Report 2016

HIGHLIGHTS

33.1

MLN €

Total revenue

1,041

MLN €

Operating profit

622

MLN €

Profit for the period

451

MLN €

Capex

OPERATING RESULTS

The Poste Italiane Group’s profit for 2016 amounts to €622 million, a 12.7% improvement on the figure for 2015, amounting to €552 million. Operating profit of €1,041 million is up 18.3% on the €880 million of 2015.

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

 for the year ended 31 DecemberIncrease/(decrease)
(€m)20162015Amount%
Revenue from sales and services and insurance premium revenue 28,627 27,007 1,620 6.0%
Postal and Business Services 3,768 3,818 (50) -1.3%
Financial Services 4,683 4,707 (24) -0.5%
Insurance Services and Asset Management 19,953 18,243 1,710 9.4%
Other Services 223 239 (16) -6.7%
Other income from financial and insurance activities 4,421 3,657 764 20.9%
Financial Services 604 442 162 36.7%
Insurance Services and Asset Management 3,817 3,215 602 18.7%
Other operating income 64 75 (11) -14.7%
Postal and Business Services 54 64 (10) -15.6%
Financial Services 7 6 1 16.7%
Insurance Services and Asset Management 2 1 1 n/s
Other Services 1 4 (3) -75.0%
Total revenue 33,112 30,739 2,373 7.7%
Cost of goods and services 2,476 2,590 (114) -4.4%
Net change in technical provisions for insurance business and other claims expenses 21,958 19,683 2,275 11.6%
Other expenses from financial and insurance activities 539 689 (150) -21.8%
Personnel expenses 6,241 6,151 90 1.5%
Capitalised costs and expenses (25) (33) 8 24.2%
Other operating costs 301 198 103 52.0%
Total costs 31,490 29,278 2,212 7.6%
EBITDA 1,622 1,461 161 11.0%
Depreciation, amortisation and impairments 581 581 - n/s
Operating profit/(loss) 1,041 880 161 18.3%
Finance income/(costs) 9 50 (41) -82.0%
Profit/(loss) on investments accounted for using the equity method 6 3 3 n/s
Profit/(Loss) before tax 1,056 933 123 13.2%
Income tax expense 434 381 53 13.9%
Profit for the year 622 552 70 12.7%

n/s: not significant

Despite the fact that the Postal and Business Services segment contributed a loss of €436 million, this is an improvement of 23.2% on the operating loss of €568 million for the previous year. This reflects the positive contribution from the fees paid by BancoPosta RFC in return for use of the Group’s distribution network.

  

GROUP – TOTAL REVENUE BY OPERATING SEGMENT
(DATA IN MILLION EURO)

GROUP – TOTAL REVENUE BY OPERATING SEGMENT

 

Total revenue of €33.1 billion is up 7.7% on 2015. The improvement primarily reflects the positive performance of insurance services and asset management, where total revenue amounts to €23.8 billion (up 10.8% compared with the previous year).

 

  • Postal and Business Services: contributed total revenue of €3,822 million, registering a reduction of 1.5% due to the expected decline in traditional letter post. It should be noted that there has been an ongoing slowdown in the pace of decline in this segment’s total revenue over a number of quarters.
  • Financial Services: total revenue amounts to €5,294 million, marking an increase of 2.7% due to a rise in “Other income from financial activities”, which is up from €442 million in 2015 to €604 million in 2016. This income includes €121 million in non-recurring income generated by the sale of the Group’s investment in Visa Europe Ltd..
  • Insurance Services and Asset Management segment: from 1 January 2016, also includes the activities of BancoPosta Fondi Sgr, delivered excellent results during the year (€23.8 billion in total revenue), with Poste Vita and its subsidiary, Poste Assicura, recording premium revenue of €19.9 billion (premium revenue of €18.2 billion in 2015). This primarily reflects the performances of traditional Class I investment and savings products, where the Group has built up a strong presence.
  • Other Services: total revenue amounts to €224 million (€243 million in 2015) and is generated by Poste Mobile.

  

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FINANCIAL POSITION AND CASH FLOW

The Poste Italiane Group’s net invested capital at 31 December 2016 amounts to €1,909 million, amply financed by equity.

 

NET FUNDS

Total net funds at 31 December 2016 amount to €6,225 million, down on the figure for 31 December 2015 (when net funds amounted to €8,659 million).

