A five-year plan that will take into account the evolution of Italian consumers' needs, from electronic payments to e-commerce, accelerating the modernization of Poste Italiane's business. The CEO Matteo Del Fante announced it to the Milan Stock Exchange, obtaining the immediate consent of investors: at the opening of the session, the Poste Italiane share immediately rose by 6% to over 7 euros per share, moreover on a generally negative day for Piazza Affari so far.
AMAZON
One of the landmarks of the new plan is the Amazon model. The e-commerce giant, with which Poste already collaborates, is considered an opportunity not to be missed, taking advantage of the widespread distribution network on which the Italian company can count. It is no coincidence that the plan is called “Delivery 2022”: “We will change our delivery model decisively – said Del Fante at the press conference -. We will become a mail and parcel distribution network at the same time.” “In Italy continued Del Fante – a significant increase in e-commerce deliveries is coming and this is a great opportunity for us. We work closely with Amazon to support their and our growth. We are very attractive for Amazon and for all the other e-commerce operators due to the capillarity of our network, which is unrivaled".
For this reason, Poste relaunches on deliveries. “We are launching an innovative delivery model based on population and volume density that includes afternoon and weekend deliveries,” explained the CEO. “In the world of parcels – added Del Fante – delivering on Sunday will become an operational requirement, because many of the online orders are placed between Friday evening and Saturday and deliveries are becoming more and more within the day or at the latest the next day. Abroad, to smooth out the workload over the 7 days, more and more Sunday delivery is an operational requirement of logistics companies”.
Experimentation is already proceeding on this aspect, in full agreement with the unions: "We are already seeing the positive results of the new operating model, moreover recently agreed with the unions". “Revenues from the world of e-commerce – added CFO Roberto Giacchi – they will cover those we lose in correspondence“. In fact, for the Mail, Parcels and Distribution sector, the plan envisages annual revenues of 3,5 billion against 3,6 billion. A slightly negative balance but amply offset by parcels which, driven by e-commerce, will almost double revenues from 0,7 to 1,2 billion, with over 100 million parcels brought by the postman, against 35 million in 2017.
ELECTRONIC PURSE
The growth of e-commerce is also linked to the other great objective of Poste Italiane, that is the birth of the new hub for digital payments which will be built around Poste Mobile. A hybrid that will be both a bank and a telephone operator to offer 33 million Bancoposta customers, small and medium-sized enterprises as well as the public administration a single container of advanced digital services. “All large mobile operators in various forms have tried, but none have succeeded in giving an electronic purse to our customers. This is our goal,” said the CEO. Operationally it will mean radd the 2022 million PostePay cards issued by 18,3 and a 12% increase in digital transactions to €1,6 billion.
From this point of view, Poste Italiane will collaborate increasingly with the banking system. Financial activity, said Del Fante, “remains such but remains such in view of a growing collaboration and cooperation with the banking system. We we are already distributing loans for various banking operators and we will continue to do so. Today we announce that we will go from 2,6 billion in loans made at the end of the plan to 6 billion in loans made on behalf of third parties".
WORK
The innovations also had consequences in the choices regarding personnel and offices: by the end of the plan, Poste Italiane will have a reduced staff of 5.000 units, i.e. the balance between 15.000 early retirements and 10.000 new hires, half of personnel qualified in finance and insurance, announced today. Personnel costs will thus drop from the current 53% of revenues to 49%, with €0,1 billion invested in early retirement incentives. "At least half of the 10.000 new figures, i.e. 5.000 workers, will be experts in the financial and insurance fields", explained the CEO without however specifying which other skills will be valued.
What is certain, however, is that, unlike the provisions of the previous plan and precisely to take advantage of the widespread distribution, the peripheral offices will not be closed. "There will not be no closure of peripheral post offices. We have also been very clear at the institutional level. The company no longer closes peripheral post offices which are legally defined as offices in municipalities with fewer than 5 inhabitants. Several hundred closures had been scheduled. The motivation is that we believe that the progressive expansion of the range of products, not only financial, must also make those branches economic at a time when both the banking and insurance systems are leaving the minor realities of our country”.
INSURANCE, POSTS ENTER THE AUTO RC
The plan also places heavy emphasis on expanding insurance and financial services. “We will complete the range of products offered including RC cars. Our intention on the car is to enter: we have planned numbers with a gradual approach, perhaps very timid and conservative. We are evaluating the best strategy to optimize returns and revenues without taking home risks that our investors are not used to having”, said Del Fante. The final and overall objective is the growth from 400 thousand to 2 million new contracts per year estimated in 2022, in the Non-Life policies branch. Revenues from the insurance segment will thus reach 1,9 billion euro from 1,5 billion in 2017, with constant growth also in the Life insurance branch.
Instead, financial assets will go up to a value of 581 billion from 506 billion in 2017, in line with the performance of the insurance market and mutual funds. More than 12 million products will be sold compared to 8 million in 2017 and customers followed by a dedicated technical consultant will rise to about half, compared to only 7% in 2017.
FINANCIAL OBJECTIVES
The plan presented in Milan also has ambitious financial goals, starting with a generous dividend policy. The plan provides for a dividend increase of 5% per year for the first three years, starting from 0,42 euros per share in 2017, and ensures a payout of 60% in the last two years, even if Del Fante has not excluded opportunities to review the dividend policy: "I believe in all honesty that between now and 2020 there will have been occasions to review the policy itself,” said the manager.
Revenues by 2022 are expected at 11,2 billion, with a increase in net income to 1,2 billion at the end of the plan (versus 689 million in 2017) with a CAGR (compound annual growth) of 13% and a solid return on equity up 3,4 percentage points. Investments are expected to amount to 2,8 billion euros over the five-year period.
