POSTE ITALIANE'S SUSTAINABILITY STRATEGY
To contribute to achieving national and international social and environmental development objectives, Poste Italiane has adopted a Sustainability Plan comprised of a series of Sustainability Policies and an ESG Strategy Plan. Within the broader strategic framework defined by the Group, this strategy is consistent with Poste Italiane’s activities and business criteria.
All the principles, qualitative objectives and different management methods are incorporated into the adopted policies, which regulate in a synergistic manner the various issues that emerged from the materiality analysis and the areas required by Legislative Decree no. 254/2016 is not established. The ESG Strategic Plan, on the other hand, includes all the specific quantitative and qualitative objectives and targets that the Group has set itself with a view to continually improving its sustainability performance.
To contribute to achieving national and international social and environmental development objectives, Poste Italiane has adopted a Sustainability Plan comprised of a series of Sustainability Policies and an ESG Strategy Plan. Within the broader strategic framework defined by the Group, this strategy is consistent with Poste Italiane’s activities and business criteria.
All the principles, qualitative objectives and different management methods are incorporated into the adopted policies, which regulate in a synergistic manner the various issues that emerged from the materiality analysis and the areas required by Legislative Decree no. 254/2016 is not established. The ESG Strategic Plan, on the other hand, includes all the specific quantitative and qualitative objectives and targets that the Group has set itself with a view to continually improving its sustainability performance.
Our Strategy model
SUSTAINABILITY THEMES RELEVANT TO POSTE ITALIANE
Poste Italiane has developed a materiality analysis process in accordance with the requirements of Legislative Decree 254/16 and the reporting standards.
This process is intended to facilitate a deeper understanding of the most relevant non-financial issues in terms of risks and opportunities relative to the achievement of the corporate objectives.
This analysis made it possible to identify the material ESG themes with the most impact on stakeholders’ decision-making process that play a key role in defining the Group’s strategy, taking into account its structure, the extension of the network served and the diversification of the market sectors in which it operates.
Poste Italiane’s process of defining these material themes, most recently approved by the Board of Directors, consists of three main phases and was conducted in accordance with the indications of the Standards Global Reporting Initiative (GRI Standards), implementing in advance the requirements of European Directive 2014/95/EU on the “double-materiality” process, which is expected to take effect in FY 2023.
To define the universe of potentially relevant issues for the sector and guide the materiality analysis process, Poste Italiane carried out an internal and external analysis that took into account input from a number of sources. Specifically, the internal analysis looked at the Strategic Plan and the Group’s risk management model, the results of the materiality analysis carried out for the purposes of the 2020 Integrated Financial Statements and the results of the stakeholder engagement activities implemented in 2021; the external analysis, on the other hand, took into account the provisions from regulatory sources and the main sustain- ability guidelines at the international level, requests from the main questionnaires prepared by sustainability rating agencies and the analyses of current trends in the Group’s various operating sectors.
The relevance of the material themes was then defined with the direct involvement of stakeholders
through specific listening and engagement initiatives.
Starting in 2021, in anticipation of the requirements introduced by the new proposed amendment of
European Directive 2014/95/ EU, Poste Italiane initiated the double materiality process by introducing a dual perspective into the material theme evaluation process: “Inside-out” and “Outside-in”. Through external engagement (Inside-out), the Company considered the current or potential significant impacts of its activities and the activities of its value chain on society and the environment. Internal engagement
(Outside-in), on the other hand, took into account Sustainability topics that could positively or negatively impact the strategy,
performance and positioning of the Company in the near, medium or long-term and therefore create or erode its value.
The key 2021 ESG achievements are outlined below. There is no sustainable financial growth without a fair and sustainable society. Poste’s support during the pandemic to the Country was fundamental and we have further progressed on diversity and inclusion policies. As a matter of fact, Poste Italiane entered the global Top 100 ranking on gender equality promoted by Equileap.
Poste Italiane is officially among the 19 companies worldwide that have addressed the gender pay gap helping to make Italy, together with the United Kingdom and Spain, a leader in this area.
We have also been included, for the third consecutive year, in the Bloomberg-Equality Index, achieving a well above average score.
