Poste Italiane 2024 – 2028 Strategic Plan

New service model and logistics transformation at the core:

• New commercial service model maximizing the value of the platform:
• Retail client coverage optimized and supported by digital enablers.
• Transforming the post office from a transactional to a relational space, focused on building and maintaining strong customer relationships.
• Renewing focus on micro-small business clients.

Logistics transformation:

• Building a future-proof tech driven network to become a fully-fledged E2E logistics operator, transforming the postal network into an increasingly parcel focused one.
• Developing a joint venture with a specialized logistic real-estate partner for the development of the parcel business and new warehouses for contract logistics.
• Leveraging technology to improve customer experience and operational efficiency.
• The SuperApp, incorporating the new payment wallet, will be fully customized to client’s individual profiles and thanks to cutting-edge technology and Artificial Intelligence will be a unique access point to Poste Italiane’s ecosystem enabling a seamless experience maximising cross and up-selling potential.

Technological transformation as a backbone for sustainable growth, improving customer experience and loyalty and contributing to value generation thanks to cross-selling and up-selling.

Conservative and efficient cost discipline, accompanying the transformation strategy.

Continued investments in training and development, along with diversity and inclusion initiatives, to support people engagement and innovation.

Supporting Italy’s social and economic cohesion and reducing the digital divide with Polis Project. By 2026, about 7,000 post offices in small municipalities will be transformed into digital service hubs, enabling quick and easy access to a variety of Public Administration services. In addition, 250 co-working sites will be made available to citizens.

Continuing Group’s path towards carbon neutrality by 2030, setting new targets to enhance long term visibility.

New benefit corporation ‘Poste Mobility’ and a Green Index introduction, further supporting the decarbonization of logistics.

Target to increase renewable energy production by +@GWh over the period 2020-2026, through the installation of photovoltaic panels covering a total area of 1.6 million square feet.

Decarbonizing investment portfolio, targeting Net Zero by 2050.

FINANCIAL HIGHLIGHTS

Group Revenue up by c.3%1 (2023-28 CAGR) to €13.5bn in 2028 with positive contributions from all business segments and increasing exposure to growing businesses.

Operating Profit2 up by c.4% (2023-28 CAGR) to €3.2bn in 2028, with contribution from all business units more than offsetting cost increase.

Net Profit up by c.4%3 (2023-28 CAGR) to €2.3bn in 2028.

Customers’ Total Financial Assets growing to €624bn in 2028 (2023: €581bn), supported by proactive client portfolio management and revamped Postal Savings products as well as an increased client coverage to 80% of Affluent+ clients.

Group funded CAPEX 2024-2028 of c. €5.0bn.

Net financial position in Mail, Parcel & Distribution from -€2.8bn in 2023 to -€0.8bn in 2028, with improving underlying cash generation.

Enhanced sustainable cash and capital generation driving an ample and diversified dividend upstream from subsidiaries supporting an improved Group dividend policy: from a proposed €0.80 DPS in 2023 to not less than €1.0 DPS from 2026 onwards, increasing from 2023 by 7% per annum with at least 65% pay-out ratio over the plan. Poste Vita remittance ratio up to 100% from 2024, providing additional flexibility. Over 1.5x dividend coverage ratio through the plan horizon, providing additional financial flexibility.

Rome, 20 March 2024: Yesterday, the Board of Directors of Poste Italiane S.p.A (“Poste Italiane”), chaired by Silvia Maria Rovere, approved the Annual Financial Report for 2023, including Poste Italiane’s separate financial statement for the year 2023 and the Poste Italiane Group’s consolidated financial statement for the year 2023, prepared in compliance with IAS/IFRS, which confirms the preliminary consolidated results for 2023 previously announced on 29 February 2024, and “2024 – 2028 Strategic Plan – The connecting platform”, a five-year strategic plan designed to thrive on the strong foundations laid with ‘Deliver22’ and ‘2024 Sustain & Innovate’.

“Poste Italiane’s transformation journey started back in 2017 with a simple ambition: to maximise value for our clients and be the most effective and trusted distribution network in Italy. We have gone beyond that and established ourselves as the largest phygital platform in Italy, thriving on the integration of multiple touchpoints and creating an omnichannel ecosystem where each portion of the platform complements the other. We have invested in digital, data and our businesses, with our vast client base at the centre. With this new strategic plan we are reshaping our business to seize substantial growth: with the New Commercial Service Model, designed to optimize the value of our platform and the logistics transformation to evolve into a future-proof network and preserve the financial sustainability of our mail and parcel business.

In Financial Services by evolving our client segmentation allocating them to specialized financial advisors, we will be sure to better cover all our client needs by adapting the network to them rather than asking them to adapt to us. In Insurance Services our focus is on keeping steady growth in the Life Investment & Pension business and leveraging increasing demand and low customer penetration in the Protection business.

Postepay Services has created an open payment ecosystem with payments at its core, adding home services such as fibre and energy and leveraging on Poste Italiane’s omnichannel platform.

The introduction of the SuperApp, with the Digital payment wallet at its core, and the constant evolution of our digital properties will create more value for customers, allowing them to choose the preferred omnichannel experience and increase our profitability. All of this focuses around the increasing relevance of our digital channels, which is a result of important tech investments made to create the truly omnichannel platform approach we have embraced. The new SuperApp is the tip of our tech evolution iceberg enabling business integration and confirming the role of Poste Italiane as a ‘Platform Company’.

In financial terms, Poste Italiane’s revenues will grow to €13.5 billion by 2028 and EBIT will reach €3.2 billion, recording an annual growth rate of around 4%. Similarly, net profit will reach €2.3 billion in 2028.

Thanks to solid and sustainable cash and capital generation, we are upgrading and changing the approach in the dividend policy, committing to a payout ratio of at least 65% over the plan, targeting at least €1.0 DPS in 2026 and at least €6.5 billion cumulated dividends over the plan.

All of this will not be possible without our colleagues, who are the real transformation drivers of the plan, as they have always been in fact. We look forward to continue delivering together sustainable, long-term returns for our shareholders, while meeting the needs of broader stakeholders, with Poste Italiane now being a solid, trusted, and effective strategic pillar for Italy”.

Source: Poste Italiane