D E L I V E R I N G R E S P O N S I B L E G R O W T H
02 POSTE ITALIANE 220 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018 03 REPORTS AND ATTESTATIONS 650
Presentation of Poste Italiane Group’s first Integrated Report 14 1. Presentation of the Organisation 16 2. External environment - risks and opportunities 29 3. Strategy and business model 41 4. Governance and integrated risk management model 52 7. Consolidated non-financial statement 197 8. Proposed shareholder resolutions 211 9. Other information 212
POSTE ITALIANE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018 220 2. Basis of preparation and significant accounting policies 225 3. Changes to accounting policies 252 4. Material events during the year 276 5. Poste Italiane Group for the year ended 31 December 2018 280 6. Poste Italiane SpA for the year ended 31 December 2018 354 7. Risk management 434 8. Hedging transactions 471 9. Proceedings pending and principal relations with the authorities 476 10. Material non-recurring events and/or transactions 483 11. Exceptional and/or unusual transactions 483 12. Events after the end of the reporting period 483 13. Additional information 484 14 BancoPosta RFC Separate Report for the year ended 31 December 2018 506
Presentation of Poste Italiane Group’s first Integrated Report 14 1. Presentation of the Organisation 16 2. External environment, risks and opportunities 29 3. Strategy and business model 41 4. Governance and integrated risk management model 52 7. Consolidated non-financial statement 197 8. Proposed shareholder resolutions 211 9. Other information 212
We believe that the integration of sustainability targets within the Group’s business processes is necessary in order to deliver sustainable performance over time, reduce the risk profile and act in line with the principles of integrity and transparency. For this reason, the sustainability strategy of the Poste Italiane Group, drawn up throughout the year, consists of elements that are in line with our business objectives. This means that they will help drive the Company’s success and further enhance the value of our distinctive competences. This strategy is backed up by a system of Sustainability Policies that now play a leading role in the group’s internal regulations, setting out general principles, future goals and operating processes in priority non-financial areas for the Company and for our stakeholders, such as integrity and transparency, human rights, occupational health and safety, corporate citizenship, the environment and the responsible management of financial assets.
Operational aspects of the policies adopted are contained in the ESG Strategic Plan, made of the sustainability goals that the Group has drawn up in keeping with the business strategy set out in the “Deliver 2022” plan and with our social and environmental development ambitions at the international level. The goals contained in the ESG Strategic Plan consist of concrete commitments to be delivered on within established time-scales. These refer to the six key pillars identified on the basis of Poste Italiane’s contribution to the 17 United Nations Sustainable Development Goals.
Partly on the basis of the results of this process, we have been able to strengthen or introduce new ESG procedures within the various areas of the Group.
Report on operations 2018 Statement from the Chairwoman and the Chief Executive Officer
Integrity, ethics and transparency represent the key values around which Poste Italiane has built its identity. These basic principles form the basis for the way we conduct our business which, by its nature, depends on creating trust and on the responsible management of relations with all our stakeholders. For this reason, we have effectively boosted our Anti-corruption System, becoming the first Italian company in the financial and communications sector to obtain the ISO 37001:2016 certification.
The inclusion of the Principles for Responsible Investment (“PRI”) and the Principles for Sustainable Insurance (“PSI”) in the Group’s investment and insurance policies enables us to better understand the risks and opportunities associated with financial transactions and, therefore, to develop innovative solutions that can benefit the performance of the business, build trust, create value for our customers and contribute to the country’s sustainable development.
Turning to environmental concerns, given the size of our organisation and of our geographical footprint, we are aware of the impact that our activities can have on the environment. For this reason, in addition to disseminating a culture of environmental protection, we have launched a series of initiatives designed to make our real estate assets and logistics activities more green-friendly, by, for instance, promoting the efficient management of our energy consumptions and the use of alternative energy sources.
Report on operations 2018 The pillars of the Group’s Environmental Social and Governance Strategic Plan
For Poste Italiane, publishing an Integrated Report means reporting to stakeholders on how the Group is implementing an “integrated approach” that runs throughout the organisation, and that leads to decisions and actions designed to create value over the short, medium and long term.
The Group has made an ongoing commitment to its stakeholders to implement strategic decisions that will result in the creation of value that can be shared with local communities, taking into account all the forms of “capital” needed to achieve this objective. The careful management of this capital – not only financial, but also human, physical, structural, intellectual, social and natural – has enabled us to play a leading role in the last 150 years in sectors that are of strategic importance for the country.
In addition to the description of the Group’s business model, its governance and risk management model, the Report shows the contribution made by each element towards achieving the business objectives, in terms of both qualitative information and specific performance indicators.
Reporting Standards” issued by the GRI – Global Reporting Initiative, with the related supplement for the Financial Services sector. The reporting process also meets the compliance requirements (including the provisions of Legislative Decree 254/16), external communication and the Group’s ranking in the main international sustainability indices.
The sections of the document where information on the Company’s non-financial is provided can be easily identified with the following infographic: Annual Report Poste Italiane Group 2018
Strategic Business Unit Poste Italiane SpA corporate functions Group companies Associates
In line with the strategic guidelines set out in the Deliver 2022 Strategic Plan, the Group’s activities are divided into four Strategic Business Units (also referred to as operating segments in Poste Italiane’s financial statements): Mail, Parcels and Distribution; Payments, Mobile and Digital; Financial Services; Insurance Services.
On 13 February 2018, the deed for the merger of PosteTutela SpA (a wholly owned subsidiary of Poste Italiane SpA) with and into Poste Italiane was executed. The transaction was effective for legal purposes from 1 March 2018, and for accounting and tax purposes from 1 January 2018. PosteTutela SpA is the company that, among other things, is responsible for organising, coordinating and managing the transport of cash and valuables for all the Group’s offices and post offices throughout Italy.
The transaction envisaged, among other things, the partial spin-off, to Anima SpA SGR, of management of the assets underlying Poste Vita SpA’s Class I insurance products (totalling over €70 billion), previously carried out by BancoPosta Fondi SpA SGR. The new agree ments also restructured the existing partnership, extending it for a duration of 15 years. The transaction was effective from 1 November 2018, following receipt of the necessary clearance from the supervisory authority.
In addition, on 12 April 2018, Poste Italiane subscribed for its share of the rights issue carried out by Anima Holding SpA, amounting to a total of approximately €30 million. This enabled the Company to retain its 10.04% interest in Anima Holding SpA.
The transaction as a whole was effective from 1 October 2018.
From the same date, Poste Mobile SpA changed its name to PostePay SpA, becoming Italy’s largest digital payments platform. The new company, operating in synergy with Italy’s most widespread distribution network, represented by the post offices network, will enable Poste Italiane to consolidate its role as a driving force behind the country’s development and innovation.
�� The reorganisation of the card payments and payment services business, with the establishment of an electronic money institution (EMI), following the business’s removal from the ring-fence that applies to BancoPosta RFC and its transfer to PosteMobile, then renamed PostePay.
�� Enhancement of the role played by information systems in driving business growth through the introduction of new technologies and the Group’s digital transformation.
�� The creation of a Customer & Innovation Hub function to provide a greater focus on innovation and on the design of the multichannel user experience to get closer to understanding what customers really want.
The Business and Public Administration function is responsible for distribution and sale of the Group’s products and services to large and medium-sized enterprises and the Public Administration and central and local government level. It has a geographical structure consisting of 5 areas for Business Customers and 1 area serving the Central Public Administration Centrale and based in Rome.
The Mail, Logistics and Communication function is responsible for all letter post and parcel services at Group level1.
All workforce data refer to permanent staff and are shown in full-time equivalent terms. n/s: not significant * Logistics Network - Macro Areas , whilst coinciding georaphically with the Post Office Network - Macro Areas, from 2018 have their own, separate organisations in terms of processes and competences. ** Delivery staff include 26,716 postmen and women and delivery supervisors (28,635 at 31 December 2017).
Implementation of the new delivery model was supported by a review of the processes and equipment used to support delivery activities. Major changes were introduced in terms of automation and an innovative approach to calculating the logarithms used to plan the routes for postmen and women and to allocate the mix of letters and parcels among both personnel and vehicles. The related development, testing and trials was handled internally and the new system is currently being scaled up and rolled out.
The flexibility offered by the “Joint delivery” model will enable Poste Italiane to fully exploit its physical infrastructure in response to the growth of e-commerce and the needs of customers throughout Italy.
Poste Italiane is now the largest logistics operator in Italy, and is a leading player in the financial, insurance and payment services. The Company plays a vital role in Italy, and makes a substantial contribution to the production chain and the national economy. By investing and operating with the actors in its value chain, Poste Italiane produces wealth and employment through its own businesses, and also generates externalities by activating a local supply chain.
In 2018, the Group’s operations carried out to produce and deliver goods and services through the use of productive factors had direct, indirect and induced impacts on the Italian economy amounting to approximately €12 billion in terms of GDP and €2 billion in terms of tax revenue. It may also be estimated that a total of approximately 184,000 workers are involved along the production chain. The use of this workforce entails the distribution of income to workers, which amounted to €8 billion in 2018.
A significant indicator of the Company’s impact on the Italian economy is the so-called multiplier, a factor that shows the leverage effect generated by spending on purchases from local suppliers. According to estimates, €1 million spent by Poste Italiane is able to generate an impact on the economy of €6 million in terms of GDP, €1 million in tax revenues and €4 million in earned income, creating over 90 jobs.
Supporting both public and private actors, Poste Italiane contributes to the development of the entire national economy. Even though this is unquantifiable at the moment given the need for reliable macroeconomic data that are currently unavailable, it is easy to grasp the extent of this in terms of the consequences generated for the nation’s economic system. Therefore, the data presented in the previous paragraph show a prudential impact that Poste Italiane has on the national economic fabric.
More than 87% of the wealth produced by the Company was distributed to its stakeholders. In particular, employees and suppliers are among the stakeholder categories that benefit most from the wealth produced by the Company, accounting respectively for 59% and 33% of the total value distributed.
The economic value generated in 2018 amounts to €10.8 billion, of which 87% was distributed to its stakeholders
Poste Italiane has adopted a “materiality analysis” process, structured in accordance with Legislative Decree 254/16 and the reporting standards adopted, for a better understanding of the non-financial topics that may entail risks and opportunities to achieve its business objectives. This process has led to the identification of the economic, social and environmental “material” topics that may have a substantial impact on the decision-making processes of the Group’s stakeholders, and which play a decisive role in defining the Group’s strategy, taking into account its structure, the reach of the network served and the diversification of the market sectors it operates in.
The relevance of the topics identified was defined thanks to the direct involvement of internal and external stakeholders in specific listening and engagement initiatives. The outcomes of the activities carried out, which led to identification of the material topics and their positioning within the materiality matrix, were presented to Poste Italiane’s Audit, Risk and Sustainability Committee at a specially arranged meeting. This matrix is a revision of the version included in the Consolidated Non-financial Statement published in 2017.
In line with the Group’s identity and the principles of its Code of Ethics, building and developing relationships of trust with stakeholders is of paramount importance in the process of generating and sharing value for Poste Italiane and for stakeholders themselves, with a view to continuity and reconciliation of both parties’ interests. As well as helping to affirm Poste Italiane’s credibility in the social context in which it operates, this also allows consideration of the possible non-financial impacts the Company’s activities may have, taking all necessary measures to prevent and minimise any negative impacts, whilst generating positive ones.
Local communities Community projects; partnerships; press releases; sponsorships; donations; dialogue with local authorities; contacts during the launch of relevant projects, publication of documents, interviews, events
The annual Forum, which took place for the second time in 2018, involves plenary and dedicated group sessions during which stakeholders are asked to give their opinions and assessments regarding sustainability issues of potential relevance for Poste Italiane previously identified through internal and external analysis. Each stakeholder group is asked to share its opinion on each issue and its degree of relevance, expressed in terms of stakeholders’ perception of the influence it generates in their relations with Poste Italiane.
In addition, during the specific sessions, the various stakeholder groups are asked to select among the sustainability issues those they would prioritize, to provide the reasons that motivated their choice to the other participants, with a view to sharing possible development scenarios that may affect Poste Italiane’s management of the selected issues.
Customer focus. The importance of customer focus for a company like Poste was confirmed. This may be achieved through the organisation of loyalty initiatives, dedicated to a wide range of users and aimed at maintaining trust in the Company and its reputation.
Safeguarding diversity. The participants recognised Poste Italiane’s role as a cultural promoter regarding diversity issues, and appreciated the Company’s virtuous model in this area. Stakeholders stressed the need to extend non-discriminatory principles and behaviours to all discrimination factors, by incorporating as many elements of diversity as possible into their models and policies regarding the safeguarding of diversity and human rights. In addition, participants encouraged the Company to deliver more training activities on diversity issues and to ensure alignment to relevant international guidelines and conventions in its practices.
Service Quality. The stakeholders focused on improving the efficiency of services management, especially the public services offered by Poste Italiane. In this respect, attention was also paid to the importance of proper cyber security risk management.
Social role in local communities. The importance of this issue is justified by the many roles Poste Italiane plays in local communities as an economic and social actor. In particular, the participants encouraged the Company to continue its aggregation and socialisation initiatives for the benefit of the social fabric, emphasising their appreciation of Poste Italiane’s constant dialogue with local authorities and third sector organisations.
Guarantee our staff ongoing development of their knowledge and skills and the opportunity to reach their full potential through training courses aimed at ensuring growth and strengthening of know-how in line with the needs they and the market have expressed, also with a view to better managing business and organisational changes.
Contribute to Italy's socio-economic wellbeing through direct, indirect and induced impacts in local areas (e.g. in terms of GDP and employment), and initiate or support social activities that respond to the needs expressed by society, including those identified through dialogue and collaboration with the third sector.
Safeguard our people's health, safety and psychophysical integrity, also in terms of workplace quality, and foster the development of a robust in-company culture in compliance with the highest national and international standards in this regard.
Provide staff with modern, flexible working tools and models that respond to specific personal needs and ensure work-life balance (e.g. agile working initiatives, improved maternity and paternity arrangements, the provision of benefits in the field of healthcare, etc.).
Consider dialogue with staff and labour union representatives as essential in finding shared solutions relating to issues that can have significant impacts on the organisation, the business and above all human capital, a vital corporate asset for the Company.
Financial inclusion Extend the financial products and services offering to traditionally excluded categories, in order to guarantee access to services that are essential for economic livelihoods, and make the customer purchasing experience more aware via financial education initiatives, especially with regard to savings, investment, payments, pensions and insurance.
�� Economic �� Strengthening of Company initiatives regarding specific issues (e.g. anticorruption, the environment, ISO 37001, etc.)
Deterioration in the levels of quality provided and increases in the number of complaints
�� Strategic �� Human rights �� Strengthening of annual training plan �� Promotion of communication, training and information initiatives to increase engagement
�� Constant structured dialogue with bodies and authorities and agreed local community engagement initiatives
Independent regulatory and/ or supervisory authorities; European and international authorities; national authorities; consumer and trade associations
�� Economic �� Constant structured dialogue with bodies and authorities and agreed local community engagement initiatives
�� Making the Postal, Communications and Logistics fleet "green", partly with the aim of increasing load capacity �� Redesign and development of the delivery network (e.g. increase in the number of afternoon delivery lines, introduction of deliveries to lockers, post offices and third-party networks)
�� Management of risks and opportunities relating to ESG factors within traditional investment processes
�� Specific organisational responsibility for digital development �� Launch of “digital” initiatives (e.g. "DilloaPosteItaliane" web panel platform)
�� Passive cycle digitisation �� Centralisation of Group companies' procurement activities within a corporate function �� Supplier Qualification Committee
�� Introduction of oversight measures for the protection of human rights
�� Whistleblowing portal 2. Freedom of association and protection of the right to organise
�� Equal opportunities initiatives (e.g. percentage of women in positions of responsibility)
�� Health and Safety portal for the management of occupational health and safety issues, as well as references to the main new legislation and case law regarding this matter 8. Data protection �� Consent management
�� Compliance relating to application of the General Data Protection Regulation (GDPR) and personal data protection legislation
�� Actions in the area of personal data protection (e.g. personal data protection assessment, adaptation plan for European Privacy Seal certification, etc.)
�� Definition and standardisation of contractual requirements for compliance with data protection regulations
Climate change threatens the basic aspects of people's lives around the world, such as access to water, food, care, land use and natural resources. However, also on the business front, it is important to identify the potential economic impacts arising from climate change.
Therefore, Poste Italiane Group has adopted an "Group policy on Environmental Sustainability" and - reinforcing what has already been stated in the Code of Ethics - undertakes to prevent, manage and, where possible, reduce the direct and indirect environmental impacts generated by its activities, as well as to take environmental impacts into account in the development of products and services (including investment and insurance products, etc.) and to turn the concern about climate change into opportunities and significant mitigation initiatives. The commitment is to promote responsible resource management in order to reduce the Group's ecological footprint and to assess the impact of its economic activity on the environment from a circular economy standpoint.
In this regard, Poste Italiane has provided for identification of corporate activities and organisational areas in which climate change risks might occur. In particular, the risks associated with climate change4 have been identified and analysed by considering various drivers - attributable to two macro-areas (transition risks and physical risks) - which are illustrated below. In addition, Poste Italiane provides for specific mitigation measures to respond to the risks identified and associated with each driver.
�� Collaboration with policy makers to represent the need for clear and stable regulations
�� Reduction of energy consumption (e.g. replacement of neon lamps and use of LEDs), in order to cope with potential sudden changes in energy prices 4. Reputation �� Monitoring of reputational risks via management tools
�� Dialogue with investors and analysts, with a focus on climate change issues
�� Dialogue with local institutions (e.g. Civil Protection, Civil Defence) regarding coordination of emergency and rehabilitation activities
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 "Deliver 2022 Plan”5. Over the period of the plan, the Company has envisaged €2.8 billion of investment in strategic assets, in order to achieve financial objectives based on realistic assumptions, with limited execution risk.
�� CAPEX to support the transformation: approximately €0.5 billion in the period 2018-2022.
�� EBITDA: €0.2 billion (2017: €0.2 billion), with CAGR of 1%.
�� Expected card transactions as CAGR up 12%, to reach €1.6 billion.
�� Revenue: €4.9 billion (2017: €5.0 million ), maintaining stable turnover and, at the same time, reducing the importance of capital gains (down to zero in 2022, from over €0.5 billion in 2017).
�� Total financial assets: a rise to €581 billion from €506 billion in 2017, in line with market growth and increased penetration of life products and mutual funds.
The need to adopt a sustainable approach is even clearer in the current context where the social and environmental impacts of activities carried out are increasingly evident and extend beyond local borders. Against this backdrop, Poste Italiane intends to develop its own sustainability initiatives in order to support and move forward the Sustainable Development Goals, by structurally incorporating elements of sustainability within corporate policies, processes and long-term strategy. The starting point for the success and effectiveness of this ambition is the process undertaken which - through the involvement of all organisational areas and listening to stakeholders - enables identification and review of strategic guidelines for the management of non-financial issues, with a view to achieving continuous improvement.
