Poste Italiane Spa · MIL:PST
Poste Italiane Spa — Q3 2024 Earnings Presentation
51 slides from Poste Italiane Spa's earnings presentation, Nov 6, 2024
Slide 1: Poste Italiane Q3 & 9M-24 Financial Results
POSTE ITALIANE Q3 & 9M-24 FINANCIAL RESULTS 6 NOVEMBER 2024 THE CONNECTING PLATFORM 1
Slide 2: Contents
CONTENTS Insurance EXECUTIVE SUMMARY Services Financial Services BUSINESS REVIEW v Postepay Services APPENDIX Mail, Parcel & Distribution 2
Slide 3: Executive Summary
EXECUTIVE SUMMARY THE LARGEST ITALIAN PLATFORM COMPANY RECORD FIRST 9 MONTHS REVENUES AND PROFITABILITY CONFIRMING GROWTH TRAJECTORY OF ALL BUSINESS UNITS ● 9M-24 UNDERLYING1 REVENUES GROWTH OF 8% DRIVEN BY ALL BUSINESS UNITS ● COST DISCIPLINE MITIGATING INFLATION IMPACT – EVOLUTION REFLECTING HIGHE
Slide 4: Q3 & 9M-24 Results Overview
Q3 & 9M-24 RESULTS OVERVIEW STRONG ADJUSTED EBIT1 PROGRESSION DRIVEN BY TOP-LINE GROWTH AND COST DISCIPLINE € m unless otherwise stated Underlying growth %2 Q3-23 Q3-24 Δ% 9M-23 9M-24 Δ% excl sennder CG, APM, systemic charges, and 2023 one-off bonus REVENUES 2,795 3,062 +10% 8,803 9,226 +5% +8% ADJU
Slide 5: External Revenues
EXTERNAL REVENUES POSITIVE COMMERCIAL TRENDS RESULTING IN STRONG REVENUE GROWTH ACROSS THE PLATFORM € m unless MAIL, PARCEL & DISTRIBUTION FINANCIAL SERVICES otherwise stated +189 +42 +166 +5% +50 +2% +14% 3,858 4,047 +6% 2,755 2,797 860 909 1,192 1,358 Q3-23 Q3-24 9M-23 9M-24 Q3-23 Q3-24 9M-23 9M-2
Slide 6: Adjusted EBIT by Segment
ADJUSTED EBIT1 BY SEGMENT PROFITABILITY BENEFITING FROM STRONG REVENUE GROWTH AND EFFECTIVE COST DISCIPLINE € m unless otherwise MAIL, PARCEL & DISTRIBUTION FINANCIAL SERVICES stated +29 +180 +19% +34 (6) n.m. 183 +18% (1%) 87 154 2261 648 6421 192 (93) 9M-23 9M-24 Q3-23 Q3-24 9M-23 9M-24 Q3-23 Q3-2
Slide 7: Contents
CONTENTS Insurance EXECUTIVE SUMMARY Services Financial Services BUSINESS REVIEW Postepay Services APPENDIX Mail, Parcel & Distribution 7
Slide 8: Mail, Parcel & Distribution
MAIL, PARCEL & DISTRIBUTION MAIL AND PARCEL REVENUES AHEAD OF PLAN € m unless otherwise stated EXTERNAL REVENUES ADJUSTED EBIT Q3 HIGHLIGHTS +42 ● Double digits parcel +2% revenue growth supported Parcel & logistics by strong performance Mail +50 2,755 2,797 across all customer Other1 +6% 91 239 (62
Slide 9: Mail, Parcel & Distribution: Volumes and Pricing
MAIL, PARCEL & DISTRIBUTION: VOLUMES AND PRICING PARCEL VOLUME GROWTH REMAINS STRONG; MAIL MIX & REPRICING OUTPACING VOLUME DECLINE € m unless otherwise stated PARCEL VOLUMES (M, PC) PARCEL AVERAGE TARIFF1 (€/PC) Q3 HIGHLIGHTS % delivered by 38% 40% 34% 39% ● Parcel volumes growth postal network (0.
