普拉达(01913) - 2025 - 中期业绩

I. Performance Highlights and Company Overview 1.1 Performance Highlights Prada Group achieved robust performance in the six months ended June 30, 2025, with net revenue growing 9% at constant exchange rates and retail net sales increasing 10%, notably driven by Miu Miu's 49% retail net sales growth 2025 H1 Key Financial Data (Consolidated) | Indicator | 2025 H1 | YoY Growth (Constant FX) | | :--- | :--- | :--- | | Net Revenue | 2,740 million euros | 9% | | Retail Net Sales | - | 10% | | Prada Brand Retail Net Sales | - | -2% | | Miu Miu Brand Retail Net Sales | - | 49% | | Adjusted EBIT | 619 million euros | - | | Adjusted EBIT as % of Net Revenue | 22.6% | - | | Group Net Income | 386 million euros | - | | Net Financial Surplus (Period End) | 352 million euros | - | - All regions recorded retail net sales growth: Middle East (+26%), Americas (+12%), Asia Pacific (+10%), Europe (+9%), and Japan (+4%)[3] 1.2 Company Overview Prada Group is a leading luxury goods company, owning brands like Prada, Miu Miu, Church's, and Car Shoe, primarily manufacturing and selling leather goods, footwear, and apparel, with 620 directly operated stores in 70 countries and sales through e-commerce and high-end retailers - Prada Group operates Prada, Miu Miu, Church's, and Car Shoe brands, and is involved in food (Marchesi 1824), sailing (Luna Rossa), and eyewear and cosmetics (licensing agreements) industries[4] - The Group owns 25 production facilities (23 in Italy), with products primarily sold through 620 directly operated stores in 70 countries, brand e-commerce, and selected high-end retailers[4] - As of June 30, 2025, 79.98% of Prada S.p.A.'s share capital is owned by Prada Holding S.p.A., with the remainder being publicly traded on the Hong Kong Stock Exchange[5] 1.3 Basis of Presentation and Accounting Policies The financial information in this announcement is based on the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, applying consistent accounting policies from the 2024 annual report, with no significant impact from new or amended standards effective this period - Financial information is prepared based on the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, consistently applying accounting policies from the 2024 annual report[6] - Amendments to existing standards, such as IAS 21 on the Effects of Changes in Foreign Exchange Rates, effective January 1, 2025, have no significant impact on the interim condensed consolidated financial statements[7][8] - New standards like IFRS 18 (Presentation and Disclosure in Financial Statements) and IFRS 19 (Non-Publicly Accountable Subsidiaries: Disclosure) are expected to apply from January 1, 2027, but have not yet been endorsed by the EU as of the reporting date[10] II. Summary of Key Financial Data 2.1 Key Economic Indicators For the six months ended June 30, 2025, Prada Group's net revenue increased by 7.5% to 2,740 million euros, with adjusted EBIT at 618.5 million euros, representing 22.6% of net revenue, consistent with the prior year, and group net income slightly increased to 385.9 million euros Key Economic Indicators for the Six Months Ended June 30, 2025 | Indicator (thousand euros) | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenue | 2,740,035 | 2,548,634 | 7.5% | | Adjusted EBIT | 618,545 | 575,119 | 7.6% | | Adjusted EBIT as % of Net Revenue | 22.6% | 22.6% | 0.0% | | EBIT | 607,294 | 575,119 | 5.6% | | EBIT as % of Net Revenue | 22.2% | 22.6% | -0.4% | | Group Net Income | 385,883 | 383,499 | 0.6% | | Earnings Per Share (euros) | 0.151 | 0.150 | 0.7% | | Net Cash Flow from Operating Activities | 467,548 | 580,484 | -19.5% | 2.2 Key Financial Position Indicators As of June 30, 2025, the Group's net operating working capital increased to 819.4 million euros, and net invested capital rose to 6,446.1 million euros, while net financial surplus decreased to 352.2 million euros compared to the end of 2024 Key Financial Position Indicators as of June 30, 2025 | Indicator (thousand euros) | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Net Operating Working Capital | 819,427 | 808,278 | 1.4% | | Net Invested Capital (incl. Right-of-Use Assets) | 6,446,127 | 6,194,941 | 4.1% | | Net Financial Surplus | 352,172 | 599,602 | -41.3% | | Equity Attributable to Group Owners | 4,224,878 | 4,399,365 | -4.0% | III. Consolidated Financial Statements 3.1 Consolidated Income Statement For the six months ended June 30, 2025, Prada Group's net revenue was 2,740 million euros, with a gross profit margin of 80.1%; total operating expenses increased by 8.0%, leading to a 5.6% EBIT growth to 607.3 million euros, and net income for the period was 387 million euros, up 0.3% year-on-year Consolidated Income Statement Key Data (Six