POSTAL AND BUSINESS SERVICES

MAIL AND PHILATELY

The initiatives implemented in 2014 were aimed at strengthening customer relations and enhancing the business model, adding to logistics and technology platforms and introducing innovative solutions to better respond to market demand.
To this end, the Infodelivery Light internet service was launched in the recorded mail segment. Aimed at professionals and SMEs, this service enables reporting of delivery outcomes for Registered, Raccomandata 1 and Insured products.
The Posta Pick–up offering was also revisited, with new solutions providing greater flexibility and customisation of the service (based on frequency, weight, day and time), a reduction in activation times and simplification of the related terms and conditions. The Posteinteractive offering was introduced. This advanced, integrated delivery service enables the remote management of complex processes involved in the delivery, replacement and sale of goods and services and the related exchange of documents. The Posta Easy service and the Local Integrated Notification Service were also revisited.
The Direct Marketing segment was enhanced, with new added value services forming part of the Linea Evolution range, which will enable customers to electronically track the progress and delivery of business post and any undelivered items. The advanced PostaZone Smart and PostaZone Premium services were also launched, cutting delivery times and providing a wider, more accurate range of delivery options (for example, items will no longer be delivered to condominium mailboxes).
The new multi-channel offering, Cross Media Solution, which includes integrated physical and digital direct marketing solutions, also began on a trial basis. Postatarget Creative Sviluppo Customer Base, a promotion valid from June to December 2014, was launched for companies already using Postatarget that wish to expand their customer base, including provision of a delivery service combined with a list of prospective customers' addresses.
In December, the Direct Marketing segment also saw the introduction of Postatarget Facile, a new delivery procedure for all products in the Postatarget range, enabling customers to streamline the process of sending addressed advertising material by making it simpler and more immediate.
Finally, with regard to Data Services, the PosteInfoPAL services were launched on an experimental basis. Via a host of local data recording and processing services to support local authorities, this offering will enable optimisation of the processes involved in the management of public spaces and areas (updating of house numbering and place names), tax collection and the provision of public services.

Infine, tra i servizi di Data Service, è stata lanciata, in via sperimentale, l’offerta dei servizi PosteInfoPAL che, attraverso una pluralità di servizi di rilevazione e di trattamento dei dati territoriali a supporto degli enti locali, permettono di ottimizzare i processi di gestione del suolo pubblico (aggiornamento numerazione civica e toponomastica), di accertamento dei tributi locali e di erogazione dei servizi ai cittadini.

Philately customers, consisting of stamp collectors and occasional customers, continue to express interest in the range of stamps and associated products on offer. In particular, in 2014, online sales of postage stamps to tobacconists registered around 35,000 orders (approximately 28,000 in 2013), partly due to activation of the Francobollofacile service, which enables postage stamp purchases via the www.poste.it website.
Spazio Filatelia outlets, which continue to be a reference point for collectors wishing to purchase philately products, are located in major Italian cities⁽¹⁾. A total of 1,400 temporary outlets were also set up during the year at various local and national events.
The philately programme featured many issues celebrating, among others, the Ordinary Public Concistory for the creation of new cardinals, Galileo Galilei on the 450th anniversary of his birth, the 40th anniversary of the Piazza della Loggia bombing in Brescia and the canonisation of John XXIII and John Paul II. Italy's artistic and cultural heritage was marked by, among other things, stamps commemorating the 450th anniversary of the death of Michelangelo, and the fifth centenary of the death of Donato Bramante. For the thematic series, “Excellence in the productive and economic system”, stamps were issued to mark 50 years since the its creation of Nutella and to celebrate sustainable development through the use of renewable energy.
During the year, in addition to the Philately and Schools project, involving pupils from elementary and middle schools, the Philately in Prisons project continued which, through the spread of stamp collecting in prisons, aims to help prisoners in the process of rehabilitation and reintegration within civil society.

Service quality

The table below shows the quality achieved compared with the targets set.

Quality targets

2013
In a Memorandum dated 22 December 2014, AGCom published quality assessment results for universal postal services in 2013. For the first time, the assessment included bulk mail results, which were recorded by Poste Italiane and sent to AGCom following specific requests. On completion of the assessment, all the results achieved, except for the one regarding ordinary parcels, were just under (approximately 0.2%) the regulatory target. Given the only slight divergence from the target, AGCom decided (Resolution 603/14/CONS of 28 November 2014) not to apply the penalty provided for by art. 5, paragraph 7 of the Planning Agreement currently in force.