In line with best practices, we continued to pay attention to the social and environmental aspects of our supply chain by adopting an internal ESG model to rate suppliers.
We believe that a transparent procurement process is key to constantly improve services offered to our customers.
Delivering a greener future
Fighting against climate change, innovating throughout the business to minimise our environmental impact, managing risk and achieving long-term resilience.
Investing in a thriving workforce
Rights, safety and wellbeing of our people come first in everything we do.
Protecting our customers, building an inclusive society
Providing vital support to the individuals and communities around us.
Driven by good corporate governance
Leading with integrity and transparency, committed to a code of business ethics and remuneration. Striving to manage our business sustainably and invest responsibly.
Our commitment to sustainability and responsible growth is a pillar of our business and of this plan. In order to be able to measure our impact and monitor our progress, we have adopted S.M.A.R.T. ESG targets, which are Specific, Measurable, Attainable, Rèlevant and Time-based.
Pictured below we summarize our targets which we will constantly monitor, to ensure effective implementation.
In 24SI we have defined a clear and ambitious roadmap towards a 30% reduction in total CO2 emissions by 2025 and carbon neutrality by 2030, in line with the Paris Agreement, the recent 2021 Glasgow Climate Pact and the European Green Deal.
We worked on new initiatives to further accelerate our transition to a certified carbon-neutral company.
Across all our businesses, we are implementing strategic and structural changes to achieve the targets we have set.
We continued reducing emissions by renewing our company fleet – reaching 10 thousand low-emissions delivery vehicles – the ones used by our “postini”.
In relation to the energy efficiency of our buildings, we further progressed on the installation of photovoltaic panels and Smart Building solutions in our real estate assets to guarantee a centralised energy consumption monitoring and management.
Our Payments and Telco clients are also contributing to this, choosing 100% bio-degradable payment cards and buying eco-friendly SIM cards from Poste.
Finally, on top of our commitment to purchase offsetting Carbon Credits, our transition journey towards carbon neutrality will be further accelerated by our new energy offering.
PostePay will in fact become the energy supplier for the entire Group, sourcing 100% of power from renewable sources and offsetting 100% of CO2 emissions.
Integrating Sustainability within Poste Italiane’s Strategy
To be sustainable for Poste Italiane means defining a clear strategy on ESG issues and structurally incorporating them within the strategic objectives set in the “2024 Sustain & Innovate Plus” Plan. Over the period of the plan, €3.1 billion of investment is envisaged in strategic assets, in order to achieve financial objectives.
Poste Italiane has developed a materiality analysis process in accordance with the requirements of Legislative Decree 254/16 and the reporting standards.
This process is intended to facilitate a deeper understanding of the most relevant non-financial issues in terms of risks and opportunities relative to the achievement of the corporate objectives.
This analysis made it possible to identify the material ESG themes with the most impact on stakeholders’ decision-making process that play a key role in defining the Group’s strategy, taking into account its structure, the extension of the network served and the diversification of the market sectors in which it operates.
Poste Italiane’s process of defining these material themes, most recently approved by the Board of Directors, consists of three main phases and was conducted in accordance with the indications of the Standards Global Reporting Initiative (GRI Standards), implementing in advance the requirements of European Directive 2014/95/EU on the “double-materiality” process, which is expected to take effect in FY 2023.
To define the universe of potentially relevant issues for the sector and guide the materiality analysis process, Poste Italiane carried out an internal and external analysis that took into account input from a number of sources. Specifically, the internal analysis looked at the Strategic Plan and the Group’s risk management model, the results of the materiality analysis carried out for the purposes of the 2020 Integrated Financial Statements and the results of the stakeholder engagement activities implemented in 2021; the external analysis, on the other hand, took into account the provisions from regulatory sources and the main sustain- ability guidelines at the international level, requests from the main questionnaires prepared by sustainability rating agencies and the analyses of current trends in the Group’s various operating sectors.
The relevance of the material themes was then defined with the direct involvement of stakeholders
through specific listening and engagement initiatives.
