Poste Italiane Spa · MIL:PST
Poste Italiane Spa — Q2 2024 Earnings Presentation
52 slides from Poste Italiane Spa's earnings presentation, Jul 30, 2024
Slide 1: Poste Italiane Q2 & H1-24 Financial Results
POSTE ITALIANE Q2 & H1-24 FINANCIAL RESULTS 30 JULY 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 NEW LABOUR UNION AGREEMENT SIGNED ENABLING LOGISTICS TRANSFORMATION, CONSISTENT WITH BUSINESS PLAN STRONG H1-24 RESULTS – POSITIVE TRENDS ACROSS BUSINESS UNITS ACCELERATING IN Q2-24 ● H1-24 UNDERLYING1 REVENUES GROWTH OF 7% DRIVEN BY STRONG PERFORMANCE IN MAIL & PARCEL, NII AND PAY
Slide 4: New Labour Union Agreement Signed
NEW LABOUR UNION AGREEMENT SIGNED UNIQUE LOGISTIC MODEL – OPERATING AND FINANCIAL IMPACT CONSISTENT WITH BUSINESS PLAN MUTUALLY BENEFICIAL AGREEMENT SIGNED IN RECORD TIME BUILDING FUTURE-PROOF NETWORKS 2024-27 AGREEMENT ON COMPENSATION ● A directly managed parcel dedicated network with ● €230 overal
Slide 5: Q2 & H1-24 Results Overview
Q2 & H1-24 RESULTS OVERVIEW HEALTHY REVENUES PROGRESSION AND COST DISCIPLINE DRIVE CONTINUED PROFITABILITY GROWTH € m unless otherwise stated Underlying Δ%1 Underlying Δ%1 excl sennder CG, APM excl sennder CG, APM Q2-23 Q2-24 Δ% and systemic charges H1-23 H1-24 Δ% and systemic charges REVENUES 2,985
Slide 6: External Revenues
EXTERNAL REVENUES POSITIVE TRENDS ACROSS BUSINESS UNITS ACCELERATING IN Q2-24 € m unless MAIL, PARCEL & DISTRIBUTION FINANCIAL SERVICES otherwise stated +6% +9% Underlying1 Underlying1 +23 +7% (8) +102 +1% +7% Underlying1 (0%) +8% 2,666 2,689 Underlying1 (49) 1,895 1,888 (5%) 1,252 1,354 1,002 954 Q
Slide 7: Adjusted EBIT by Segment
ADJUSTED EBIT1 BY SEGMENT PROFITABILITY BENEFITTING FROM A DIVERSIFIED BUSINESS MODEL AND EFFECTIVE COST DISCIPLINE € m unless otherwise stated MAIL, PARCEL & DISTRIBUTION FINANCIAL SERVICES +20% +80m +9% (151) Underlying2 Underlying2 Underlying2 (40) (2%) (61%) 247 +18 (9%) Underlying2 (104) +9% 45
Slide 8: Contents
CONTENTS Insurance EXECUTIVE SUMMARY Services Financial Services BUSINESS REVIEW Postepay Services APPENDIX Mail, Parcel & Distribution 8
Slide 9: Mail, Parcel & Distribution
MAIL, PARCEL & DISTRIBUTION MAIL AND PARCEL REVENUES MATERIALLY AHEAD OF PLAN € m unless otherwise stated EXTERNAL REVENUES ADJUSTED EBIT Q2 HIGHLIGHTS +7% (8) +6% +80m ● Double digits parcel Underlying2 (0%) Underlying2 Underlying2 revenue growth driven by Parcel & logistics +20% (151) (49) (61%) a
Slide 10: Mail, Parcel & Distribution: Volumes and Pricing
