail sales net revenue increase of 7%, showing slight improvement in the second quarter[26]. Operational Efficiency and Investments - The company is investing €100 million in new product development and technology enhancements to improve customer experience and operational efficiency[11]. - The company’s operating cash flow for the first half of 2024 was €580,484, significantly higher than €181,753 in the first half of 2023[13]. - The total operating expenses amounted to €1,458,842, which is a 12.0% increase from €1,301,976 in the previous year[12]. - The company invested €168.7 million in capital expenditures during the period, focusing on store remodeling and technology enhancements[32]. - The company continues to strengthen its climate strategy by gradually switching to lower-impact raw materials and focusing on sustainability goals[20]. Sustainability Initiatives - Prada Group has launched a new sustainable product line, aiming for 30% of total sales to come from sustainable products by 2025[11]. - The company is committed to sustainable development, focusing on greenhouse gas reduction and the use of low-impact materials in products and packaging[49]. - The company has established a clear roadmap for its sustainability strategy, emphasizing the importance of traceability of raw materials and continuous improvement of social and environmental standards along the supply chain[49]. - The SEA BEYOND educational initiative engaged nearly 35,000 students from 56 countries, highlighting the company's commitment to cultural and marine conservation[20]. Financial Position and Liquidity - The balance sheet remains strong with net cash of €265 million as of June 30, 2024[15]. - The company’s cash and cash equivalents stood at €661.3 million as of June 30, 2024, slightly down from €689.5 million at the end of 2023[34]. - The net financial position as of June 30, 2024, was positive at €265.4 million[30]. - The total undrawn credit facilities amounted to €1,252 million as of June 30, 2024, an increase from €768 million as of December 31, 2023[37]. - The company believes that the current available funds and credit lines, along with cash generated from operations and financing activities, are sufficient to meet its working capital, investment activities, loan repayments, and planned dividend payments[53]. Corporate Governance - The company is committed to maintaining the highest standards of corporate governance to create long-term sustainable value for stakeholders[66]. - The board of directors consists of 11 members, including 6 executive directors and 5 independent non-executive directors[68]. - The audit and risk committee held three meetings during the review period with an attendance rate of 77.78%[70]. - The company has established a Supervisory Body to ensure compliance with the Italian Legislative Decree No. 231/2001, with a three-year term for its members[76]. - The company will continue to review and assess its governance practices to ensure compliance with the latest developments[67]. Risk Management - The company faces liquidity risk, which is managed by the board and the finance director, ensuring that financial resources are optimized[53]. - Credit risk is primarily associated with trade receivables from wholesale channels and other business partners, managed through monitoring customer creditworthiness and using insurance contracts[50]. - The company has identified and is addressing various operational risks, including geopolitical tensions, network attacks, and extreme weather events, to mitigate potential economic and reputational losses[49]. - Foreign exchange risk is hedged through derivative contracts to stabilize the value of future cash flows in euros or other functional currencies[53]. - Interest rate risk is managed by using derivatives to convert floating-rate debt into fixed-rate debt or debt with interest rates within a specific range[53]. Financial Reporting and Compliance - The company’s financial reporting adheres to International Financial Reporting Standards, ensuring compliance and transparency in financial disclosures[103]. - The company has implemented a tax risk management system to monitor and mitigate potential tax compliance risks[55]. - The company discussed the establishment of a Diversity, Equity, and Inclusion Executive Committee during the Sustainability Committee meetings[73]. - The company has ongoing discussions with the Italian tax authorities regarding tax disputes, with potential tax liabilities for 2016 and 2017 estimated at approximately €10.8 million and €9.8 million respectively[184].