LETTERS TO STAKEHOLDERS

Evolve to grow: 2023 performance
Let me start on a personal note, by saying that this first year at the Prada Group marks the beginning of an extremely fulfilling chapter for me and that I am extremely proud of being a part of this incredible journey.

2023 was a remarkable year, as we achieved our ambitions against the backdrop of increasing macroeconomic and geopolitical uncertainty, especially in the second half of the year.
The Group generated revenue of Euro 4.7bn, with growth up +17%. The strong performance of the fourth quarter (+17%), marks the 12th consecutive quarter of growth.
At a brand level, Prada’s retail sales grew at a solid +12%, while Miu Miu thrived with +58%.
Alongside these excellent topline results, we also improved our profitability, reaching a 22.5% EBIT margin, which also reflects significant investments behind our brands.
Our capex was mostly directed to strengthening our retail network, alongside supporting our industrial and digital strategies: these areas will continue to be our top priorities in the following months.

Evolve to stay relevant: our brands as part of the cultural conversation
In a world that’s constantly changing, it is crucial for brands to stay relevant by interpreting and shaping the cultural debate and conversation. In 2023, the creative flame of Prada burnt stronger than ever, as the brand interpreted and readapted its stylistic codes to find a continuously new aesthetic dialogue. Runways have resonated strongly, becoming center stage for broader reflections on society: as always, Prada is not afraid to embrace contradictions. On the other side, Miu Miu’s whimsical narrative continued to strike. 2023’s collections have been widely acclaimed, receiving a strong commercial response across all categories: the brand’s irreverent curiosity continues to captivate and excite with its timely interpretation of human complexity. Our brands dared to explore, question, analyze and redefine, amplified by campaigns, immersive experiences and unexpected collaborations, nurturing an ever-evolving conversation with their global community.

Evolve to improve: achieve excellence in our retail strategy
Today more than ever, stores are the stages where our brands engage with their clients: as the complexity of the dialogue increases, retail spaces must find new forms of connection, allowing deeper interactions with the brand’s communities.
In 2023, we made it a priority to invest into the Group’s retail network. At the same time, we have monitored our KPI closely to ensure continuous progress on the retail channel across all brands and geographies.
In 2024 our focus remains unchanged: we will continue to evolve our network and our execution to further progress on the path towards retail excellence, providing our brands with a powerful dimension to express their identity.

Evolve to matter: progressing on the sustainability journey
Sustainability is integral to our strategy.
As we set the ambition of being “Drivers of Change”, we committed to evolve in every aspect of our business, becoming a more inclusive employer, and a more sustainable manufacturer, as well as promoting educational initiatives for the next generation.
As we continue to challenge ourselves along this journey, I am pleased to see that our efforts continue to pay off.

Evolve to move forward: the future ahead
The last few months have reminded us, once again, that we live in times that require us to embrace flexibility. We are mindful of this, and we will continue to navigate at pace, being ready to change course should unexpected tides occur.
While we might adapt and evolve our way of doing business, our objectives remain unchanged: we want to nurture the creative identity of our brands so that they can continue to be relevant and to lead modern society’s cultural debate; we want to keep on elevating our stores to progress on the path towards retail excellence and we want to invest into our people, our supply chain and our sustainability initiatives because we are committed to be drivers of change for our employees and society.

Our organization is strengthened, and we are confident in our strategy. We are proud of what we have accomplished so far, but restless as we look towards the future, eager to brave new horizons. Dynamism, creativity, talent and ambition have always animated the history of the Prada Group, and we will continue to foster these values as we draw the next chapters of growth in the journey ahead.

In 2023, we continued to strengthen our sustainability governance with the appointment of a Group Sustainability Director of Operations and Product Compliance, who is responsible for driving sustainability progress in the industrial side of the business. This is a key area for the Group and essential to ensure we meet our most ambitious targets. The decision is part of our commitment to achieve the Group’s target to reduce indirect (Scope 3) GHG emissions in our supply chain and to mitigate the Group's wider environmental impact.
The Group’s Sustainability Committee has been instrumental in supporting ESG efforts and helping to drive cultural change across the business, by highlighting the main challenges facing the business and assigning internal responsibility for the specific areas needed to successfully implement our sustainability strategy.
During 2023, we made progress on our three-year roadmap, setting targets across our three pillars of action Planet, People and Culture. We focused primarily on one of our key challenges - reducing Scope 3 emissions - including the transition to lower environmental impact alternatives for our key raw materials. Further integrating sustainability into our long-term growth objectives in a financially viable way is challenging but essential work. Strategic investment is one way to drive progress towards our goals, which is why we have invested in the decarbonization of our logistics by purchasing Sustainable Aviation Fuel (SAF) credits from accredited partners. This further stimulates the production and use of technology that benefits the entire aviation industry.
To accelerate the transition, we and 11 other members of The Fashion Pact coalition signed the Collective Virtual Power Purchase Agreement (CVPPA) with a solar energy developer in Europe, a pioneering collaboration that is already viewed as a landmark clean energy deal that we hope will inspire other industry players to support the production of additional renewable energy. 

During the year, we have also continued to invest in the vertical integration of our supply chain to broaden our oversight and control over the most delicate phases of value creation. Firstly, by acquiring a minority stake in the knitwear company Luigi Fedeli e Figlio S.r.l. - an Italian family business globally recognized for the quality of its knitwear and fine yarns - thereby improving our traceability of raw materials, and secondly by increasing internal production capacity through the expansion of some of the Group's production facilities and the recruitment of new employees. The Group announced the recruitment of 400 people to strengthen its production capacity and artisanal expertise in Italy. The Group has also significantly increased the number of training hours during the year, including on the digitalization of production management systems. These measures will allow us to ensure the transmission of know-how and improve our efficiency, also to better respond to the numerous transparency and traceability requirements from the European Union and some more advanced markets in these aspects.
We also continued to further our strategic objective of talent retention. We have done this through internal projects aimed at embedding our corporate values and our purpose: to be Drivers of Change. The arrival of a new Group’s Chief People Officer was a key development, and I will be working closely with her to accelerate the most urgent issues within the People pillar, and to pursue our shared ambitions for our employees.
Finally, the SEA BEYOND project was extended with a stronger partnership with the IOC/UNESCO: the educational activities have been complemented with support for scientific research and the development of humanitarian projects concerning ocean protection. The project is supported by 1% of the proceeds from the Prada Re-Nylon Collection from July 2023. In recognition of the Prada Group’s support for ocean literacy through the SEA BEYOND program, I had the great honor of becoming a Patron of the Ocean Decade Alliance at the end of 2023.
In this role, I will continue to promote collaboration between the private sector and third-party institutions, which I believe is an essential tool for achieving goals that affect the entire community. Collaboration and cooperation have a greater impact than individual actions.