MAIL, PARCEL & DISTRIBUTION: VOLUMES AND PRICING PARCEL VOLUME GROWTH ACCELERATING FURTHER; MAIL MIX & REPRICING OUTPACING VOLUME DECLINE € m unless otherwise stated PARCEL VOLUMES (M, PC) AVERAGE PARCEL TARIFFS1 (€/PC) Q2 HIGHLIGHTS % delivered by 35% 39% 32% 38% ● Strong parcel volumes postal netw
Slide 11: Financial Services
FINANCIAL SERVICES REVENUES GROWTH SUPPORTED BY NII AND POSITIVE COMMERCIAL TRENDS € m unless otherwise stated GROSS REVENUES ADJUSTED EBIT1 & NET PROFIT Q2 HIGHLIGHTS Active Portfolio Management Net interest income Postal Savings Transaction Banking2 Consumer Loans Adjusted EBIT1 ● Strong NII growt
Slide 12: Group Client Total Financial Assets
GROUP CLIENT TOTAL FINANCIAL ASSETS GROWING TFAs DRIVEN BY OUR DIVERSIFIED INVESTMENT PLATFORM ATTRACTING NET INFLOWS € bn unless otherwise stated TFA EVOLUTION1 HIGHLIGHTS Postal Savings +4.0 +4.3 ● 2.8 bn positive net flows in Life Investments & 580 581 o.w. o.w. 589 investment products with: Pens
Slide 13: Insurance Services
INSURANCE SERVICES STRONG PROFITABILITY IMPROVEMENT SUPPORTED BY RESILIENT LIFE AND FAST-GROWING PROTECTION € m unless EXTERNAL REVENUES1 ADJUSTED EBIT2 & NET PROFIT otherwise stated Figures reported under IFRS17 Q2 HIGHLIGHTS ● Life Investments & Pension Life Investments & +55 +63 net flows impacte
Slide 14: Contractual Service Margin Evolution
CONTRACTUAL SERVICE MARGIN EVOLUTION €13.5BN CSM SUPPORTING SUSTAINABLE PROFITABILITY GOING FORWARD € m unless otherwise stated, EoP figures +427 256 164.1 525 164.0 (71) 14,170 6.5 (284) 6.1 13,743 2.3 13,477 2.8 (693) 139.0 Liabilities related to insurance contracts Liabilities related to insuranc
Slide 15: Solvency II
SOLVENCY II STRONG SII RATIO EMBEDDING 100% REMITTANCE RATIO - WELL ABOVE MANAGERIAL AMBITION % unless otherwise stated Q2 SOLVENCY II RATIO EVOLUTION1,2 Q2 HIGHLIGHTS ● Strong Solvency II ratio at 313 297% including the impact (20) 297 275 9 (5) of foreseeable dividend based on a 100% remittance to
Slide 16: Postepay Services
POSTEPAY SERVICES SUSTAINED REVENUES AND ADJUSTED EBIT GROWTH € m unless otherwise stated SEGMENT REVENUES1 ADJUSTED EBIT & NET PROFIT Q2 HIGHLIGHTS Adjusted EBIT ● Sustained growth of Energy +86 +50 Payments revenues Net profit +13% +25% driven by: Payments Telco 761 +21 +47 i. double digit2 transa
Slide 17: Human Capital – FTEs
HUMAN CAPITAL – FTEs CONTINUED WORKFORCE TRANSFORMATION AVERAGE WORKFORCE EVOLUTION (#, K) (1.3) 119.2 119.3 118.0 (5.7) 2.8 1.6 Jun-23 Dec-23 Turnover & Hirings Fixed term Jun-24 subsidised exits contracts Y/Y H1-23 FY-23 H1-24 Value added/ +3.2% 82.4 81.4 85.1 FTEs (€ K) 1,2 HR costs/ +4.7% 44.9 4
Slide 18: Human Capital – HR Costs