Slide 10: Financial Services
FINANCIAL SERVICES STRONG REVENUE GROWTH DRIVEN BY NII AND POSITIVE COMMERCIAL TRENDS € m unless otherwise stated GROSS REVENUES ADJUSTED EBIT1 & NET PROFIT Q3 HIGHLIGHTS Active Portfolio Management Net interest income Postal Savings Transaction Banking2 Consumer Loans Adjusted EBIT1 ● NII growth co
Slide 11: Group Client Total Financial Assets
GROUP CLIENT TOTAL FINANCIAL ASSETS GROWING TFAs DRIVEN BY INVESTMENT PRODUCTS AND DEPOSITS € bn unless otherwise stated TFA EVOLUTION1 HIGHLIGHTS Postal Savings +4.8 +7.0 ● 3.9 bn positive net flows in 581 593 investment products with: Life Investments & 580 o.w. o.w. Pension 11 13 Mutual 17 Deposi
Slide 12: Insurance Services
INSURANCE SERVICES POSITIVE LIFE NET FLOWS AND GROWING PROTECTION GWP € m unless EXTERNAL REVENUES1 ADJUSTED EBIT2 & NET PROFIT otherwise stated Figures reported under IFRS17 Q3 HIGHLIGHTS ● Life Investments & Pension: +85 Life Investments & Pension Adjusted EBIT2 +9% i. positive net flows +84 suppo
Slide 13: Contractual Service Margin Evolution
CONTRACTUAL SERVICE MARGIN EVOLUTION €13.6BN CSM SUPPORTING SUSTAINABLE PROFITABILITY GOING FORWARD – GROWING SINCE JUNE 2024 € m unless otherwise stated, Up vs 13,477 as of EoP figures +922 H1-24, supported by 384 17 higher new 164.1 833 14,665 production 170.6 6.5 (312) 6.5 2.3 13,743 13,618 2.8 (
Slide 14: Solvency II
SOLVENCY II STRONG SII RATIO EMBEDDING 100% REMITTANCE RATIO - WELL ABOVE MANAGERIAL AMBITION % unless otherwise stated Q3 SOLVENCY II RATIO EVOLUTION1,2 Q3 HIGHLIGHTS ● Strong Solvency II ratio at 322 322% including the impact 297 7 (5) of foreseeable dividend 23 based on a 100% remittance 252 to t
Slide 15: Postepay Services
POSTEPAY SERVICES PAYMENTS AND ENERGY GROWTH DRIVE SOLID ADJUSTED EBIT GROWTH € m unless otherwise stated SEGMENT REVENUES1 ADJUSTED EBIT & NET PROFIT Q3 HIGHLIGHTS Adjusted EBIT ● Payments revenues growth Energy +109 +64 driven by double digit Net profit +10% +20% transaction value growth Payments
Slide 16: Human Capital – FTEs
HUMAN CAPITAL – FTEs CONTINUED WORKFORCE TRANSFORMATION AVERAGE WORKFORCE EVOLUTION (#, K) (1.0) 118.8 119.3 118.4 (6.2) 3.4 1.8 Sep-23 Dec-23 Turnover & Hirings Fixed term Sep-24 subsidised exits contracts Y/Y 9M-23 FY-23 9M-24 Value added/ +4.7% 80.7 81.4 84.5 FTEs (€ K) 1,2 HR costs/ +3.5% 44.5 4
Slide 17: Human Capital – HR Costs
HUMAN CAPITAL – HR COSTS HR COSTS EMBEDDING THE IMPACT OF SALARY INCREASE € m unless otherwise stated ORDINARY HR COSTS Ordinary HR costs / 42 41 revenues (%) +124 +3% 3,962 4,087 (10) 134 9M-23 ex. IFRS17 Δ FTEs Δ salary & 9M-24 ex. IFRS17 benefits, variable comp and other1 IFRS17 HR Costs 3,597 3,
Slide 18: Non-HR Costs
