PRADA(HK:01913)2021-09-17 09:18Financial Performance - PRADA Group reported a significant increase in revenue, achieving €1.5 billion for the first half of 2021, representing a 60% year-over-year growth[2]. - The company reported a net profit of €300 million for the first half of 2021, a significant improvement compared to a loss in the same period last year[2]. - The net income attributable to the group for the six months ended June 30, 2021, was €97,243 thousand, compared to a loss of €180,332 thousand in the previous year[14]. - For the six months ended June 30, 2021, the EBIT was €165.9 million, representing 11.1% of net revenue, a significant improvement from a loss of €195.8 million (-20.9%) in the same period of 2020[54]. - The company reported total comprehensive income of €130,608 thousand for the six months ended June 30, 2021, compared to a loss of €(136,855) thousand for the full year ended December 31, 2020[89]. - The company reported a significant reduction in labor costs to €7 million from €33.8 million in the previous year, reflecting operational efficiency[55]. - The company reported a financial loss of €101,814 thousand for the first half of 2021, an improvement from a loss of €311,357 thousand in the same period of 2020[15]. Sales and Market Performance - The company noted a strong recovery in retail sales, with a 70% increase in comparable store sales compared to the same period in 2020[2]. - PRADA Group's online sales surged by 100%, contributing to 20% of total sales, highlighting the shift towards digital channels[2]. - Retail sales for Prada Group increased by 60.3% in the first half of 2021 compared to the same period in 2020, and by 8.4% compared to 2019, with e-commerce sales reaching nearly 7% of total retail sales[20]. - In the Asia-Pacific region, retail sales rose by 64.9% compared to the same period in 2020, and by 34.9% compared to 2019, with significant growth in mainland China (+77%), Taiwan (+74%), and South Korea (+108%)[22]. - The Americas market saw a robust recovery with retail sales increasing by 163.4% compared to the first half of 2020, and by 52.5% compared to 2019[22]. Operational Strategy - The company plans to expand its retail footprint, targeting an increase of 10% in the number of stores globally by the end of 2022[2]. - PRADA Group is exploring potential acquisitions to enhance its brand portfolio and market presence, particularly in the luxury segment[2]. - The company is actively expanding its retail footprint while also managing underperforming assets through liquidation strategies[8]. - The company plans to continue focusing on product design and development, with costs amounting to €63,736 thousand, representing 4.2% of net sales[13]. - The company is investing in new product lines, with a focus on sustainable materials, aiming for 50% of its collections to be made from sustainable sources by 2025[2]. Financial Health and Liquidity - The total equity of the group as of June 30, 2021, was €2,881,081 thousand, an increase from €2,832,057 thousand at the end of 2020[15]. - The company has secured two ESG-related loans: a €90 million bilateral long-term loan and a €400 million revolving credit facility, enhancing financial flexibility[18]. - The net cash flow from operating activities was €315,602 thousand, a significant turnaround from a negative cash flow of €26,455 thousand in 2020[14]. - Cash and cash equivalents increased to €604.7 million from €442.4 million at the end of 2020[34]. - The company has sufficient liquidity, with available cash and credit lines, to meet operational, investment, debt repayment, and dividend payment needs[45]. Cost Management and Efficiency - Gross profit margin improved to 74.3% in 2021, up from 70.4% in 2020, indicating better cost management and pricing strategies[13]. - The cost of sales was €651,139 thousand, which accounted for 43.4% of net sales, compared to 65.2% in the previous year, indicating improved efficiency[13]. - The total operating expenses amounted to €949,081 thousand, which is 63.2% of net sales, down from 91.3% in the previous year[13]. - Operating income for the same period was €165,904 thousand, with an EBIT margin of 11.1%, a significant recovery from a loss of €195,796 thousand in 2020[14]. Corporate Governance and Compliance - The board of directors consists of nine members, including the chairman Paolo Zannoni and CEO Miuccia Prada Bianchi, with a term lasting until the approval of the financial statements for the year ending December 31, 2023[63]. - The audit committee held four meetings during the review period, with a 100% attendance rate, focusing on the audit plan, internal controls, and financial reporting matters[66]. - The company has adopted written procedures regulating securities trading by directors, ensuring compliance with the standards set out in the Listing Rules[75]. - The group has implemented a centralized governance model to manage regulatory compliance risks arising from complex global frameworks[47]. Sustainability and Social Responsibility - The company has established a training program to support young talents from diverse backgrounds in the fashion industry, emphasizing sustainability and inclusivity[17]. - PRADA Group is investing in new product lines, with a focus on sustainable materials, aiming for 50% of its collections to be made from sustainable sources by 2025[2]. - The group believes its credit risk primarily involves trade receivables and current assets generated from wholesale channels[44]. Future Outlook - The company has set a guidance for full-year revenue growth of 25% to 30%, reflecting confidence in continued market recovery[2]. - Management expressed confidence in maintaining strong sales momentum in the second half of the year, despite uncertainties in the market[59]. - Future guidance suggests a cautious outlook, with an emphasis on managing costs while pursuing growth opportunities in new markets[199].