Months Ended June 30) | Indicator (thousand euros) | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenue | 2,740,035 | 2,548,634 | 7.5% | | Gross Profit | 2,194,582 | 2,033,961 | 7.9% | | Total Operating Expenses | (1,576,037) | (1,458,842) | 8.0% | | Operating Income – EBIT | 607,294 | 575,119 | 5.6% | | Profit Before Tax | 557,915 | 537,029 | 3.9% | | Net Income for the Period | 386,992 | 385,713 | 0.3% | | Net Income – Attributable to Group Owners | 385,883 | 383,499 | 0.6% | - Advertising and communication costs increased by 16.0% to 254.4 million euros, and selling costs increased by 8.8% to 1,064.3 million euros, reflecting increased brand investment[19] - Total financial expenses increased by 29.6% to 49.4 million euros, primarily due to a 24.2% increase in interest expenses on lease liabilities[20] 3.2 Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets decreased to 8,322.2 million euros from 8,549.9 million euros at the end of 2024, with total current assets decreasing and total non-current assets slightly increasing, while total liabilities slightly decreased and equity attributable to group owners decreased by 4.0% Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator (thousand euros) | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 8,322,218 | 8,549,959 | -2.7% | | Total Current Assets | 2,159,797 | 2,559,408 | -15.6% | | Total Non-Current Assets | 6,162,421 | 5,990,551 | 2.9% | | Total Liabilities | 4,077,687 | 4,130,529 | -1.3% | | Total Current Liabilities | 1,491,835 | 1,683,452 | -11.4% | | Total Non-Current Liabilities | 2,585,852 | 2,447,077 | 5.7% | | Equity Attributable to Owners of the Company | 4,224,878 | 4,399,365 | -4.0% | | Total Equity | 4,244,531 | 4,419,430 | -3.9% | - Cash and cash equivalents decreased by 40.9% from 1,011.6 million euros at the end of 2024 to 598.0 million euros[21] - Right-of-use assets increased by 8.0% from 2,279.0 million euros at the end of 2024 to 2,460.4 million euros[21] 3.3 Consolidated Statement of Changes in Equity As of June 30, 2025, equity attributable to group owners was 4,224.9 million euros, a decrease from 4,399.4 million euros at the end of 2024, primarily due to the distribution of 2024 net income, dividend payments, and the impact of comprehensive income/(loss) for the period Consolidated Statement of Changes in Equity Key Data (As of June 30) | Indicator (thousand euros) | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Share Capital | 255,882 | 255,882 | 0.0% | | Total Other Reserves | 3,568,397 | 3,155,617 | 13.1% | | Translation Reserve | 14,716 | 148,959 | -90.1% | | Net Income for the Period | 385,883 | 838,907 | -54.0% | | Equity Attributable to Owners of the Company | 4,224,878 | 4,399,365 | -4.0% | | Total Equity | 4,244,531 | 4,419,430 | -3.9% | - Dividends of 419.6 million euros were paid in the first half of 2025, leading to a reduction in equity[22] - Translation reserve significantly decreased by 90.1% from 148.9 million euros at the end of 2024 to 14.7 million euros due to exchange differences[22] 3.4 Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash flow from operating activities was 689.1 million euros, a decrease from the prior year, while net cash outflow from investing activities significantly increased to 293.9 million euros, and net cash outflow from financing activities also rose to 778.4 million euros, resulting in a substantial reduction in cash and cash equivalents at period-end Consolidated Statement of Cash Flows Key Data (Six Months Ended June 30) | Indicator (thousand euros) | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 689,139 | 799,277 | -13.8% | | Net Cash Flow Used in Investing Activities | (293,945) | (184,425) | 59.4% | | Net Cash Flow Used in Financing Activities | (778,439) | (648,536) | 19.9% | | Change in Cash and Cash Equivalents | (383,245) | (33,684) | 1037.9% | | Cash and Cash Equivalents at End of Period | 597,992 | 661,260 | -9.6% | - Expenditures for the purchase of property, plant and equipment and intangible assets increased by 47.8% from 182.9 million euros in 2024 to 270.4 million euros[23] - Dividends paid to Prada S.p.A. shareholders increased by 20.2% from 331.1 million euros in 2024 to 397.8 million euros[23] 3.5 Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, total comprehensive income for the period was 238.9 million euros, a significant decrease from 408.1 million euros in the prior year, primarily impacted by exchange differences from foreign operations translation and gains/(losses) on cash flow hedging instruments Consolidated Statement of Comprehensive Income Key Data (Six Months Ended June 30) | Indicator (thousand euros) | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income for the Period | 386,992 | 385,713 | 