GROUP OPERATING RESULTS

Profit for the first quarter of 2017 amounts to €351 million, down €16 million on the first quarter of the previous year.
Operating profit totals €526 million (€562 million for the first quarter of 2016) and reflects reduced contributions from the Postal and Business Services segment (operating profit down €42 million compared with the first quarter of 2016) and the Financial Services segment (operating profit down €39 million compared with the first quarter of 2016).
The reductions were only partially offset by a positive contribution to operating profit from the Insurance Services and Asset Management segment (up €47 million on the first quarter of 2016), having benefitted from, among other things, the performance of inflows into mutual investment funds.

Reclassified consolidated statement of profit or loss

for the three months ended 31 MarchIncrease/(decrease)
(€m)20172016  
Revenue from sales and services and insurance premium revenue 8,011 8,277 (266) -3.2%
Postal and Business Services 900 923 (23) -2.5%
Financial Services 1,119 1,165 (46) -3.9%
Insurance Services and Asset Management 5,942 6,132 (190) -3.1%
Other Services 50 57 (7) -12.3%
Other income from financial and insurance activities 1,513 1,467 46 3.1%
Financial Services 398 389 9 2.3%
Insurance Services and Asset Management 1,115 1,078 37 3.4%
Other operating income 15 15 n/s
Postal and Business Services 14 13 1 7.7%
Financial Services 1 2 (1) -50.0%
Total revenue 9,539 9,759 (220) -2.3%
Cost of goods and services 592 600 (8) -1.3%
Net change in technical provisions for insurance business and other claims expenses 6,574 6,728 (154) -2.3%
Other expenses from financial and insurance activities 135 197 (62) -31.5%
Personnel expenses 1,480 1,505 (25) -1.7%
Capitalised costs and expenses (9) (4) (5) n/s
Other operating costs 99 20 79 n/s
Total costs 8,871 9,046 (175) -1.9%
EBITDA 668 713 (45) -6.3%
Depreciation, amortisation and impairments 142 151 (9) -6.0%
Operating profit/(loss) 526 562 (36) -6.4%
Finance income/(costs) 2 3 (1) -33.3%
Profit/(loss) on investments accounted for using the equity method 4 3 1 33.3%
Profit/(Loss) before tax 532 568 (36) -6.3%
Income tax expense 181 201 (20) -10.0%
Profit for the period 351 367 (16) -4.4%

n/s: not significant

Total revenue by operating segment

 for the three months ended 31 MarchIncrease/(decrease)
(€m)20172016  
Postal and Business Services 914 936 (22) -2.4%
Financial Services 1,518 1,556 (38) -2.4%
Insurance Services and Asset Management 7,057 7,210 (153) -2.1%
Other Services 50 57 (7) -12.3%
Total revenue 9,539 9,759 (220) -2.3%

Total revenue of €9.5 billion is down 2.3% on the first quarter of 2016. A more detailed look shows that Postal and Business Services contributed total revenue of €914 million, registering a reduction of 2.4% compared with the first quarter of 2016, due to a decline in traditional letter post.
Total revenue from Financial Services amounts to €1,518 million, marking a decline of 2.4%, primarily as a result of lower commissions earned on the distribution of postal savings products. The impact of this was only partly offset by an increase in “Other income from financial activities”, which is up from €389 million in the first quarter of 2016 to €398 million in the first quarter of 2017.
The Insurance Services and Asset Management segment contributed €7.1 billion to total revenue (€7.2 billion in the same period of the previous year), with premium revenue amounting to €5.9 billion (premium revenue of €6.1 billion in the same period of 2016). This represents a solid performance for the period, given the sharp decline in the Life market compared with the positive performance of 2016 (market data for new business to February 2017 shows a contraction of approximately 17% at national level). T
otal revenue from Other Services amounts to €50 million (€57 million in the same period of 2016).

Personnel expenses

 for the three months ended 31 MarchIncrease/(decrease)
(€m)20172016  
Salaries, social security contributions and sundry expenses(*) 1,487 1,501 (14) -0.9%
Redundancy payments 2 6 (4) -66.7%
Net provisions (uses) for disputes (7) 1 (8) n/s
Amounts recovered from staff due to disputes (2) (3) 1 -33.3%
Total personnel expenses 1,480 1,505 (25) -1.7%

n/s: not significant
(*) This includes the following items: salaries and wages; social security contributions; employee termination benefits; temporary work; Directors’ fees and expenses; other costs (cost recoveries).

Personnel expenses are down 1.7% from €1,505 million in the first quarter of 2016 to €1,480 million in the same period of 2017, largely due to a reduction in the ordinary component, linked to salaries, contributions and sundry expenses (down €14 million). This reflects a reduction in the average workforce employed during the period (approximately 4,700 fewer full-time equivalents or FTEs compared with the same period of the previous year), which has offset the increased costs resulting from a public holiday falling on a Sunday and provisions linked to the expected increase in pay in the renewed national collective labour contract.
The cost of early retirement incentives incurred during the quarter amounts to €2 million (€6 million in the first quarter of 2016) and regards management personnel. The cost of early retirement incentives for non-management staff was covered by a portion of the provisions for restructuring charges, made at the end of the previous year.