Poste Italiane's Sustainability Strategy The Group's sustainability strategy involves a system of sustainability policies and an ESG Strategic Plan in line with the Group's business strategy and ambitions, and with national and international social and environmental development targets.
General principles, qualitative objectives and management methods are incorporated within Group policies that govern the topics identified in the materiality analysis and the areas required by Legislative Decree 254/2016, while specific objectives and targets - quantitative and qualitative - are contained in the ESG Strategic Plan.
The policy sets out the general principles, objectives and methods for managing the Group's environmental impact and confirms Poste Italiane's commitment to promoting efficient use of natural resources and focusing on seeking innovative solutions to protect the environment in its value chain.
In its responsible investment policy, Poste Vita sets out principles that enable inclusion of ESG elements in the management of its investment activities, making a positive contribution to the impact issuers in its financial portfolios have on the community, and concrete adherence to principles and guidelines recognised at national and international level regarding the incorporation of sustainability criteria within traditional investment processes.
In its responsible investment policy, BancoPosta Fondi SGR sets out principles that enable inclusion of ESG elements in the management of its investment activities, making a positive contribution to the impact counterparties in its financial portfolios have on the community, and concrete adherence to recognised principles and guidelines.
THE PILLARS OF POSTE ITALIANE'S ESG STRATEGIC PLAN THAT SUPPORT THE DELIVER 2022 PLAN
The actions and objectives included in the Plan are the outcome of a structured process that has led the Company's management to define the key stages to be achieved in the coming years, in line with the timeframe covered by the business strategy set out in the "Deliver 2022 Plan". With a view to creating shared value, these stages have been identified taking into account the opinions expressed by stakeholders during engagement activities.
Reference should be made to the section on “Performance” in which the objectives, management methods and key performances achieved in the pillars of the Group's ESG Strategic Plan are dealt with.
Poste Italiane Group's sustainability strategy is also reflected in its active participation in national and international networks and associations that aim to promote development and ongoing discussions on sustainability issues, as well as in the Company voluntary participation in the sustainability assessments conducted by ethics rating agencies.
ASPHI: an organisation that has been promoting the integration of disabled people in schools, employment and companies via the use of ICT technology for over 30 years. The collaboration with Poste Italiane has been consolidated over several years, in relation to participation in programmes for the inclusion and enhancement of disabled people in corporate environments
Payments, Mobile and Digital • Collection and payment services • Mobile telephony • Digital services for the Public
Financial • share capital (own funds, free float) • debt capital • cost of the universal postal service • postal savings and deposits • insurance premiums
Physical-structural • real estate, post offices, branches and ATMs • logistics network • IT hardware • IT software
Human • talent • specialist and managerial expertise • experience • integrity
Social-relational • large geographical footprint • relations with Public Sector and the authorities • labour relations • customer base • stakeholder engagement
Over the years, Poste Italiane has shown its ability to transform its operational structures and services by adapting to market needs, and in some cases anticipating them, through continuous investment in technology and know-how.
�� sustainable growth in dividends, in line with improvement in the Group's operating performance.
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.
Insurance Services • Personal protection, property and pet insurance • Loan protection • Multi-risk insurance for businesses • Savings protection and management • Pensions
CAPITAL DESCRIPTION KEY MEASUREMENT INDICATORS REFERENCES TO SECTIONS IN THE ANNUAL REPORT
�� FS 11 Percentage of assets subject to positive and negative environmental or social screening regarding social/environmental aspects
Structures, equipment and infrastructure that have an impact on efficiency and effectiveness
�� Legality and incorporation of ESG criteria within the procurement process
�� Initiatives to improve access to financial services for disadvantaged people
The Strategic Business Units In order to implement Poste Italiane's strategic vision, each of the Strategic Business Units - which have seen gradual and constant reorganisation of their operating divisions over time - has specific objectives which, viewed as a whole, enable strengthening of the growth and sustainability of all of the Poste Italiane Group's businesses.
In the period between 4 and 15 February 2019, Poste Italiane purchased 5,257,965 own shares at an average price of €7.608, making a total cost of approximately €40 million. The purchases were made in execution of the buyback authority approved by the Annual General Meeting of shareholders held on 29 May 2018. The buybacks are part of a programme whose launch was announced to the market on 1 February 2019, pursuant to art. 144-bis of CONSOB Regulation 11971/1999.
Share buybacks are carried out with the aim of creating a stock of treasury shares of up to €50 million, equal to approximately 7 million shares or less than 1% of the share capital, partly to service any future staff incentive plans.
BY THE ITALIAN COURT OF AUDITORS TO AUDIT POSTE ITALIANE Francesco Petronio
Carlo Longari 1. The Board of Directors was elected by the Annual General Meeting held on 27 April 2017 to serve for a period of three years, and will remain in office until the Annual General Meeting's approval of the financial statements for the year ended 31 December 2019.
2. The Board of Statutory Auditors was elected by the Ordinary General Meeting of 24 May 2016 to serve for a period of three years and will remain in office until the General Meeting's approval of the financial statements for the year ended 31 December 2018. On 30 January 2017, the Alternate Auditor, Andrea Bonechi, resigned from his position with immediate effect. As a result, the Annual General Meeting of 27 April 2017 elected Antonio Santi to serve as an Alternate Auditor.
3. The Supervisory Board was appointed by the Board of Directors' meeting of 24 May 2016 for a three-year term. Carlo Longari was appointed by the Board of Directors' meeting of 7 November 2018 to replace Giulia Bongiorno, who resigned on 12 March 2018.
The Board of Directors consists of nine members (eight non-executives and one executive) and normally meets once a month to examine the operating performance and vote on resolutions regarding the results of operations, proposals relating to the organisational structure and transactions of strategic importance. The Board met 14 times in 2018. Of the nine members of the Board, seven meet the requirements to qualify as independent in accordance with the Corporate Governance Code for listed companies and eight qualify as independent in accordance with the independence requirements in the Consolidated Law on Finance and the By-laws.
The Board of Statutory Auditors in office has three standing members and three alternates. The Board verifies compliance with the law, the Company’s By-laws and with correct corporate governance principles, also verifying the adequacy of the organisational structure and administrative and accounting systems adopted by the Company and their functionality. The Board of Statutory Auditors met 36 times during the year.
The audit firm PricewaterhouseCoopers SpA has been appointed to audit the Company’s accounts for the period 2011-2019. The appointment was made in conformity with Legislative Decree 39/2010 (“Implementation of Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts”). In view of the approaching expiry of nine-year engagement as the independent auditor (the financial statements for the year ended 31 December 2019), the Company, in line with the provisions of Legislative Decree 39/2010, as amended by Legislative Decree 135/2016, under the responsibility and supervision of the Board of Statutory Auditors, in 2018 began the process of selecting a new single audit firm for the Group for the nine-year period 2020-2028. The tender procedure was completed in the first three months of 2019, providing the basis for the Board of Statutory Auditors’ reasoned proposal for the choice of the new independent auditor to be submitted to the Annual General Meeting of 28 May 2019.
Proposed changes to BancoPosta RFC (removal from the ring-fence of the “payment services and card payments” unit); Changes to the subsidiary, PosteMobile: (A) authorisation to establish a separate ring-fenced card payments and payment services entity, (B) the transformation of this entity into a hybrid electronic money institution ("EMI"); Grant of authority to begin the process of applying for authorisation from the Bank of Italy.
Participation in Anima Holding SpA's rights issue 19 February 2018 Preliminary results for 2017, proposed dividend 26 February 2018 Approval of the Deliver 2022 Strategic Plan 29 March 2018 The Company's financial statements for the year ended 31 December 2017 and the consolidated financial statements for the same period
Sustainability Guidelines "The ESG (Enviromental Social and Governance) precess within the Poste Italiane Group".
Guidelines for application of the independence requirements for members of the Board of Directors.
Report and analysis concerning completion of the planned IT upgrade provided for in the EMI authorisation and subsequent submission to the Bank of Italy of the extract from the minutes of the Board meeting, mas requested by the Bank for the purposes of registering PosteMobile SpA as an EMI.
Approval of the planned outsourcing of “BancoPosta's Financial Management” from BancoPosta to BancoFondi SGR.
7 November 2018 Interim report for the three months ended 30 September 2018
Transaction designed to strengthen the capital of the subsidiuary, Poste Vita
Approval of the Unified Security Document: IT Risk Report for 2018
In order to promote and maintain an adequate Internal Control and Risk Management System (also “SCIGR”), Poste Italiane uses a series of organisational, IT and regulatory tools to enable it to identify, measure, manage and monitor the Group’s principal risk exposures.
This system is at the heart of Poste Italiane’s corporate governance6 allowing the Board of Directors to pursue its priority goal of creating value over the medium to long term whilst being able to determine the nature and level of risk that is compatible with the Company’s business objectives.
Risk management and risk assessment Poste Italiane has adopted a Risk Management model based on the Enterprise Risk Management (ERM) framework, with the aim of providing an organic, integrated vision and an effective, standardised response to the risks to which the Group is exposed. The Group Risk Management function (Governo dei Rischi di Gruppo “GRG”), which within the Corporate Affairs function is responsible for ensuring that these objectives are met. This is primarily done through the definition of an integrated risk management process that relies on the coordinated involvement of all the actors in the Internal Control and Risk management System, above all the specialist forms of second-level control, the use of standardised models and metrics based on Group-wide criteria, and the design and implementation of shared tools for assessing and managing risk. In this latter regard, the Group implemented an integrated Governance, Risk and Compliance (“GRC”) platform in 2018 to support the integrated risk management process. This IT tool assesses and manages operational risk, in accordance with Legislative Decree 231/01 and the various fraud, IT security, strategic, ESG and reputational risks, as well as ensuring compliance with the statutory requirements applicable to financial and payment services. This is the tool that has enabled the Group to maximise integration of the risk management process, ensuring that risk assessment methods are shared across all the specialist second-level control functions. At the same time, it has improved communication with senior management and corporate bodies and between the various control functions, minimising the risk of inadequate or redundant information.
Compliance This refers to the risk that breaches of existing laws and regulations, such as the risks connected with Legislative Decree 231/01, Law 262/05, Data Protection and Market Abuse regulations or the introduction of new legislation or regulations (or new interpretations legislation and regulations) of either general importance (e.g. regarding administrative, accounting, tax matters, etc.) or specific to the sectors in which the Poste Italiane Group operates. This risk category includes the risks linked to the introduction of new regulations governing the management and development of universal postal services and the related rates providing a return for Poste Italiane, and the risk of the failure to meet the service quality standards set by the regulator (the Autorità per le Garanzie nelle Comunicazioni or AGCom)
Financial risk primarily relates to the operations of BancoPosta RFC and PostePay’s ring-fenced EMI (the active management of the liquidity deriving from postal current account deposits, and of collections and payments carried out in the name of and on behalf of third parties), asset financing and the investment of liquidity and, as regards the Poste Vita Insurance Group, investments designed to cover contractual obligations to policyholders.
Price This is the risk that the value of a financial instrument fluctuates as a result of market price movements, deriving from factors specific to the individual instrument or the issuer, and factors that influence all instruments traded on the market
Credit This is the risk of default of one of the counterparties to which there is an exposure. In relation to revenue and receivables due from the state and from central and local government entities, regulated by statute and specific agreements or contracts, prompt and full payment of the amounts due is dependent on availability of the necessary funds in the state budget or in the budgets of the related public sector entities
Cash flow inflation This is defined as the uncertainty related to future cash flows due to changes in the rate of inflation observed in the market
Foreign exchange risk This is the risk that the value of a financial instrument fluctuates as a result of movements in exchange rates for currencies other than the functional currency. This risk primarily regards trade receivables and payables due from and to overseas counterparties, investments in equity instruments and holdings in certain funds 7. The indicated amounts do not take into account the nominal value of forward purchases and sales of securities with a total nominal value of approximately €3 billion.
An eventual downgrade due to a significant deterioration in Poste Italiane’s creditworthiness, above all to below investment grade, could have an impact on Poste Italiane’s cost of funding and potentially restrict Poste Italiane’s access to certain forms of financing, including the capital markets
Incorporating risk management and sustainability within Poste Italiane’s strategy In 2018, Poste Italiane developed a framework with the priority goal of integrating ESG (Environmental, Social and Governance) principles into its strategy, governance and business processes. Poste Italiane has for some time now been working on a plan to, on the one hand, improve awareness and understanding of reputation risk and, on the other, integrate sustainability into all aspects of its strategy. This process if closely linked to decisions taken in response to changes in the operating environment, such as the additional disclosures required by investors, regulatory changes and the growing attention paid by stakeholders. This has required Poste Italiane to go beyond the current statutory requirements, developing specific cross-segment guidelines and drawing up an inclusive, open and transparent sustainability action plan, capable of supporting delivery of the Company’s strategy and giving shared value to all its distinctive features.
In August 2018, Poste Italiane’s Board of Directors, prior receiving opinion from the Audit, Risk and Sustainability Committee, approved the ESG Guidelines, which describe the activities carried out by the Poste Italiane Group with regard to sustainability issues. These include the uniform, consistent, cross-functional integration of the principles on which the concept of sustainability is based into the Group’s various activities, the permanent, transparent and proactive involvement of stakeholders and oversight of the associated reputational risk.
The ESG Guidelines provide for, among other things, the establishment of a Cross-functional Sustainability Group (Gruppo Interfunzionale di Sosteniblità “GIS”), made up of representatives from central functions and from Group companies, who contribute to implementation of the sustainability strategy and are responsible for achievement of the goals included in the ESG Strategic Plan, given their roles as managers of the people, tools and know-how needed to proceed with the related implementation.
The IGI is the result of the new Integrated Governance Survey and is drawn up with the involvement of Italy’s top 100 companies by stock market capitalisation. The IGI takes a snapshot of companies’ governance infrastructure and processes in order to gauge how they manage non-financial factors and assesses the level of companies’ understanding and analysis of integrated governance.
Trade tensions are having an impact on global trade. The uncertainty caused by US protectionism has dampened enthusiasm among economic operators and risks slowing investment, with a resulting impact on growth and jobs.
The impact of the trade tensions on the United States has been limited and the rate of growth continues to be one of the highest among the advanced economies, partly due to fiscal stimulus. Trend GDP growth in the third quarter was 3.5% per year, even if this was down from the 4.2% of the previous quarter. The trade deficit, however, continued to widen, with exports down 3.5% and imports up 9.1%, figures that have served to strengthen the current administration’s protectionist policies. The Federal Reserve, having raised interest rates in December, increasing the FED Funds rate from 2.25% to 2.5%, dampened expectations of further rate rises in 2019 in view of the low rate of inflation. Investors expect strong growth in 2019, though the pace is expected to ease slightly10.
After forging ahead in 2017, the euro area is slowing more than expected. Annual growth in 2018 was 1.8%, compared with 2.5% in 2017. The trade surplus declined as European businesses proved highly sensitive to the prospects for the international market. Germany, above all, slowed, leading the government to cut its growth estimate for 2019 from 1.8% to 1%. On the supply side, manufacturing saw a slowdown in growth, with reduced order books also having an impact on services. The €-coin indicator13 in December continued to reflect a worsening of business and consumer confidence, falling for the second month running from 0.47 in November to 0.42. A further decline in confidence could remove support for domestic consumption, which has so far remained solid, which would add to weak overseas demand. Following the end of
Italy, like Germany, is slowing more than other European countries. Figures from ISTAT show that GDP was down 0.1% in the fourth quarter of 2018, resulting in an “acquired” growth rate of 0.9% for 201815. Uncertainty had a negative impact on household spending and on business investment. The weakening economic cycle has particularly hit the manufacturing sector, where automobile production fell by almost 20%, whilst the production of intermediate goods was down 5.3%. This phase could continue into early 2019, whilst the expansionary effects of the economic measures approved by the government in December 2018 are expected to be seen in the second part of 201916.
The market for European government bonds in 2018 reflected the progressive slowdown in the euro area’s economy. The yield on 10-year Bunds reached a peak of 0.80% on 8 February, before closing the year at 0.24%. In contrast, the yield on BTPs was affected by the political uncertainty surrounding the new government: the ten-year spread between BTPs and Bunds began the year at 163 bps, before falling to a low of 114 bps on 24 April. In the second part of 2018, the spread rose to 327 bps, before then falling in the last weeks of the year. At the end of 2018, the ten-year spread stood at 250 bps. The yield on ten-year BTPs, which had begun the year at 2%, closed 2018 at 2.74%, after reaching a peak of 3.80%.
14. Source: Prometeia, Economic Outlook - December 2018; Il Sole 24 (January 2019). 15. “Acquired” GDP growth is the annual growth rate that would be obtained if growth in the other quarters of the year was zero. 16. Source: ISTAT, “GDP and public debt” – March 2018; ISTAT, “Quarterly economic performance” – March 2019; Il Sole 24 (January 2019).
A particularly significant contributions came from the Financial Services Strategic Business Unit, where EBIT is up 33% from €646 million in 2017 to €859 million in 2018, and from the Payments, Mobile and Digital Strategic Business Unit, where EBIT is up 5% from €194 million in 2017 to €204 million in 2018.
Profit for the year is up €709 million, partly reflecting deferred tax income at Poste Vita (€385 million). Capital expenditure rose significantly in order to support the transformation of the Company and the individual businesses.
Increase/(decrease) 2017 2018 Results of operations for the year ended 31 December (€m)
Average worforce expressed in full-time equivalent terms 134,360 138,040 (3,680) -2.7%
Net funds of the Mail, Parcels & Distribution segment (1,131) (1,335) 204 -15.3%
In detail, total revenue from Mail, Parcels and Distribution services amounts to €3,580 million, a reduction of 1.4% compared with 2017. This reflects a decrease in traditional letter post and in other revenue, partly offset by the performance of parcels, where volumes were up 12.6% from 113 million items in 2017 to 127 million in 2018, resulting in a 9.8% increase in revenue from €693 million to €761 million.
The Payments, Mobile and Digital segment contributed €592 million to total revenue, an increase of 11.4% compared with 2017. This reflects a good performance from card payments, where revenue is up from €238 million in 2017 to €291 million.
The Insurance Services segment contributed €1,470 million to total revenue, an increase of €15 million despite a reduction in gross premium revenue compared with the previous year (a decline of €3.7 billion). The improvement reflects the increase in the net investment result which, in contrast, benefitted from the greater volume of assets under management, and a positive contribution from the Non-life business.
As anticipated, total costs are down from the €9 billion of 2017 to €8.8 billion, a reduction of 1.8%. This primarily reflects a reduction in other operating costs, amounting to €2,659 million after a 7.3% reduction compared with the €2,868 million of 2017. This reflects higher provisions for risks and charges in 2017, for the most part linked to the operational risk associated with the Company’s sale of units in real estate funds in the period between 2002 and 2005.
The company, in common with other leading players in the sector, has begun a review of its internal processes and developed and implemented appropriate information systems to support the correct assessment and recognition of the above deferred tax assets.