NON-HR COSTS INCREASE MAINLY DRIVEN BY VARIABLE COSTS AND INFLATION € m unless otherwise stated NON-HR COSTS1 Variable costs / variable 62 62 revenues (%)2 Fixed COGS / total 10 10 revenues (%) +211 +7% 3,221 13 3,010 (11) 120 89 683 COGS 670 D&A o.w. 58% variable o.w. 59% variable 2,538 2,341 9M-23
Slide 19: Closing Remarks
CLOSING REMARKS THE LARGEST ITALIAN PLATFORM COMPANY RECORD FIRST 9 MONTHS REVENUES AND PROFITABILITY CONFIRMING GROWTH TRAJECTORY OF ALL BUSINESS UNITS ● 9M-24 UNDERLYING1 REVENUES GROWTH OF 8% DRIVEN BY ALL BUSINESS UNITS ● COST DISCIPLINE MITIGATING INFLATION IMPACT – EVOLUTION REFLECTING HIGHER
Slide 20: Contents
CONTENTS Insurance EXECUTIVE SUMMARY Services Financial Services BUSINESS REVIEW Postepay Services APPENDIX Mail, Parcel & Distribution 20
Slide 21: Human Capital – HR Costs
HUMAN CAPITAL – HR COSTS HR COSTS EMBEDDING THE IMPACT OF THE NEWLY SIGNED LABOUR CONTRACT € m unless otherwise stated ORDINARY HR COSTS Ordinary HR costs / 42 39 revenues (%) +28 +2% 1,284 1,312 12 16 Q3-23 ex. IFRS17 Δ FTEs Δ salary & Q3-24 ex. IFRS17 benefits, variable comp and other1 IFRS17 HR C
Slide 22: Non-HR Costs
NON-HR COSTS INCREASE MAINLY RELATED TO BUSINESS DRIVEN VARIABLE COSTS AND INFLATION € m unless otherwise stated NON-HR COSTS1 Variable costs / variable 61 61 revenues (%)2 Fixed COGS / total 11 11 revenues (%) +79 +8% 1,083 19 1,003 (2) 32 30 235 COGS 216 D&A o.w. 59% variable 848 o.w. 58% variable
Slide 23: Strong Cash Generation, Ample Liquidity & Balanced Debt Profile
STRONG CASH GENERATION, AMPLE LIQUIDITY & BALANCED DEBT PROFILE GROUP FUNDS FROM OPERATIONS (9M-24 - € M) SIGNIFICANT LIQUIDITY RESOURCES (€ BN)1 2,240 6.5 (122) 82 685 1,595 3.4 3.1 Net D&A Δ Risk & Δ Other Funds from Group cash Undrawn Potential profit Charges Operations available credit lines liq
Slide 24: Mail, Parcel & Distribution Net Financial Position
MAIL, PARCEL & DISTRIBUTION NET FINANCIAL POSITION IMPROVING UNDERLYING CASH GENERATION € m unless otherwise stated NET FINANCIAL POSITION (+CASH – DEBT) +817 Underlying (ex. IFRS16) NFP evolution (564) 430 (345) 1,189 (1,381) (455) (1,339) (1,902) • +68 Net income MP&D • +450 D&A capex • -88 Change
Slide 25: Bancoposta Assets and Liabilities Structure
BANCOPOSTA ASSETS AND LIABILITIES STRUCTURE RESILIENT RETAIL DEPOSITS € bn unless otherwise stated AVERAGE DEPOSITS AVERAGE INVESTMENT PORTFOLIO HIGHLIGHTS Italian government ● Retail deposits resilient bonds & Other4 y/y, assets yield driven Retail + Postepay (5) Deposits @ MEF (5) by BTP and tax c
Slide 26: Unrealised Gains & Losses and Sensitivities