HUMAN CAPITAL – HR COSTS HR COSTS FULLY REFLECTING THE NEWLY SIGNED LABOUR CONTRACT € m unless otherwise stated ORDINARY HR COSTS Ordinary HR costs / 41 41 revenues (%) +96 2,775 +4% 2,678 122 (26) H1-23 ex. IFRS17 Lower Δ salary & H1-24 ex. IFRS17 FTEs benefits, variable comp and other1 IFRS17 HR C
Slide 19: Non-HR Costs
NON-HR COSTS INCREASE MAINLY DRIVEN BY VARIABLE COSTS AS A RESULT OF HIGHER BUSINESS VOLUMES € m unless otherwise stated NON-HR COSTS1 Variable costs / variable 62 63 revenues (%)2 Fixed COGS / total 10 10 revenues (%) +132 +7% 2,138 87 (6) 2,007 60 (10) 448 COGS 454 D&A o.w. 58% variable o.w. 59% v
Slide 20: Closing Remarks
CLOSING REMARKS NEW LABOUR UNION AGREEMENT SIGNED ENABLING LOGISTICS TRANSFORMATION, CONSISTENT WITH BUSINESS PLAN STRONG H1-24 RESULTS – POSITIVE TRENDS ACROSS BUSINESS UNITS ACCELERATING IN Q2-24 ● H1-24 UNDERLYING1 REVENUES GROWTH OF 7% DRIVEN BY STRONG PERFORMANCE IN MAIL & PARCEL, NII AND PAYME
Slide 21: Contents
CONTENTS Insurance EXECUTIVE SUMMARY Services Financial Services BUSINESS REVIEW Postepay Services APPENDIX Mail, Parcel & Distribution 21
Slide 22: Human Capital – HR Costs
HUMAN CAPITAL – HR COSTS FULLY REFLECTING THE NEWLY SIGNED LABOUR CONTRACT € m unless otherwise stated ORDINARY HR COSTS Ordinary HR costs / 41 41 revenues (%) +56 1,377 +4% 1,321 66 (11) Q2-23 ex. IFRS17 Lower Δ salary & Q2-24 ex. IFRS17 FTEs benefits, variable comp and other1 IFRS17 HR Costs 1,196
Slide 23: Non-HR Costs
NON-HR COSTS INCREASE MAINLY DRIVEN BY HIGHER BUSINESS VOLUMES € m unless otherwise stated NON-HR COSTS1 Variable costs / variable 61 63 revenues (%)2 Fixed COGS / total 10 10 revenues (%) +69 +7% 1,068 36 2 998 29 2 229 COGS 227 D&A o.w. 58% variable 839 o.w. 58% variable 771 Q2-23 ex. Δ inflation
Slide 24: Strong Cash Generation, Ample Liquidity & Balanced Debt Profile
STRONG CASH GENERATION, AMPLE LIQUIDITY & BALANCED DEBT PROFILE GROUP FUNDS FROM OPERATIONS (H1-24 - € M) SIGNIFICANT LIQUIDITY RESOURCES (€ BN) 1,546 5.4 22 48 449 1,026 3.4 2.0 Net D&A Δ Risk & Δ Other Funds from Group cash Undrawn Potential profit Charges Operations available credit lines liquidi
Slide 25: 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) +956 Underlying (ex. IFRS16) NFP evolution (425) 1,169 345 (295) (1,381) (263) (1,384) (1,809) • +16 Net income MP&D • +291 D&A capex • +38 Change
Slide 26: Net Interest Income Evolution
NET INTEREST INCOME EVOLUTION POSITIVE IMPACT FROM RISING INTEREST RATES € m unless otherwise stated Y/Y EVOLUTION Fair value changes & Other 653 564 (9) 8 (1) Treasury 92 Public Administration Retail & Corporate 523 615 50 41 1 (3) 0 (10) Q2-23 Retail & Corporate Public Administration Treasury Fair