0.3% | | Items That May Be Reclassified Subsequently to Profit or Loss | (148,056) | 24,559 | -703.0% | | Exchange Differences Arising from Translation of Foreign Operations | (135,710) | 25,259 | -637.3% | | Changes in Cash Flow Hedge Reserve, Net of Tax | (12,346) | (700) | 1663.7% | | Total Comprehensive Income – Total | 238,936 | 408,051 | -41.4% | | Total Comprehensive Income – Attributable to Group Owners | 239,294 | 405,647 | -41.0% | - Exchange differences arising from the translation of foreign operations shifted from a 25.3 million euros positive gain in 2024 to a 135.7 million euros negative gain in 2025, significantly impacting comprehensive income[24] IV. Notes to the Financial Statements 4.1 Net Revenue Analysis For the six months ended June 30, 2025, the Group's total net revenue grew by 9.1% at constant exchange rates, with retail net sales contributing 89.5% of total revenue and growing 10.1% at constant exchange rates, while wholesale net sales decreased by 1.3% Net Revenue Analysis (Six Months Ended June 30) | Sales Type (thousand euros) | 2025 | 2024 | Change at Constant FX (%) | | :--- | :--- | :--- | :--- | | Retail Net Sales | 2,453,381 | 2,262,591 | 10.1% | | Wholesale Net Sales | 219,762 | 225,213 | -1.3% | | Royalty Income | 66,892 | 60,830 | 10.0% | | Total Net Revenue | 2,740,035 | 2,548,634 | 9.1% | 4.1.1 By Sales Channel Retail net sales are the primary revenue source, accounting for 89.5% of total revenue and growing 10.1% at constant exchange rates, while wholesale net sales decreased by 1.3% due to the Group's selective strategy, and royalty income increased by 10.0%, mainly driven by eyewear and fragrance businesses - Retail net sales (directly operated stores and e-commerce) increased by 10.1% at constant exchange rates, accounting for 89.5% of total net revenue[25] - Wholesale net sales decreased by 1.3% at constant exchange rates, impacted by the Group's ongoing selective strategy[25] - Royalty income increased by 10.0% at constant exchange rates, primarily driven by contributions from eyewear and fragrance[25] 4.1.2 By Brand Miu Miu brand showed strong performance with retail net sales growing 49.2% at constant exchange rates, while Prada brand retail net sales decreased by 1.9% but still demonstrated good resilience, and Church's and other brands also achieved growth Retail Net Sales by Brand (Six Months Ended June 30) | Brand (thousand euros) | 2025 | 2024 | Change at Constant FX (%) | | :--- | :--- | :--- | :--- | | Prada | 1,646,788 | 1,707,710 | -1.9% | | Miu Miu | 780,140 | 530,129 | 49.2% | | Church's | 15,370 | 14,656 | 4.1% | | Other Brands | 11,083 | 10,096 | 9.8% | | Total Retail Net Sales | 2,453,381 | 2,262,591 | 10.1% | - Prada brand retail net sales decreased by 1.9% year-on-year, showing good resilience despite a high comparison base in Japan and reduced tourist spending in Europe[25] - Miu Miu brand retail net sales significantly increased by 49.2% year-on-year, continuing its robust and sustainable growth trajectory[25] 4.1.3 By Region All regions recorded growth in retail net sales, with the Middle East performing best at 25.7% growth, while the Americas and Asia Pacific also saw double-digit increases, and Europe and Japan maintained steady growth Retail Net Sales by Region (Six Months Ended June 30) | Region (thousand euros) | 2025 | 2024 | Change at Constant FX (%) | | :--- | :--- | :--- | :--- | | Asia Pacific | 838,371 | 774,435 | 10.4% | | Europe | 727,562 | 682,192 | 8.6% | | Americas | 424,090 | 386,961 | 12.4% | | Japan | 325,945 | 308,612 | 4.3% | | Middle East | 137,413 | 110,391 | 25.7% | | Total Retail Net Sales | 2,453,381 | 2,262,591 | 10.1% | - Middle East retail net sales performed strongly, increasing by 25.7% year-on-year[25] - Americas retail net sales grew by 12.4%, driven by local and tourist demand[25] - Asia Pacific retail net sales increased by 10.4%, with similar growth trends across quarters[25] 4.2 Store Count As of June 30, 2025, Prada Group operated 620 directly operated stores and 22 franchised stores globally, with the number of directly operated stores increasing by 11 since the end of 2024, notably driven by the Miu Miu brand Store Count (As of June 30, 2025) | Brand | June 30, 2025 (DOS) | Dec 31, 2024 (DOS) | Change | | :--- | :--- | :--- | :--- | | Prada | 426 | 425 | +1 | | Miu Miu | 156 | 147 | +9 | | Church's | 28 | 28 | 0 | | Car Shoe | 2 | 2 | 0 | | Marchesi 1824 | 8 | 7 | +1 | | Total | 620 | 609 | +11 | - As of June 30, 2025, the Group's total number of directly operated stores reached 620, an increase of 11 from the end of 2024, primarily driven by the Miu Miu brand[26] 4.3 Earnings Per Share and Dividends Paid For the six months ended June 30, 2025, basic and diluted earnings per share were 0.151 