FINANCIAL REVIEW
GROUP OPERATING RESULTS (*)
Based on the strategic guidelines contained in the Deliver 2022 Plan, the Group’s operating performance is influenced by two non-recurring items: provisions for voluntary early retirement incentives designed to accelerate the transformation of the Mail, Parcels and Distribution Business Unit and gains on the securities portfolio. In order to present the market with the Group’s results from ordinary activities, we have thus included adjusted amounts for the Group’s results after stripping out the above non-recurring items.
CONSOLIDATED OPERATING RESULTS
| For the nine months ended 30 September | ||||
|---|---|---|---|---|
| (€m) | 2019 | 2018 | Increase/(decrease) | |
| EXTERNAL REVENUE | 8,089 | 7,951 | +138 | +1.7% |
| Adjusted external revenue | 7,807 | 7,531 | +276 | +3.7% |
| TOTAL COSTS | 6,549 | 6,443 | +106 | +1.6% |
| EBIT | 1,540 | 1,509 | +32 | +2.1% |
| Adjusted EBIT | 1,288 | 1,166 | +122 | +10.5% |
| EBIT Margin (%) | 19.0% | 19.0% | ||
| NET PROFIT | 1,083 | 1,056 | +27 | +2.6% |
| Adjusted net profit | 891 | 807 | +84 | +10.4% |
| EARNINGS PER SHARE | 0.83 | 0.81 | +0.02 | +3% |
| ROE | 13.3% | 18.3% | ||
| CAPEX | 389 | 260 | +129 | +50% |
| % of revenue | 4.8% | 3.3% | ||
(*) Adjusted items primarily regard net gains and early retirement incentives. Further details are provided in the section, “Alternative performance indicators”
The Group’s total reported revenue of €8.1 billion is up €138 million (1.7%) compared with the first nine months of 2018. This reflects the positive contribution of the Insurance Services Strategic Business Unit, which contributed €1,219 million to total revenue, marking an improvement of €171 million (up 16.3% on the same period of 2018), primarily due to the greater volume of assets under management by the Life business and an increase in P&C premium revenue. The increase in revenue also benefitted from the performance of the Payments, Mobile and Digital Strategic Business Unit, which registered an improvement of €43 million (9.8%), increasing from €434 million in 2018 to €477 million.
After adjusting for non-recurring items, including gains of €261 million realised during the first nine months of 2019 (€404 million in the first nine months of 2018), revenue is up €276 million (3.7%).
Total financial assets amount to €540 billion, an increase of €26 billion compared with 31 December 2018. This is linked to the positive performance of current account deposits, which have risen by over €6 billion (partly reflecting transitional factors), and the strong performance of the insurance business, thanks to the effects of fair value measurement and the contribution from multiclass products.
Total costs, including depreciation, amortisation and impairments, amount to €6.5 billion, including €4.1 billion in personnel expenses and €1.9 billion in other operating costs.
Poste Italiane Group – Interim report for the nine months ended 30 September 2019 17 WORKFORCE (in thousands of FTEs) Personnel expenses are down €14 million (0.3%) compared with the first nine months of 2018, reflecting a reduction in the average workforce employed during the period (over 5,000 fewer FTEs compared with the same period of 2018), which more than offset the increase in the per capita cost linked to the full entry into force of the latest collective labour agreement (for 2016-2018). The change in the workforce is in keeping with the guidelines in the Deliver 2022 Strategic Plan and is the result of efficiencies implemented by the Company, above all in the Mail, Parcels and Distribution Business Unit.
Other costs are up from €2.3 billion in the first nine months of 2018 to €2.4 billion in the same period of 2019 (an increase of €136 million). This primarily reflects a rise in variable costs linked to business growth and above all to expansion of the parcels and digital businesses.
SUMMARY OF OPERATING RESULTS BY STRATEGIC BUSINESS UNIT
Adjusted operating results by Strategic Business Unit are shown below.
ADJUSTED REVENUE
ADJUSTED EBIT