UNREALISED GAINS & LOSSES AND SENSITIVITIES IMPROVING NET UNREALISED LOSSES – NOT IMPACTING BANCO POSTA CAPITAL POSITION € m unless otherwise stated UNREALISED NET GAINS AND LOSSES PORTFOLIO SENSITIVITIES BTP swap Spread Fair Value (66) (1,597) (544) (808) 156 +1 bp Reserve1 BTP swap Spread 66 -1 bp
Slide 27: Postal Savings
POSTAL SAVINGS NET OUTFLOWS FROM POSTAL SAVINGS IMPROVING € m unless otherwise stated AVERAGE POSTAL SAVINGS1 POSTAL SAVINGS NET FLOWS (1,716) Postal savings 313,301 312,247 311,585 Var 9M-24 books vs FY-23 Postal Bonds 222,149 221,231 218,252 (1%) (772) 91,153 91,016 93,334 +3% (1,394) (1,387) Q3-2
Slide 28: Asset Management
ASSET MANAGEMENT AUM GROWTH SUPPORTED BY STRONG NET INFLOWS € m unless otherwise stated AVERAGE ASSETS UNDER MANAGEMENT1 AUM1 EVOLUTION - EOP Balanced & Flexible +6,553 Bond & Cash +26% Equity Unit linked & +6,980 28,191 multiclass Class III +33% 1,432 31,680 5,121 21,211 21,881 13,617 25,127 11,078
Slide 29: Asset Management Net Inflows
ASSET MANAGEMENT NET INFLOWS STRONG NET INFLOWS DRIVEN BY MULTICLASS PRODUCTS AND MUTUAL FUNDS € m unless otherwise stated TOTAL NET FLOWS Q3-24 MULTICLASS CLASS1 III & UNIT LINKED 2,833 Gross Inflows 1,722 765 Outflows 242 Net Flows 1,480 MUTUAL FUNDS 2,068 Gross Inflows 1,111 Outflows 523 Net Flow
Slide 30: Bancoposta: Solid and Efficient Capital Position
BANCOPOSTA: SOLID AND EFFICIENT CAPITAL POSITION AN ASSET GATHERER WITH A CAPITAL LIGHT BALANCE SHEET LEVERAGE RATIO (%) TOTAL CAPITAL RATIO (%) CET1 CET1 ratio AT1 AT1 ratio 3.2 3.2 3.3 24.2 24.3 22.1 3.5 0.5 3.6 0.5 0.4 3.2 2.8 2.8 20.7 20.8 2.8 18.9 Sep-23 Dec-23 Sep-24 Sep-23 Dec-23 Sep-24 BALAN
Slide 31: Insurance Services: Solvency II Evolution
INSURANCE SERVICES SOLVENCY II EVOLUTION Q4 – 23 Q1 – 24 Q2 – 24 Q3 – 24 18 7 322 307 313 (3) (13) (2) 8 297 37 252 18 Sep-23 Δ Own Δ SCR Dec-23 Δ Own Δ SCR Mar-24 Δ Own Δ SCR Jun-24 Δ Own Δ SCR Sep-24 funds funds funds funds SWAP (BP) 339 249 259 284 235 BTP-SWAP SPREAD (BP) 139 121 109 124 111 V.A
Slide 32: Solvency II Ratio Sensitivities
SOLVENCY II RATIO SENSITIVITIES WELL ABOVE RISK TOLERANCE AND MANAGERIAL AMBITION UNDER SIMULATED SCENARIOS % unless otherwise stated Q3 HIGHLIGHTS ● Solvency II ratio sensitivity to Impact on BTP-Swap spread (+100bp): SII ratio at Sep-24 322 SII ratio ● (129) p.p. as of Dec-20 ● (98) p.p. as of Dec
Slide 33: Solvency II Own Funds Tiering and Capital Requirements
INSURANCE SERVICES SOLVENCY II OWN FUNDS TIERING AND SOLVENCY CAPITAL REQUIREMENTS € m unless otherwise stated SOLVENCY II CAPITAL AND SOLVENCY II CAPITAL REQUIREMENT BREAKDOWN 14,702 2,020 Tier 2 Tier 1 + RT 1 (1,542) 5,225 640 4,572 12,683 4,466 (1,292) 1,687 614 Market Counterparty Underw. Divers
Slide 34: Insurance Services GWP