euros, slightly higher than the prior year, and the company paid a dividend of 0.164 euros per share, totaling 419.6 million euros, in April 2025 Basic and Diluted Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Group Net Income (in euros) | 385,882,747 | 383,499,246 | | Weighted Average Number of Ordinary Shares Issued | 2,558,824,000 | 2,558,824,000 | | Basic and Diluted Earnings Per Share (euros) | 0.151 | 0.150 | - The company approved a dividend payment of 419,647,136 euros, or 0.164 euros per share, at the Annual General Meeting held on April 30, 2025[29] 4.4 Net Trade Receivables As of June 30, 2025, net trade receivables were 377.4 million euros, a decrease from 423.7 million euros at the end of 2024, with a slight reduction in the allowance for doubtful accounts, and most receivables were not overdue Net Trade Receivables (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables – Third Parties | 389,819 | 435,403 | -10.5% | | Allowance for Doubtful Accounts | (13,571) | (14,062) | -3.5% | | Trade Receivables – Related Parties | 1,156 | 2,392 | -51.7% | | Total | 377,404 | 423,733 | -10.9% | - As of June 30, 2025, 84.8% (331.6 million euros) of trade receivables were not overdue[32] 4.5 Net Inventories As of June 30, 2025, net inventories increased to 888.3 million euros from 866.2 million euros at the end of 2024, primarily to support sales growth, with the allowance for inventories increasing by 3.7 million euros Net Inventories (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Raw Materials | 134,151 | 132,455 | 1.3% | | Work-in-Progress | 52,867 | 45,893 | 15.2% | | Finished Goods | 820,763 | 799,772 | 2.6% | | Allowance for Obsolete and Slow-Moving Inventories | (132,541) | (128,822) | 2.9% | | Total | 888,295 | 866,160 | 2.6% | - The increase in inventories is primarily due to the need to support sales growth, with significant increases in work-in-progress and finished goods[34] - In the first half of 2025, the allowance for inventories increased by 3.7 million euros, allocated to slow-moving products and raw materials[34] 4.6 Amounts Due from Related Parties and Prepayments to Related Parties - Current As of June 30, 2025, amounts due from related parties and prepayments to related parties totaled 152 thousand euros, a slight increase from the end of 2024 Amounts Due from Related Parties and Prepayments to Related Parties - Current (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Financial Receivables | 25 | 7 | 257.1% | | Other Receivables and Prepayments | 127 | 134 | -5.2% | | Total | 152 | 141 | 7.8% | 4.7 Other Current Assets As of June 30, 2025, other current assets totaled 246.6 million euros, largely consistent with the end of 2024, with prepayments increasing while VAT and other tax receivables decreased Other Current Assets (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | VAT | 34,624 | 37,833 | -8.5% | | Tax and Other Tax Receivables | 48,085 | 62,283 | -22.8% | | Prepayments | 145,058 | 124,011 | 17.0% | | Total | 246,562 | 245,324 | 0.5% | 4.8 Capital Expenditures (Property, Plant and Equipment and Intangible Assets) For the six months ended June 30, 2025, the net book value of property, plant and equipment slightly decreased, while intangible assets increased, with capital expenditures primarily focused on retail property restyling, store relocations, and investments in software and assets under construction 4.8.1 Property, Plant and Equipment The net book value of property, plant and equipment decreased from 2,255.1 million euros at the end of 2024 to 2,220.1 million euros, with additions of 199.3 million euros primarily for leasehold improvements and furniture and fixtures related to retail property restyling and store relocations Net Book Value of Property, Plant and Equipment (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Book Value | 2,220,081 | 2,255,055 | -1.6% | | Additions | 199,334 | - | - | | Depreciation | (132,100) | - | - | - Increases in leasehold improvements and furniture and fixtures are primarily related to retail property restyling and store relocations[38] - Assets under construction at period-end are related to retail and industrial projects[39] 4.8.2 Intangible Assets The net book value of intangible assets increased from 867.9 million euros at the end of 2024 to 886.5 million euros, with additions of 47.8 million euros primarily for software and assets under construction, and goodwill remained at 515.5 million euros with no impairment indicators identified during the period Net Book Value of Intangible Assets (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Book Value | 886,547 | 867,920 | 2.1% | | Additions | 47,784 | - | - | | Amortization | (28,459) | - | - | - As of June 30, 2025, goodwill was 515.5 million