Announced at the end of February 2018, the Deliver 2022 strategic plan will enable us to fully capitalise on the unique strengths of the Poste Italiane network. Our distribution platform is the largest and most widespread in Italy, with 12,812 post offices located across the entire nation. What’s more, we are widely recognised as the safest and most reliable distribution service provider in the country.
The plan sets out:
The new strategic plan is part of a broader approach built on a commitment to sustainability and to our stakeholders.
The plan sets out:
- financial targets based on realistic assumptions, with a low execution risk;
- a company transformation programme;
- an overriding focus on evolution in customer needs;
- sustainable growth in dividends, in line with Group’s improving operational performance.
FINANCIAL TARGETS
- Forecast 2022 consolidated revenues: €11.2 billion, with a compound annual growth rate (CAGR) of 1%;
- Forecast 2022 operating profit: €1.8 billion, with a CAGR of 10%;
- Forecast 2022 net profit: €1.2 billion, with a CAGR of 13%;
- 2022 Return On Equity (ROE): 13% (+3.4 p.p.);
- Customer’s Total Financial Assets: €581 billion (2018: €514 billion)
- 2018–2022 capital investments: €2.8 billion of capex to support the digitalisation, automation and reorganisation of the service model;
- Net financial position of the Mail, Parcel and Distribution business: €1.7 billion (€1.1 billion in 2018);
- dividend policy : 2017 baseline of €0.42 per share, €0.44 in 2018 and increasing by 5% per annum up to 2020, with a minimum payout of 60% from 2021 onwards.
KEY CONSOLIDATED FINANCIAL TARGETS
€ bn unless otherwise stated| 2017 | 2018 | 2019 | 2020 | 2022 | CAGR 17 - 22 | |
|---|---|---|---|---|---|---|
| Revenue | 10.6 | 10.86 | 11.0 | 10.9 | 11.2 | + 1% |
| EBIT EBIT Margin % |
1.1 11% |
1.50 14% |
1.6 15% |
1.6 15% |
1.8 16% |
+ 10% |
| Net Profit ROE %1 |
0.7 10% |
1.402 18% |
1.1 14% |
1.1 13% |
1.2 13% |
+ 13% |
| 2020 | 21-22 | |||||
| Dividend (€/share) | 0.42 | 0.44 | +5% | +5% | 60% min. payout |
|
1. Group equity net of fair value and cash flow hedge reserves and including goodwill on investments;
2. Including 385m one-off DTAs
The new strategic plan is part of a broader approach built on a commitment to sustainability and to our stakeholders.
- Shareholders: clear growth in dividends.
- Poste Italiane people: cooperation with trade unions to encourage workforce renewal.
- Customers: an operating model able to meet the changing needs of Italians.
- The Country: support the digital transformation in Italy, offering digital solutions through the widespread reach of the distribution network and services.
Business Model
The engine driving this process of value creation over time is the distinctive business model the Company has adopted to achieve the targets the Group has set itself for each operating sector, with the ESG objectives in the Integrated Strategic Plan. In particular, as previously mentioned, Poste Italiane operates as an integrated industrial group via Strategic Business Units specialising in activities that share the Group's multi-channel distribution network and uniform governance.
The following diagram illustrates the interaction between strategy, business model and forms of financial and non-financial capital that characterises Poste Italiane's value creation process over time.
THE VALUE CREATION PROCESS AT POSTE ITALIANE
The following diagram illustrates the interaction between strategy, business model and forms of financial and non-financial capital that characterises Poste Italiane's value creation process over time.
THE VALUE CREATION PROCESS AT POSTE ITALIANE
Transformation of our Business Areas
To roll-out our strategic vision, we have completed the reorganisation of our operating divisions. Each business area has specific targets, and the gradual progress made will combine to form a great leap forward for Poste Italiane.
The new Payments, Mobile & Digital segment has been established thanks to the combination of PosteMobile and the Payments business. Asset management shifts to Financial Services and Mail, Parcel is now called Mail, Parcel & Distribution.