Slide 27: Bancoposta Assets and Liabilities Structure
BANCOPOSTA ASSETS AND LIABILITIES STRUCTURE STABLE RETAIL DEPOSITS € bn unless otherwise stated AVERAGE DEPOSITS AVERAGE INVESTMENT PORTFOLIO HIGHLIGHTS Italian government ● Retail deposits stable bonds & Other4 y/y, assets yield driven Retail + Postepay (5) Deposits @ MEF (5) by BTP and tax credit
Slide 28: Unrealised Gains & Losses and Sensitivities
UNREALISED GAINS & LOSSES AND SENSITIVITIES NET UNREALISED LOSSES NOT IMPACTING CAPITAL POSITION € m unless otherwise stated UNREALISED NET GAINS AND LOSSES PORTFOLIO SENSITIVITIES BTP swap Spread Fair Value (60) (859) (544) (362) (808) +1 bp Reserve1 BTP swap Spread 60 -1 bp Swap Rate (20) +1 bp Sw
Slide 29: Postal Savings
POSTAL SAVINGS NET OUTFLOWS FROM POSTAL SAVINGS IMPROVING – IN LINE WITH EXPECTATIONS € m unless otherwise stated AVERAGE POSTAL SAVINGS1 POSTAL SAVINGS NET FLOWS (2,433) Postal savings 314,569 315,537 312,136 Var H1-24 books vs FY-23 Postal Bonds 223,252 221,592 218,619 (1%) (1,387) (2,691) 91,317
Slide 30: Asset Management
ASSET MANAGEMENT AUM GROWTH SUPPORTED BY STRONG NET INFLOWS € m unless otherwise stated AVERAGE ASSETS UNDER MANAGEMENT AUM EVOLUTION - EOP Balanced & Flexible +3,863 Bond & Cash +15% Equity Unit linked & +6,554 27,105 multiclass Class III +32% 810 28,990 3,052 21,881 20,552 13,193 25,127 11,354 10,
Slide 31: Asset Management Net Inflows
ASSET MANAGEMENT NET INFLOWS STRONG NET INFLOWS MAINLY DRIVEN BY MUTUAL FUNDS € m unless otherwise stated TOTAL NET FLOWS Q2-24 MULTICLASS CLASS1 III & UNIT LINKED 2,447 Gross Inflows 629 915 Outflows 298 Net Flows 331 MUTUAL FUNDS Gross Inflows 1,818 1,532 Outflows 617 Net Flows 1,201 Gross Inflows
Slide 32: 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 3.3 23.5 23.8 3.2 22.1 0.5 3.5 3.5 0.5 0.4 3.2 2.8 2.8 20.0 20.3 2.7 18.9 Jun-23 Dec-23 Jun-24 Jun-23 Dec-23 Jun-24 BALAN
Slide 33: Insurance Services: Solvency II Evolution
INSURANCE SERVICES SOLVENCY II EVOLUTION Q3 – 23 Q4 – 23 Q1 – 24 Q2 – 24 307 313 (3) (2) 8 (13) 297 274 37 (2) (20) 252 18 Jun-23 Δ Own Δ SCR Sep-23 Δ Own Δ SCR Dec-23 Δ Own Δ SCR Mar-24 Δ Own Δ SCR Jun-24 funds funds funds funds SWAP (BP) 302 339 249 259 284 BTP-SWAP SPREAD (BP) 106 139 121 109 124
Slide 34: Solvency II Ratio Sensitivities
SOLVENCY II RATIO SENSITIVITIES WELL ABOVE RISK TOLERANCE AND MANAGERIAL AMBITION UNDER SIMULATED SCENARIOS % unless otherwise stated Q2 HIGHLIGHTS ● Solvency II ratio sensitivity to BTP-Swap spread (+100bp): Impact on ● (129) p.p. as of Dec-20 SII ratio at Jun-24 297 SII ratio ● (98) p.p. as of Dec