euros, allocated to Prada (424.3 million euros) and Miu Miu (91.2 million euros) brands, with no impairment indicators identified during the period[41] 4.9 Right-of-Use Assets The net book value of right-of-use assets increased to 2,460.4 million euros, primarily due to new leases and remeasurements of existing leases totaling 567.4 million euros, offset by depreciation and negative exchange differences Net Book Value of Right-of-Use Assets (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Book Value | 2,460,374 | 2,278,955 | 8.0% | | New Contracts, Initial Direct Costs and Remeasurements | 567,355 | - | - | | Depreciation | (236,166) | - | - | | Exchange Differences | (149,631) | - | - | - The increase in right-of-use assets is mainly due to lease renewals (primarily in Asia and Americas) and remeasurement of liabilities to adjust to commonly used real estate indices (primarily CPI)[43] 4.10 Other Non-Current Assets As of June 30, 2025, other non-current assets totaled 128.7 million euros, a slight decrease from the end of 2024, primarily comprising security deposits paid under retail leases Other Non-Current Assets (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Security Deposits | 78,601 | 84,513 | -7.0% | | Prepayments for Commercial Agreements | 39,647 | 41,733 | -5.0% | | Total | 128,690 | 139,086 | -7.5% | - Security deposits primarily refer to deposits paid under retail leases[45] 4.11 Amounts Due to Related Parties - Current As of June 30, 2025, amounts due to related parties totaled 4.98 million euros, a decrease from 8.28 million euros at the end of 2024 Amounts Due to Related Parties - Current (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Financial Payables | 4,938 | 8,149 | -39.4% | | Other Payables | 40 | 130 | -69.2% | | Total | 4,978 | 8,279 | -39.9% | 4.12 Trade Payables As of June 30, 2025, trade payables totaled 446.3 million euros, a decrease from 481.6 million euros at the end of 2024, with most payables not overdue Trade Payables (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables – Third Parties | 443,299 | 475,822 | -6.9% | | Trade Payables – Related Parties | 2,973 | 5,793 | -48.7% | | Total | 446,272 | 481,615 | -7.3% | - As of June 30, 2025, 94.3% (420.8 million euros) of trade payables were not overdue[48] 4.13 Other Current Liabilities As of June 30, 2025, other current liabilities totaled 321.6 million euros, a decrease from 371.3 million euros at the end of 2024, primarily due to a reduction in payables for capital expenditures Other Current Liabilities (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Payables for Capital Expenditures | 94,050 | 124,163 | -24.3% | | Accrued Expenses and Deferred Income | 26,321 | 26,560 | -0.9% | | Other Payables | 201,189 | 220,537 | -8.8% | | Total | 321,560 | 371,260 | -13.4% | 4.14 Provisions for Risks and Charges As of June 30, 2025, provisions for risks and charges totaled 63.0 million euros, a slight decrease from the end of 2024, primarily including contractual obligations to restore leased commercial properties to their original condition and commitments for the SEA BEYOND project Provisions for Risks and Charges (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Provisions for Legal Disputes | 738 | 529 | 39.5% | | Provisions for Tax Disputes | 2,145 | 1,508 | 42.2% | | Other Provisions | 60,089 | 62,247 | -3.5% | | Total | 62,972 | 64,284 | -2.1% | - Other provisions are mainly related to contractual obligations to restore leased commercial properties to their original condition (52 million euros) and commitments for the SEA BEYOND project[51] V. Management Discussion and Analysis 5.1 Net Revenue and Sales Performance In the first half of 2025, Prada Group's net revenue reached 2,740 million euros, growing 9.1% at constant exchange rates, with retail net sales increasing 10.1% and accounting for 89.5% of total revenue, while wholesale net sales decreased by 1.3% and royalty income grew by 10.0% - Net revenue increased by 9.1% at constant exchange rates to 2,740 million euros, with exchange rate fluctuations reducing growth by 1.6% to 7.5%[52] - Retail net sales increased by 10.1% at constant exchange rates, driven by full-price and like-for-like sales, accounting for 89.5% of total net revenue[52] - Wholesale net sales decreased by 1.3% at constant exchange rates, impacted by the Group's ongoing selective strategy, while royalty income increased by 10.0%, driven by eyewear and fragrance contributions[53][54] 5.2 Brand Performance Miu Miu brand retail net sales showed strong year-on-year growth of 49.2%, while Prada brand retail net sales slightly decreased by 1.9% year-on-year but still demonstrated good resilience, and Church's retail net sales grew by 4.1% - Prada retail net sales decreased