Investments accounted for using the equity method 1,434 280 214 157 (1,588) 497
Current tax assets and liabilities 86 (3) 1 22 (1) 105
Provisions for employee termination benefits (1,178) (2) (5) (2) 1 (1,187)
of which: fair value reserve 4 - (72) (1) - (69)
Cash and deposits attributable to BancoPosta - - (3,318) - - (3,318)
Property, plant and equipment and Investment property 2,025 18 1 9 - 2,053
Trade receivables, Other receivables and assets and Inventories 2,352 115 2,454 1,972 (723) 6,170
Current tax assets and liabilities 77 3 (1) (9) - 70
Provisions for risks and charges (1,031) (21) (532) (11) - (1,595)
Provisions for employee termination benefits (1,253) (3) (16) (3) 1 (1,274)
Technical provisions for the insurance business - - - 123,579 - 123,579
Cash and deposits attributable to BancoPosta - - (3,196) - - (3,196)
Current tax assets and liabilities 9 (6) 2 31 (1) 35
Provisions for employee termination benefits 75 1 11 1 - 87 of which: fair value reserve (8) - (252) (180) - (440)
In line with the investment programme for the period 2018-2022, designed to support delivery of the Strategic Plan, around 25% of the Group’s investment (€133 million) focused on the transformation process and almost entirely regarded the Mail, Parcels and Distribution Strategic Business Unit.
As part of the process of modernising its vehicle fleet, the Group is progressively introducing alternative electric delivery vehicles (3-wheeled vehicles). This will improve occupational safety and extend the process, launched in recent years, of adopting eco-friendly forms of transport, involving the introduction of a fleet of 4-wheeled electric vehicles.
Approximately 28% of investment focused on projects needed to meet legal requirements (€152 million). In the Mail, Parcels and Distribution Strategic Business Unit, approximately €70 million was invested in improving safety for employees in accordance with the related legislation (Legislative Decree 81/08) and approximately €20 million was spent on IT security, the GDPR and anti-money laundering. In the Financial Services Strategic Business Unit, around €27 million was spent on IT Risk, on the MiFID 2 regulations (3 January 2018) and the new IDD - Insurance Distribution Directive (1 October 2018).
Provisions for risks and charges total €1,513 million (€1,595 million at the end of December 2017) and include provisions for early retirement incentives of €444 million, to cover the 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 2020.
Analysis of the net debt/(funds) of the Mail, Parcels and Distribution Strategic Business Unit in accordance with ESMA guidelines Net funds attributable to the Mail, Parcels and Distribution Strategic Business Unit at 31 December 2017, amounting to €845 million, have been adjusted to take into account a financial receivable of €490 million, following the reclassification of the investments in FSIA and Anima Holding, in the Payments, Mobile and Digital and Financial Services segments, respectively, which are now accounted for using the equity method. Net funds at 31 December 2018, before the above reclassification, amount to €611 million (taking into account the further €30 million incurred by the Parent Company in order to subscribe for the new shares issued by Anima Holding in 2018, in addition to the above €490 million).
Industrial net (funds)/debt after adjusting for intersegment transactions (1,131) (1,335) 204 -15.3%
EBIT, though negative, has improved thanks partly to process efficiencies following the introduction of the new delivery model, the cost efficiency drive and economies of scale generated by the increase in volumes, which has cut the average unit cost.
Gross gains realised, amounting to €404 million compared with the €547 million of 2017, are in line with the objective in the Deliver 2022 Plan to reduce the dependence of the segment’s results on non-recurring items.
EBIT is up 8.4% to €866 million, compared with €799 million for 2017. The Non-life business performed well during the year.
Adjustments and eliminations Total of which early retirement incentives 608 - 10 1 - 619 17. Directive 97/67/CE defines common rules for the development of the internal market for postal services within the EU and for the improvement of service quality.
The postal services market The postal services market is going through a period of radical change, primarily linked to the digital transformation of the economy, which has influenced the volume of letters and parcels in circulation. The ongoing decline in traditional mail, which is being replaced with more immediate forms of communication such as e-mail and instant messaging, is accompanied by a significant increase in the volume of parcels sent, linked to the growth in e-commerce.
In this context, in view of the expected growth in online shopping and the development of new organisational and business models in post services markets, and considering the above measures in the EU regulation designed to standardise the conditions applicable to cross-border services, AGCom has issued Resolution 399/18/CONS of 25 July 2018. This launched a market survey of parcel delivery services in order to assess the outlook for competition and the impact of existing regulation, as well as to identify potential remedies designed to restore competition in order to protect users.
18. Pursuant to Legislative Decree 261 of 1999, deliveries of books, catalogues, newspapers, periodicals and similar publications fall within the scope of the Universal Postal Service.
The regulator issued Resolution 77/18/CONS on 20 February 2018, setting out the regulations governing the issue of special licences to provide postal services relating to legal process and the notification of violations of the Highway Code. Poste Italiane’s exclusive right to provide these services was eliminated with effect from 10 September 2017 by Law 124/2017. This licence is subject to meeting a series of requirements (e.g. reliability, professionalism and integrity) and satisfying certain universal service obligations covering the security, quality, continuity, availability and provision of the services.
In Resolution 453/18/CONS, effective from 1 October 2018, the regulator then extended the new basic rates to shipments of less than 2,000 and approved the special prices proposed by Poste Italiane for such shipments.
The funds earmarked to finance government subsidies for 2018 by the 2018 Stability Law, amount to €59.3 million.
The 2019 Budget Law has provided funding of €54.9 million for 2019 and, with respect to future years, has made provisions of €54.3 million for 2020 and €54.6 million for 2021.
Increase/(decrease)Increase/(decrease) 2017 2018 Results of operations (€m) 2018 2017 21.5% 104 485 589 of which early retirement incentives 608 492 116 23.6%
KPIs for the Mail, Parcels & Distribution segment 2018 2017 Increase/(decrease)
New PuntoPoste network (number of Lockers and alternative collection points) 417 5 412 n/s
External revenue is down from €3,632 million to €3,580 million, a decline of 1.4% due to lower revenue from traditional letter post (down €68 million) and a fall in other revenue (down €51 million). Among other things, this includes the revenue generated by the airline, Mistral Air, which in 2018 progressively withdrew from the passenger transport market to focus exclusively on its cargo business. On the other hand, revenue from the parcels segment grew 9.8% (up €68 million compared with 2017), especially in the B2C segment, thanks to the ongoing expansion of e-commerce.
Ordinary personnel expenses are down €49 million, reflecting a decrease in the average workforce. In contrast, provisions for early retirement incentives are up €116 million, in relation to the Company’s decision to accelerate generational turnover through voluntary early retirement for employees who are close to retirement.
Universal Service Obligation (USO) compensation** - - - - 262 262 - -
The performance of the Group’s Mail services saw volumes and revenue decrease by 5.5% (173 million fewer items) and 2.5% (down €68 million), respectively, compared with 2017. This essentially reflects the structural decline in demand for traditional postal services as a result of the digitalisation of the economy.
In detail, the contraction in volumes of Unrecorded Mail (34 million fewer items, or 2.5% less than in the previous year) led to a fall in revenue of €35 million (4.4%).
Integrated Services registered an increase in volumes and revenue of 4.0% and 7.6%, respectively, compared with the previous year. This was primarily due to the positive contribution from the Integrated Notification Service provided to the Municipality of Milan, to which the Company currently only provides delivery services for legal process.
* This item includes international parcels, partnerships with logistics operators, dedicated services, integrated logistics and other revenue.
Operating review Following agreement with the labour unions, the progressive rollout of the new “Joint delivery” model began in April. The new model, which aims to keep pace with the development of e-commerce and changing customer needs, enables parcels to be delivered via the network of postmen and women, introducing afternoon and weekend shifts.
The flexibility offered by the “Joint delivery” model also played a role in the conclusion of an agreement with Amazon in June, covering the delivery of products throughout Italy. Thanks to this partnership, which will have a duration of three years, renewable for a further two, the Group will help to drive the development of e-commerce in Italy.
Progressive expansion of the new PuntoPoste network, providing 417 points for collecting online purchases and sending returns and prefranked or prepaid parcels, began during the year. The new PuntoPoste network offers customers 328 lockers (automated kiosks equipped with touchscreens, barcode readers and mini-printers) located in the self-service areas of a number of post offices and in high footfall locations such as supermarkets, shopping centres, fuel stations and 89 alternative collection points to meet the growing need for readily accessible service points and flexible opening hours. Major progress was made in this sense with the conclusion of a framework cooperation agreement between Poste Italiane and the Federation of Italian Tobacconists, which enables tobacconists’ shops to join the PuntoPoste network.
Work continued during the period on improving sorting processes through the introduction of automation. This included the installation of new mail sorting systems at the Bologna and Milano Peschiera Borromeo sorting centres and the reorganisation, on a lean manufacturing basis, of 7 sites in the sorting office network (Turin, Padua, Bologna, Bari, Naples, Florence and Rome, with the introduction, for example, of new equipment designed to make operations and workstations safer and more ergonomic).
In addition, as part of the process of modernising its vehicle fleet, the Group is progressively introducing alternative electric delivery vehicles (3-wheeled vehicles). This will improve occupational safety and extend the process, launched in recent years, of adopting eco-friendly forms of transport, involving the introduction of a fleet of 4-wheeled electric vehicles.
23. Source: AGCom Communications Observatory no. 4/2018. 24. The Internet of Things (IoT) is the expression used to define all electronic equipment and devices, other than personal computers, that are connected to the Internet. These include fitness sensors, cars, radios and air-conditioning systems, but also electrical applicances, lighting, video cameras and shipping containers.
In July 2018, the process of pre-notification of the SPID to the European Commission, begun on 24 November 2017, was completed in accordance with the requirements of eIDAS (electronic IDentification Authentication and Signature) regulation. Following pre-notification, Italy is the second European country, after Germany, to opt for reciprocal recognition of its national digital identity system and the first to pre-notify a system that involves the private sector.
According to the latest available figures22, mobile market penetration, in terms of total mobile lines, stands at approximately 173% of the population, with MVNOs accounting for 15%. The total number of lines at 30 September 2018 amounts to 103 million, including approximately 20 million Machine to Machine (M2M) SIM cards. In terms of market share, PosteMobile, with a total market share of approximately 4%, accounts for approximately 47% of the total customers of mobile virtual network operators23.
Regulatory environment Legislative Decree 218 of 15 December 2017 has transposed the EU’s Payment Services Directive (EU 2015/2366 or PSD2) into Italian law. This was followed, in March 2018, by publication of Delegated Regulation (EU) 2018/389, supplementing PSD2 and defining the requirements to be met by payment service providers (PSPs) in terms of the implementation of specific security measures. Poste Italiane has planned the necessary technology upgrades to ensure compliance with the new statutory requirements, which will come into effect from 14 September 2019.
The new text of the Digital Administration Code (DAC), as amended by Legislative Decree 217 of 13 December 2017, came into effect on 27 January 2018. The aim of the revision of the DAC is to ensure that citizens have the right to access their data, documents and services in digital form. Extension of the DAC to include public service providers, as part of the application process, produces a series of effects and will require changes to the way that digital services are provided.
The related providers will also, in relation to public interest services, be required to accept payments in electronic form – including via the use of mobile phone credits – using the platform made available by AgID.
On 17 September 2018, the European Banking Authority (EBA) published a document concerning Guidelines on reporting requirements for fraud data. The guidelines require payment service providers to supply detailed information on frauds linked to the various forms of payment to their respective supervisory authorities, who are then required to share aggregated data with the EBA and the ECB.
On 4 December 2018, the EBA published Guidelines regarding the technical standards regulating strong customer authentication and common and secure open standards of communication in accordance with Delegated Regulation (EU) 2018/389, which has supplemented Directive (UE) 2015/2366 (the PSD2) - “Final report. Guidelines on the conditions to benefit from an exemption from the contingency mechanism under Article 33 (6) of Regulation (EU) 2018/389 (RTS on SCA & CSC)”. The Guidelines sets out the conditions that account servicing payment service providers (ASPSPs) must meet in order to be exempted from the obligation to prepare contingency measures under article 33 of Regulation (EU) 2018/389 regarding the strong customer authentication and common and secure open standards of communication. The EBA has encouraged ASPSPs to begin testing and implementing their interfaces ahead of the September 2019 deadline and the Bank of Italy has already notified, in a consultation document, its intention to apply the guidelines in full. The bank has announced that they will apply to banks, Poste Italiane SpA as regards Bancoposta’s operations, payment service providers, electronic money institutions and financial intermediaries authorised to provide payment services.
- - - - of which early retirement incentives - - - - * The figures for 2018 and 2017 have been reclassified in accordance with the reorganisation following from the transfer of BancoPosta RFC’s card payments and payment services unit (the Financial Services segment) to the newly established PostePay SpA (the Payments, Mobile and Digital segment) with effect from 1 October 2018.
KPIs for the Payments, Mobile & Digital segment 2018 2017 Increase/(decrease)
of which Postepay Evolution cards stock (m)** 6.3 4.7 1.6 33.0%
Total revenue of €952 million (up 6.7%) benefitted from the positive performance of card payments, which recorded growth of 22.3% (€53 million), and a 2.6% increase in mobile revenue (up €5.4 million).
The segment’s total costs amount to €725 million, an increase of 7.3% compared with 2017 and in line with the growth in revenue. Intersegment costs are up 7.3% and primarily include the cost of distribution, IT management, back office, customer care activities involved in monitoring fraud and customer communication services provided by other segments within Poste Italiane to the card payments and payment services business.
After income tax expense for the year (€55 million), the segment’s net profit amounts to €153 million, up 4.8% on 2017.
Following the transfer, pursuant to art. 2558 of the Italian Civil Code, of BancoPosta’s payment services unit to PosteMobile, following its removal from BancoPosta RFC’s ring-fence, PosteMobile was renamed PostePay and operates, in its role as a hybrid EMI, as a payment service provider and as a card issuer, following the creation of a specific ring-fenced entity.
PostePay aims to be the largest digital payments platform in Italy, operating in synergy with Italy’s most widespread distribution network, made up of post offices, in order to enable the Poste Italiane Group to consolidate its role as a driver of the country’s development and innovation. PostePay forms part of Poste Italiane’s digital transformation in response to a changing competitive scenario in the payments sector, designed to take advantage of the opportunities offered by market deregulation and the changes in progress.
Work on boosting the Internet of Things (IoT) offering proceeded with the launch, for consumers, of the PosteMobile Qui solution, an App that allows the user to locate their pet.
In compliance with Law Decree 4 of 28 January 2019, Poste Italiane will handle applications for the citizen’s basic income through our widespread network of over 12,800 post offices, and will issue the cards necessary in order to access the related financial benefits.
After a particularly positive 2017, 2018 was marked by a high degree of equity market volatility. Having seen the S&P reach an all-time high at the end of September 2018, on the back of strong growth in the domestic economy and improved corporate earnings, in part thanks to the tax reform introduced at the end of 2017, US markets then proceeded to give up the gains accumulated since the beginning of the year. This reflected fears that a worsening of trade tensions with China and Europe could have a negative influence on the global economy and on corporate earnings. 2018 ended with the S&P 500 down 6.24% and the Euro Stoxx 50 off 14.34%. The FTSE MIB closed the year down 16.15%.
The market for European government bonds was impacted by the progressive slowdown in the euro area’s economy in 2018. The yield on 10-year Bunds reached a peak of 0.80% on 8 February, before closing the year at 0.24%. In contrast, the yield on BTPs was affected by the political uncertainty surrounding the new government: the ten-year spread between BTPs and Bunds began the year at 163 bps, before falling to a low of 114 bps on 24 April. In the second part of 2018, the spread rose to 327 bps, before then falling in the last weeks of the year. At the end of 2018, the ten-year spread stood at 250 bps. The yield on ten-year BTPs, which had begun the year at 2%, closed 2018 at 2.74%, after reaching a peak of 3.80%.
Banking system26 Funding by banks operating in Italy in 2018, represented by deposits by resident Italian savers (current accounts, certificates of deposit and repurchase agreements) and bond issues, was stable overall. Estimates from ABI (the Italian banking association) indicate that total funding in December 2018 amounted to approximately €1,732 billion, registering a year-on-year increase of 0.2%. As in previous years, this is due to a year-on-year increase in deposits by resident Italian savers of approximately €38 billion in absolute terms (up 2.6% on December 2017), which more or less offset a sharp decline in bond issues, amounting to approximately €34 billion (a year-on-year reduction of 12.3%). The cost of bank funding (deposits, bonds and repurchase agreements) progressively eased from the beginning of 2018, declining from 0.69% in January to 0.61% in December. Bank lending rose consistently over the year: according to estimates from ABI for December 2018, total lending to Italian residents (private sector and the Public Administration) - excluding interbank loans – amounted to approximately €1,720 billion, presenting a year-on-year increase of 1.92%. Household loans also rose, recording a 2.7% year-on-year increase as at December 2018.
During 2018, the platform used to support the consultancy service was further enhanced and developed, with initiatives designed to add new functions and strengthen interactions with customers.
On 9 July 2018, the Ministry of the Economy and Finance published Circular 22 of 15 June 2018, regarding the application of PSD2 (the Payment Services Directive) by the Public Administration (PA) who use treasury or cash management services provided by a bank or by Poste Italiane. The aim is to identify, with regard to the application of PSD2, the statutory requirements applicable to the PA, the specific nature of the treasury (or cash) management services, the aspects that might have an impact on the relationship between the PA and the treasurer/cash management provider, and the accounting solutions enabling the correct application of the new legislation.
-71.5% (1) 2 1 of which early retirement incentives 10 6 3 48.0%
Total revenue of €5,871 million is up 2.9% on the €5,705 million of 2017, reflecting the good performance of postal savings (up 16.6% or €261 million), partly reflecting the mechanisms established in the new agreement with Cassa depositi e prestiti, applied from 1 January 2018, the performance of interest earned on the investment of current account deposits, which is up €78 million (up 5.3% compared with 2017) as a result of an increase in deposits during the period (up from €55.0 billion in 2017 to €58.7 billion in 2018), and the positive contribution from asset management (up €123 million), linked to the partnership between Poste Italiane and Anima Holding.
Transaction banking revenue is down 9.2% from €1,063 million in 2017 to €965 million, primarily due to the sale of shares in Mastercard during 2017 for €91 million and a downturn in the volume of payment slips processed.
The segment’s total costs €5,011 million are down €49 million (1.0%) compared with the previous year, primarily due to a decrease in other operating costs (down €135 million or 38.7%), partially offset by an increase in intersegment costs of
€111 million (up 2.4%). The change in other operating costs is above all due to a reduction in net provisions for risks and charges compared with 2017, relating to potential liabilities resulting from the sale of investment products in the period between 2003 and 2005 whose performance was not in line with customers’ expectations. Personnel expenses are also down, declining from €103 million to €80 million (a decrease of 23.0%), reflecting the sale of BdM and the reorganisation of BancoPosta from 1 October 2018.
After net finance costs, broadly relating to the impairment loss recognised on the investment in Anima Holding at 31 December 2018, following the conduct of an impairment test, and income tax expense, the segment ended 2018 with net profit of €617 million, up 23.6% (€118 million) on the €499 million of 2017.