Slide 35: 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 13,901 2,018 Tier 2 Tier 1 + RT 1 (1,550) 5,331 664 4,674 11,883 4,539 (1,322) 1,771 570 Market Counterparty Underw. Divers
Slide 36: Insurance Services GWP
INSURANCE SERVICES GWP SOLID COMMERCIAL ACTIVITY – STRONG GROWTH OF PROTECTION € m unless otherwise stated LIFE INVESTMENTS & PENSION PROTECTION TOTAL Segregated funds Life Investments (208) products (class I-V, Health & Property1 & Pension (5%) Pension) (249) Protection1 4,604 (6%) Credit protectio
Slide 37: Insurance Services Technical Provisions
INSURANCE SERVICES TECHNICAL PROVISIONS POSITIVE NET INFLOWS IN A CHALLENGING ENVIRONMENT € bn unless otherwise stated TOTAL INSURANCE TECHNICAL PROVISIONS1 LI&P TECHNICAL PROVISIONS EVOLUTION1 +3.9 Protection Segregated fund +2% +1.9 & Pension (LI&P) +1% Life Investments products (class I-V, Pensio
Slide 38: Insurance Services LI&P Net Inflows
INSURANCE SERVICES LI&P NET INFLOWS NET INFLOWS IN MULTICLASS & UNIT LINKED PRODUCTS MITIGATING SEGREGATED FUNDS OUTFLOWS € m unless otherwise stated TOTAL NET FLOWS Q2-24 4,161 MULTICLASS & UNIT LINKED1 Gross written premiums 1,473 Outflows 703 Net Flows 770 4,364 SEGREGATED FUNDS PRODUCTS (CLASS I
Slide 39: Insurance Services: Investment Portfolio
INSURANCE SERVICES STABLE AND DIVERSIFIED INVESTMENT PORTFOLIO INVESTMENT PORTFOLIO BREAKDOWN1 BOND PORTFOLIO BREAKDOWN BY COUPON TYPE • HY: 4% Fixed • EM: 4% • Equity: 1% Floating • Private Debt: Total investment 1% Inflation linked portfolio (€ bn) • RE: 1% • Infrastructure: 8% 149.5 147.6 151.0 1
Slide 40: Reclassifications
RECLASSIFICATIONS INSURANCE GUARANTEE FUND AND ENERGY € m unless otherwise stated Q2-24 H1-24 FINANCIAL INSURANCE CONSOLIDATED FINANCIAL INSURANCE CONSOLIDATED SERVICES SERVICES ACCOUNTS SERVICES SERVICES ACCOUNTS EBIT Reported 210 349 745 408 698 1,451 Systemic charges estimate related to insurance
Slide 41: Postepay Services Key Metrics
POSTEPAY SERVICES KEY METRICS STEADY INCREASE ACROSS KEY METRICS € m unless otherwise stated CARD STOCK1 (#) TOTAL CARD TRANSACTIONS (#)2 +1 +68 +3% +11% 28.7 29.6 29.6 718 714 Postepay cards 7.5 7.5 645 Debit cards 7.5 21.2 22.1 22.1 Jun-23 Dec-23 Jun-24 Q2-23 Q4-23 Q2-24 Postepay Of which Evolutio
Slide 42: Poste Italiane Digital Footprint
POSTE ITALIANE DIGITAL FOOTPRINT KEY METRICS CONSTANTLY IMPROVING APP USERS STICKINESS1 (%) DAILY DIGITAL INTERACTIONS2 (# M) +1pp +1.3 +2% +15% 23.8 24.2 24.3 9.1 10.1 8.8 Q2-23 FY-23 Q2-24 Jun-23 FY-23 Jun-24 DAILY DIGITAL TRANSACTIONS & SALES3 (# M) SPID - DIGITAL IDENTITIES ISSUED (# M) +0.3 +1.