by 1.9% year-on-year, recording solid performance despite a high comparison base in Japan and reduced tourist spending in Europe[55] - Miu Miu retail net sales significantly increased by 49.2% year-on-year, continuing its robust and sustainable growth trajectory[56] - Church's retail net sales recorded a year-on-year increase of 4.1%[57] 5.3 Market Performance In the first half of 2025, all regions recorded growth in retail net sales, with the Middle East performing best at 25.7% growth, the Americas growing 12.4%, Asia Pacific 10.4%, Europe 8.6%, and Japan 4.3% - All regions recorded retail net sales growth, including Middle East (+25.7%), Americas (+12.4%), Asia Pacific (+10.4%), Europe (+8.6%), and Japan (+4.3%)[58][59] - Europe retail net sales grew by 8.6%, but the second quarter was impacted by reduced tourist spending[58] - Japan retail net sales grew by 4.3%, affected by a slowdown in tourist spending, but local demand remained more robust[58] 5.4 Operating Results The gross profit margin remained at 80.1%, largely stable year-on-year, primarily due to increased production cost absorption and lower logistics costs, with adjusted EBIT at 618.5 million euros, up 7.6% year-on-year, and a margin of 22.6%, while non-recurring expenses were mainly related to the Versace acquisition - Gross profit margin was 80.1%, largely stable compared to 79.8% in the first half of 2024, mainly due to increased production cost absorption and lower logistics costs[60] - Operating expenses (excluding non-recurring items) increased by 117.2 million euros, primarily due to variable costs from increased sales, rent and labor costs, marketing expenses, and depreciation[60] - Adjusted EBIT was 618.5 million euros, up 7.6% year-on-year, representing 22.6% of net revenue, consistent with the prior year[60] - Non-recurring expenses were mainly related to the definitive agreement for the acquisition of Versace from Capri Holdings Ltd[60] 5.5 Financial Expenses and Taxes Financial expenses increased by 11.3 million euros to 49.4 million euros, primarily attributable to higher interest expenses on lease liabilities, and taxes for the period were 170.9 million euros, representing 30.6% of profit before tax - Financial expenses increased by 11.3 million euros to 49.4 million euros, primarily attributable to an 8.2 million euros increase in interest expenses on lease liabilities[61] - Taxes for the six months ended June 30, 2025, were 170.9 million euros, representing 30.6% of profit before tax[61] 5.6 Net Income For the six months ended June 30, 2025, net income was 387 million euros, representing 14.1% of net revenue, a slight increase from 385.7 million euros (15.1% of net revenue) in the prior year - Net income for the six months ended June 30, 2025, was 387 million euros, representing 14.1% of net revenue, compared to 385.7 million euros (15.1% of net revenue) in the first half of 2024[62] 5.7 Net Invested Capital As of June 30, 2025, net invested capital was 6,446 million euros, primarily composed of equity attributable to group owners, lease liabilities, and net financial surplus, with net operating working capital slightly increasing and net other current assets/(liabilities) decreasing - As of June 30, 2025, net invested capital was 6,446 million euros, including equity attributable to group owners of 4,245 million euros, lease liabilities of 2,554 million euros, and a net financial surplus of 352.2 million euros[63] - Net operating working capital was 819.4 million euros, an increase of 11.1 million euros from the end of 2024, mainly impacted by a decrease in trade receivables, an increase in inventories, and a decrease in trade payables[64] - Right-of-use assets increased by 181.4 million euros, primarily due to new leases and remeasurements of existing leases totaling 567.4 million euros, offset by depreciation of 236.2 million euros and negative exchange differences of 149.6 million euros[64] 5.8 Net Financial Position As of June 30, 2025, net financial surplus was 352.2 million euros, a significant decrease from 599.6 million euros at the end of 2024, with net cash flow from operating activities at 467.5 million euros and free cash flow at 173.6 million euros, and the Group has signed a 1.5 billion euro financing agreement for the Versace acquisition Net Financial Position Key Data (thousand euros) | Indicator | June 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | Net Financial Surplus | 352,172 | 599,602 | -41.3% | | Net Financial Debt (incl. Lease Liabilities) | (2,201,596) | (1,775,511) | 23.9% | | Net Cash Flow from Operating Activities | 467,548 | 580,484 | -19.5% | | Free Cash Flow | 173,603 | 396,059 | -56.2% | - Prada S.p.A. signed a 1,500 million euro financing agreement on April 11, 2025, for