With regard to the distribution of financial products, On 11 April 2018, Poste Italiane and Intesa Sanpaolo signed a three-year framework agreement for the distribution of specific products and services offered by the two groups. Under this agreement, and with particular regard to asset management, Poste Italiane’s network has begun to distribute BancoPosta Orizzonte Reddito, a mutual investment fund created as a result of the partnership between BancoPosta Fondi SGR and Eurizon Capital SGR, a wholly owned subsidiary of Intesa Sanpaolo.
With regard to asset management, the Group launched 8 new mutual investment funds in 2018, 6 of which resulting from the partnership with Anima SGR.
In terms of loans provided by partners (to private and corporate customers), a number of promotions were run during the year for specific categories of borrower, supported by advertising campaigns.
With regard to insurance products, bearing in mind the introduction of the IDD regulation from 1 October 2018, the range of products was strengthened and improved in terms of its ability to meet customer needs, cover and pricing. In the Life segment, the offering of Class I products was restructured and new products were launched. One of these offers investors the option of making flexible payments and to receive periodic returns, whilst another is a multiclass policy combining the capital guarantees typical of Class I products with the opportunity to invest in an internal insurance fund offering various levels of risk. In the Protection segment, new products were launched and the offering was reviewed. In addition, a new Protection and Pensions platform was launched to provide advice on insurance products.
Bank of Italy With regard to the inspection conducted by the Bank of Italy in 2017, with the aim of assessing the governance, control and operational and IT risk management systems in relation to BancoPosta’s operations, the process of implementing the relevant compliance initiatives is still in progress and work is proceeding according to the established timing.
In July and August, two requests were received from the CONSOB: the first, dated 27 July, was also sent to other intermediaries and regarded an in-depth assessment of the key issues relating to implementation and application of MiFID II; the second, dated 13 August, contained a request for a meeting with the aim of obtaining greater details on the provision of investment services. During this meeting, held at the CONSOB in September 2018, additional information was provided with respect to the information previously made available, and the related implementation plan was presented, in line with the details submitted to the regulator in the Tableau de Bord on Compliance at 30 June 2018, supplemented with further guidance based on evidence emerging during the process. Finally, during the above meeting, the CONSOB requested further details on specific issues, later formalised in writing, to which the Group gave a full and timely response.
Premiums by class** Premiums since beginning of year % change 2018 vs 2017
* Source: ANIA ** Premiums refer to Italian and non-EU undertakings and EU undertakings
Regulatory environment On 3 July 2018, IVASS issued Regulation 38, containing provisions regarding the corporate governance system for both undertakings and groups. The new regulations implement the EIOPA guidelines on corporate governance and, where compatible with the new primary regulations, also apply the following: �� ISVAP Regulation 20 of 26 March 2008, containing provisions regarding internal controls, risk management, compliance and outsourcing; �� ISVAP Regulation 39 of 9 June 2011, relating to remuneration policies; and
For the purposes of preparing statutory financial statements under local GAAP in 2018, an undertaking that elects to take advantage of this option must measure its current securities on the basis of the value at the time of initial recognition, as presented in its financial statements for 2017 or, in the case of securities not held at 31 December 2017, at purchase cost, with the exception of permanent losses.
Change in other technical provisions and other technical costs/income 262.1% (5) (2) (7) Change in technical provisions and claims expenses (35) (29) (6) -20.3%
The Insurance Services Strategic Business Unit generated EBIT of €866 million in 2018, an increase of 8.4% compared with the previous year (€799 million).
Total revenue amounts to €1,472 million (€1,457 million in 2017), essentially reflecting the performance of the Life business, which contributed €1,336 million, whilst the contribution from the Non-life business is €123 million.
Net finance income amounts to €51 million, marking a 14.8% (€7 million) increase compared with the previous year, when the impairment loss of €12 million on the investment of in the Atlante fund weighed.
The performance of premium revenue at the Life business is shown below: Poste Vita SpA 2018 2017 Increase/(decrease)
of which multiclass products (Class III portion) 357 179 179 99.9%
The transaction designed to strengthen the company’s capital position through the use of AOFs was formalised in November 2018 with Poste Italiane’s signature of an unconditional, irrevocable commitment letter with a five-year term. The letter commits the Parent Company, merely at the request of the subsidiary, to subscribe for ordinary shares to be issued in future by Poste Vita, amounting to up to €1,750 million.
Following clearance from IVASS, the commitment letter signed by the Parent Company in the subsidiary’s favour can be included in the computation of Tier 2 AOFs, as defined by the Solvency II Directive and the regulatory framework for insurance companies, within the limits represented by the available amount, being approximately €1,000 million at 31 December 2018. This has had a positive impact on the solvency ratio of approximately 24 percentage points.
Total costs are also in line with 2017, having risen from €8,030 million in 2017 to €8,037 million. In detail, personnel expenses of €5,934 million (€5.865 million in 2017) reflect an overall reduction of €57 million in the ordinary component, linked to a decrease in the average workforce and an increase in the cost of early retirement incentives, which is up from €491 million in 2017 to €617 million in 2018, primarily due to provisions for early retirement schemes, totalling approximately €136 million, which will cover the cost of further early retirement initiatives for personnel meeting the related requirements in the next 5 years under existing legislation (such as, for example, the Solidarity Fund and art. 4 of the Fornero Law).
Poste Italiane SpA’s net profit for the year ended 31 December 2018 is €584 million (€617 million in 2017).
Financial position and cash flow of Poste Italiane SpA (€m) at 31 December 2018 at 31 December 2017 Increase/(decrease)
Poste Italiane SpA’s net invested capital amounts to €2,321 million at 31 December 2018 (€2,239 million at 31 December 2017).
Net working capital at 31 December 2018 amounts to a negative €105 million, a reduction of €249 million compared with the end of 2017, primarily due to the amount payable to Poste Vita (€114 million) as a result of Poste Italiane’s role as the consolidating entity for the tax consolidation arrangement, and to the amount payable to PostePay (€72 million). This represents the difference between the carrying amounts of the assets and liabilities of the card payments and payment services business unit contributed to PostePay from 1 October 2018, which will be settled by Poste Italiane in early 2019.
Provisions for risks and charges amount to €1,431 million (€1,538 million at the end of December 2017) and primarily take into account provisions for early retirement incentives of €444 million, to cover the 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 2020.
Equity amounts to €5,459 million, a reduction of €53 million. The decrease primarily reflects the payment of dividends totalling €549 million and a reduction in the fair value reserve of €259 million (including the positive effect of €1,372 million resulting
from the transition to IFRS 9), reflecting movements (positive and/or negative) in the value of investments classified in the new FVTOCI category. These reductions were partially offset by net profit for the year of €584 million and an increase in the cash flow hedge reserve of €150 million.
Corporate Governance at BancoPosta RFC With regard to BancoPosta RFC’s governance, the rules governing the organisation, management and control of BancoPosta’s operations are contained in the specific BancoPosta RFC Regulation approved by the Extraordinary General Meeting of 14 April 2011 and recently amended by the Extraordinary General Meeting of 29 May 2018. Following the issue by the Bank of Italy on 27 May 2014 of an update to the prudential supervisory regulations for banks, the corporate governance regulations for banks are applied to BancoPosta RFC (Part One, Title IV, Chapter I “Corporate governance” of Circular 285). Further information regarding the corporate governance structure is provided in Poste Italiane’s “Report on Corporate Governance and the Ownership Structure”, approved by the Board of Directors and published in the “Governance” section of the Company’s website.
Operating expenses / Net interest and other banking income****** 84% 83%
** The CET 1 Ratio represents the adequacy of Tier 1 capital in terms of Pillar 1 capital requirements (operational, credit, counterparty and market risks). *** Return On Assets. Represents the ratio of profit for the period and total assets. **** Return On Equity. Represents the ratio of profit for the period and equity after deducting profit for the period and the valuation reserves. ***** Represents the contribution from net interest income as a ratio of net interest and other banking income. ****** Cost/income ratio.
BancoPosta RFC’s performance in 2018 resulted in net profit of €597 million, an increase of 2.1% compared with the previous year (up €12 million).
The net profit from the sale of financial assets, amounting to €379 million, is down 39.3% compared with the €624 million of the previous year, reflecting reduced gains realised, in keeping with the strategy in the Deliver 2022 Plan to progressively reduce the dependence on non-recurring income. 2017 benefitted from €91 million in income generated by the sale of Class B Mastercard Incorporated shares.
The net profit on assets and liabilities measured at fair value through profit or loss, totalling €9 million, includes the overall change in the fair value of Visa Incorporated shares reclassified as a result of the application of IFRS 9 from 1 January 2018.
Net interest and other banking income, after the increase in the interest margin and in net fee and commission income and the reduction in the net profit from the sale of financial assets, amounts to €5,641 million, in line with the figure for 2017.
Net operating expenses, which include personnel expenses of €82 million, other administrative expenses of €4,604 million and other operating costs in the form of operating losses resulting from withdrawals that customers claim not to have made, totalling €31 million, amount to a total of €4,717 million, slightly up on the €4,674 million of the previous year (up €43 million). The increase in this item is above all linked to the costs incurred as a result of the services provided to BancoPosta RFC by Poste Italiane functions (up €89 million), reflecting the growth of the business and the reorganisation process that has resulted in the centralisation of operations within Poste Italiane. These costs are partially offset by a reduction in personnel expenses, service costs and sundry expenses (down €46 million).
Financial assets measured at fair value through profit or loss 58 - 58 -
Liabilities and equity (€m) at 31 December 2018 at 31 December 2017 Increase/(decrease)
Assets are represented by cash and cash equivalents, financial assets and hedging derivatives, tax assets and other assets.
With regard to financial assets, from 1 January 2018, the Poste Italiane Group has adopted IFRS 9 Financial Instruments, electing not to restate comparatives for prior periods.
Cash and cash equivalents amount to €3,328 million (€3,217 million at 31 December 2017) and includes cash at post office counters and companies that provide cash transportation services, totalling €2,980 million, and cash deposited with the Bank of Italy to settle interbank transactions, totalling €348 million.
Financial assets measured at fair value through profit or loss, amounting to €58 million at 31 December 2018, regard Visa Incorporated shares not listed on a regulated market, totalling €50 million, and the amount receivable on the sale of a Visa Europe Limited share to Visa Incorporated in 2016, payment of which was deferred for three years from the date of the sale. At 31 December 2017, the fair value of the above shares, classified in “Available-for-sale financial assets”, was €41 million. The increase in value (€9 million) has been recognised in profit or loss in the item, “Profit/(Losses) on financial assets and liabilities measured at fair value through profit or loss”.
Financial assets measured at fair value through other comprehensive income amount to €32,040 million and include Italian government securities. The change compared with 2017 (€39,140 million) primarily reflects: (i) the impact of first-time adoption of IFRS 9 and the reallocation of securities based on the identified business models, which, at 1 January 2018, resulted in a balance of €34,832 million (down €4,308 million); (ii) fair value losses at 31 December 2018 of €1,562 million; (iii) the overall negative impact of movements in securities during the year as a result of purchases, sales and repayments.
Financial assets measured at amortised cost amount to €33,743 million (€22,014 million at 31 December 2017) and relate to investments in securities issued by the Italian government and those guaranteed by the Italian government, totalling €22,872 million (€12,912 million at 31 December 2017) and sundry receivables of €10,871 million (€9,102 million at 31 December 2017).
With regard to financial assets represented by investments in Italian government securities and securities guaranteed by the Italian government, the increase primarily reflects: (i) the impact of the above first-time adoption of IFRS 9 and the reallocation of securities based on the identified business models, which, at 1 January 2018, resulted in a balance of €19,094 million (up €6,182 million); (ii) and the overall positive impact of movements in securities during the year as a result of purchases, sales and repayments.
Other assets of €2,445 million (€2,063 million at 31 December 2017) essentially relate to tax assets following the payment of tax withholdings and items in progress that will be settled after the end of the reporting period.
Financial liabilities measured at amortised cost total €64,203 million (€59,636 million at 31 December 2017) and include: (i) amounts due to customers, totalling €58,218 million (€53,686 million at 31 December 2017), primarily regarding current account deposits and other forms of deposit, repurchase agreements and advances from the MEF to meet cash requirements; (ii) amounts due to banks, totalling €5,985 million (€5,949 million at 31 December 2017) relating to current account deposits and repurchase agreements. The increase in this item is primarily linked to repurchase agreements and to the positive movement in current account deposits and other forms of deposit (money orders and cheques).
Other liabilities amount to €2,692 million (€2,335 million at 31 December 2017) and primarily include tax liabilities in the form of tax withholdings, items in progress that will be settled after the end of the reporting period and amounts payable to other Poste Italiane functions for services provided to BancoPosta regulated by specific operating guidelines.
The provisions for employee termination benefits (TFR) amount to €3 million at 31 December 2018, compared with €17 million at the end of 2017 (down €14 million). The movement reflects the reorganisation that took place in 2018 and the centralisation of certain operations within Poste Italiane, as described earlier in this document.
Internal control system The system of internal controls consists of a body of rules, procedures and organisational structures, which aim to prevent or limit the consequences of unexpected events, enable the achievement of strategic and operating objectives and compliance with the relevant laws and regulations, and ensure the fairness and transparency of internal and external reporting.
In terms of BancoPosta RFC’s organisational structure, the existing organisational model envisages autonomous and independent control functions in compliance with the Bank of Italy’s supervisory requirements: Risk Management, Compliance, Anti-Money Laundering and Internal Auditing.
The audits were in part performed with reference to the findings of Poste Italiane’s Internal Auditing function, which is responsible, in accordance with the specific operating guidelines for the IT audit and the audit of the local units and distribution channels within Poste Italiane’s network, which are responsible for BancoPosta’s processes and products.
During 2018, the Risk Appetite Framework was revised. The annual report for 2017 and the programme of activities for 2018 were submitted to the Board of Statutory Auditors, the Audit, Risk and Sustainability Committee and the Board of Directors, as were the ICAAP (Internal Capital Adequacy Assessment Process) report and the Public Risk Report for 2017. These bodies also received quarterly reports on the performance of the effective risk profile versus the determined risk appetite. The principal types of risk to which BancoPosta RFC is exposed in the course of its ordinary activities are described below: �� market risk (including banking book rate risk); �� credit risk (including counterparty risk); �� liquidity risk; �� operational risk.
In terms of the evolution of significant risks, the first five months of 2018 witnessed a slight decline in the yields on Italian government securities, resulting in an increase in fair value gains. From the end of May, the trend went into reverse and the yields on 10-year Treasury Notes (BTPs) began to rise. This was reflected in unrealised gains, which returned to lower levels, below those seen at the beginning of 2018. The spread between BTPs and German Bunds ended the year higher than at the end of 2017 (around 250 basis points) and, compared with unrealised gains of €1,615 million in 2017, unrealised losses amount to €1,687 million in 2018.
In terms of Bancoposta’s capital structure, following the positive performance of postal current account deposits, in 2018, the process of monitoring the risk profile indicated that, from March, there had been a decline in the leverage ratio to below the threshold set in the Risk Appetite Framework (RAF). The contribution of fresh capital of €210 million by Poste Italiane on 27 September 2018, in execution of the Board of Directors resolution of 25 January 2018 and the shareholder resolution of 29 May 2019, helped to rebalance the leverage ratio, which at 31 December 2018 stands at 3.2% (3% being the minimum level required by the regulations). The CET 1 ratio for 2018 is 18%, compared with 17% in 2017, confirming the strength of the entity’s balance sheet, which was further boosted by the above contribution of fresh capital.
Details of the various areas of risk and the methods used for their measurement and prevention are provided in other sections of the Annual Report for the year ended 31 December 2018.
Other events after the end of the reporting period are described in other sections of the Annual Report for 2018 and there are no further material events occurring after 31 December 2018 to report.
Finally, the strategy of actively managing the securities portfolio will aim to stabilise the overall return.
Related party transactions Information on transactions between BancoPosta and its related parties is provided in Poste Italiane Financial Statements for the year ended 31 December 2018 (BancoPosta RFC’s Separate Report, Part H of the notes).
Poste Italiane intends to promote complete and effective disclosure of its ESG performances, which are strongly linked to the ESG Strategic Plan. The ESG Group Strategy is based on six key pillars relating to the 20 material topics.
Certify the main Group companies in accordance with ISO 37001 standard 100% of significant Group companies certified to ISO 37001 by 2022
Verify ESG aspects in the supplier qualification process 100% of suppliers belonging to significant product categories qualified according to ESG criteria by 2022
Carry out sustainability audits (ESGs) along the supply chain 100% of the Group’s qualified suppliers subject to sustainability audits by 2022
Therefore, the Company recognises the strategic importance of compliance with internal and external regulations and codes of conduct, as well as respect for rules and absolute fairness, without any conflict between corporate and personal interests.
Moreover, the Company disseminates its Code of Ethics at all levels within the organisation, so that the parties concerned may comply with its content, and every possible tool to promote its full application may be prepared.
In addition to the general principles of conduct, the guidelines set out in Poste Italiane’s Code of Ethics particularly refer to the protection of: �� workers’ rights and dignity; �� corporate assets and data processing; �� workplaces.
In June 2018, Poste Italiane revised its 231 Model in order to add content following legislative initiatives that introduced new categories of alleged offences, including regulatory amendments regarding the criminal liability of entities, and incorporating changes in best practices and the reference guidelines.
In November 2018, the Board of Directors of Poste Italiane approved the Integrated Management Policy that reflects and documents the commitment made to all Company’s stakeholders, to improve its performance and, at the same time, build and develop trusting relationships with them, as part of a process of generating and sharing value for the Company as well as for the communities in which it operates, with a view to achieving continuity and reconciliation of the related interests.
Poste Italiane, highest performing brand in terms of image and reputation
In 2018, Poste Italiane renewed its “legality rating”, obtaining the top score, which ranked it among the 6% of companies achieving such recognition
Internal Regulations for Procurement Procedures of Works Services and Suppliers Procurement
• In order rationalise the processes involved, the Qualification System is also used by Group companies
In 2018, Poste Italiane SpA revised and updated its internal procedures which govern the procurement process, regarding contracts that are subject to the Public Contracts Code as well as those excluded from its scope of application. These procedures, together with the Internal Regulations for the Award of Works, Service and Supply Contract Procedures and the Public Contracts Code, if applicable, constitute the main governance and regulatory oversight of the Parent Company’s contract awards. Specific Procurement Regulations were subsequently approved by the respective Boards of Directors of the main Group companies, which implement the principles and content of the Corporate Regulations. In order to ensure objectivity and transparency in the procurement phase, the procedures regarding the composition and appointment of tendering committees and assessment teams have also been redefined, with particular reference to the introduction of drawing lots and rotation as a criterion for identifying a portion of their members, as set out in the operational directive “Composition and appointment of tendering committees and assessment teams”.
• Published rules meeting the requirements of the Public Tenders Code (Legislative Decree 50 of 18 April 2016)
Supplier qualification procedures In line with current legislation (art. 134 of the current Public Contracts Code), and In order to provide the Group with a pool of business operators who meet Poste Italiane requirements, as well as to adopt clear and transparent selection criteria in the procedures regarding the procurement of goods, services and works, the Company established its own Supplier Register in 2006. The aim is to simplify contract awarding procedures, while at the same time ensuring uniform standards among the selected suppliers in each product area, and transparency towards the market.