Starting in 2021, in anticipation of the requirements introduced by the new proposed amendment of
European Directive 2014/95/ EU, Poste Italiane initiated the double materiality process by introducing a dual perspective into the material theme evaluation process: “Inside-out” and “Outside-in”. Through external engagement (Inside-out), the Company considered the current or potential significant impacts of its activities and the activities of its value chain on society and the environment. Internal engagement
(Outside-in), on the other hand, took into account Sustainability topics that could positively or negatively impact the strategy,
performance and positioning of the Company in the near, medium or long-term and therefore create or erode its value.
The key 2021 ESG achievements are outlined below. There is no sustainable financial growth without a fair and sustainable society. Poste’s support during the pandemic to the Country was fundamental and we have further progressed on diversity and inclusion policies. As a matter of fact, Poste Italiane entered the global Top 100 ranking on gender equality promoted by Equileap.
Poste Italiane is officially among the 19 companies worldwide that have addressed the gender pay gap helping to make Italy, together with the United Kingdom and Spain, a leader in this area.
We have also been included, for the third consecutive year, in the Bloomberg-Equality Index, achieving a well above average score.
In line with best practices, we continued to pay attention to the social and environmental aspects of our supply chain by adopting an internal ESG model to rate suppliers.
We believe that a transparent procurement process is key to constantly improve services offered to our customers.
Delivering a greener future
Fighting against climate change, innovating throughout the business to minimise our environmental impact, managing risk and achieving long-term resilience.
Investing in a thriving workforce
Rights, safety and wellbeing of our people come first in everything we do.
Protecting our customers, building an inclusive society
Providing vital support to the individuals and communities around us.
Driven by good corporate governance
Leading with integrity and transparency, committed to a code of business ethics and remuneration. Striving to manage our business sustainably and invest responsibly.
Our commitment to sustainability and responsible growth is a pillar of our business and of this plan. In order to be able to measure our impact and monitor our progress, we have adopted S.M.A.R.T. ESG targets, which are Specific, Measurable, Attainable, Rèlevant and Time-based.
Pictured below we summarize our targets which we will constantly monitor, to ensure effective implementation.
In 24SI we have defined a clear and ambitious roadmap towards a 30% reduction in total CO2 emissions by 2025 and carbon neutrality by 2030, in line with the Paris Agreement, the recent 2021 Glasgow Climate Pact and the European Green Deal.
We worked on new initiatives to further accelerate our transition to a certified carbon-neutral company.
Across all our businesses, we are implementing strategic and structural changes to achieve the targets we have set.
We continued reducing emissions by renewing our company fleet – reaching 10 thousand low-emissions delivery vehicles – the ones used by our “postini”.
In relation to the energy efficiency of our buildings, we further progressed on the installation of photovoltaic panels and Smart Building solutions in our real estate assets to guarantee a centralised energy consumption monitoring and management.
Our Payments and Telco clients are also contributing to this, choosing 100% bio-degradable payment cards and buying eco-friendly SIM cards from Poste.
Finally, on top of our commitment to purchase offsetting Carbon Credits, our transition journey towards carbon neutrality will be further accelerated by our new energy offering.
PostePay will in fact become the energy supplier for the entire Group, sourcing 100% of power from renewable sources and offsetting 100% of CO2 emissions.
Integrating Sustainability within Poste Italiane’s Strategy
To be sustainable for Poste Italiane means defining a clear strategy on ESG issues and structurally incorporating them within the strategic objectives set in the “2024 Sustain & Innovate Plus” Plan. Over the period of the plan, €3.1 billion of investment is envisaged in strategic assets, in order to achieve financial objectives.
STRATEGIC HIGHLIGHTS
FINANCIAL HIGHLIGHTS
With our ‘24 Sustain & Innovate’ (‘24SI’) Plan, we are able to build and grow on the solid foundations put in place with Deliver22 with achievable targets across all our four businesses. Revenues will grow steadily throughout the plan, with EBIT and Net Profit increasing 5% and 6% CAGR respectively, generating €0.4 billion of incremental EBIT between 2019 and 2024. After a step up of 14% in 2021, the dividend per share will benefit from a 6% annual growth.
The turnaround in mail and parcels is fully underway and it is the first time parcels will represent a higher revenue proportion than mail, while we will become a fully-fledged logistics player with a sustainable business. In financial and insurance services, the priority is to become the main reference point for all customers’ needs, from savings to insurance and loans, attracting them with data driven advisory across all Poste’s distribution channels.