the acquisition of Versace, including a 1,000 million euro term loan and a 500 million euro bridge term loan[68] - As of June 30, 2025, the Group had 2,864 million euros in undrawn cash credit lines with banks, of which 2,359 million euros were committed credit lines[69] - Total lease liabilities increased to 2,553.8 million euros, primarily due to new contracts and remeasurements from lease extensions or modifications[69] 5.9 Subsequent Events No significant subsequent events to report - No significant events to report[71] VI. Outlook Facing industry and macroeconomic challenges, Prada Group achieved solid results in the first half of 2025, and management will continue to balance prudence with long-term investments, adhering to strategic goals of robust, sustainable, and above-market growth - The Group's strategic objectives remain unchanged: striking an appropriate balance between prudence and continued long-term investment[72] - Management is confident in achieving ambitious goals of robust, sustainable, and above-market growth[72] VII. Corporate Governance Practices 7.1 Corporate Governance Model and Code Compliance The company is committed to maintaining the highest corporate governance standards, with its model complying with applicable Italian law and the Corporate Governance Code in Appendix C1 of the Hong Kong Stock Exchange Listing Rules, and generally complied during the review period, except for Chairman Patrizio Bertelli's absence from the Annual General Meeting due to other commitments - The company's adopted corporate governance model complies with applicable Italian law and the requirements of the Corporate Governance Code in Appendix C1 of the Hong Kong Stock Exchange Listing Rules[73] - During the review period (January 1 to June 30, 2025), the company generally complied with the Code provisions, except for Code Provision F.1.3, as Chairman Patrizio Bertelli was unable to attend the Annual General Meeting[74] 7.2 Board of Directors The Board of Directors comprises 11 directors (6 executive directors, 5 independent non-executive directors), responsible for setting the Group's overall strategy and reviewing operational and financial performance, holding four meetings during the review period to discuss annual budgets, significant investments (e.g., Versace acquisition), and financial statement approvals - The Board of Directors comprises 11 directors, including 6 executive directors and 5 independent non-executive directors[77] - During the review period, the Board held four meetings, with key agendas including evaluating operating and financial performance, approving significant investments (such as the Versace acquisition and related financing), and approving the 2024 Annual Report and Sustainability Report[77] - The Board elected Ms. Ilaria Resta as a new independent non-executive director at its meeting on July 30, 2025, replacing Ms. Marina Sylvia Caprotti[78][95] 7.3 Audit and Risk Committee The Audit and Risk Committee, composed of three independent non-executive directors, provides independent advice on internal audit, financial reporting, internal control, and risk management, holding four meetings during the review period to discuss the 2025 budget, related party transactions, external auditor selection, and impairment testing - The Audit and Risk Committee comprises three independent non-executive directors, responsible for assisting the Board in providing independent advice on internal audit, financial reporting, internal control, and risk management[79] - During the review period, the Committee held four meetings, discussing the 2025 budget, related party transactions, external auditor selection, impairment testing methodology, pending litigation, and the internal audit work plan[79] 7.4 Remuneration Committee The Remuneration Committee, consisting of two independent non-executive directors and one executive director, is responsible for recommending policies and structures for the remuneration of directors and senior management, holding two meetings during the review period to review remuneration, variable compensation components, and receive an initial report on a new long-term incentive plan - The Remuneration Committee comprises two independent non-executive directors and one executive director, responsible for recommending policies and structures for the remuneration of directors and senior management[81] - The Committee reviewed the remuneration of executive directors and top management, discussed variable compensation components related to 2024 performance, and received an initial report on the new long-term incentive plan for 2025-2027[81] 7.5 Nomination Committee The Nomination Committee, composed of two independent non-executive directors and one executive