The new Payments, Mobile & Digital segment has been established thanks to the combination of PosteMobile and the Payments business. Asset management shifts to Financial Services and Mail, Parcel is now called Mail, Parcel & Distribution.
The Mail, Parcel and Distribution business lies at the core of our operations. Its reorganisation is designed to capitalise on growth in e-commerce. To boost our market share of the parcel delivery business, we have made an agreement with the trade unions for a new, innovative Joint Delivery Model, which includes afternoon and weekend delivery. The new partnership forged with Amazon in June 2018 is another fundamental enabler for the roll-out of the plan. Finally, we will be investing in new distribution and automation technologies to support the division’s growth.Learn more about the market environment of the business area.
- Revenues: €3.5 billion (2018: €3.58 billion), with growth in Parcel revenues and a slowdown in the decline in Mail revenues.
- Parcel revenues: €1.2 billion (2018: €0.76 billion).
- EBIT: the division will approach its operating breakeven point (€-0.1 billion)
- Implementation of the new delivery model.
- Parcels delivered by delivery personnel: over 100 million (2017: 35 million).
- B2C parcel market share: 40% (2017: 30%).
The new Payments, Mobile and Digital division, set up in 2018, will become an internal Fintech, enabling opportunities to be seized from the growing convergence of these market segments. The division will also act as a competency centre to help steer the roll-out of the Digital Strategy of the group.Learn more about the competitive and regulatory framework of the business area.
- Revenues: €0.8 billion (2018: €0.59 billion).
- Payment Card revenues: €0.4 billion (2018: €0.3 billion).
- EBITDA: €0.2 billion (2018: €0.2 billion), with a CAGR of 1%.
- Postepay total portfolio to reach 18.3 million cards issued.
- Card transactions to rise by 12% CAGR to €1.6 billion.
Poste Italiane provides Financial Services based on a service model centred on the distribution of third-party products that is credit risk-free and delivered through a subsidiary distribution platform. We aim to achieve sustainable growth, based on the efficient allocation of capital and a wide range of products. Key milestones in the roll-out of the plan include the three-year distribution agreement signed in April 2018 with Intesa Sanpaolo and the definitive conclusion in March 2018 of a series of agreements with ANIMA Holding for a closer partnership in asset management services.Learn more about the sector.
- Revenues: €4.9 billion (2018: €5.2 billion), maintaining stable revenue while reducing the reliance on capital gains (to fall from over €0.5 billion in 2017 to zero in 2022).
- EBIT: €0.7 billion (2018: €0.9 billion).
- Total financial assets: to rise to €581 billion from €506 billion in 2017, in line with market growth, with improved penetration of life insurance products and mutual funds.
- Over 12 million products (2017: 8 million).
- Customers covered by a relationship manager: 45–55% (2017: 7%).
In the Insurance Services business, our aim is to defend our leadership of the Life segment, while rebalancing customer portfolios away from traditional life insurance policies and towards unit-linked products. Major growth will be delivered in the Casualty segment and in private pension plans.Learn more about the market environment of the business area.
- Revenues: €1.9 billion (2018: €1.5 billion), led by constant growth in the segment.
- EBIT: €0.9 billion (2018: €0.87 billion).
- Net profit: CAGR of 4% over the period 2017–2022.
- Gross written premiums: €20.7 billion (2017: €20.3 billion).
- Casualty policy distribution: over 2 million new contracts per annum (2017: €0.4 million), driven by a smart distribution model to complete the range of insurance products offered.
Our People
Poste Italiane is the biggest employer in Italy. Over 53% of our current workforce (122,655 headcount in 2018) will retire over the next ten years, which will enable the recruitment of new skilled professionals and young talent.
- Forecast headcount in 2022: 123,000 employees
- Training: 20 million hours planned over the plan horizon
- Redeployment of personnel: 4,500 employees to be redeployed to the commercial frontline
- New hires: 10,000 skilled workers, including 5,000 finance and insurance specialists.