Slide 43: Postepay Payments Transaction Value
POSTEPAY PAYMENTS TRANSACTION VALUE STEADY INCREASE IN E-COMMERCE TRANSACTIONS POSTEPAY TRANSACTION VALUE (BASE 100)1 o.w. e-commerce 282 269 267 260 257 +21% 248 +7% 241 237 CAGR 225 220 205 201 185 190 167 169 159 138 135 141 123 128 116 108 113 100 +16% 76 74 79 87 84 87 62 59 62 67 72 44 57 51 5
Slide 44: Intersegment Costs as of Q2-24
INTERSEGMENT COSTS AS OF Q2-24 INTERSEGMENT DYNAMICS’ KEY DRIVERS MAIN INDICATIVE MAIN € m unless otherwise stated RATIONALE REMUNERATION SCHEME Q2-23 Q2-24 • Postepay Services remunerates: a) Mail, Parcel and Distribution for providing IT, delivery volume, promoting and a) Number of payment transac
Slide 45: Poste Italiane's Sustainability Path
POSTE ITALIANE’S SUSTAINABILITY PATH STRONG PRESENCE IN KEY INDICES CONFIRMING THE SUCCESS OF OUR ESG STRATEGY INDICES AND RATINGS MEMBERSHIPS • ‘Leadership‘ (A- rating) • Europe and Developed indices • UN Global Compact • Climate action 100+ • Highest score 1 – Environment, Social and Governance •
Slide 46: Consolidated Accounts
CONSOLIDATED ACCOUNTS PROFIT & LOSS €m Q2-23 Q2-24 Var. Var. % H1-23 H1-24 Var. Var. % Total revenues 2,985 3,119 +134 +4% 6,008 6,164 +156 +3% of which: Mail, Parcel and Distribution 1,002 954 (49) (5%) 1,895 1,888 (8) (0%) Financial Services 1,252 1,354 +102 +8% 2,666 2,689 +23 +1% Insurance Servi
Slide 47: Consolidated Accounts – Segment View
CONSOLIDATED ACCOUNTS – SEGMENT VIEW H1-24 PROFIT & LOSS Mail, Parcels & Financial Insurance Postepay Adjustments & €m Total Distribution Services Services Services eliminations1 External Revenues 1,888 2,689 827 761 6,164 Intersegment Revenues 2,743 441 (75) 138 (3,246) TOTAL REVENUES 4,631 3,130 7
Slide 48: Mail, Parcel & Distribution P&L
MAIL, PARCEL & DISTRIBUTION PROFIT & LOSS €m Q2-23 Q2-24 Var. Var. % H1-23 H1-24 Var. Var. % Segment revenue 1,002 954 (49) (5%) 1,895 1,888 (8) (0%) Intersegment revenue 1,273 1,372 +99 +8% 2,655 2,743 +88 +3% Total revenues 2,275 2,325 +50 +2% 4,550 4,631 +81 +2% Personnel expenses 1,283 1,340 +57
Slide 49: Financial Services P&L
FINANCIAL SERVICES PROFIT & LOSS €m Q2-23 Q2-24 Var. Var. % H1-23 H1-24 Var. Var. % Segment revenue 1,252 1,354 +102 +8% 2,666 2,689 +23 +1% Intersegment revenue 219 217 (2) (1%) 453 441 (12) (3%) Total revenues 1,471 1,571 +100 +7% 3,119 3,130 +11 +0% Personnel expenses 12 13 +1 +11% 24 26 +2 +7% o
Slide 50: Insurance Services P&L
INSURANCE SERVICES PROFIT & LOSS €m Q2-23 Q2-24 Var. Var. % H1-23 H1-24 Var. Var. % Segment revenue 379 430 +51 +13% 772 827 +55 +7% Intersegment revenue (33) (37) (3) (10%) (82) (75) +7 +8% Total revenues 345 393 +47 +14% 690 751 +61 +9% Personnel expenses 2 3 +1 +34% 4 6 +1 +30% of which personnel
Slide 51: Postepay Services P&L
POSTEPAY SERVICES PROFIT & LOSS Q2-23 Q2-24 Var. Var. % H1-23 H1-24 Var. Var. % Segment revenue 352 382 30 9% 675 761 86 13% Intersegment revenue 65 68 3 4% 132 138 6 5% Total revenues 417 450 33 8% 806 899 92 11% Personnel expenses 13 15 1 10% 27 29 3 10% of which personnel expenses 13 15 1 10% 27
Slide 52: 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