We will leverage cross and up selling expertise in Payments & Mobile, confirming the leadership in digital payments, introducing broadband connectivity and entering the power and gas market in 2022 with a fair, competitive and customer friendly offering.
Our strategic foresight in creating a cloud-based architecture, leads the Group to be Italy’s number one cloud services user. We are delivering new products and services that will help our customers, businesses, the Public Administration and the country as a whole for years to come, with the commitment in creating significant value for all stakeholders.
Confirming the relevance of the environmental topics for our strategy, Poste Italiane will become a net zero emission company by 2030.
Our people have proved to be a cornerstone of our success and we will continue to invest in their skills.
The ’24SI’ plan transforms challenges into opportunities thanks to the robustness and flexibility of our strategic approach to business.
- Plan leveraging on emerging new trends across all businesses
- Achievable financial targets and KPIs thanks to revenue growth and renewed focus on operational performance: revenues up 3% (CAGR 2019-2024)
- Enhanced and sustainable dividend policy based on solid cash generation: DPS +14% in 2021 Y/Y and +6% every year over the plan horizon
- Become the single point of entry for all Italians’ daily needs and maximise the value of the powerful omnichannel network
- Shifting from a mail centric operator into a parcel driven business, leader in the B2C segment
- Half of over 11 million daily customer interactions generated from new channels (digital and third-party network), representing 12% of relevant revenues (up to 20% by 2024)
- Cultivating a culture of innovation, with the new Digital Technology and Operations division to accelerate Group digitalisation, upgrading the IT architecture and migrating to Italy’s largest proprietary cloud
- A financial services model based on People (dedicated training), Products (enhanced product range, responding to wider customer needs) and Platform (data-driven customer profiling)
- Confirming Poste Italiane’s support to Italy’s digitalisation, connecting the country in the new hybrid world
- Delivering responsible growth, supporting Italy’s transition to a sustainable low carbon economy and social integrity through innovation and digitalisation
- Continuing investments in transformation and business innovation as an enabler for future growth.
FINANCIAL HIGHLIGHTS
With our ‘24 Sustain & Innovate’ (‘24SI’) Plan, we are able to build and grow on the solid foundations put in place with Deliver22 with achievable targets across all our four businesses. Revenues will grow steadily throughout the plan, with EBIT and Net Profit increasing 5% and 6% CAGR respectively, generating €0.4 billion of incremental EBIT between 2019 and 2024. After a step up of 14% in 2021, the dividend per share will benefit from a 6% annual growth.
The turnaround in mail and parcels is fully underway and it is the first time parcels will represent a higher revenue proportion than mail, while we will become a fully-fledged logistics player with a sustainable business. In financial and insurance services, the priority is to become the main reference point for all customers’ needs, from savings to insurance and loans, attracting them with data driven advisory across all Poste’s distribution channels.
We will leverage cross and up selling expertise in Payments & Mobile, confirming the leadership in digital payments, introducing broadband connectivity and entering the power and gas market in 2022 with a fair, competitive and customer friendly offering.
Our strategic foresight in creating a cloud-based architecture, leads the Group to be Italy’s number one cloud services user. We are delivering new products and services that will help our customers, businesses, the Public Administration and the country as a whole for years to come, with the commitment in creating significant value for all stakeholders.
Confirming the relevance of the environmental topics for our strategy, Poste Italiane will become a net zero emission company by 2030.
Our people have proved to be a cornerstone of our success and we will continue to invest in their skills.
The ’24SI’ plan transforms challenges into opportunities thanks to the robustness and flexibility of our strategic approach to business.
- Sustainable and competitive dividend policy linked to Group performance: baseline of €0.55 DPS for 2021 (60% pay-out ratio1, +14% vs. 2020), increasing by 6% per annum (2019 - 2024)
- Group Revenue up by 3% CAGR (2019 - 2024) to €12.7bn in 2024 with positive contributions from all business segments. Revenues will continue to grow steadily, reaching 12.7 billion euro in 2024, with a positive contribution from all segments.