INSURANCE SERVICES GWP SOLID COMMERCIAL ACTIVITY – STRONG GROWTH ACROSS LI&P AND PROTECTION € m unless otherwise stated LIFE INVESTMENTS & PENSION PROTECTION TOTAL Segregated funds Life Investments products (class I-V, Health & Property1 & Pension +724 Pension) Protection1 +18% 4,790 +697 Credit pro
Slide 35: Insurance Services Technical Provisions
INSURANCE SERVICES TECHNICAL PROVISIONS GROWTH DRIVEN BY PERFORMANCE AND POSITIVE NET FLOWS IN A CHALLENGING ENVIRONMENT € bn unless otherwise stated TOTAL INSURANCE TECHNICAL PROVISIONS1 LI&P TECHNICAL PROVISIONS EVOLUTION1 Protection +4.7 Segregated fund +3% +3.2 & Pension (LI&P) +2% Life Investme
Slide 36: Insurance Services LI&P Net Inflows
INSURANCE SERVICES LI&P NET INFLOWS INFLOWS IN MULTICLASS & UNIT LINKED PRODUCTS COMPENSATING SEGREGATED FUNDS OUTFLOWS € m unless otherwise stated TOTAL NET FLOWS Q3-24 4,565 MULTICLASS & UNIT LINKED1 Gross written premiums 2,463 Outflows 573 Net Flows 1,890 4,100 SEGREGATED FUNDS PRODUCTS (CLASS I
Slide 37: Insurance Services: Stable and Diversified Investment Portfolio
INSURANCE SERVICES STABLE AND DIVERSIFIED INVESTMENT PORTFOLIO INVESTMENT PORTFOLIO BREAKDOWN1 BOND PORTFOLIO BREAKDOWN BY COUPON TYPE Fixed Floating • HY: 4% Total investment • EM: 4% Inflation linked portfolio • Equity: 1% (€ bn) • Private Debt: 8% 148.8 147.6 150.4 1% • RE: 2% • Infrastructure: 1
Slide 38: Reclassifications
RECLASSIFICATIONS ADJUSTED EBIT AND UNDERLYING GROWTH € m unless otherwise stated Q3-24 9M-24 FINANCIAL INSURANCE CONSOLIDATED FINANCIAL INSURANCE CONSOLIDATED SERVICES SERVICES ACCOUNTS SERVICES SERVICES ACCOUNTS EBIT Reported 222 330 770 630 1,028 2,221 Systemic charges related to insurance guaran
Slide 39: Reclassifications: Energy Business Net Revenues
RECLASSIFICATIONS ENERGY BUSINESS NET REVENUES € m unless otherwise stated Q3-23 Q3-24 9M-23 9M-24 CONSOLIDATED CONSOLIDATED CONSOLIDATED CONSOLIDATED POSTEPAY SERVICES POSTEPAY SERVICES PAYMENTS & MOBILE PAYMENTS & MOBILE ACCOUNTS ACCOUNTS ACCOUNTS ACCOUNTS External revenue - reported 405 2,827 470
Slide 40: Postepay Services Key Metrics
POSTEPAY SERVICES KEY METRICS STEADY INCREASE ACROSS KEY METRICS € m unless otherwise stated CARD STOCK1 (#) TOTAL CARD TRANSACTIONS (#)2 +0.5 +69 +2% +10% 29.7 29.6 30.2 771 Postepay cards 702 718 Debit cards 7.5 7.5 7.4 22.2 22.1 22.7 Sep-23 Dec-23 Sep-24 Q3-23 Q4-23 Q3-24 Postepay Of which Evolut
Slide 41: Poste Italiane Digital Footprint
POSTE ITALIANE DIGITAL FOOTPRINT KEY METRICS CONSTANTLY IMPROVING APP USERS STICKINESS1 (%) DAILY DIGITAL INTERACTIONS2 (# M) +0pp +1.3 +1% +14% 24.1 24.2 24.4 9.1 10.1 8.8 Q3-23 FY-23 Q3-24 Sep-23 FY-23 Sep-24 DAILY DIGITAL TRANSACTIONS & SALES3 (# M) SPID - DIGITAL IDENTITIES ISSUED (# M) +0.3 +1.