director, is responsible for formulating director nomination policies and advising on the Board's structure, size, and composition, conducting an annual assessment of independent non-executive directors and confirming a new appointment during the review period - The Nomination Committee comprises two independent non-executive directors and one executive director, responsible for formulating director nomination policies and advising on the Board's structure, size, and composition[84] - The Committee conducted an annual assessment of the independence of independent non-executive directors and reviewed the Board's structure, size, and composition for the 2024 financial year[84] - The Committee confirmed the resignation of Ms. Marina Sylvia Caprotti and reviewed the personal profile and independence of the new independent non-executive director, Ms. Ilaria Resta[84] 7.6 Sustainability Committee The Sustainability Committee, composed of two independent non-executive directors and one executive director, assists the Board in evaluating and deciding on sustainability matters and supports the preparation of non-financial reports, discussing and approving the 2024 Sustainability Report and reviewing ESG strategy progress and the SEA BEYOND project during the review period - The Sustainability Committee assists and supports the Board in evaluating and deciding on sustainability matters, and supports the preparation and review of non-financial reports[85] - The Committee discussed and approved the 2024 Sustainability Report, reviewed the progress and achievements of the Group's ESG strategy, and received updates on the SEA BEYOND project[85][86] 7.7 Board of Statutory Auditors In accordance with Italian law, the company has a Board of Statutory Auditors, appointed by shareholders, responsible for overseeing the company's compliance with applicable laws, regulations, articles of association, and sound management principles - The Board of Statutory Auditors, appointed by shareholders, is responsible for overseeing the company's compliance with applicable laws, regulations, articles of association, sound management principles, and the adequacy and operational effectiveness of its organizational, administrative, and accounting structures[87][88] 7.8 Supervisory Body To comply with Italian Legislative Decree No. 231, the company has established a Supervisory Body responsible for ensuring the operation, effectiveness, and implementation of the company's organization, management, and control model - The Supervisory Body (Organismo di Vigilanza) aims to ensure the operation, effectiveness, and implementation of the company's organization, management, and control model adopted in accordance with Italian Legislative Decree No. 231[89] 7.9 Dividends The company did not declare or pay any dividends during the review period; however, the Board recommended a final dividend of 0.164 euros per share for the 2024 financial year, totaling 419.6 million euros, which was paid in May 2025 - The company did not declare or pay any dividends during the review period[90] - The Board recommended a final dividend of 0.164 euros per share for the 2024 financial year, totaling 419,647,136 euros, which was paid on May 19, 2025[90] 7.10 Directors' Securities Transactions The company has adopted procedures governing directors' securities transactions, with terms no less stringent than the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance with relevant provisions during the review period, with no breaches - The company has adopted procedures governing directors' securities transactions, with terms no less stringent than the Model Code in Appendix C3 of the Listing Rules[91] - All directors confirmed compliance with the Model Code and the company's relevant procedures during the review period, with no breaches[91] 7.11 Purchase, Sale or Redemption of the Company's Listed Securities During the review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, nor did the company hold any treasury shares - During the review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[92] - The company held no treasury shares during the review period[92] VIII. Other Information 8.1 Publication of Interim Results Announcement and Interim Report The company's interim results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the company, and the interim report will be posted on these websites and dispatched to shareholders in due course - The company's interim results announcement has been published on the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the company's website (www.pradagroup.com)[93](index=93&type=chunk) - The interim report will be posted on the aforementioned websites and dispatched to the company's shareholders in due course[93]