1Q19 Group Financial Highlights

1. Revenues at €2,842m (-1.5% y/y); adjusted revenues1 at €2,569m (+3.5% y/y) with improving revenue quality and reduced reliance on capital gains
2. Total Operating Costs at €2,225m (+2% y/y) in line with expectations; HR cost increase mitigated by lower FTEs; higher variable costs supporting revenue growth; value added per capita increased
3. EBIT at €617m (-12.2% y/y); adjusted EBIT2 increased by €20m to €351m (+6% y/y) with strong progression of underlying operating profitability on track with 2019 targets
4. Total Financial Assets (TFA) of €525bn (+€11bn from December 18) driven by positive market performance and improving inflows from all products: deposits  +€6.6bn, with a seasonal effect from Public Administration accounts; insurance +€1.5bn thanks to multiclass offering; mutual funds +€0.2bn
5. PosteVita Group Solvency II Ratio at 214% as of March 2019; ongoing managerial actions to protect against market volatility; Ancillary own Funds approved by the Regulator in 1Q19
6. Group Capex at €65m (+.7% y/y) well on track with 2019 guidance

1Q19 Segment Financial Highlights

1. Mail, Parcel & Distribution: Revenues at €880m (-2.1% y/y); Parcel revenues up 15% with B2C up 35% y/y to €86m; Mail Revenues down vs strong 1Q18 featuring positive one-off items; volumes for higher value mail items (e.g. corporate clients) in line with expectations, confirming visibility on future trend; adjusted operating profit down to -€53m, in line with expectations and on track with our 2019 target
2. Payments, Mobile & Digital: Revenues at €140m (+7.3% y/y); thanks to Card Payments and strong progression of transaction volumes; Telecom revenues resilient in a competitive market; Operating profit in line with last year and up 11% excluding VAT provision for €6m
3. Financial Services: Revenues at €1,485m (-3.1% y/y); all distribution related revenues contributed positively: higher fees from postal savings placement, increasing third party loan and mortgage as well as asset management revenues; operating profit up 9.3% actively substituting capital gains down 31%. EBIT up €28m on an adjusted basis
4. Insurance Services: Revenues at €337m (+4.3% y/y) supported by Life and P&C growth; Life revenues up 2% supported by higher volumes thanks to multiclass products; P&C revenues up 28% thanks to improved welfare and CPI product offer

1Q19 Segment Operational Highlights

1. Mail, Parcel & Distribution: 64% of progress on Joint Delivery Model for Mail & Parcel; Bologna new hub for parcel sorting now operational at 125,000 parcels daily with a full capacity of 250,000 parcels/day; MoU signed with European digital start-up sennder to optimize long-haul transportation logistics; alternative delivery expansion with 1,400 locations beyond post offices
2. Payments, Mobile & Digital: Positive impact from Postepay Connect integrated offer with over 1,600 daily average sales, driving average daily sales of Postepay Evolution cards to 6,600 and SIM cards to 3,300 in 1Q19
3. Financial Services: Third party loan and mortgage distribution revenue up supported by commercial initiatives
4. Insurance Services: Ongoing diversification with positive contributions from both Life and P&C businesses; successful results from new multiclass products with €1.9bn net inflows in 1Q19; P&C benefitted from welfare products and CPI products (linked to third party loan and mortgage distribution)

Yesterday, the Board of Directors of Poste Italiane S.p.A. (“Poste Italiane” or the “Group”) chaired by Maria Bianca Farina approved First Quarter 2019 Financial Results (unaudited).

Commenting on the results, Matteo Del Fante, Poste Italiane Chief Executive Officer and General Manager, said: “First quarter results demonstrate ongoing Deliver 2022 progress, with sustainable recurring revenue growth, cost discipline, as well as a continued reduction of Poste’s reliance on non-recurring items such as capital gains.
We continue to accelerate our industrial transformation in 2019 to capitalize on future growth opportunities. The new, state of the art, parcel sorting centre in Bologna will add daily capacity of 250,000 parcels, while we continued to expand alternative delivery options for our customers. Our Joint Delivery Model is now running in 64 percent of delivery centres and we are well on track to reach full implementation by year end.
Efforts to maximize the potential of our extensive distribution network improved net inflows across all financial products in the first quarter, with positive contributions from Life and P&C insurance as well as payment and mobile activities.

Our workforce transformation also continues, with new hires in key areas like last-mile delivery, customer relationship management and digital to drive Deliver 2022.”

Source: Poste Italiane