2014
Regarding delivery quality results for the first half of 2014, the Company sent registered product and ordinary parcel results to AGCom on 29 September 2014, as required by the regulations. These results were in line with the regulatory targets. The Company will send the results for the second half of the year, including the overall figures for the full year, to AGCom by 31 March 2015.
In terms of priority mail, the Company is awaiting the quality report produced by the independent body, IZI, which will include consolidated data for 2014. AGCom will then check the results.

⁽¹⁾ Rome, Milan, Venice, Naples, Trieste, Turin and Genoa.

OPERATING RESULTS FOR MAIL AND PHILATELY

The market for traditional postal services continues to suffer the effects of a structural decline in volumes. Moreover, unlike other sectors, and also partly due to the dual effect of economic recession and the switch to web-based and digital forms of communication in general, the process of postal sector deregulation has not generated the expected effects in terms of attractiveness of the market, which instead of growing has gone into decline. This decline, which has affected all of Europe’s postal operators, has been particularly significant in Italy, partly as a result of the worsening economic situation and the small size of the overall market compared with other industrialised countries.
Against this backdrop, the results for mail and philately services in 2014 reveal reductions in both volumes and revenue of 10.4% (431 million fewer items handled) and 11.4% (a decrease in revenue of €351 million), respectively, compared with 2013. This is primarily reflected in the poor performances registered by these segments: Unrecorded Mail (288 million fewer items handled and a decrease in revenue of €190 million compared with 2013), Recorded Mail (15 million fewer items handled and a decrease in revenue of €80 million compared with 2013), Services for Publishers (56 million fewer items handled and a decrease in revenue of €18 million compared with 2013) and Direct Marketing (50 million fewer items handled and a decrease in revenue of 14 million compared with 2013).
Market revenue of €2,713 million is down 10.3%, representing a reduction of €312 million compared with 2013.
In detail, the contraction in the Unrecorded Mail segment, which registered revenue of €1,109 million in 2014 (€1,299 million in 2013), affected volumes of both Priority Mail (168 million fewer items, down 19.3% on 2013) and Bulk Mail (121 million fewer items, down 10.8% on 2013). These result reflect lower demand for “traditional” forms of communication, above all due to large accounts (companies and Public Sector entities) who have continued to develop the digital channel as an alternative to the physical channel by increasingly using the various types of digital communication, as well as the economic downturn, leading customers, above all large accounts, to look for cost savings.
Recorded Mail generated revenue of €912 million (€992 million in 2013), marking an 8.1% decrease (down €80 million compared with 2013), due to the negative performance of Registered Mail (14 million fewer items handled, corresponding to a fall in revenue of €69 million), which was affected by the growing volume of electronic communication used by companies and the Public Sector in their dealings with customers and/or the general public.
Integrated Services registered a 2.8% decrease in revenue (down €7 million compared with 2013), essentially due to a reduction in tax documents sent by customers, whilst the reduction in Multi-channel Service revenue (down €4 million on 2013, equivalent to 12.1%) is due to the steady ongoing decline in traditional telegram, certofax and teltex services.
Direct Marketing services registered a 5.8% reduction in volumes (50 million fewer items) and a 6.7% decrease in revenue (down €14 million) compared with 2013, primarily due to the contraction in the amount of advertising carried out by companies. These minor activities also influenced the Unaddressed Mail segment, which registered overall reductions in volumes and revenue of 4.2% (21 million items handled) and 13.8% (down €4 million), respectively, compared with 2013.
Services for Publishers registered an 11.4% reduction in volumes (56 million fewer items handled) and a 13.5% decrease in revenue (down €18 million) compared with 2013, due to an ongoing decline in publishing product subscribers and an increase in digital subscriptions.

Philately revenue included in postal services revenue, including revenue generated by the sale of stamps, amounts to approximately €116 million (€124 million in 2013), whilst the Philatelic Programme included 45 issues with 89 stamps and 1 postcard, with a total value of €67.70 (50 issues with 88 stamps and 4 postcards with a total value of €40.85 in 2013).

The Postel Group’s external revenue is down 12.5% on the previous year, falling from €168 million in 2013 to €147 million in 2014. This reflects the downturns registered in the Electronic Document Management segment (€40.6 million in 2014, compared with €49.3 million in 2013) and the traditional businesses of Mass Printing (€70.2 million in 2014, €74.8 million in 2013) and Direct Marketing/Commercial Printing (€17.1 million in 2014, €21.3 million in 2013).
Similarly to revenue, but also in part due to implementation of cost saving measures, operating costs incurred during the year register a decrease compared with the total figure for the previous year (€143 million in 2014, €157 million in 2013).
Overall, the Postel Group has contributed operating profit of €4 million (€11 million in 2013) and a loss for the year of €2 million (a profit of €6.7 million for 2013) to the Poste Italiane Group’s consolidated results.