- Operating Profit up by 5% CAGR to €2.2bn (2019 - 2024), driven by operational efficiency
- Net Profit up by 6% CAGR to €1.6bn (2019 - 2024) We foresee an EBIT growth of 5 percent on average over the plan, with net profit landing to 1.6 billion in 2024.
- Customers’ Total Financial Assets growing to €615bn in 2024 (2020: €569bn), supported by a changing investment product mix
- Capital expenditure: record €3.1bn between 2021 and 2024 supporting transformation, with more than 60% of investments being ESG related
- Steady net financial position in Mail, Parcel & Distribution -€1.9bn in 2020 to -€1.8bn in 2024, with operating cash generation supporting capex & dividend distribution.
2024 SUSTAIN & INNOVATE PLUS
2022 TARGETS UPGRADED THANKS TO STRONG FOUNDATIONS
2022 TARGETS UPGRADED THANKS TO STRONG FOUNDATIONS
All stakeholders have benefited from strong performance and impressive results over the 2017-2021 period:
- Shareholders have benefitted from growth in all business lines, with revenues increasing by €0.7bn and net profit by €0.9bn; dividend per share up 40%.
- Poste Italiane has strengthened its role as strategic pillar for the country, contributing to economic growth with a positive cumulated impact on Italian GDP for more than €49bn from 2018 to 2021. Poste Italiane has been supporting communities over the pandemic through its state-of-the-art IT platform for Covid vaccines distribution and booking system.
- Poste Italiane continues to invest in its people, with over 15,000 new hirings and training and upskilling programs at the core of our people transformation plan with more than 24 million training hours.
- Group Revenues: €11.7bn (+1.1% vs. “24SI” previous guidance of €11.6bn).
- Operating Profit: €2.0bn (+9.0% vs. “24SI” previous guidance of €1.9bn).
- Net Profit: €1.4bn (+8.9% vs. “24SI” previous guidance of €1.3bn).
- 2021 dividend upgraded to €0.59, up 21% compared to 2020, a year ahead of the previous policy embedded in “24SI”.
- Yearly growth now at 7%, from original 6%, reflecting solid underlying performance.
Successfully Executing Deliver22
Every single year we overachieved Net Profit targets set in our strategic plans taking advantage of evolving conditions.
In 2021 Net Profit reached 1.6 billion, exceeding the 1.4 billion target, almost doubling compared to 2017.
Our ability to create value has allowed us to constantly share these achievements with our investors.
We are proud of these achievements, and I want to thank again all of Poste Italiane’s 120 thousand plus colleagues for their commitment and hard work.
CONSISTENTLY OVERDELIVERING TARGETS WHILE DRIVING SUSTAINABLE RETURNS
| € bn unless otherwise stated | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Revenues | 10.57 | 10.82
|
10.96
|
10.53 | 11.22
|
| Ebit | 1.12 | 1.5
|
1.77
|
1.52 | 1.85
|
| Net Profit | 0.69
.76 excl. |
1.4
1.01 excl. write-off1 |
1.34
1.23 excl. write-off2 |
1.21
1.11 excl. write-off3 |
1.58
|
Revenues are presented net of interest expenses and capital losses on investment portfolio, previously booked as costs; 1. Positive tax one-offs; 2. SIA stake revaluation and positive tax one-offs; 3. Positive tax one-offs; 4. Nexi stake revaluation and positive tax one-offs. Nexi closing price of €13.99 per share as of 30/12/2021;
A customer centric business model
In the last three years we successfully transformed Mail & Parcel, shifting from a pure mail, which faces a secular decline, to a parcel driven business, becoming market leader in B2C.In Financial and Insurance, we built a comprehensive open platform for savings, insurance and investment products, to meet all clients' needs which we now understand better thanks to a wider-spread profiling of all our clients.
With more than 8,000 financial advisors and 30,000 tellers, we served all our clients, with increasingly targeted, financial, insurance and payment products.
On Payments & Mobile, since PostePay’s foundation in 2018, our vision proved successful, affirming Poste as the key player in the Italian payments’ market, also by offering a unique platform, integrating payments and telcos.