In 2018, the Company Qualification Committee was set up to share information and assign responsibilities in accordance with Poste Italiane’s general regulatory framework and its ethical, sustainability and innovation values. This Committee oversees the entire process of qualification, updating and monitoring of qualified business operators.
For some time now, the Group has paid special attention to the social and environmental aspects of its supply chain management, in the belief that the development of transparent and long-lasting relationships with suppliers, and paying utmost attention to quality, safety and respect for the environment in the procurement process, are useful principles for constantly improving the service offered to its customers, as well as for pursuing a public interest objective for Italy’s entire economic system.
In continuity with previous years, Poste Italiane has implemented the criteria set out in Green Public Procurement (GPP) in order to combine sustainability in terms of reducing environmental impacts and cost rationalisation. In this regard, the Company has incorporated into its contracts, via special provisions within the specifications and/or with specific tendering methods, the ministerial guidelines that establish the minimum criteria for a contract to be considered “green”, in application of the provisions of art. 34 of the Public Contracts Code (“Energy and environmental sustainability criteria”).
Cleaning and sanitation For this product category, assignments are carried out in accordance with Green Public Procurement, which requires the adoption of the “Minimum Environmental Criteria” or “MEC” contained in Ministerial Decree 24/05/2012, and respecting the figure of 15% provided by the Ministerial Decree relating to the awarding of specific scores for beneficial “green procurement” techniques (e.g. dosing systems and cleaning techniques; electrical equipment and machinery bearing information about the brand, model and power capacity, and specification of the energy consumption and noise level for each device; a separate waste collection plan; vehicles used for low environmental impact transport; and Ecolabel products and consumables).
In 2018, all 10 cleaning and sanitation service contracts were awarded in compliance with the MEC.
Catering In order to guarantee the provision of a Company catering service with a “reduced environmental impact”, which in terms of processes and content is characterised by respect for all aspects of environmental, economic and social sustainability, Poste Italiane has granted a concession for catering services operating within its real estate facilities in compliance with Green Public Procurement principles.
In implementation of the “Minimum Environmental Criteria” set out in the Decrees of the Ministry of the Environment,
Poste Italiane rewards the supply of foodstuffs in excess of the minimum quantities prescribed by the MEC, by purchasing sustainable products (BIO, PGI, PDO, sustainable fishing, etc.) for meals provided in company canteens at some local sites. In this context, local suppliers who guarantee certified products are potentially involved in the supply chain of food products for canteens and bars.
Another example of a localised supply chain is the one used for works contracts to be implemented in the two main islands, Sardinia and Sicily, where requests arising from the Register are preferably addressed only to regional suppliers.
Clothing With regard to the supply of clothing and footwear, in drawing up the award procedures, utmost attention is paid to the “green” requirements of the outfits to be provided to delivery staff.
With reference to footwear, “recyclability of the outer packaging” is a requirement for the product offered, while with regard to postmen and women’s uniforms, the focus is on ensuring the fabric used for packaging has Oeko-Tex or Ecolabel certification. This certification guarantees that the fabric’s packaging process does not contain or give off substances that are harmful to human health, and certifies products with a reduced environmental impact.
The purpose of this analysis of parties and counterparties is to limit the risks deriving from transactions with third parties; to guarantee adequate rotation of suppliers; and to minimise losses deriving from non-payment of receivables.
Boosting prevention of illegal activities, via integrated analysis of information within and beyond Poste Italiane, enables detection of direct and indirect relations that highlight possible critical issues. Therefore, combating fraudulent activities is implemented via a process of continuous monitoring of the degree of exposure to fraud risk and risk factors, through gathering and analysis of reports and signs of potential offences, examination of processes, and adoption of adequate and increasingly rigorous governance and supervisory measures for fraud prevention.
Expand the scope of the workforce involved in the performance appraisal system 90% of employees participating in the performance appraisal system by 2022
Increase the quota of middle managers and whitecollar staff involved in the MLAB development plans (Managerial LAB for the enhancement of middle managers who have further growth potential) and POP (Professional Guidance Programme which identifies and develops talented young people)
Increase employee satisfaction 50% Poste Italiane Group employees claiming to be “satisfied” during “employee engagement” surveys by 2022
Reduce the number of Group employees' occupational injuries 790 fewer events in the Mail, Communication and Logistics segment compared with the 2017 figure by 2021
Reduce the occupational injury frequency rate for Group employees down 8% compared with the 2017 seriousness rate by 2021
Reduce Poste Italiane SpA's work-related stress levels Reduction of the risk of 40 homogeneous groups from “medium-high” to “not relevant” by 2020
Certify the main Group companies in accordance with the BS OHSAS 18001 standard 100% of Group production units certified to BS OHSAS 18001 by 2021
Therefore, respect for human rights - as an essential prerequisite for building societies founded on the principles of equality, solidarity and the protection of civil, political, social, economic and cultural rights and the so-called third-generation rights (right to self-determination, peace, development and environmental protection) - is an essential priority for Poste Italiane in conducting its business and a fundamental requirement for the development of a working environment based on loyalty and fairness.
Indeed, in its Code of Ethics the Group highlights its responsibility to protect workers by combating any form of discrimination or harassment, and promotes the inclusion and protection of diversity among its employees, in the belief that cooperation between people with different cultures, perspectives and experiences is a vital element in the acquisition and sharing of new skills, and for the gratification of individuals as contributors to the entire corporate system. This approach also includes Poste Italiane Group’s Declaration, drawn up in accordance with the “Framework Agreement on Harassment and Violence in the Workplace” in November 2018, in which the Company establishes its duty to cooperate in maintaining a working environment where everyone’s dignity is respected and interpersonal relations are encouraged, based on the principles of equality and mutual fairness, and all forms of harassment or violence in the workplace are condemned.
Poste Italiane’s commitment to supporting equal opportunities and victims of gender-based violence
In addition to implementing compensatory leave for victims of gender-based violence - a protection measure established by art. 24 of Legislative Decree no. 80 of 15 June 2015 - which is provided for in the collective labour agreement, Poste Italiane has carried out specific activities aimed at increasing and disseminating knowledge on the matter among its employees. Specifically, the Company has actively carried out dissemination initiatives, informing and raising awareness of local entities regarding the relevant legislative provisions on gender-based violence.
The Group-wide human rights policy is intended to be a manifesto of the Company’s commitment to further align its business processes to the main international standards and best practices on human rights, actively disseminate the principles enshrined in it, and periodically report on the human rights protection performance achieved in terms of management and monitoring methods, identified risks, and management and mitigation actions
The document describes the attention the Group pays to human rights, focusing on certain stakeholder categories such as its own workers, suppliers and business partners, local communities, customers, migrants, children, disabled people, and victims of discrimination and any form of violence.
The Policy sets out the commitment to prevent and reject all kinds of discrimination and violence and forced or child labour, and also reaffirms the Company’s interest in promoting personal wellbeing on the basis of the following principles and management guidelines: �� respect for the rights of Group employees, suppliers and business partners; safeguarding the dignity, freedom and equality of human beings; protection of labour, working conditions and labour union freedoms; protection of health and safety and guaranteed professional and cultural development through the implementation of specific training initiatives; �� support for the rights of local communities; provision of own products and services to different groups of people, including those group categories that may not have direct access to them; support for initiatives and projects aimed at spreading cultural values and collaboration with central and local government authorities, the third sector and local communities in order to address and satisfy social needs arising from disadvantaged and vulnerable situations; �� respect for customers’ rights: confidentiality of personal data and information.
In order to identify, prevent and mitigate the risks of human rights violations, Poste Italiane verifies the effectiveness of the approach adopted with dedicated tools. In line with this approach, Poste Italiane subscribes to the “Equal Opportunities and Equality at Work Charter”, a declaration of intent voluntarily signed by companies of all sizes regarding the dissemination of a corporate culture and the adoption of inclusive human resources policies, free from discrimination and prejudice and designed to enhance talent in all its diversity. The Charter provides a framework of reference values for the implementation of commitments aimed at creating a work environment characterised by pluralism and inclusion, which ensures equal opportunities for everyone and recognition of each one’s potential and skills, thereby helping to promote equity and social cohesion and at the same time the Company’s competitive growth and success.
As evidence of the Group’s ongoing commitment on the protection of human rights and the enhancement of diversity, in 2018 Poste Italiane signed a Memorandum of Understanding with the Ministry of Equal Opportunities, aimed at promoting the cooperation between the two parties to carry out more effective and common communication, awareness and dissemination actions in order to: �� promote initiatives aimed at the protection and full affirmation of human rights, as well as preventing and combating all forms of exploitation of human beings and people trafficking; �� promote full implementation of policies regarding equal opportunities between men and women, with particular reference to work-life-balance and career issues; �� prevent and combat sexual and gender-based violence, stalking and any other form of violence against and abuse of women and children; �� prevent and eliminate all forms of discrimination directly or indirectly based on gender, racial or ethnic origin, religion or beliefs, age, sexual orientation and gender identity.
Indeed, nowadays it is essential for Poste Italiane to affirm and respect this value in order to ensure the fair and responsible management of its activities. As evidence of the primary importance the Group attributes to this issue, the Diversity Policy of Poste Italiane SpA’s administrative and supervisory bodies is the document in which the Parent Company states its commitment to adopt such approach.
Every year, with the support of a specialised firm, the Board of Directors carries out a Board Review, which consists in a self-assessment procedure that involves conducting interviews - including through the use of specific questionnaires 44. 4 % of the Parent Company’s Board of Directors are women 45% of middle and senior women managers in 2018.
with individual directors, as well as with the statutory auditors and the secretary of the Board of Directors. The appointed firm issues a final report, to be examined and shared with the Board of Directors in its entirety. In this regard, the Board Review findings for 2018 relating to composition showed that gender diversity is adequately enhanced, and is in line with the relevant legal provisions and recent practical developments. The same assessment also showed that the overall mix of Directors’ profiles, skills and experience is suitable, and that the skills present are balanced to ensure effective performance of the role on the Board and on Committees.
Diversity issues in the composition of the Board of Directors, specifically in terms of gender quotas and diversity policies, was also analysed as part of the induction given to Poste Italiane’s governing and supervisory bodies in October 2018.
Therefore, the Group’s objective is to promote the spread of an inclusive corporate culture with a view to reducing situations of personal vulnerability, and supporting balanced organisational models that promote dialogue, and the emergence and enhancement of diversity
The initiative is part of a broader framework of cultural awareness actions regarding the importance of the presence of women in the workforce and support for active parenting, accompanied by the dissemination and communication of good business practices aimed at supporting women’s leadership. Registration to MAAM is aimed at both women who take maternity leave and newly parents (mothers and fathers) of children aged from 0 to 3 years, as well as managers whose staff members are involved in the initiative.
In the Payments, Mobile and Digital segment, 27% of employees are under 30
30. Valore D is the first association of companies that promotes gender balance and an inclusive culture for the growth of businesses and the nation. Founded in 2009 through the joint efforts of 12 virtuous companies: AstraZeneca, Enel, GE Oil&Gas, Johnson&Johnson, Ikea, Intesa Sanpaolo, Luxottica, McKinsey & Company, Microsoft, Standard&Poor’s, UniCredit and Vodafone.
In collaboration with the Association Valore D30, Poste Italiane has participated in managerial training, skill building and role modelling in support of issues relating to gender balance and inter-company mentorship projects, in order to promote the professional development of women towards managerial roles.
In 2018, the Group also signed the “Manifesto for women’s employment” promoted by Valore D. The Manifesto, signed by more than 120 companies at national level, highlights existing good practices within organisations and enables commitment to developing women’s talents via clear and measurable objectives, performance indicators and periodic monitoring.
There are nine concrete commitments and positive actions to promote women’s talents and leadership, including increasing women’s presence in the Company, career pathways, and parenting support policies relating to leave and flexible working methods to facilitate work-life balance.
Therefore, the Manifesto provides a concrete tool for valuing “diversity” - as a key resource for growth, productivity and innovation at all levels - which sets out concrete measures to enhance key aspects of the female workforce within the Company.
Furthermore, the Company continued the Participation in the European project “Innov’age in the Postal Sector”, aimed at raising awareness of the age management in the postal sector.
Enhancement of disabled staff The Company continued the implementation of Nave Scuola (The School Ship), the training project aimed at improving the professional inclusion of staff with hearing difficulties through the delivery of computer literacy and behavioural courses, with a view to facilitating communication between colleagues.
The Group’s objective is to create a virtuous company in which everyone may access a path of professional enrichment, competence and experience
In this regard, the Company is committed on a daily basis to ensuring constant adaptation, consolidation and development of professional and managerial skills, and to drawing up succession plans to cover “critical” positions, in order to incentivise operational excellence and achieve the objectives set out in the “Deliver 2022” Strategic Plan. The Strategic Plan envisages around 20 million training hours by 2022, of which around 6.5 million dedicated to staff working in the financial sector, in order to ensure development of skills in line with market trends, customer needs and regulations.
Therefore, training and development play an enabling role in promoting the growth of staff know-how, developing talent that gives the entire Group a real competitive edge, and supporting a culture of change.
In accordance with the new businesses and changes in the corporate context - together with the business lines - the Corporate University defines a specific managerial structure focused on the training needs of staff operating in the various functions, also relying on the training focal points of the business functions operating nationwide.
Training initiatives are differentiated on the basis of specific roles and training and educational needs.
Mail, Parcels and Distribution In the logistics sector, training activities dedicated to postmen continued and new ones were launched to support the radical transformation of logistics processes. Such transformative process is strongly linked to the implementation and dissemination of lean production methods and tools, and aims at supporting the development of a service culture based on continuous improvement. In addition, with a view to transforming the sales network in terms of customer relationship management, various training plans were implemented, with a special focus on the regulatory compliance requirements of the financial and insurance world, via the certification of Poste Italiane’s training system to meet MiFID II-ESMA requirements, with the aim of monitoring and developing skills and continuously assessing the related development needs.
Insurance Services PosteVita focuses on the continuous evolution of the product offer and on the implementation of new distribution practices to offer greater guarantees to customers. In this context, training plays a crucial role in keeping in line with regulatory and socio-economic developments. No longer limited to technical and regulatory content, training is designed to integrate all new products and services, as well as an equal number of relational skills and abilities to take customers’ needs into account. Interactive workshops and specific case studies are envisaged, in order to place maximum emphasis on interaction and dialogue with customers.
90% of staff receive assessments on the outcomes and development of their careers
The various types of assessment of potential continued, with regard to: �� Knowledge, evaluation process and mapping of competences and skills aimed at strengthening those resulting to be weaker from the assessment outcomes; �� Professional Guidance (POP), dedicated to young members of staff and aimed at identifying the best performers in whom to invest development, by recognising so-called young talent; �� Managerial Potential (MLAB), dedicated to the more mature workforce, aimed at identifying key people to perform middle management roles. Participants in the programme are periodically involved in surveys that monitor the degree of satisfaction and perceived usefulness of the development initiative, and gather feedback and suggestions to improve the proposed activities.
In response to the growing demand from employees for flexibility and work-life balance, a teleworking service is available. This is aimed at people with objective care needs for themselves or their families (e.g. pre- and post-natal periods; resumption of service after a long illness, injury or leave; disabled people; employees who need to care for elderly parents or children). Employees taking advantage of teleworking may choose to work from home, whilst guaranteeing their presence at the Company one or more times per week.
In addition, employees and their families have access to special agreements and conditions regarding products and services. Welfare payments are also provided to support employees with special needs, arising from serious personal and/or family situations or from serious natural disasters.
In line with the Company’s objective of ensuring work-life balance and promoting the social values of aggregation and inclusion, Poste Italiane is committed to creating opportunities for practising sport, as a key tool for strengthening relationships. With this in mind, the Company has decided to set up its own national football team, as a starting point for promoting sports values among its employees.
Regarding supplementary pension contributions, the Company contributes to the financing of Fondoposte for non-managerial staff, and to the PREVINDAI Supplementary Pension Fund for managers, so that pension benefits supplementary to the Compulsory Pension may be recognised.
The quality of labour union relations enables fostering of a positive corporate atmosphere and finding appropriate solutions for issues that may have a significant impact on the organisation, on business and, in particular, on human capital, a fundamental asset for the Company.
Dialogue with the social partners is managed via periodic meetings with the labour unions.
In order to ensure compliance with the law, Poste Italiane stipulates agreements with labour unions in the interest of its employees, in accordance with the bargaining procedures set out in the National Collective Labour Agreement and the Consolidated Law on Representation.
During 2018, various opportunities for dialogue with the labour unions enabled the signing of several agreements, the most significant of which are described below.
This operational and organisational reorganisation, which began in 2018 and continued in 2019, is divided into four phases, the first of which began on 16 April 2018 and ended on 22 October 2018. At the end of this first implementation step, the Parties verified the actions carried out at both national and local level. Moreover, with the agreement of 8 February 2018, the Parties also defined procedures for managing surplus staff resulting from this reorganisation process, excluding recourse to collective redundancy procedures pursuant to Law 223/91.
The managerial and organisational levers required to meet the Company’s needs were identified in the following areas: �� hiring employees with fixed-term contracts on permanent contracts; �� recruitment from external markets, mainly through professional apprenticeship contracts; �� conversion from part-time to full-time contracts; �� job rotation.
On 31 July 2018, an agreement was signed to award performance -related bonuses to employees of Poste Italiane SpA, PosteVita SpA, Poste Assicura SpA, EGI SpA and BancoPosta Fondi SGR. The agreement, which has a one year validity, allows to further emphasise the contribution made by staff towards the achievement of corporate objectives in 2018.
Participatory organizations with mixed composition (members from Poste Italiane and Trade Unions) Together with the labour unions, Poste Italiane has set up joint bilateral bodies at national level regarding issues that are also relevant in terms of sustainability, including: �� Comitato per l’Attuazione dei Principi di Parità di Trattamento e Uguaglianza di Opportunità (Committee for the Implementation of the Principles of Equal Treatment and Equal Opportunities), with the objective of “implementing and strengthening a culture that pays attention to diversity, including gender diversity, through positive actions aimed at creating examples of good practice within the Group and removing obstacles that actually prevent achievement of equal opportunities”. In this context, the Committee will address issues relating to the integration and inclusion of disabled people, as well as those regarding other factors of discrimination.
�� Organismi Paritetici per la Salute e la Sicurezza sui Luoghi di Lavoro (Joint Bodies for Occupational Health and Safety) also continued activities relating to the uniform and correct application of the guidelines regarding occupational health and safety, in particular concerning issues relating to the new work-related stress risk assessment criteria with the aim of “implementing measures to improve occupational health and safety”. At the end of 2018, the Osservatorio Paritetico sulla Sanità Integrativa (Joint Observatory on Supplementary Healthcare) was set up, with the role of proposing and monitoring the services offered by the Supplementary Healthcare Fund.
Protecting our employees’ health and safety in the workplace is of utmost importance for Poste Italiane. Therefore, in its activities the Group respecst the highest international standards and the specific rules and regulations regarding the postal sector, via an approach based on continuous improvement.
