Thanks to a sustainable business model, it becomes possible to face the new challenges offered by increasingly changing and competitive scenarios not only by reacting to risks, but by seizing all opportunities without ignoring their social implications.
Over the last three years, Poste Italiane has undertaken an important sustainability path aimed at promoting the distinctive elements of its corporate strategy, transforming market challenges into opportunities for the creation of shared value and contributing to the development of the company’s reputation.
Intended as a key element to support business strategy, today sustainability is considered an integral component of the company’s activities, processes and strategy, being embedded in all components of the Company and an essential element for the definition of future strategic and financial choices undertaken by the Group.
The value of reputation
In an economic-financial context in which the market value of companies increasingly derives from their intangible assets, reputation represents an extraordinary asset for Poste Italiane, as it is able to significantly influence the behaviour and choices of its stakeholders and, as a result, creates a strong impact on business and corporate strategies and becomes a competitive lever for the Company to face (and win) the challenges of an increasingly evolved market where the boundaries of traditional business are increasingly transient and trust becomes an element of choice for consumers.
ESG Awards and Recognitions
A measure of the reputation achieved by Poste Italiane is represented by the many awards and recognitions achieved in recent years, which further strengthen its image and confirm the effectiveness of the activities undertaken.
The year 2019 saw the entry of Poste Italiane into important sustainability indices. These indices allow analysts to monitor and evaluate Poste Italiane’s performance with respect to environmental, social and governance issues.
Consolidated operating results
Consolidated operating results
The Group’s total revenue amounted to €11 billion and grew by €174 million compared to 2018 (+1.6%) due to the positive contribution of the Insurance Services Strategic Business Unit, which contributed to the formation of revenue with €1,669 million, marking an increase of €199 million (+13.5% on 2018) mainly due to the growth in financial assets in the Life business and higher premiums in the P&C business, as well as the Payments, Mobile and Digital Strategic Business Unit, which recorded an increase of €71 million in revenue (+12.1%) from €592 million in 2018 to €664 million, and the Financial Services Strategic Business Unit, which recorded revenue of €5,213 million (-€8 million compared to 2018).
Adjusted revenue1 also show growth of €327 million (+3.2%) compared to last year, mainly thanks to the positive contribution of the Insurance Services Strategic Business Unit (+€199 million) and Financial Services one (+€145 million).
1 Adjusted revenue items: gains on securities (€404 million in 2018, €353 million in 2019), Anima gain (€120 million in 2018), gain on fair value measurement of Visa shares (€9 million in 2018, €25 million in 2019), gain on sale of Visa shares (€1 million in 2019).
- Operating results by Strategic Business Unit
Operating results by Strategic Business Unit
Mail, Parcels and Distribution
Payments, Mobile and Digital
Group financial position and cash flow
The Poste Italiane Group’s non-current assets amounted to €4,578 million at 31 December 2019, an increase of €1,543 million compared with the end of 2018. This primarily reflects first-time adoption, from 1 January 2019, of the new accounting standard, IFRS 16, resulting in the recognition of right-of-use assets of €1,254 million (which take into account €1,374 million of Assets, €102 million of acquisitions for new contracts and €222 million of amortisation). Investments of €734 million also contributed to the formation of non-current assets, partly offset by amortisation of €552 million.
Finally, the balance of the item includes investments accounted for using the equity method for a total of €617 million, up €120 million compared to 31 December 2018, mainly due to the adjustment of the carrying amount of FSIA Investimenti2, which at the end of 2019 was classified as an associate investment, in place of the previous joint control.
The Group’s investment amounted to €734 million in 2019, an increase of 36% compared with 2018 (+€195 million).
Provisions and other assets and liabilities at 31 December 2019 amounted to €2,041 million, substantially in line with 31 December 2018. This item also includes the balance of Provisions for risks and charges of €1,218 million (€1,519 million at the end of December 2018) and includes provisions for early retirement incentives of €421 million (€447 million at 31 December 2018); this reflects the estimate of liabilities that Poste Italiane will incur, under the current arrangements agreed with the unions, as a result of a certain number of staff taking voluntary early retirement by 31 December 2021. The balance also includes the provision for operational risks relating primarily to liabilities arising from BancoPosta’s operations amounting to €241 million (€423 million at 31 December 2018) and the provision for disputes with third parties amounting to €313 million (€335 million at 31 December 2018).
Equity amounts to €9,698 million at 31 December 2019, an increase of €1,593 million compared with 31 December 2018. This change reflects primarily the net profit for the period of €1,342 million and an increase of €1,087 million in the fair value reserve, which reflects changes in the value of investments classified as FVTOCI. These changes were partially offset by the distribution of dividends totalling €774 million, including €574 million from 2018 profit and €200 million as an interim dividend scheduled for 2019, actuarial losses on the provision for employee termination benefits net of the tax effect of €50 million and the purchase of 5,257,965 treasury shares (equal to 0.4026% of the share capital) for a total of €40 million.
2 Further information is provided in the Notes to Poste Italiane Financial Statements for the year ended 31 December 2019.
The total Net debt/(funds) at 31 December 2019 showed a surplus of €5,667 million, or €295 million compared to the figures at 31 December 2018 (when there was a surplus of €5,372 million); this change primarily reflects the increase in the fair value of investments classified as FVTOCI, the recognition of financial liabilities required by the adoption from 1 January 2019 of the new IFRS 16 accounting standard (€1,279 million at 31 December 2019), the distribution of dividends totalling €774 million and a decrease in net working capital.
With regard to financial instruments held by the Financial Services SBU, the overall fair value fluctuation during the period was positive by approximately €5.7 billion and was recognised in a specific equity reserve of €1.7 billion for the portion not hedged by fair value hedges, and through profit or loss for €4 billion for the portion hedged, which speculatively increased the negative balance of fair value hedging derivatives. At 31 December 2019, the balance of these instruments was negative by €5.4 billion (€1.6 billion at 31 December 2018). In addition, as part of these hedging transactions, the Parent Company has increased its Receivables for Guarantee Deposits by approximately €4 billion for amounts paid to counterparties with which Asset Swap transactions are in place.
- Operating results by Strategic Business Unit