Over the last 3 years we have constantly renewed our offer, introducing innovative services and products, which have further consolidated our brand. And we continue to look ahead, with new value-added services.
|
|
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|---|---|---|---|
|
MAIL, PARCELS AND DISTRIBUTION |
FINANCIAL SERVICES |
INSURANCE SERVICES |
PAYMENTS & MOBILE |
| In addition to its mail and parcel handling activities, the SBU also includes those relating to the sales network, post offices and the corporate functions of Poste Italiane SpA, which also support the other sectors of the Group | The SBU is engaged in the placement and distribution of financial and insurance services such as current accounts, postal savings products (on behalf of Cassa Depositi e Prestiti), mutual funds, loans provided by partner banks and policies. | The SBU refers to activities involving the issuance of life and non-life insurance products and Welfare services. | The SBU includes the activities of payment management, electronic money services and mobile and fixed-line telephone services by PostePay SpA. |
“2024 Sustain & Innovate” Strategic Plan
The strategic objective of Mail, Parcel and Distribution segment is to accelerate its transformation from a pure mail operator to a full logistics operator, ensuring the economic and environmental sustainability of its operations. Implementation of the strategy is based on streamlining of the distribution networks, including the integration of Nexive, acquired at the end of 2020, consolidation of leadership in the B2C market and growth in the C2X and B2B segments through the introduction of specific offers and initiatives aimed at improving the customer experience. From this point of view, the Plurima acquisition will reinforce the contract logistics segment. Through the implementation of these strategic directions, the segment aims to achieve operating profit in 2024.
- Revenue: €3.9 billion (2019: €3.5 billion), with an increase in revenue from the Parcels segment and easing of the decline in the Mail segment.
- Revenue from the Parcels segment: €2.0 billion (2019: €0.85 billion).
- EBIT: operating profit expected by 2024.
- Double the volume of automatically sorted parcels
- B2C parcel market share: 38% by 2024
- C2X market share: 57% by 2024 (2019: 41%).
The Payments and Mobile area aims to establish itself as a complete and omni-channel platform for its customers, flanking the traditional business lines of payments and telecommunications with an offer dedicated to Energy from 2022, a market which the company will enter by taking advantage of its liberalisation. From this point of view, the LIS acquisition will contribute further to the Group’s omni-channel strategy. The expansion of products, together with the ability to exploit physical and digital channels and third-party networks, will make it possible to fully exploit cross-selling opportunities for customers, thereby increasing value for Poste Italiane as a whole.
- Revenue: €1.9 billion (2019: €0.7 billion).
- EBIT: €0.4 billion (2019: €0.2 billion), with CAGR of 1%.
- Expected Postepay Evolution portfolio of 11.6 million cards issued.
- Expected card transactions as CAGR up 14%, to reach €2.7 billion.
Financial Services aims to further evolve its service model by combining the traditional physical model with the opportunities provided by technological innovation. The priorities of the Strategic Plan include growth in wealth management, thanks to the diversification of customer portfolios to optimise their risk-return profile, the integration of non-life policies within the advisory model and a renewed focus on loans, with particular emphasis on the CQS segment, also thanks to partnerships signed with leading operators in the sector. The business related to the purchase of tax credits on building bonuses represents an opportunity to diversify the investment portfolio.
- Revenue: €6.1 billion (2019: €5.8 billion).
- EBIT: €0.7 billion (2019: €0.9 billion).
- Common Equity Tier 1 Capital: 17%.
Total financial assets: a rise to €615 billion from €569 billion in 2020, with increased penetration of life products.
In Insurance Services Poste Italiane aims to establish itself as an insurance operator capable of serving all customers’ investment and protection needs. Poste Vita aims to confirm its position as leader in the life insurance sector, continuing to offer customers safe products that are both more profitable and more capital efficient. Lastly, the non-life insurance strategy envisages an increase in profitability thanks to the modular offer, supplemented by car insurance, provided to customers without assuming risk thanks to distribution agreements signed with leading Italian insurance companies.
- Revenue: €2.7 billion (2019: €1.7 billion).
- EBIT: €1.3 billion (2019: €0.8 billion).
- Net profit: 5% CAGR in the period 2019-2024.
- Solvency Ratio: >200%.
- Gross premiums: €26.5 billion (2020: €16.7 billion).
- Double the average premium of the modular offer.
- 8,000 post offices enabled to sell car policies by 2024
