2018 Group Financial Highlights
- EBIT and net profit for 2018 ahead of Deliver 2022 targets
- Group revenues up 2.2% at €10,864m in FY18, with recurring revenue growth and reduced reliance on capital gains
- Total operating costs down 1.5% fy/fy to €9,366m; early retirement provisions of €619m for FY18
- EBIT increased to €1,499m (+3.5% vs FY17) thanks to improving contributions from all segments and cost efficiencies
- Net profit at €1,399m (+€709m fy/fy) reflecting higher revenues and EBIT, including €385m one-off DTA
- Total Financial Assets (TFA) of €514bn as at 2018 year-end (+€4bn y/y) driven by €1.6bn net inflows with a significant contribution from retail inflows (€3.5bn), notwithstanding a volatile environment
- Solvency II ratio at 211% as of December 2018 thanks to proactive management actions; 235% pro-forma following recent approval of €1.75bn Ancillary Own Funds
- Capex at €538m in line with Deliver 2022 targets
- Group dividend for FY18 up by 5% fy/fy to €0.441 subject to AGM approval, in line with Deliver 2022 commitment, supported by EPS at €1.07 in FY18.
2018 Segment Performance
- Mail, Parcel & Distribution: FY18 revenues at €3,580m (-1.4% y/y) and EBIT at -€430m (+.7% y/y) as a result of B2C parcel growth and better than expected mail performance, supported by successful implementation of Joint Delivery Model and continuing network transformation
- Payments, Mobile & Digital: FY18 revenues at €592m (+.4% y/y) and EBIT at €204m (+4.7% y/y) as a result of overall card stock and transactions growth, combined with an increase in mobile and landline users
- Financial Services: FY18 revenues at €5,221m (+4.2% y/y) and EBIT at €859m (+3.1% y/y) as a result of expanded product portfolio and commercial efforts, driving TFA growth along with record product volumes
- Insurance Services: FY18 revenues at €1,470m (+1% y/y); EBIT at €866m (+8.4% y/y) as a result of retained leadership in life products and continued rebalance to capital-light and P&C business.
Deliver 2022 Progress Report – Strategic Plan on Track across all segments •Mail, Parcel & Distribution: Successful rollout of Joint Delivery Model; new state-of-the-art automated equipment; transport network optimization
- Payments, Mobile & Digital: Building on payments leadership with new services and partnerships; driving mobile growth with more sustainable multi-monthly contracts and data-bundled offers: launch of PostePay Connect, ground breaking integrated mobile and digital payments product
- Financial Services: Improved product offer across wealth management, mutual funds, postal saving products and loan and mortgage distribution; enhanced commercial frontline with increased Relationship Manager coverage supported by digital tools; reduced reliance on capital gains thanks to effective active portfolio management
- Insurance Services: Ongoing diversification of insurance offer with growing P&C, increasing focus on product innovation. Proactive management actions strengthened Solvency II ratio to support business growth.
2019 Guidance – Pragmatic and achievable targets in line with Deliver 2022 trends •Achievable financial targets, in line with the trends for Deliver 2022, with an expected net profit at €1.1bn
- Revenues are expected at €11bn, reflecting into EBIT and net profit thanks to focus on costs and low leverage
- Mail, Parcel and Distribution segment revenues in 2019 are expected down 1%. Parcel revenues (+% y/y), offsetting the ongoing mail decline (-3% y/y). Operating profit will continue to improve, with an expected EBIT of €-0.3bn vs €-0.4bn in 2018
- Payments, Mobile & Digital revenues increase, reaching €0.7bn, up 14% y/y with card payment revenues strongly up (+% y/y). Expected EBIT growth of 9%
- Financial Services segment revenues at €5.1bn, reducing reliance on capital gains (-20% y/y mostly already executed) thanks to net interest (€1.6bn), postal saving fees (€1.8bn), and focus on product distribution. As a result, EBIT forecast for 2019 is set at €0.9bn
- Insurance Services segment revenues to increase 12% driven by consolidated leadership in life, shift from traditional life products to Multi-Class products and continued growth in P&C
- Cost discipline confirmed. Operating profit at €1.6bn, resulting in an EBIT margin of 15%, supported by underlying EBIT progression across all segments
- Dividend policy confirmed with a DPS increasing by 5% compared to 2018, supporting Deliver 2022 targets.
Rome, 19 March 2019, today the Board of Directors of Poste Italiane S.p.A. (“Poste Italiane” or the “Group”) approved 2018 financial results and 2019 guidance. The Board of Directors of Poste Italiane, chaired by Maria Bianca Farina, reviewed and approved the 2018 Annual Financial Report, prepared in compliance with IAS/IFRS.
Commenting on the results, Matteo Del Fante, Poste Italiane Chief Executive Officer and General Manager, said: “Poste Italiane met all 2018 financial targets both at group and segment level thanks to a strong progression of underlying operating profit, driven by steady revenue growth, reduced reliance on capital gains and cost discipline.
Our performance in 2018 demonstrates improved operating leverage, where increased revenues supported by cost efficiencies translated into EBIT progression. The strong balance sheet, with limited leverage created the same positive impact at the net profit level.
These results have been driven by our ongoing business transformation plan Deliver 2022 that will allow Poste Italiane to capitalize on market growth opportunities.
This includes the transformation of our core Mail and Parcel business to capitalize on the rapid development of e-commerce, the expansion of our financial and insurance product offer across our unrivalled Postal Offices network, as well as continued opportunities arising from convergence in digital payments and mobile telecommunications.
In 2019 you will see a continuing improvement of our revenues, margins and profitability. Our plan is made of many small steps and we intend to consistently deliver on a quarter by quarter basis.
We are pleased with progress in the first year and remain focused on delivery given the significant operational transformation still underway.”
Source: Poste Italiane