At 31 December 2016
(€m)
Postal and Business ServicesFinancial ServicesInsurance Services and Asset ManagementOther ServicesEliminationsConsolidated amount
Financial liabilities (1,947) (59,225) (1,012) (2) 1,265 (60,921)
Technical provisions for insurance business - - (113,678) - - (113,678)
Financial assets 1,236 58,681 115,596 29 (1,180) 174,362
Technical provisions for claims attributable to reinsurers - - 66 - - 66
Net financial assets/(liabilities) (711) (544) 972 27 85 (171)
Cash and deposits attributable to BancoPosta - 2,494 - - - 2,494
Cash and cash equivalents 1,556 1,320 1,324 21 (319) 3,902
Net funds/(debt) 845 3,270 2,296 48 (234) 6,225

At 31 December 2015
(€m)
Postal and Business ServicesFinancial ServicesInsurance Services and Asset ManagementOther ServicesEliminationsConsolidated amount
Financial liabilities (2,442) (55,418) (1,218) (4) 1,604 (57,478)
Technical provisions for insurance business - - (100,314) - - (100,314)
Financial assets 1,396 57,574 102,409 26 (1,315) 160,090
Technical provisions for claims attributable to reinsurers - - 58 - - 58
Net financial assets/(liabilities) (1,046) 2,156 935 22 289 2,356
Cash and deposits attributable to BancoPosta - 3,161 - - - 3,161
Cash and cash equivalents 1,315 485 1,615 16 (289) 3,142
Net funds/(debt) 269 5,802 2,550 38 - 8,659

FINANCIAL POSITION

A comparison with the end of the previous year, when the figure was €999 million, shows an increase of €910 million.

at 31 December (€m)20162015Increase/ (decrease) 
Non-current assets:        
Property, plant and equipment 2,080 2,190 (110) -5.0%
Investment property 56 61 (5) -8.2%
Intangible assets 513 545 (32) -5.9%
Investments accounted for using the equity method 218 214 4 1.9%
Total non-current assets (a) 2,867 3,010 (143) -4.8%
Working capital:        
Inventories 137 134 3 2.2%
Trade receivables and other receivables and assets 5,843 5,546 297 5.4%
Trade payables and other liabilities (4,724) (4,398) (326) 7.4%
Current tax assets and liabilities (73) 19 (92) n/s
Total working capital: (b) 1,183 1,301 (118) -9.1%
Gross invested capital (a+b) 4,050 4,311 (261) -6.1%
Provisions for risks and charges (1,507) (1,397) (110) 7.9%
Provisions for employee termination benefits and pension plans (1,347) (1,361) 14 -1.0%
Deferred tax assets/(liabilities) 53 (554) 607 n/s
Non-current assets and disposal groups held for sale and liabilities related to assets held for sale (1) 660 - 660 n/s
Net invested capital 1,909 999 910 91.1%
Equity 8,134 9,658 (1,524) -15.8%
Net funds 6,225 8,659 (2,434) -28.1%

(1) Non-current assets and disposal groups amount to €2,720 million and regard BdM-MCC SpA, totalling €2,665 million, and BancoPosta Fondi SpA SGR, totalling €55 million. Liabilities related to assets held for sale amount to €2,060 million and regard BdM-MCC SpA, totalling €2,049 million, and BancoPosta Fondi SpA SGR, totalling € 11 million.
n/s: not significant

  

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AREAS OF BUSINESS

The Group’s operations are divided into four operating segments: Postal and Business Services, Financial Services, Insurance Services and Asset Management, and Other Services, which are managed by dedicated Group functions and/or companies.

The organisation is also based on two distribution channels for retail customers, on the one hand, and business and Public Administration customers, on the other. These channels operate alongside a series of corporate functions responsible for policy, governance, controls and the provision of services supporting business processes.

The organisational model, which ensures the development of synergies within the Group as part of an integrated approach to operations, is applied via governance and operating models, characterised by:

  • coherent and integrated management of the Group, ensuring a uniform and coordinated approach to the market, whilst taking into account the central importance of customers and exploiting potential synergies, as well as assigning responsibility for coordinating subsidiaries to the relevant functions within the Parent Company according to business sector;
  • an organisational structure focused on core businesses: mail and logistics, payments and financial services, savings and insurance;
  • Corporate functions capable of ensuring, through coordination and integration of their respective areas of expertise, coherent fulfilment of their assigned roles at Group level and the provision of shared services closely aligned with business needs, thus ensuring efficiency, economies of scale, quality and effective support for the different businesses.

 

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