The Company deems the assessment and prevention occupational health and safety risks to be fundamental principles, which all employees should be inspired by in carrying out their daily activities.
From this perspective, safety is a culture that characterises the actions of the Company as a whole, with the aim of engaging all employees in the process of constant awareness and involvement in management processes.
Therefore, in accordance with corporate values, the Group is committed to: �� consolidating a safety culture, by promoting awareness on the issue and encouraging the continuous involvement by everyone working within the Group, especially at local operating centres (Distribution Centres and post offices) and within the relative coordination departments; �� preserving people’s physical and moral integrity, starting with the reduction of injuries, especially in the logistics and delivery segment; �� promoting continuous improvement of management systems through the planning and implementation of initiatives, in line with the principles set out in the Group’s Policy, regarding the constant monitoring of performance and the periodic review of setting new objectives.
As regards health and safety, Poste Italiane aims to consolidate a safety culture in the Company, preserve the physical and moral integrity of its employees, and promote continuous improvement of the management systems adopted
The commitment to occupational health and safety in the logistics sector
In this context, some Group companies have also adopted management systems that guarantee correct and uniform management of these issues, and have implemented an effective certified Occupational Health and Safety Management System, in compliance with the relevant international standard, involving central and local facilities and identifying roles and responsibilities in the implementation of requirements. In addition to ensuring timely compliance with any regulatory changes and updates and effective and transparent communication of any information that might be useful for prevention purposes, this management model guarantees alignment between innovations and changes in work processes in terms of occupational health and safety objectives.
The Company policy regarding occupational health and safety comprises the following key principles and objectives: �� continuous assessment of risks and definition/update of related rules and procedures; �� ensuring that innovations and changes in work processes are always accompanied by occupational health and safety objectives; �� timely adaptation to all regulatory changes and updates; �� identification of roles and responsibilities within the organisation and allocation of the necessary resources for planning and implementing the programmes aimed at achieving the objectives; �� effective and transparent communication that ensures dissemination of any information that might be useful for prevention purposes, including cooperation and coordination measures with contractors; �� periodic review of the management system by top management to assess its correctness and effectiveness with a view to achieving constant improvement.
inclusion of small municipalities 5 years of “Il Risparmio che fa Scuola”
WE HAVE A RESPONSIBILITY TO INVEST IN LOCAL COMMUNITIES TO HELP DRIVE THE COUNTRY’S DEVELOPMENT.
Increase the Group's support for socio-cultural initiatives that benefit the community 60% increase in investment in the community to promote socio-cultural initiatives by 2019
Allow Company-owned spaces in "disadvantaged" areas to be used for social activities
Eliminate architectural barriers in post offices 80% fewer architectural barriers by 2020
Certify the financial advisory service and the skills of people operating in accordance with the ISO 22222 standard 100% of finance consultants ISO 22222 certified by 2022
Supporting the needs of the community is the foundation of the Group’s values and corporate mission. The Company has always accompanied the local communities where it is present on a daily basis towards modernisation and digitisation processes, thereby promoting the wellbeing of citizens and socio-economic development.
Poste Italiane systematically promotes activity programmes nationwide relating to social inclusion issues that have a positive impact and bring benefits to the community through its extensive network of post offices and through the engagement of corporate volunteers and/or the financing of specific EU projects via donations and sponsorships. As part of its initiatives to support the community, the Company pays particular attention to the most vulnerable categories of people who experience hardship due to their physical, mental, family, economic, ethnic and social conditions.
At the beginning of 2019, the Company adopted the Poste Italiane Group policy on community initiatives, which defines the Company strategy within the scope of its actions to support the socio-economic development of local areas, with specific reference to the United Nations Sustainable Development Goals. The Policy describes the main areas of intervention of its initiatives, including: facilitating access and inclusion for those categories more at risk of exclusion by offering dedicated products and services; promoting culture and education by implementing initiatives aimed at fostering cultural values and the right to education; and encouraging economic sustainability and social connection through collaboration with central and local authorities, the third sector and local communities in order to meet the needs of the most disadvantaged people.
In collaboration with the main local authorities and administrators, the Group has defined specific initiatives to benefit communities through the “10 Impegni a favore delle comunità nei Piccoli Comuni” . From 2019, the initiative provides for implementation of a series of concrete commitments to support local municipalities with fewer than 5,000 inhabitants through dedicated investment, services and opportunities. Taking advantage of the increasing efficiency of the 12,824 post offices and the Company’s digital spaces, which over 3 million people access every day, the initiative has the dual objective of finalising and improving the customer experience of services provided to citizens, and promoting specific initiatives to support local development, in order to have a positive impact on the social fabric, encourage economic and social growth in Italy and, at the same time, boost the Company’s strategic presence in local areas. The planned commitments, as set out in the initiative manifesto, include: �� Open post offices: In line with the provisions of its Business Plan, Poste Italiane confirms its commitment to no longer close its post offices in municipalities with fewer than 5,000 inhabitants, thereby supporting the growth and development of local areas, in agreement with local authorities and public bodies.
�� Home deliveries by postmen and the agreement with tobacconists: Provision of the main postal services through the network of tobacconists and home deliveries by postmen with no surcharges on post office rates, thanks to the agreement between Post Italiane and the Italian Tobacconists Federation.
In support of the initiative, the network of Poste Italiane volunteers participated in the implementation of distribution, storage and administrative activities relating to management of the parcels. In this regard, the first group of Poste Italiane volunteers was established at the Solidarity Emporium in Rome in November 2018, to whom a training session was dedicated in January 2019.
With the aim of generating a positive local impact and at the same time raise awareness on the issue of solidarity and reuse, during 2019 the Company plans to activate the initiative at the Solidarity Emporium in Perugia and Pescara, and to carry out the first “solidarity” auction. In particular, for goods classified as of high value and/or unsuitable or needed to support the beneficiaries of the Solidarity Emporium, the contents of the parcels will be sold at local markets, on dedicated online websites and at “solidarity” auctions. The use of alternative channels to the Solidarity Emporium is designed to top up the Solidarity Fund, which is aimed at funding the return to work of people who have lost their jobs.
To support the achievement of these criteria, Poste Italiane has designed a Company volunteering operating model (in terms of processes, criteria and support tools), regarding the accreditation phase for notfor -profit organisations, presentation and ratification of projects, recruitment and hiring of volunteers, and internal and external communication.
The P.A.I.N.T. project Based on the fundamental values of proximity and the Company’s social role, the P.A.I.N.T. project (Poste e Artisti Insieme nel Territorio – Poste Italiane and Artists Together in Local Communities), a local initiative regarding the refurbishment and decoration of post offices, was launched. In line with Poste Italiane’s role and its proximity to local areas and citizens, through this project the Group aims to enhance its presence in Italy’s social fabric, in order to make the Company’s predilection for local communities and innovation more concrete and visible. The initiative envisages the creation of murals on the outside walls of post offices throughout Italy, thereby turning them into landmarks for neighbourhoods and citizens. Through online contests involving street artists from all over Italy, the Company identified the best sketches for 21 murals, which were painted by the end of 2018. The “10 impegni a favore delle comunità nei Piccoli Comuni” is the reference framework for the second phase of the project which, as part of the initiatives relating to the renovation of real estate, provides for identification of 20 post offices in small municipalities that will have murals painted on their walls by the end of 2019.
Social engagement Poste Italiane is sensitive to social initiatives and the willingness of our employees to take an active part in social change. According to the principle of social engagement, the Company has joined the National Food Collection Day organised by the Banco Alimentare Onlus (not-for-profit
Poste Italiane receives award for its initiatives to support the digital development of small towns at the 2018 Cresco Awards
The role and nature of Poste Italiane’s activities require constant dialogue with national and international institutions, as well as with the Regions and local authorities.
Indeed, taking into account its mission, widespread presence and the context in which it operates, Poste Italiane has always fostered positive interaction with public decision -makers, by maintaining constant, structured relations with authorities and institutions through a systematic and transparent dialogue, and promoting effective and correct cooperation, in strict compliance with legal provisions and regulatory measures.
These dialogue initiatives are based on a quest for shared solutions that enable a response to the social needs of the community, having a positive impact on the social fabric in the areas where the Company operates and, at the same time, increasing competitiveness and promoting business continuity
This institutional dialogue takes place mainly through direct relations with the various institutional representatives, in order to promote knowledge of the Company’s activities and to prevent application problems deriving from the choices made by public decision-makers, with a view to achieving positive collaboration.
During 2018, the Company also carried out specific dialogue and collaboration initiatives with Regions and local authorities that led to the signing and implementation of specific agreements, including: �� the Agreement between Poste Italiane and the Autonomous Province of Trento regarding the determination and financing of a public service obligation in addition to the universal postal service in the Autonomous Province; �� implementation of the Memorandum of Understanding between Poste Italiane, the Piedmont Region and ANCI Piedmont, regarding the provision of innovative services to citizens in municipalities in Piedmont, with a special focus on small municipalities; �� implementation of the Agreement between Poste Italiane and the Autonomous Province of Bolzano, signed in 2017, to determine the operating costs of the delivery service within the provincial boundaries to be borne by the Autonomous Province, and to determine and finance public service obligations in addition to the universal postal service.
Among the main local institutions and regulatory and supervisory bodies the Company with which the Company interacts are: the Communications Regulator (Autorità per le Garanzie delle Comunicazioni - AGCom), the Ministry of Economic Development (Ministero per lo Sviluppo Economico - MISE), the Ministry of Economy and Finance (Ministero dell’Economica e delle Finanze - MEF), the Ministry of Foreign Affairs and International Cooperation (Ministero per gli Affari Esteri e della Cooperazione Internazionale - MAE) and the European Policies Department of the Cabinet Office. At European and international level, the Group also maintains relations with the European Parliament, the European Commission, the Universal Postal Union (UPU), PostEurope, the European Centre of Employers and Enterprises providing Public services (CEEP), the International Post Corporation (IPC) and other institutions and associations in the sectors in which it operates.
With specific reference to the Mail, Parcels and Distribution segment, the Group aims to: �� guarantee access to SGEIs - services of general economic interest (e.g. the universal postal service, publishing - access to information, various services for citizens), with the aim of ensuring end users’ access to information.
�� handle requests from AGCom (Communications Regulator) regarding the regulation and supervision of the postal sector (e.g. requests for information, sanctions proceedings, etc.) and AgID (Digital Italy Agency), in relation to the activities of the Payment, Mobile and Digital segment.
An additional monitoring tool used by the Company refers to the periodic listening activities with representatives of institutions and local authorities, whose requests are shared in terms of their impact on business decisions.
By taking advantage of its proximity to local communities and the network’s nationwide reach, the Company has always provided support to traditionally excluded sectors of the population who, due to specific personal or physical conditions, have no direct access to the basic products and services required for their economic livelihoods and social wellbeing.
With this in mind, as specified in the Company’s policy regarding the protection of human rights, Poste Italiane undertakes to promote the right to access and inclusion by developing products and services that respond to social needs, including those of people living in internal and peripheral areas or deprived and disadvantaged areas, as well as the promotion and planning of financial education initiatives, especially regarding savings, investment, payments, social security and insurance.
In this regard, in line with the evolution of the customer advisory service model, the Company intends to propose a new post office concept, for example, by assigning a consultant dedicated to a customer’s specific financial needs, and providing tools to encourage dialogue with customers based on their priorities.
With particular reference to senior citizens, the Company is developing services and dedicated communication approaches in the new spaces inside post offices, such as the promotion of digital literacy through reception services and technological support, helping customers to deal with paperwork and fill in forms, and information initiatives using specific, legible procedures. Staff training for this purpose is very important, with particular attention paid to the sales network, in order to ensure constant updating of their knowledge and skills and best meet customers’ needs.
In addition to supporting financial inclusion projects already launched during 2018, the Group has developed specific initiatives dedicated to traditionally excluded sectors of the population, aimed at promoting social inclusion and cultural integration.
200 more ATMs installed in small municipalities in order to promote financial inclusion
Post offices with Italian Sign Language staff and ATMs for blind and visually impaired people The focus on disabled people results in incorporation of their needs within the Company’s project activities, through which Poste Italiane provides specific tools, technologies and dedicated staff to help them with their financial inclusion.
The Group has also planned a series of initiatives aimed at promoting the involvement of deaf colleagues and their participation in the life of the Company. Among these initiatives, with the “Progetto LIS – Laboratori musicali inclusivi” (Italian Sign Language Project - Inclusive Music Workshops), Poste Italiane has planned the launch of a music workshop aimed at facilitating the learning of sign language.
Finally, with a view to inclusion, all ATMs installed nationwide are equipped with keyboards for blind and visually impaired people. ATMs include a guidance system with a series of contrasting graphic maps that can be activated from the screen, and the use of complete voice guidance using headphones that can be inserted into a special jack.
Over 6,000 ATM equipped with voice guidance in 2018 up 1,038 on 2016 (5,269)
More than 3 million customers were served in the 27 multi -ethnic post offices that currently active during the year. In addition, in line with previous years, more than 5 million transactions were carried out in 2018. In line with the numerous initiatives to support the inclusion of the most disadvantaged sectors of the population, the Company plans to set up additional multi-ethnic post offices.
In line with the Company’s Code of Ethics and Principles of Good Conduct, all post office staff give priority at counters to customers with motor and visual disabilities, expectant mothers and parents with newborn infants. In order to support the application of this principle, courtesy notices are displayed in all post offices to encourage such behaviour.
The financial inclusion of senior citizens, young people and minors “Mese dei Nonni” (Grandparents Month), a commercial initiative dedicated to the needs of customers over 65 (senior citizens) in its third edition since 2017, provides an integrated and diversified products and services offering, in accordance with the various Group businesses. The initiative, which is implemented through a single, dedicated communication plan for the entire Poste Italiane Group, provides for a selection of products and ad hoc services, some of which are special offers, including insurance (Postaprotezione Infortuni Senior Più, Postafuturo Da Grande, Poste Amici a 4 Zampe), mobile (PosteMobile Casa, Piano Creami Extra), financial (Quinto BancoPosta Pensionati, PostePay Evolution, special offers for Bancoposta products) and mail (offerings linked to postal savings and the over 70 payment slip).
During 2018, the setup phase of the “Silver Economy” Programme designed for senior citizens was also completed, with the aim of managing all the Group’s actions dedicated to this important segment of the population in a single synergistic framework.
The long-term programme will be implemented from early 2019, entailing several courses of action: �� involvement of startups and industry observers to identify needs and bring senior citizens closer to new technologies by getting them to take part in the innovation process; �� home delivery/neighbourhood services through the network of postmen and post offices; �� financial and computer literacy events at post offices; �� development of new dedicated offerings; �� dedicated commercial initiatives (Mese dei Nonni).
Financial literacy “Il Risparmio che fa scuola” (savings education project) is one of the most successful initiatives implemented by the Company in the field of financial education in recent years, which is part of the “National Strategy for Financial Education”.
In December 2017, the partners renewed the agreement for five years and a new educational project was developed, for students and teachers at all levels, with a wider variety of activities and educational initiatives, aimed at involving 1 million students by the end of the fifth year.
The new edition of “Il Risparmio che fa scuola” promotes Economic Citizenship by focusing on the issue of multidimensional savings as a key value and tool to promote progress and support individual development and of the entire community as well.
19,900 Schools involved 1,000,000 Students 39,500 Kits sent 346 Events at schools
The 5 years of “Il Risparmio che fa scuola” (savings education project): Report on operations 2018 5. Performance
Promote knowledge and skills development within the sales network 6.5 million training hours provided to employees operating in the sales network by 2022
Reduce paper consumption due to the dematerialisation of sales operations 30 million less pages consumed by the end of 2019
Engage Poste Italiane customers and employees via web platforms 30,000 customers and 6,000 employees involved in the web panel platform “Dillo a Poste Italiane” by the end of 2019
Launch of 4 pilot projects based on blockchain technology by the end of 2019
Poste Italiane deems it fundamental to base relations with its customers on striving for maximum transparency and fairness, with a constant commitment to meeting their expectations.
To this end, Poste Italiane avows its utmost attention to customers and, with regard to its activities, sets itself the dual objective of guaranteeing an excellent quality experience and, at the same time, establishing a relationship of trust with customers that goes beyond merely using a traditional product or service
In this context, the recognised value attributed to customer satisfaction is demonstrated by the Company’s desire to provide a customer experience objective for all beneficiaries of the “Management By Objectives” (MBO) programme. In particular, in 2018 the Company decided to assign the “Poste Italiane Group Customer Experience” indicator to the Chief Executive Officer, the Internal Audit function and all staff functions, in
Improvement of approximately 81% in customer experience results for 2018 (up 3%), compared to the figure of approximately 79% in 2017
The focus on satisfying customers’ needs is demonstrated by the significant number of staff employed in the quality area. In particular, in the Mail, Parcels and Distribution segment, the Company organisation employs around 1,200 professionals spread across the local and central levels, who carry out targeted measurement, prevention and improvement activities, supporting daily operational management and guiding the actions to be taken to achieve the Company’s objectives.
The presidium dedicated to oversee Poste Italiane’s corporate reliability, which operates within the second control level, monitors the Company’s processes and reliability in order to strengthen operational and commercial processes with respect to the service levels set out in the quality and performance indicators, with the ultimate objective of improving the Company’s reputation and image.
The primary attention paid to quality is expressed in the Integrated Group Policy which, with reference to quality issues, documents the Company’s commitment to the continuous incorporation of quality within the Company’s development strategy, so that all the processes that contribute to the design, development and implementation of a product or service are mapped within quality management systems.
The Poste Italiane Group deems it fundamental to base its relations with its customers on striving for maximum transparency and fairness, with a constant commitment to meeting their expectations. Therefore, the Group’s Integrated Policy regarding quality requires Group companies - within the scope of their autonomy and independence - to implement the Policy, adapting it to their own size and organisational and operational context, as well as to specific applicable regulations (for example, in the Financial and Insurance services segments).
The level of customer experience satisfaction in post offices rose from 8.4 in 2016 to 8.7 in 2018
In the Payment, Mobile and Digital segment, a “Qualità PostePay” (PostePay Quality) programme was also defined, aimed at critically rethinking processes and systems on the basis of reports received and launching activities sites that redesign processes from a customer perspective.
“Dillo a Poste Italiane” (Tell Poste Italiane about it) - customers and employees, two sides of the same coin bearing witness to the customer-centric innovation path the Company has embarked on
The commitment to quality, expressed in terms of compliance with the timeframes and methods for carrying out activities, is also confirmed by the signing of a Framework Agreement with 20 consumer associations in April 2018. This has led to the creation of a single organisational struc32. In particular, the “Investors”, “Governance” and “Transparent contracts” sections contain all the relevant information relating to financial reporting, the composition of corporate bodies, governance systems and corporate strategies, as well as detailed information on the procedures for awarding works and services contracts, with a view to maximising free competition in the marketplace.
Therefore, digitisation becomes an essential tool for promptly responding to the many external stimuli, and for implementing an effective strategy at all levels of the organisation. It can also create positive externalities for society by reducing environmental impacts and promoting social inclusion through new ways of accessing information, products and services.