Slide 42: Postepay Payments Transaction Value
POSTEPAY PAYMENTS TRANSACTION VALUE STEADY INCREASE IN E-COMMERCE TRANSACTIONS POSTEPAY ISSUING TRANSACTION VALUE (BASE 100)1 +11% excluding government welfare cards o.w. e-commerce 288 282 269 267 +7% 260 257 +22% 248 CAGR 241 237 225 220 205 201 185 190 167 169 159 138 135 141 123 128 116 108 113
Slide 43: Intersegment Costs as of Q3-24
INTERSEGMENT COSTS AS OF Q3-24 INTERSEGMENT DYNAMICS KEY DRIVERS MAIN INDICATIVE MAIN € m unless otherwise stated RATIONALE REMUNERATION SCHEME Q3-23 Q3-24 • Postepay Services remunerates: a) Mail, Parcel and Distribution for providing IT, delivery volume, promoting and a) Number of payment transact
Slide 44: Poste Italiane's Sustainability Path
POSTE ITALIANE’S SUSTAINABILITY PATH STRONG PRESENCE IN KEY INDICES CONFIRMING THE SUCCESS OF OUR ESG STRATEGY RATINGS AND INDICES MEMBERSHIPS • Sustainability Yearbook 2024 (85/100) World and Europe indices • • Anima per Il Sociale • ‘Top 1%’ S&P Global ESG Score 2023 • Climate action 100+ • ‘Advan
Slide 45: Consolidated Accounts: Profit & Loss
CONSOLIDATED ACCOUNTS PROFIT & LOSS €m Q3-23 Q3-24 Var. Var. % 9M-23 9M-24 Var. Var. % Total revenues1 2,795 3,062 +267 +10% 8,803 9,226 +423 +5% of which: Mail, Parcel and Distribution 860 909 +50 +6% 2,755 2,797 +42 +2% Financial Services 1,192 1,358 +166 +14% 3,858 4,047 +189 +5% Insurance Servic
Slide 46: Consolidated Accounts – Segment View
CONSOLIDATED ACCOUNTS – SEGMENT VIEW 9M-24 PROFIT & LOSS Mail, Parcels & Financial Insurance Postepay Adjustments & €m Total Distribution Services Services Services eliminations1 External Revenues 2,797 4,047 1,226 1,156 9,226 Intersegment Revenues 4,120 672 (117) 205 (4,880) TOTAL REVENUES2 6,917 4
Slide 47: Mail, Parcel & Distribution Profit & Loss
MAIL, PARCEL & DISTRIBUTION PROFIT & LOSS €m Q3-23 Q3-24 Var. Var. % 9M-23 9M-24 Var. Var. % Segment revenue 860 909 +50 +6% 2,755 2,797 +42 +2% Intersegment revenue 1,215 1,377 +161 +13% 3,870 4,120 +250 +6% Total revenues 2,075 2,286 +211 +10% 6,625 6,917 +292 +4% Personnel expenses 1,340 1,279 (6
Slide 48: Financial Services Profit & Loss
FINANCIAL SERVICES PROFIT & LOSS €m Q3-23 Q3-24 Var. Var. % 9M-23 9M-24 Var. Var. % Segment revenue 1,192 1,358 +166 +14% 3,858 4,047 +189 +5% Intersegment revenue 208 231 +23 +11% 661 672 +11 +2% Total revenues 1,400 1,589 +189 +13% 4,519 4,718 +200 +4% Personnel expenses 11 12 +0 +4% 36 38 +2 +6%
Slide 49: Insurance Services Profit & Loss
INSURANCE SERVICES PROFIT & LOSS €m Q3-23 Q3-24 Var. Var. % 9M-23 9M-24 Var. Var. % Segment revenue 371 399 +29 +8% 1,142 1,226 +84 +7% Intersegment revenue (34) (42) (8) (22%) (116) (117) (1) (1%) Total revenues 336 358 +21 +6% 1,026 1,109 +83 +8% Personnel expenses 3 3 (1) (23%) 8 8 +0 +6% of whic
Slide 50: Postepay Services Profit & Loss
POSTEPAY SERVICES PROFIT & LOSS €m Q3-23 Q3-24 Var. Var. % 9M-23 9M-24 Var. Var. % Segment revenue 373 396 23 6% 1,048 1,156 109 10% Intersegment revenue 64 68 3 5% 196 205 9 5% Total revenues1 437 463 26 6% 1,244 1,362 118 9% Personnel expenses 12 13 1 6% 38 42 3 9% of which personnel expenses 12 1
Slide 51: Disclaimer
DISCLAIMER This document contains certain forward-looking statements that reflect Poste Italiane’s management’s current views with respect to future events and financial and operational performance of the Company and of the Company’s Group. These forward-looking statements are made as of the date of