2018 marked a significant development in the communication activities through Poste Italiane ’s Linkedin channel, placing the Company ranked second in the “Talent Awards - Best Employer Brand with 10,000 + Employees on LinkedIn”, which rewards brands that have managed to make the best use of the platform for “employer branding” purposes, by reaching and involving their target thanks to sharing impactful and engaging content.
Social media are also used to provide support and information to customers, through a simple user experience that fits in well with consumers’ daily habits. In 2018, over 650,000 interactions and assistance requests were handled via Poste Italiane’s social media, thus guaranteeing a high level of response in terms of promptness, as well as the ratio of responses to the number of requests. Thanks to these activities, in 2018 - coming in just after the leading Italian telcos - Poste Italiane was firmly positioned among the Top 10 Italian companies in the “socially devoted” ranking, devised by SocialBakers, one of the world’s leading companies for social media monitoring solutions.
The distinguishing features of this process include the presence of a dedicated business area (Payment, Mobile and Digital), which serves as a competence centre to support the implementation of the Group’s digital strategy, and PostePay, the largest Electronic Money Institution in Italy, which has integrated the telecommunications services previously provided by PosteMobile with its card payments and payment services business. PostePay aims to enhance Poste Italiane’s distribution channels through a “hybrid” model, which combines the largest and most widespread physical network in Italy and the digital world, and to create new channels, products and integrated services, especially regarding acquiring, e-commerce and mobile and digital payments.
Thanks to this strategy, innovative digital solutions have already been implemented in the Group’s various Strategic Business Units. These include, for example, the digital collection of undelivered registered mail, the electronic postman, the digital evolution of postal savings services, the PosteID digital identity service enabled by the Public Digital Identity System (SPID - Sistema Pubblico d’Identità Digitale), and the Postepay Connect service, the first integrated product in the payments and mobile field that, through a single app, enables users to manage their telephone and payment services in an intuitive and secure way.
For the Company, as well as being a fundamental value, this is a commitment to guarantee high levels of security in the selection and use of its IT systems in order to protect customers and citizens and combat cybercrime.Therefore, at organisational level, a single hub has been created to monitor the risks relating to information security and information systems.
Personal data protection With a view to achieving uniform management of personal data and compliance with recent regulatory requirements in this regard, the Group has adopted a corporate regulatory system consisting of the Privacy Guidelines, to ensure that management complies with legal provisions, and the Personal Data Protection Management System Guidelines, designed to ensure a uniform personal data management system at Group level, which complies with the provisions of the European General Data Protection Regulation (GDPR) and current Italian legislation. In detail, the Guidelines illustrate the Company’s privacy model, the principles of Privacy by Design and Privacy by Default, which respectively establish the incorporation of privacy from the design stage and the guarantee by default, as well as the main processes adopted by the Poste Italiane Group and the related responsibilities regarding the effective management of personal data protection risk.
The Poste Italiane Group considers personal data protection to be a fundamental value that every Group company must adhere to in its daily activities
Reduce the total number of kilometres travelled by increasing First Time Delivery Success 90% of parcels delivered on first attempt by the end of 2019
Reduce the Group’s total energy consumption from renewable sources 32.8 GWh less total electricity consumed by buildings by 2022
Certify Corporate processes in accordance with ISO 14001 and ISO 50001 100% of Corporate processes ISO 14001 and ISO 50001 certified by the end of 2019
The Company’s objective is to spread an environmental protection culture, whilst systematically drawing up sectoral action plans regarding the efficient management of energy resources, water resources and waste, from a circular economy perspective, in order to reduce its ecological footprint
In terms of organisation, a single central Function is tasked with overseeing the areas of environmental responsibility relating to real estate assets, including ensuring compliance with current regulations regarding energy use, monitoring and measurement of consumption, identifying areas where savings can be made, and defining efficiency improvement projects and consumption reduction objectives.
In order to raise awareness of the impact that the daily actions of the people who work permanently or temporarily at Group companies have on the environment, in early 2019 the Company adopted an Group policy on environmental sustainability with a view to sharing with customers, civil society and stakeholders in general, the commitments it has undertaken - in addition to the principles - to respect the rules and instruments it intends to adopt to ensure compliance with international regulations and standards.
Therefore, the Policy’s objective is to prevent, manage and, where possible, reduce the environmental impacts
In order to ensure oversight of consumption and reduce environmental impacts and costs, the Group has contracted a supplier for electricity and another one for gas, so as to have a systematic basis of consumption for the individual utilities for each month of supply.
In 2018, the energy use optimisation plan continued, including introduction of initiatives aimed at reducing waste by installing and activating energy consumption meters that enable monitoring of trends, analysis of consumption, taking measurements at the most energy-intensive sites, and correctly setting temperatures and operating times for cooling and heating systems. In this regard, Poste Italiane has already planned an energy management system for 2019, which will be gradually extended to the entire Group.
In this context, The Group’s strategy involves these courses of action: �� Renewable energy sources. In order to promote renewable energy sources, Poste Italiane has focused on the distribution of integrated photovoltaic systems in buildings, thereby creating infrastructure aimed at reducing dependence on fossil fuels. With a view to reducing the withdrawal of electricity from the national grid, as well as the overall costs of supply and payment for the expected tariff increases, the Group has planned to increase its own self-production facilities by installing photovoltaic panels on its buildings.
�� Smart buildings. Minimise the environmental impacts of the Group’s buildings with regard to energy use, water consumption, waste and consumption of raw materials, through implementation of specific measures that strictly depend on preventive analysis and constant monitoring systems. In this regard, in compliance with the obligations set out in Legislative Decree 102/2014, which provides for the promotion and improvement of energy efficiency, the Group carries out continuous energy audits, through a system for monitoring the withdrawal of electricity, based on a network of meters connected to a central data collection system that generates a report on energy consumption at each site, thus enabling identification of sites that are critical in terms of high consumption. The energy audits must be drawn up by Energy Management Experts (EGE- Esperti in Gestione dell’Energia) who are certified in accordance with UNI CEI 11339:2009. Consequently, a certification process for internal staff has been launched. The Company has embarked on a process of incorporating specific smart building initiatives within its environmental impact strategic priorities. With this in mind, Poste Italiane has selected specific technological solutions regarding building automation, energy management and space management equipment within the Group’s national network of buildings. Furthermore, with the aim of monitoring its own energy consumption, identifying possible areas for improvement and planning the relative reduction, the Group intends to acquire a special control system regarding computerisation of the electricity and gas bills relating to the energy consumption of its buildings. In addition to providing a tool to support management of the process of checking electricity and gas bills relating to contracts with external suppliers, this platform will enable verification of historical consumption trends and market rates.
Indeed, the rational use of natural resources in compliance with ethical principles and social responsibility, and the focus on finding innovative environmental protection solutions, are the priorities the Poste Italiane Group has defined in its Code of Ethics, which sets out the fundamental principles that inspire us to achieve the best environmental performance.
In order to guarantee a clear and uniform managerial approach to environmental issues, the Poste Italiane Group has adopted a policy that sets out the Company’s commitment to mitigating the environmental impact of its key business processes, and encourages the development of green transport solutions for logistics activities and staff mobility, partly by providing staff with a corporate fleet of hybrid and electric vehicles (for further details see the section on “Environmental impacts of real estate facilities”).
Specifically, Poste Italiane has decided to radically overhaul its delivery network and operating model through implementation of the new delivery model, which provides for a transition from a single network (operating only in the morning from Monday to Friday) to a structure with two networks that differ in terms of delivery methods and type of product.
�� by using electrically powered models, operating in city areas subject to traffic restrictions and in the event of traffic jams, while at the same time enhancing the “ecological mobility” process, already previously embarked on with the introduction of electric quadricycles to the fleet.
Postmen move around on electric tricycles, to make urban parcel delivery environmentally-friendly, easy and safe
Finally, with a view to identifying suppliers and partners who may represent risks in terms of environmental protection, further proof of the Company’s commitment to environmental sustainability was demonstrated during the year by a review of tender specifications with reference to third-party companies that provide transport services to the Company. Specifically, in addition to meeting all the requirements imposed by current legislation, Poste Italiane requires its suppliers to submit a quarterly report on the numbers of kilometres travelled and litres of fuel consumed. The Company also conducts technical checks on vehicles from third-party companies that carry out transport activities, in order, in the event of unsatisfactory assessments, to plan appropriate actions to be taken.
Monitor the ESG ratings of the issuers present in directly managed portfolios 100% of issuers monitored with respect to ESG issues by 2019
Poste Vita has signed up to the Principles for Sustainable Insurance promoted by the United Nations, with the aim of becoming one of the leading proponents of a sustainability culture in the insurance sector.
In order to ensure a consistent approach to risk management at the company, the Policy has established a principle requiring the systematic assessment of economic, social and environmental issues that may have an impact on people and, therefore, on the company’s long-term business. This process enables the company to adequately mitigate potential threats and identify new business opportunities that could lead to the development of sustainable insurance products of high social and environmental value. The Policy also envisages the establishment of structured processes for effectively managing and monitoring the approach adopted through specific principles, activities, roles and tools.
Another area in which the Group plays an important role refers to the so-called “pure risk” products. In view of the significance of the so-called “mortality gap within households ”, being the difference between the available resources and those needed to maintain an adequate standard of living for people close to the insured person in the event of the latter’s death, Affetti Protetti is a Life insurance policy that aims to protect the other family members. At the end of 2018, around 191,000 policies had been sold with an average capital per policyholder of €93,000 and an average annual premium of €144.
Given the aging of the Italian population, with the aim of providing concrete support to cope with the difficulties associated with ageing, Poste Vita has developed its product “Sempre Presente”, which guarantees the policyholder income if they lose their independence. This provides financial support enabling them to meet the cost of the necessary care without weighing on those nearest to them. Approximately 16,600 policies were sold in 2018, with a guaranteed average payout of €622 and an annual premium of €369.
Posta protezione dal Mondo is the policy for foreign citizens legally residing in Italy, offering a single product that guarantees financial support in the event of injury and the need for care, meaning that the insured person can rest easy during their stay in Italy. The product meets the needs of people who, finding themselves living in a country that is not their own, wish to protect themselves and their family and receive concrete support at times of need. In particular, it offers the policyholder round-the-clock protection in the event of a workplace injury or for an injury incurred in their free time. Posta protezione dal Mondo provides simple cover (injury resulting in serious permanent disability rated higher than 60%, death from injury, care packages designed specifically for the target) at an accessible price (€60 per year). The policy helps to create greater social integration, offering protection through an insurance product that is accessible to everyone.
Increase the Group’s support for socio-cultural initiatives that benefit the community
Certify the financial advisory service and the skills of people operating in accordance with the
Increase the number of post offices in small municipalities with free
Reduce the total number of kilometres travelled by increasing First Time Delivery Success
The following tables show the indicators required by the Global Reporting Initiative standards, together with other indicators that Poste Italiane believes important in order to illustrate its performance. The indicators are presented on the basis of the six pillars of the Group’s ESG Strategic Plan.
No. Personnel No. Personnel No. Personnel * The figures refer to the Group company, SDA SpA.
Economic value distributed to stakeholders 9,917 9,828 9,418 * The amount refers to the dividend to be proposed to the Annual General Meeting of 28 May 2019.
[GRI 205-1] COMPANIES ASSESSED FOR RISKS RELATED TO CORRUPTION* AND PERCENTAGE** OF OPERATIONS AUDITED FOR RISKS RELATED TO CORRUPTION
* Assessment of Group companies for risks related corruption was conducted as part of the survey carried out in drawing up the Organisational, Management and Control Model required by Legislative Decree 231/2001.
of which relating to corruption 23 23 7 of which confirmed 1 - -
Total percentage of Group companies subject to human rights reviews 100 100 100
Total permanent and flexible workforce 141,246 138,040 134,360 136,739 136,555 132,338
Men Women Total Men Women Total Men Women Total of which: of which: * The figures are shown in Full Time Equivalent (FTE) terms. ** Includes permanent staff and apprenticeships. *** 2018 witnessed a number of major organisational and corporate changes within the BancoPosta function, accompanied by a restructuring of the card payments and payment services business unit and the centralisation of back-office activities. **** Includes fixed-term and agency staff.
[GRI 102-8] NUMBER OF PERSONNEL BY TYPE OF EMPLOYMENT AND GENDER, BY STRATEGIC BUSINESS UNIT*
[GRI 405-1] COMPOSITION AND BREAKDOWN OF POSTE ITALIANE SPA BOARD OF DIRECTORS BY GENDER AND AGE*
[GRI 405-1] CLASSIFICATION OF EMPLOYEE BY CATEGORY, GENDER AND AGE GROUP*
[GRI 404-3] PERCENTAGE OF EMPLOYEES WHO RECEIVE REGULAR PERFORMANCE APPRAISALS, BY GENDER AND CATEGORY*
Men Women Total Men Women Total Men Women Total * The figures do not include figures for Mistral Air, as it is not possible to compare like-for-like categories as the related contract is different. The figures do not include approximately 3,500 – 4,000 personnel (the average for the year) who cannot be assessed due to a lengthy absence from work (over 6 months). These staff are, however, included in the process of assigning annual objectives for the coming year.
[GRI 404-1] AVERAGE HOURS OF TRAINING FOR EMPLOYEES BY GENDER AND CATEGORY
Type of training 2016 2017 2018 * The figures have been rounded in line with the figures reported last year.
Parental leave ** ** ** ** ** ** ** ** ** ** ** **
Pension **  **  **  **  **  ** 
Disputes with employees 1,023 1,167 956 * Over the last three years, the number of disputes increased by approximately 12% in 2017 and fell by around 18% in 2018. In greater detail, in terms of “contractual matters”, disputes registered a light increase in 2017 and a significant reduction in 2018, with the number of disputes totalling 81 in 2016 and 92 in 2017, before falling to 26 in 2018, a reduction reflecting a decline in the number of fixed-term contract disputes following the entry into force of new legislation. As regards “workplace issues”, on the other hand, the number of disputes rose from 775 in 2016 to 939 in 2017, before falling to 788 in 2018. The reduction in the last year reflects a significant decline in disputes regarding demotions, tasks assigned beyond a worker’s pay grade, union rights and other pay-related matters. Finally, disputes over the “termination of employment” are down from 167 in 2016 to 136 in 2017 and 142 in 2018. In the last, the number of disputes has risen by approximately 4% compared with the previous year.
Men Women Total Men Women Total Men Women Total of which: of which: * Compared with the previous year, the number of injuries includes injuries at Mistral Air. ** The number of injuries at work divided by the number of hours worked multiplied by 1,000,000. The rate is calculated for permanent and flexible personnel. *** The number of days of absence from work divided by the number of hours worked multiplied by 1,000. the rate is calculated for permanent and flexible personnel.
Fall and/or awkward movement 744 1,376 2,120 847 1,338 2,185 1,047 1,394 2,441
Training and knowledge development (€000) 289.9 5 * Donations: one-off disbursements made to support charitable organisations. ** Investment in communities: spending on medium- to long-term initiatives supporting communities in collaboration with non-profit organisations and local authorities. *** Commercial initiatives: business initiatives that benefit the community (e.g. sponsorship, occasional donations of the Company’s property and other assets.
The figures refer solely to spending on support for the community and do not include, for example, expenses linked to advertising and/or marketing initiatives relating to commercial initiatives).
Settlements discussed regarding IRS real estate fund (no. of applications)* n.a 35 of which settled (%) n.a 100 -
ATMs equipped with touchpads for the visually impaired and the blind 7,249 7,257 7,279 of which: ATM with voice guidance 5,269 5,847 6,307
Percentage of senior current account holders (under 35) 24 24.4 23.8
Percentage of current account holders who are "new Italians" 16.5 17.6 17.9
Percentage of senior current account holders (under 35) 6.4 7 7.6
Percentage of senior current account holders (under 35) 5.3 5.5 5.6
Average response time (days) n/a 6 10 * The figures on complaints relate to open cases requiring back-office intervention. ** Despite the increase in complaints regarding financial services in 2018, the average response time has improved (a reduction of 26 days compared with 2016), accompanied by a 15% reduction in the ratio of fraudulent transactions to total genuine transactions compared with 2017.
Satisfied customers following Customer Experience surveys (%) 81.3 79.1 81.4 * The customer experience for the various Business Units is measured twice a year (June and November) by an external research company using Net Promoter Score (NPS) surveys to measure the degree to which customers would recommend Poste Italiane’s products and services.
In terms of channels, the indicator used is the Customer Effort Score (CES), which records the ease of access to services. The customer samples involved in the customer experience surveys represent the related universe. The Business Units involved in the customer experience surveys are: BancoPosta (Consumer, SME and Large Customers); Mail, Communication and Logistics
(SMEs and Large Customers); Poste Vita (Consumer). The sales and customer care channels involved regard the Post Office channel and the Contact Centre. The target set for 2018 is +0.1 compared with 2017.
In terms of the method used to measure customer satisfaction, the surveys use a scale of 1 to 10 to measure satisfaction. The percentages shown include customers who have answered 7-8 and 9-10 in the surveys carried out.
Customers registered on Poste Italiane's digital channels (websites and apps) (millions) 12.5 15 17.6
Mainframe services (open services being processed) covered by disaster recovery plans (%) 100 100 100 * The figures refer to Poste Italiane SpA (the financial and insurance services segments), PostePay SpA and BancoPosta Fondi SpA SGR. ** The increase in investments is in line with the Company’s strategy and the importance given to Business Continuity Management projects. *** Drills, which are conducted every quarter, involved all the applications hosted by Poste Italiane’s central mainframe system, in addition to applications hosted in OPEN environments included within the scope of Bancoposta’s financial services.
No. of pro-cedures % dematerialised No. of pro-cedures % dematerialised No. of pro-cedures % dematerialised * Figures in thousands. ** the increase in dematerialised procedures is linked to the greater number of enabled post offices. The total number of dematerialised procedures in 2018 is up 28% compared with 2017.
Total amount of fines /penalties paid in relation to IT security breaches or other IT security incidents (€) - 24,000 -
Consumption of fuel from non-renewable sources (GJ) 2,688,782 2,816,874 1,963,646 of which: Natural gas (GJ) 671,062 657,874 624,541
Total external Group energy consumption * (GJ) 2,369,374 2,214,578 1,774,660 of which: Jet fuel (GJ) 508,371 538,845 379,090 * The target set for 2018 is 1,767,112 GJ (490,865 MWh) for total energy from renewable sources (internal and external) and 4,726,766 GJ (1,406,008 MWh) for total energy from non-renewable sources (internal and external).
of which: Municipal water supplies or other public or private water utilities (m3) 2,375,889 1,938,726 1,757,111 * Water withdrawals in the three-year period differ from the amounts reported in the Non-financial Statement for 2017 as a result of the change in scope. ** The target set for 2018 is 1,783,628 cubic metres.
[GRI 305-1] TOTAL DIRECT GHG EMISSIONS (SCOPE 1); [GRI 305-2] TOTAL INDIRECT GHG EMISSIONS (SCOPE 2); [GRI 305-3] TOTAL OTHER INDIRECT GHG EMISSIONS (SCOPE 3)*
Direct emissions - Scope 1** (tCO2 e) 183,338 196,573 134,540 of which: LPG (tCO
** The emission factors used to convert fuels into CO2e: LPG for 2016 1.22 kg CO2e/l (source DEFRA 2016), for 2017 1.50 kg CO2e/l (source DEFRA 2017) and for 2018 1.51 kg CO2e/l (source DEFRA 2018). Diesel for 2016 2.61 kg CO2e/l (source DEFRA 2016), for 2017 2.60 kg CO2e/l (source DEFRA 2017) and for 2018 2.63 kg CO2e/l (source DEFRA 2018). Natural gas for 2016 2.02 kg CO2e/m3 (source DEFRA 2016), for 2017 2.09 kg CO2e/m3 (source DEFRA 2017) and for 2018 2.04 kg CO2e/m3 (source DEFRA 2018). Petrol for 2016 2.19 kg CO2e/l (source DEFRA 2016), for 2017 2.19 kg CO2e/l (source DEFRA 2017) and 2018 2.2 kg CO2e/l (source DEFRA 2018). The target set for 2018 is 172,984 tCO2e *** Poste Italiane acquires renewable energy guarantee of origin certificates for approximately 95% of its electricity consumption. The GRI Sustainability Reporting Standards envisage two calculation methods for Scope 2 emissions – the location-based method and the market-based method. The market-based method (the method used by Poste Italiane) is based on CO2 emissions emitted by the energy suppliers from which, via a contract, the organisation purchases electricity (in this case renewable energy guarantee of origin certificates), and for the remaining 5%, emission factors from the national electricity grid (the
Total non-hazardous waste (t) 21,821.6 25,790.6 27,449.5 of which: Sent to landfill (t) 218.3 182.5 795.8
Other types of disposal (t) 398.0 418.0 524.6 * The figures for the quantity of waste produced are provided by the companies that provide waste management services. ** The target set for 2018 in relation to waste sent to landfill, incinerated or subject to other types of disposal is 2,341 tonnes. This projection is in line with the increase in the volume of hazardous waste produced in 2018, generated by the disposal of obsolete equipment at the various sites during that year.
Total energy consumption (GJ) 2,638,361 2,632,318 2,509,826 of which: from renewable sources (GJ) 1,790,247 1,810,741 1,741,421 from non-renewable sources (GJ) 848,114 821,577 768,405
Indirect emissions - Scope 2 (market-based) (tCO2 e) 11,562 10,647 9,266 of which: Electricity (tCO
[GRI 302-2; GRI 305-3] EXTERNAL ENERGY CONSUMPTION AND CO2 EQUIVALENT EMISSIONS RELATING TO REAL ESTATE FACILITIES
Total km travelled 328,223,769 331,886,754 342,508,496 of which: of which: hybrid motor vehicles 32 102 88 petrol-natural gas fuelled vehicles 3,302 2,173 1,705 petrol-LPG fuelled vehicles - 979 1,070 diesel-natural gas fuelled vehicles - - -
Percentage of alternative vehicles (%) 11.2 12.1 12.6 * The figure includes 150 tricycles purchased in 2018 and added to the fleet in January 2019.
[GRI 302-1; GRI 305-1] ENERGY CONSUMPTION AND CO2 EQUIVALENT EMISSIONS BY THE MAIL AND CHARTER FLEET*
[GRI 302-2; GRI 305-3] ENERGY CONSUMPTION AND CO2 EQUIVALENT EMISSIONS BY MAIL AND CHARTER TRANSPORT
The Poste Italiane Group will continue to be engaged in implementing the objectives outlined in the five-year Deliver 2022 Plan, approved by the Board of Directors on 26 February 2018 and, with specific regard to 2019, will focus on the targets set out in the budget for 2019 approved by the Board of Directors on 19 March 2019 and presented to the market.
The reduction in headcount at central and local staff departments is expected to be at least 650 FTEs.
Finally, plans to streamline the post office network will involve at least 1,400 FTEs, in view of the geographical reorganisation that took place in 2018, involving the creation of new macro areas, and the projects to be implemented in 2019.
A range of initiatives designed to develop the existing Postepay card offering will take place in 2019, alongside the introduction of new innovative products and services and commercialisation of the new Postepay Connect product, launched at the end of 2018, with a total of 40,000 cards issued by 31 December 2018.
In the Financial Services segment, the Group will continue with efforts to leverage our customer base, distribution network and brand. Postal Savings will continue to benefit from the new three-year agreement with Cassa depositi e prestiti signed in December 2017 and effective from 2018.
Plans to broaden the distribution of financial products will continue to take shape, with the aim of effectively responding to the various needs of customers.
Finally, the active management strategy for the financial instruments portfolio will aim to stabilise the overall return.
In keeping with the strategic guidelines set out in the Deliver 2022 Plan, 2019 will see the PosteVita Insurance Group continue to offer integrated savings and investment products with the aim of consolidating its position in the life insurance market. This will in part take the form of a progressive rebalancing of the offering towards products adding more value (multiclass and unitlinked products) and with risk-return profiles that are still moderate, in keeping with the type of customer served by the Group. Continuing the approach adopted in 2018, the Group is committed to delivering on the growth targets for the non-life business set out in the strategic plan. The focus will above all be on the welfare and non-vehicle non-life sectors, including property insurance (the launch of the new Posta Protezione Casa 360 product, which has introduced cover for guarantees linked to natural disasters) and efforts to develop and complete the loan and mortgage protection offering.
Finally, with regard to vehicle insurance, having looked at the market and at potential partnerships in 2018, Poste Italiane expects to trial the distribution of vehicle insurance policies to the Group’s employees in 2019.
Poste Italiane’s Consolidated Non-Financial Statement (NFS or “Statement”) for the year ended 31 December 2018 has been drafted on the basis of the six key sustainability pillars of the Group’s ESG Strategic Plan which covers environment, social and governance issues (ESG) and has been designed with the aim of generating long-term value for stakeholder.
SCOPE OF DECREE 254/2016 PARAGRAPHS INCLUDED IN THE NFS TOPICS AND ADDITIONAL INFORMATION INCLUDED IN OTHER 2018 DOCUMENTS
�� 8. Board of Statutory Auditors/Organisational, management and control model pursuant to Legislative Decree 231/2001
�� 9. Internal Control and Risk Management System; 9.2 Organisational, management and the control model pursuant to Legislative Decree 231/2001
�� Legality and incorporation of ESG criteria within the procurement processes
In addition to the above, additional information as required by the Decree can be found in the paragraph “The Group’s Organisation And Operating Segments”.
33. Figures for Poste Tributi, which is in liquidation and has three employees, regard the workforce.
Poste Italiane’s Consolidated Non-financial Statement has been prepared in compliance with Italian Legislative Decree 254/2016 and in accordance with the most widely used standards at international level: the Global Reporting Initiative (“GRI”) Standards, applied in accordance with the core option, published by the Global Reporting Initiative in 2016 and including the “Financial Services Sector Disclosures” issued by the GRI in 2013.
The NFS was approved by Poste Italiane SpA’s Board of Directors on 19 March 2019 and, pursuant to art.3, paragraph 10 of the Decree, requires a separate assurance report from the independent auditor, PricewaterhouseCoopers SpA.
For each material topic, if applicable, information has been provided on the relevant management and organisational model, policies, including due diligence policies, and the results achieved through their application, as well as certain non-financial performance indicators.
Key Performance Indicators are collected on an annual basis; indicators reported refer to 2018, and where available to the 2016-2018 period as well. The qualitative and quantitative information derive from the Group’s information systems and from a non-financial reporting system specifically implemented in order to comply with the requirements of the “GRI Sustainability Reporting Standards”. The disclosures correspond with the scope of the Decree and are consistent with the activities conducted and the impacts produced by Poste Italiane. The data is based on punctual calculations and, where specifically indicated, on estimates. The estimated data regard certain items relating to energy consumption inside and outside the organisation - in particular, data regarding electricity consumption (for security purposes and relating to outsourced Data Centres), natural gas, diesel, LPG and district heating for the Group’s real estate facilities – and water consumption, which was calculated on the basis of the costs incurred and the average tariff payable. Consumption linked to logistics is estimated in terms of distance travelled and/or average consumption of the means and the transported load, except for motor vehicles used in last mile logistics.
The scope of reporting refers exclusively to companies consolidated on a line-by-line basis for financial report, as indicated in the table “List of investments consolidated on a line-by-line basis”33. Exceptions to this scope are explicitly indicated within the document. The terms “Poste Italiane”, “Group” or “Company” are used in the NFS to refer to the Poste Italiane Group.
TABLE SHOWING THE LINK WITH THE SCOPE OF THE DECREE, POSTE ITALIANE’S MATERIAL TOPICS AND THE GRI STANDARDS
Scope of Decree 254/2016 Material topic GRI Specific Standard Internal scope External scope
Integrity and transparency �� GRI 205 Anticorruption Poste Italiane Group Suppliers and business partners
�� GRI 403 Occupational Health and Safety Poste Italiane Group Suppliers and business partners
Financial inclusion �� FS 14 Initiatives designed to improve access to financial services for disadvantaged people
�� FS 11 Percentage of assets subject to positive and negative environmental/social screening
GRI 102: General Standards Organisational profile 102-1 Name of the organisation Report on Operations: Statement from the Chairwoman and the Chief Executive Officer 102-2 Activities, brands, products and services Report on Operations: The Group’s organisation and operating segments 102-3 Location of headquarters Annual Report: inside the back cover 102- 4 Location of operations Report on Operations: Multichannel commercial strategy 102-5 Ownership and legal form Report on Operations: 4. Governance and integrated risk management model 102-6 Markets served Report on Operations: The Group’s organisation and operating segments; Multichannel commercial strategy 102-7 Scale of the organisation Report on Operations: Group financial review; Indicators tables – People development
Report on Corporate Governance and the Ownership Structure: Section I: Governance and ownership structures 102-8 Information on employees and other workers Report on Operations: Indicators tables – Protection of human rights 102-9 Supply chain Report on Operations: Legality and incorporation of ESG criteria within the procurement processes 102-10 Significant changes to the organization and its supply chain
102-12 External initiatives Report on Operations: The Group’s Environmental Social and Governance (ESG) Strategic Plan 102-13 Membership of associations Report on Operations: The Group’s Environmental Social and Governance (ESG) Strategic Plan; Dialogue and transparency in relations with the authorities; Relations with social partners
Report on Corporate Governance and the Ownership Structure: 7.2 Audit, Risk and Sustainability Committee 102-19 Process for delegating authority for economic, environmental, and social topics from the highest governance body to senior executives and other employees
102-27 Measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental, and social topics
Report on Corporate Governance and the Ownership Structure: 6.3 Role and functions (pursuant to art. 123bis, paragraph 2.d), Consolidated Law on Finance); 6.8 Independent Directors; 6.10 Assessment of workings of the Board of Directors and Board Committees 102-28 Processes for evaluating the highest governance body’s performance
Report on Corporate Governance and the Ownership Structure: 6.10 Assessment of workings of the Board of Directors and Board Committees 102-29 Highest governance body’s role in identifying and managing economic, environmental, and social topics
Stakeholder Engagement 102-40 A list of stakeholder groups engaged with by the organisation
Report on Operations: Stakeholder engagement 102-41 Collective bargaining agreements Report on Operations: Relations with social partners 102-42 The basis for identifying and selecting stakeholders with whom to engage
Report on Operations: Indicators tables The restatements of information provided in the Consolidated non-financial Statement 2017 concern the following indicators: 303-1, 305-1, 305-2, 305-3 and 403-2. The reasons for the restatements are explicated in note of the related data collection tables 102-49 Significant changes in reporting compared with previous periods
Report on Operations: 7. Consolidated Non-financial Statement 102-50 Reporting period Report on Operations: 7. Consolidated Non-financial Statement 102-51 Date of most recent report Non-financial Statement 2017; Sustainability Report 2017 102-52 Reporting cycle Report on Operations: 7. Consolidated Non-financial Statement 102-53 Contact point for questions regarding the report For further information and details regarding the topics and indicators covered in this Report, contact: Poste Italiane SpA Corporate Affairs/Group Risk Management Viale Europa, 190 00144 Rome – Italy 102-54 Claims of reporting in accordance with the GRI Standards
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; The economic value generated and distributed by the Poste Italiane Group 103-2 The management approach and its components 103-3 Evaluation of the management approach
Report on Operations: The economic value generated and distributed by the Poste Italiane Group
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Integrity and transparency 103-2 The management approach and its components 103-3 Evaluation of the management approach
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Legality and incorporation of ESG criteria within the procurement processes; Environmental impacts of logistics 103-2 The management approach and its components 103-3 Evaluation of the management approach
GRI 301: Materials 301-1 Materials used by weight or volume Report on Operations: Indicators tables
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Environmental impacts of real estate facilities; Environmental impacts of logistics 103-2 The management approach and its components 103-3 Evaluation of the management approach
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Environmental impacts of real estate facilities 103-2 The management approach and its components 103-3 Evaluation of the management approach
305-2 Indirect (Scope 2) GHG emissions Report on Operations: Indicators tables
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Staff welfare and wellbeing 103-2 The management approach and its components 103-3 Evaluation of the management approach
GRI 402: Labour/ management relations 402-1 Minimum notice periods regarding operational changes
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Occupational health and safety 103-2 The management approach and its components 103-3 Evaluation of the management approach
GRI 403: Health and safety 403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
GRI 103: General requirements for reporting the management approach 103-1 Explanation of the material topic and its boundary Report on Operations: Materiality matrix; Poste
GRI 404: Training 404-1 Average hours of training per year per employee
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Protection of human rights 103-2 The management approach and its components 103-3 Evaluation of the management approach
GRI 405: Diversity and equal opportunity 405-1 Diversity of governance bodies and employees
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Work with transparency and integrity; Legality and incorporation of ESG criteria within the procurement processes 103-2 The management approach and its components 103-3 Evaluation of the management approach
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Legality and incorporation of ESG criteria within the procurement processes 103-2 The management approach and its components 103-3 Evaluation of the management approach
GRI 103: General requirements for reporting the management approach 103-1 Explanation of the material topic and its boundary
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Integration of ESG factors into investment policies; Integration of ESG factors into insurance policies 103-2 The management approach and its components 103-3 Evaluation of the management approach
In 2018, Poste Vita and BancoPosta Fondi SGR – the Poste Italiane Group companies operating in the investment sector – subjected their portfolios to social and environmental screening by an external body. The process regarded 99% of Poste Vita’s total AuM and 80% of BancoPosta Fondi SGR’s total AuM.
Report on Operations: Materiality matrix; Poste Italiane’s sustainability strategy; Financial inclusion 103-2 The management approach and its components 103-3 Evaluation of the management approach
Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.
Events after the end of the reporting period to which the Annual Report for 2018 refers are described in other sections of this document. Further information is provided in Poste Italiane Financial Statements for the year ended 31 December 2018.
In line with these regulations, the Guidelines are reviewed every three years, and are in any event revised in response to any changes in legislation or of an organisational nature, or in the event of significant changes in the business model.
As a result, on 7 November 2018, Poste Italiane’s Board of Directors approved new Guidelines that reflect, among other things, in relation to Bancoposta RFC’s operations, the recommendations made by the Bank of Italy as part of the process of authorising the electronic money institution.
Moreover, in connection with the process that resulted in the establishment of the electronic money institution, the Related and Connected Parties Committee issued a favourable opinion to the Board of Directors on two contracts with PostePay SpA that qualify as material under the Bank of Italy’s regulations. These regard the contract governing the outsourcing of BancoPosta’s
Details of the impact of related party transactions on the financial position and profit or loss are provided in Poste Italiane Financial Statements for the year ended 31 December 2018.
34. Such transactions are defined as transactions that due to their significance/materiality, the nature of the counterparties, the purpose of the transaction, the manner of determining the transfer price and timing of the transaction may give rise to doubts over the correctness and/or completeness of the disclosures in the financial statements, over a conflict of interest, safeguards for the Company’s financial position and protections for non-controlling shareholders.
The statement of reconciliation of the Parent Company’s profit/(loss) for the period and Equity with the consolidated amounts at 31 December 2018, compared with the statement at 31 December 2017, is included in Poste Italiane Financial Statements for the year ended 31 December 2018 (Notes to the Poste Italiane Group’s financial statements – Equity).
NET INVESTED CAPITAL – this indicator represents the sum of non-current assets and net working capital, deferred tax assets, deferred tax liabilities, provisions for risks and charges and provisions for employee termination benefits and pension plans and non-current assets and disposal groups held for sale and liabilities related to assets held for sale. This indicator is also presented separately for each Strategic Business Unit inclusive of intersegment transactions.
* Equity for 2018 includes capital of €7million injected by the Parent Company during the year.
* The figures shown have been prepared in accordance with IFRS and therefore may not coincide with those in the financial statements prepared in accordance with the Italian Civil Code and under Italian GAAP.
* During the year, the company declared dividends totalling €9 million. Equity includes the capital increase of €140 million carried out via the contribution of the card payments and payment services business unit from BancoPosta RFC, effective for legal, accounting and tax purposes from 1 October 2018. On the same date, PosteMobile SpA changed its name to PostePay SpA.
POSTE ITALIANE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018 2. Basis of preparation and significant accounting policies 225 3. Changes to accounting policies 252 4. Material events during the year 276 5. Poste Italiane Group for the year ended 31 December 2018 280 6. Poste Italiane SpA for the year ended 31 December 2018 354 7. Risk management 434 8. Hedging transactions 471 9. Proceedings pending and principal relations with the authorities 476 10. Material non-recurring events and/or transactions 483 11. Exceptional and/or unusual transactions 483 12. Events after the end of the reporting period 483 13. Additional information 484 14 BancoPosta RFC Separate Report for the year ended 31 December 2018 506
Poste Italiane’s shares have been listed on the Mercato Telematico Azionario (the MTA, an electronic stock exchange) since 27 October 2015. At 31 December 2018, the Company is 35% owned by CDP and 29.3% owned by the MEF, with the remaining shares held by institutional and retail investors. Poste Italiane SpA continues to be under the control of the MEF.
The Mail, Parcels and Distribution segment includes letter post, express delivery, logistics, parcels and philately, in addition to the activities conducted by various units of Poste Italiane SpA for other segments in which the Group operates. The Payments, Mobile and Digital segment includes revenue from payment services, card payments and mobile telecommunications services. Financial Services regard the activities of Bancoposta, which include the collection of all forms of savings deposits, the provision of payment services (of which some outsourced to the Payments, Mobile and Digital segment), foreign currency exchange, the promotion and arrangement of loans issued by banks and other authorised financial institutions, the provision of investment services and the activities of BancoPosta Fondi SpA SGR. Insurance Services regard the activities of Poste Vita SpA, which operates in ministerial life assurance Classes I, III and V, and of its direct subsidiaries, Poste Assicura SpA, which operates in non-life insurance, and Poste Welfare Servizi Srl, which provides services to the segment in question.
This section of the Annual Report for the year ended 31 December 2018 includes the consolidated financial statements of the Poste Italiane Group, the separate financial statements of Poste Italiane SpA and BancoPosta RFC’s Separate Report. The Report has been prepared in euros, the currency of the economy in which the Group operates.